TIES Scheme: Benefits, Eligibility & How It Works in India

In 1991, India faced a dreadful economic crisis when its forex reserves dropped below $1.2 billion, barely covering two weeks of imports of oil and other essential items. It taught India a valuable lesson. It had to implement stringent measures to strengthen its economy. 

Exports are one of the factors driving a country's economic growth. They help in creating jobs and expanding foreign currency reserves. Keeping this in mind, India has implemented several schemes and policies that aim to promote export competitiveness. The Trade Infrastructure for Export Scheme (TIES) is one such initiative of the Government of India.

In this article, we explore the Trade Infrastructure for Export Scheme, its key objectives and how it works in India. 

• The Trade Infrastructure for Export Scheme (TIES) was launched in 2017 by the Ministry of Commerce and Industry. TIES provides financial assistance to state and central government agencies, their joint ventures and PPP projects for setting up and upgrading export infrastructure. 
• The documents required to apply for TIES funding include a project proposal, executive summary and detailed project report (DPR). 
• Documents are vetted technically and financially by an independent agency and duly recommended by the Nodal Ministry or the export commissioner to the Empowered Committee for approval.
• Since 2017, 69 projects have been approved under TIES, of which 43 have been completed. A total of 224.45 Cr has been released for these projects. 
• TIES has provided businesses with the necessary infrastructure to ease their access to export markets. These exporters can further benefit by utilising XFlow to handle their cross-border payments in a fast, secure and cost-efficient manner.

The Trade Infrastructure for Export Scheme (TIES) is an initiative of the Government of India, launched by the Ministry of Commerce and Industry in 2017, that aims to promote exports. It replaced the Assistance to States for Development of Export Infrastructure and Allied Activities (ASIDE) scheme.

Under the TIES scheme, financial assistance is provided to the State and central government agencies for setting up and upgrading export infrastructure, such as border haats, dry ports, cold chain infrastructure, land customs stations, ports/cargo terminals, etc. 

The Trade Infrastructure for Export Scheme focuses on providing necessary infrastructure and logistical support to businesses and MSMEs to ease their access to the export market. The approval for projects under TIES depends on their export competitiveness. 

The key objectives of the Trade Infrastructure and Export Scheme are to improve export infrastructure, facilitate market access, and upgrade testing and certification facilities. These are explained in detail below.

1. Improve export infrastructure

As suggested by its name, the TIES’s main objective is to improve export infrastructure by bridging the gaps in it and funding projects that promote export competitiveness. This export infrastructure includes border haats, land customs stations, trade promotion centres, etc.

2. Facilitate market access

The TIES aims to make export markets more accessible to Micro, Small, Medium and Enterprise (MSME) businesses by facilitating first-mile and last-mile connectivity through necessary infrastructure and logistical support. 

3. Upgrade testing and certification facilities 

Businesses aiming to expand into foreign markets need to pass certain quality standards and obtain certifications like ISO 9001, Export Inspection Council certificates, etc. These certifications serve as proof that your products comply with safety and regulatory standards, helping businesses build trust among international customers. 

The Trade Infrastructure for Export Scheme provides funding to the testing and certification laboratories, helping businesses, especially MSMEs, meet international standards for product quality.

Based on the revised guidelines for the Trade Infrastructure for Export Scheme, all the agencies that are eligible for funding are known as the implementing agencies. These implementing agencies should be the owners of the facility created under the scheme and bear responsibility for its operation and maintenance. The agencies eligible to apply for TIES funding include

1. Central and State government agencies, including 

• Export Promotion Council
• Commodities Boards
• SEZ authorities
• Apex Trade Bodies recognized under the EXIM policy

2. Joint ventures of the state or central government where they have a major stakeholding 

3. Public-Private partnership projects

The agencies applying for Trade Infrastructure for Export scheme funding must submit the following documents.

1. Project proposal

The agency applying for TIES funding has to formulate a thorough project proposal after conducting a detailed survey. The project proposal should establish an overwhelming export linkage. It should include details on the gaps in export infrastructure, indicators for measuring the outcome of the project, the name of the project head and the signing authority of the Utilization Certificate. 

2. Executive summary

The agency implementing the project has to prepare an executive summary. The details in the executive summary include

1. Name and address of proposing and implementing organization

2. Status of the implementing agency

3. Total Cost of the project

4. Financing pattern 

5. Whether finance from all sources has been tied up

6. Land availability for the project

7. Status of statutory clearances

8. Project phasing and completion date 

9. Scope of work

10. Evidence of export linkages 

11. Whether the proposal has been vetted technically and financially by an independent agency

12. Deliverables accruing from the project

13. Strategy for operation and maintenance

3. Detailed Project Report (DPR)

Along with the project proposal and executive summary, the agency applying for TIES funding also has to create a detailed project report (DPR). The DPR should include the cost estimation of construction, technical specifications, and plant and machinery costs.

It should provide a detailed master plan of the project that consists of sectional drawings, building plans, PERT charts showing the timeline for critical path activities and details on employment that will be generated during the execution and operation of the project. 

The approval cycle of TIES projects moves through 3 phases

1. Technical and financial vetting

Once the applying agency submits the project proposal, executive summary and detailed project report, they are vetted technically and financially by an independent agency and duly recommended by the Nodal Ministry in case of the Central government and the Export Commissioner in case of the State government.

2. Approval by the Empowered Committee

The proposal is then forwarded to the Empowered Committee that is specially constituted for this scheme. It evaluates the benefits of the project, the bottleneck it will address, and the financial tie-ups for the project before approving it. 

3. Release of funds

Upon approval of the project, the applying agency will receive financial assistance in the form of a grant-in-aid. The ceiling for grant-in-aid is Rs. 20 Cr. These funds are released in two or more equal instalments. 

The Trade Infrastructure for Export Scheme has performed remarkably in enhancing India's trade competitiveness and promoting export-oriented growth. So far, 69 projects have been approved by the empowered committee, out of which 43 have been completed.

A total of Rs. 224.45 Cr has been released under TIES for infrastructure projects such as border haats, SEZs, ports/cargo terminals, etc. Combined with the PM Gati Shakti National Master Plan, the Trade Infrastructure for Export Scheme has achieved significant progress in addressing infrastructure and logistics bottlenecks. 

As per the World Bank’s Logistics Performance Index Report-2023, India acquired the 38th rank on the logistics performance index and registered a “turnaround time” of 0.9 days on Indian ports, which is comparatively better than countries like the USA (1.5 days), Australia (1.7 days) and Canada (2.0 days).

The aim of TIES has been to encourage businesses to export by providing them with the necessary infrastructure and logistics support. This has been further encouraged by the Duty Drawback Scheme, which rebates customs duties on imported inputs and centralized excise duty on domestic inputs that are used in the manufacturing of export goods.

The trade infrastructure for export scheme has funded 69 projects so far, 43 of which have been completed. These projects have created and upgraded the necessary export infrastructure, such as dry ports, cold chain infrastructure, ports/cargo terminals, etc. What businesses now need is a reliable payment solution that can quickly and securely collect their cross-border payments.

This is where Xflow comes into play. Xflow is a smart payment solution that enables Indian businesses to receive international payments from 140+ countries in 25+ currencies, including USD, GBP, EUR, etc. It offers you a mid-market linked exchange rate with a transparent fee structure.

Instead of waiting days for banks to receive and settle your cross-border payment in your bank account, Xflow enables you to get funds in your INR bank account the very next business day. Moreover, it generates an e-FIRA for you within 24 hours of receiving an international payment.