Rs.4,000 Crore Subsidies Stuck as Gulf War Hits Surat Exports

Surat | Gujarat — South Gujarat’s industry is facing a double crisis as the ongoing Gulf war disrupts export trade while nearly ₹4,000 crore worth of industrial subsidies remain stuck in government files, triggering a severe liquidity crunch for businesses.

The Southern Gujarat Chamber of Commerce and Industry (SGCCI) has raised serious concerns over the situation, warning that over 22,400 subsidy files and claims under various state government schemes are pending approval, leaving thousands of industrial units struggling for survival.

Calling the situation alarming, SGCCI President Nikhil Madrasi said the delay in releasing subsidies has worsened the financial stress already caused by global trade disruptions.

“Exports from Surat’s textile and diamond sectors are already suffering due to the Gulf war. Containers are stuck mid-sea and payments are delayed. At such a time, ₹4,000 crore belonging to industrialists is locked in government files,” Madrasi said.

Export Cycle Hit by Red Sea Crisis

The conflict in the Gulf region has severely impacted shipping routes through the Red Sea, one of the world’s busiest trade corridors.

As a result, hundreds of export containers from Surat are currently stranded, causing a major disruption in the payment cycle for exporters.

“Since goods are stuck in transit, payments are not being realised. This has triggered a severe liquidity crunch which is directly affecting production and even workers’ salaries,” Madrasi said.

Industry leaders say that in times of economic slowdown, government incentives and subsidies act as a financial lifeline for industries, but the current delay is worsening the crisis.

5,400 Files Pending Under Gujarat Textile Policy 2024

Under the Gujarat Textile Policy 2024, industrialists across South Gujarat made large investments to upgrade technology and expand production.

However, administrative delays have left around 5,400 subsidy files pending for approval, affecting nearly 1,500 industrial units.

According to SGCCI estimates, approximately ₹1,000 crore in subsidies under this policy alone remains pending.

MSME Self-Reliant Policy Facing Major Delays

The situation is even more concerning under the MSME Self-Reliant Policy 2022, which aims to strengthen small industries.

Currently, around 6,000 files are stuck in processing, with nearly ₹1,400 crore in subsidies awaiting approval.

Industry leaders warn that if these payments are not released soon, many small units could be forced to shut down permanently.

Even 2019 Subsidy Claims Still Pending

Shockingly, claims under the Gujarat Textile Policy 2019, whose tenure has already ended, are still awaiting clearance.

According to SGCCI data, about 3,000 files under the policy remain unsanctioned, while another 8,000 subsidy claims are still pending.

These older claims alone account for around ₹1,500 crore.

Industry Urges Government to Fast-Track Approvals

SGCCI has urged the state government to accelerate the approval process and show flexibility in procedural rules during the current economic crisis.

“The government process is moving as per rules, but the present situation is extraordinary. If the disposal of files is fast-tracked, the liquidity crisis will ease significantly,” Madrasi said.

He also suggested that instead of rejecting or delaying applications due to technical errors, authorities should allow corrections and release payments quickly.

Delegation May Meet State Ministers

The chamber has submitted a detailed representation along with data to state minister Harsh Sanghavi and finance minister Kanu Desai, urging them to release the pending subsidies before the end of the financial year on March 31.

Industry leaders say a delegation may soon travel to Gandhinagar to personally present the urgency of the situation.