The Indian government has announced fresh incentives worth Rs 8,450 crore to boost exports and support the MSME and labour-intensive industries. The incentive came as a part of the mid-term review of India’s Foreign Trade Policy (FTP) 2015-2020.
“The revised FTP focuses on the goal of exploring new markets and new markets and new products as well as on increasing India’s share in traditional markets and products, leveraging benefits of Goods and Services Tax (GST) by exporters; close monitoring of export performances and taking immediate corrective measures based on data analysis,” read the FTP statement, 2017.
The revised FTP focuses on exploring new markets and products, as well as increasing the country’s share in traditional markets, leveraging the benefits of GST, increasing ease of trading across borders and increasing farmers’ income through a focused policy for agricultural exports. The government has repositioned India’s export strategy by increasing incentives in the Merchandise Exporters from India Scheme (MEIS). The MEIS rate has been increased to 4 percent from 2 percent earlier, effective November 1.
“There has been across the board increase of 2 percent in existing MEIS incentive for exports by MSMEs/labour-intensive industries involving additional incentive of Rs 4,567 crore ,” the policy statement said. Key sectors receiving the incentives are leather, agriculture, carpets, hand-tools, marine products, rubber products, ceramics, sports goods, medical and scientific products and electronic and telecom components.
“Government should gradually extend the MEIS to other sectors of exports since they are also facing numerous challenges in exports. A one-time relaxation to meet Export Obligation may be provided to the industry so that they can escape the penal provisions ,which will be disruptive and will provide an opportunity to add to exports besides providing employment,” Ganesh Gupta, President of Federation of Indian Export Organisation (FIEO), said.