MEIS export incentive hiked to Rs 21,000 crore

By Kirtika Suneja

NEW DELHI: The government has increased the allocations under the export incentive scheme called Merchandise Exports from India Scheme ( MEIS) to Rs 21,000 crore from Rs 18,000 crore earlier to give a boost to shipments.

Commerce secretary Rita Teaotia announced the increased allocation in a meeting with 27 export promotion councils in the wake of exports declining for the last nine months.

This amount is likely to be available for allocations in the coming week.

MEIS rewards merchandise exports with different kinds of duty scrips, which can be used for paying duties or be monetized through permissible trade in them. The rates of duty credit scrips issued under MEIS currently range from 2 per cent to five per cent of the exports.

Government said it was not possible to give more benefits.

Teaotia said that the Foreign Trade Policy 2015-20 was drawn after extensive deliberations and it may not be possible to make changes very frequently and go back on the scheme, commerce department said in a statement.

Citing changing dynamics of the export market, the secretary asked exporters to be flexible to exploit opportunities.

"The secretary asked exporters to give specific requests for the Regional Comprehensive Economic Partnership agreement as it is moving fast and its negotiations are at a critical stage," said an official who was present in the meeting.

Teaotia said that special economic zones could be made as a fulcrum of Make in India.

"Agricultural exporters cited non-tariff barriers as a problem while electronics exporters wanted MEIS incentive for software products. The issue of increasing transaction costs was also brought up," the official said.

A representative from one of India's traditional exports council said that it is unlikely for the government to increase benefits as it is bound by financial and regulatory concerns.