Government increases MEIS allocation to Rs 21,000 crore

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

Commerce secretary Rita Teaotia announced the increased allocation at a meeting with 27 export promotion councils here on Wednesday. This amount is likely to be available for allocations in the coming week.

India’s merchandise exports have declined in the last nine months.

MEIS rewards merchandise exports with different kinds of duty scrips, which can be used for paying duties or be monetised through permissible trade in them.

The rates of duty credit scrips issued under MEIS range from 2 per cent to 5 per cent of the exports.

The government said it was not possible to give more benefits.

According to a commerce department statement, Teaotia said 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.

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 at the meeting.

Teaotia said that special economic zones could be made a fulcrum of the ‘Make in India’ initiative.

"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 it is unlikely for the government to increase benefits as it is bound by financial and regulatory concerns.