Government on Friday announced enhanced support for export of various products and increased the list of products eligible for support under the Merchandise Exports from India Scheme (MEIS) by inclusion of additional products. This has been done in the light of the major challenges faced by Indian exporters amidst the global economic slowdown.
The Department of Commerce on Thursday announced the increase in support for export of various products and inclusion of some additional items under the MEIS through a public notice issued by the Directorate General of Foreign Trade.
The move comes after India's merchandise exports shrank by nearly a quarter in September from a year ago, falling for a 10th straight month and threatened to derail Prime Minister Narendra Modi's goal of boosting economic growth through manufacturing.
MEIS, introduced through the Foreign Trade Policy (FTP) 2015-20 on 1 April 2015, with product and market focused incentives for 4,914 tariff lines, is a major export promotion scheme implemented by the ministry of commerce and industry. Rewards under MEIS are payable as a percentage of realised FOB value of covered exports, by way of the MEIS duty credit scrip, which can be transferred or used for payment of a number of duties, including basic customs duty.
The current revision introduces 110 new tariff lines and increases rates or country coverage or both for 2,228 existing tariff lines. The additional coverage described in the DGFT notification include:
- Global support has been accorded to textile items, pharmaceuticals, surgical, herbals, project goods exports, auto components, telecom, computer, electrical and electronics products, railway, transport equipment and parts;
- Higher support has been granted to several categories of products, many of which are manufactured by MSMEs. These include industrial machinery, IC engines, machine tools, parts and machinery for dairy, agriculture, food processing, textiles, paper, hand tools used in agriculture /horticulture/forestry, safety razors, blades, all types of locks, reinforced safes, strong boxes and doors, safe deposit lockers, flexible tubing, pilfer proof caps for packaging and bicycle parts;
- Additional countries have been covered for selected leather products, iron, steel and base metal products;
- Higher support has been allowed for cashew, readymade garments, paper mache products and handmade shawls of wool;
- The additional products in the list include: flexible intermediate bulk containers of manmade textile materials, medical instruments, sports goods, value added / processed products of natural rubber, chemicals, and plastics.
India, Asia's third largest economy, is mostly driven by domestic demand, but the country is still import dependent on several manufactured products, including consumer items.
While the country's exports have dropped, consumer and industrial demand for imports has also weakened.
Imports fell 25.42 per cent in September from a year earlier to $32.32 billion. Exports stood at $21.84 billion, according to latest official data released by the commerce ministry.