Govt offers Rs8,450 cr incentives to labour intensive, MSME exporters

06 Dec 2017


The Mid-Tem Review of Foreign Trade Policy 2015-2020 announced on Tuesday provides for a 2 percent increase in annual incentives amounting to about Rs8,450 crore for labour intensive and MSME sectors.

While restoring the benefits under the export promotion schemes of duty free imports under Advanced Authorisation, Export Promotion Capital Goods and 100 percent Export Oriented Units and thus resolving the problem of blocked working capital for exporters following the roll out of GST, the FTP review has focused on increasing the incentives for labour intensive MSME sectors. 

The government has increased export incentives under Merchandise Exports from India (MEIS) by 2 percentage points across the board for labour intensive MSME sectors amounting to an additional annual incentive of Rs4,567 crore.

This is in addition to the already announced  increase in MEIS incentives from 2 per cent to 4 per cent for ready-made garments and made-ups in the labour intensive textiles sector with an additional annual incentive of Rs2,743 crore

Further, incentives under Services Exports from India Scheme (SEIS) have been increases by 2 percentage points leading to additional annual incentive of Rs 1,140 crore.

Thus, incentives under the two schemes have been increased by 33.8 per cent (Rs8,450 cr) from the existing incentives of Rs25,000 crore which could help boost exports from labour intensive sectors and increase employment opportunities.

Some of the major sectors that will be benefited include:

  • Ready-made garments and made-ups in textiles sector (Rs2,743 crore);
  • Leather and footwear articles (Rs749 crore);
  • Handmade carpets of silk, handloom and coir and Jute (Rs 921 crore);
  • Agriculture and related products (Rs1,354 crore);
  • Services, including hotel and restaurant, hospital, educational services etc (Rs 1,140 crore);
  • Marine products (Rs759 crore);
  • Telecom and electronics components (Rs369 crore); and
  • Medical and surgical equipment (Rs193 crore).

Further, the validity period of Duty Credit Scrips has been increased from 18 to 24 months and GST rates on transfer/sale of scrips has been reduced to zero. Issue of gold availability for exporters has been resolved by allowing Specified Nominated Agencies to import gold without payment of IGST.

Support to Export Credit Guarantee Corporation is also being enhanced to increase insurance cover to exporters particularly MSME's exploring new or difficult markets.

A new scheme of Self-Assessment based duty free procurement of inputs required for exports has been introduced. There will be no need of Standard Input Output Norms in such cases and this will eliminate delays. It is based on trust. Exporters will self-certify the requirement of duty free raw materials/ inputs. The scheme would initially be available to the Authorized Economic Operators (AEOs) and will get expanded as more exporters join the AEO programme. The scheme will improve ease of doing business.

DGFT website ( has launched `contact@DGFT' service as a single window contact point for exporters and importers for resolving all foreign trade related issues and also to give suggestions. Exporters/importers can track status of their queries through the assigned reference number. Feedback mechanism has also been provided. High level monitoring of disposal is also being ensured. 

A state-of-the-art trade analytics division has been set up in DGFT for data based policy actions. The initiative envisages processing trade information from DGCIS and other national and international databases related to India's key export markets and identify specific policy interventions.

A new Logistics Division has been created in the Department of Commerce to develop and co-ordinate  integrated development of the logistics sector, by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology based interventions in this sector. These steps would improve India's ranking in the Logistics Performance Index (LPI) and promote exports and enhanced growth.

Focus will be given to Ease of Trading across borders.  A professional team to handhold, assist and support exporters in their export related problems, accessing export market and meeting regulatory requirements. The team will also examine the procedures and processes in clearances related to trading across borders for their simplification and rationalization and track progress. Dwell time at ICDs, ports and airports is being closely monitored in coordination with customs, and infrastructure ministries.

The commerce ministry said it will continue to review and regularly evaluate Foreign Trade Policy for addressing concerns of the exporters, simplification of procedures and for promotion of exports.

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