Export Promotion Scheme in India: Boosting Trade Opportunities

The Export Promotion Scheme plays a crucial role in boosting India's exports by providing promotional measures to offset infrastructural inefficiencies and associated costs. These schemes aim to create a level playing field for exporters and encourage trade growth. In this article, we will explore various Export Promotion Scheme in India and their benefits for exporters.

Table of Contents

1. Introduction

2. Merchandise Exports from India Scheme (MEIS)

3. Service Exports from India Scheme (SEIS)

4. Duty Exemption & Remission Schemes

   1. Advance Authorization Scheme

   2. Advance Authorization for Annual Requirement

   3. Duty-Free Import Authorization (DFIA) Scheme

   4. Duty Drawback of Customs

   5. Interest Equalization Scheme (IES)

5. EPCG Scheme

   1. Zero Duty EPCG Scheme

   2. Post Export EPCG Duty Credit Scrip Scheme

6. EOU/EHTP/STP & BTP Schemes

7. Other Schemes

   1. Towns of Export Excellence (TEE)

   2. Market Access Initiative (MAI) Scheme

   3. Status Holder Scheme

   4. Gold Card Scheme

8. Conclusion

9. FAQs

1. Introduction

The Export Promotion Schemes introduced under the Foreign Trade Policy 2015-20 aim to provide exporters with the necessary support to enhance their competitiveness in the global market. These schemes offer benefits such as duty credits, duty exemptions, and financial assistance to exporters.

2. Merchandise Exports from India Scheme (MEIS)

MEIS allows exporters to earn duty credit scrips based on the FOB value of their exports. These scrips can be used to pay basic customs duties for importing inputs or goods. MEIS benefits are available for exports of notified goods/products to notified markets.

3. Service Exports from India Scheme (SEIS)

SEIS provides duty credit scrips to service providers of notified services. Eligible service providers can earn duty credits equivalent to 5% of their net foreign exchange earnings. These scrips are freely transferable and can be used for various purposes.

4. Duty Exemption & Remission Schemes

The duty exemption and remission schemes enable duty-free import of inputs for export production with export obligations. These schemes include the Advance Authorization Scheme, Advance Authorization for Annual Requirement, Duty-Free Import Authorization (DFIA) Scheme, Duty Drawback of Customs, and the Interest Equalization Scheme (IES).

4.1 Advance Authorization Scheme

Under this scheme, exporters can import duty-free inputs that are physically incorporated in the export product. The authorization is issued for inputs related to resultant products as per the Standard Input-Output Norms (SION) or self-declaration.

4.2 Advance Authorization for Annual Requirement

Exporters with a past export performance can avail Advance Authorization for their annual requirement. This scheme is applicable to items with Standard Input-Output Norms (SION).

4.3 Duty-Free Import Authorization (DFIA) Scheme

DFIA allows duty-free import of inputs with a minimum value addition requirement of 20%. DFIA is issued on a post-export basis for products with notified SION.

4.4 Duty Drawback of Customs

Under this scheme, exporters can claim a refund of duty paid on inputs used in the exported products. Duty drawback can be claimed either under the All Industry Rates or by applying for Brand Rates.

4.5 Interest Equalization Scheme (IES)

The Interest Equalization Scheme provides exporters with interest rate subsidies on pre and post-shipment rupee export credit. It aims to make export credit more affordable by reducing the cost of borrowing.

5. EPCG Scheme

The Export Promotion Capital Goods (EPCG) Scheme allows import of capital goods at zero customs duty. It helps exporters enhance their production capacity and improve competitiveness. The scheme requires exporters to fulfill export obligations equivalent to six times the duty saved in six years.

5.1 Zero Duty EPCG Scheme

Under this scheme, import of capital goods at zero customs duty is allowed to produce quality goods and services. The scheme also allows indigenous sourcing of capital goods with a reduced export obligation.

5.2 Post Export EPCG Duty Credit Scrip Scheme

This scheme provides duty credit scrips to exporters who import capital goods by making full payment of applicable duty incash.

6. EOU/EHTP/STP & BTP Schemes

The EOU/EHTP/STP & BTP Schemes allow the establishment of units that undertake to export their entire production of goods and services. These units can import or procure inputs domestically without payment of duties.

7. Other Schemes

India also offers various other schemes to promote exports. These include the Towns of Export Excellence (TEE) scheme, Market Access Initiative (MAI) Scheme, Status Holder Scheme, and the Gold Card Scheme.

8. Conclusion

Export promotion schemes in India play a crucial role in boosting the country's exports. These schemes provide exporters with essential support, including duty credits, duty exemptions, and financial assistance. By leveraging these schemes, exporters can enhance their competitiveness in the global market.

9. FAQs

Q1. Who can benefit from the Merchandise Exports from India Scheme (MEIS)? Ans: Exporters of notified goods/products to notified markets can benefit from the MEIS scheme.

Q2. What is the objective of the Interest Equalization Scheme (IES)? Ans: The IES aims to provide exporters with interest rate subsidies on pre and post-shipment rupee export credit to reduce borrowing costs.

Q3. What are the benefits of the EPCG Scheme? Ans: The EPCG Scheme allows import of capital goods at zero customs duty and helps exporters enhance production capacity and competitiveness.

Q4. What is the Towns of Export Excellence (TEE) scheme? Ans: TEE scheme identifies towns producing goods worth Rs 750 crores or more as potential areas for export growth. Financial assistance is provided to recognized associations under the Market Access Initiative (MAI) Scheme.

Q5. Who is eligible for the Gold Card Scheme? Ans: The Gold Card Scheme is available to all eligible exporters, including those in the small and medium sectors, who satisfy the prerequisite conditions set by individual banks.