Concerned over exports contracting for the 10th month in a row, the commerce ministry on Friday extended duty incentives to several products including textiles, pharmaceuticals, project goods, auto components and telecom, computer, and electronics products, in a bid to boost exports.
While global support under the Merchandise Exports from India Scheme (MEIS) has been accorded to the above products, higher support under the scheme has been provided to products including industrial machinery, machine tools, parts and machinery for dairy, agriculture, food processing, hand tools used in agriculture etc locks, and reinforced safes among several other things. Earlier, benefits to these items were provided to a few countries.
“In light of the major challenges being faced by Indian exporters in the backdrop of the global economic slowdown, commerce department has increased support for export of various products and included some additional items under the MEIS,” the department said in an official statement.
According to the data released by the department, India’s merchandise exports dipped 24.33 per cent in September to $21.84 billion while the imports shrank 25.42 per cent to $32.32 billion year-on-year, resulting in a trade deficit of $10.47 billion. Cumulative exports during the first half of 2015-16 also contracted by 17.36 per cent to stand at $132.93 billion as compared to $161.39 billion during the same period last fiscal, pulled down by abysmal performance of export of engineering products, petroleum products, gems and jewellery amid slowdown in the global demand.
Earlier in a meeting with export promotion councils, commerce secretary Rita Teotia had said that the allocation under the MEIS had been increased from Rs 18,000 crore to Rs 21,000 crore.
By the current revision, the government has introduced 110 new tariff lines or products and increased rates or country coverage or both for 2,228 existing tariff lines, the official statement said.
Under the MEIS, the government provides duty benefits at 2 per cent, 3 per cent and 5 per cent depending upon the product and country.
The federation of Indian export organisation (Fieo) welcomed the decision and said that this will benefit exporters who are under huge pressure as “they booked orders taking into consideration the benefits available to them and were therefore demanding this revision for a long time.”
“This will indeed enhance price competitiveness to some extent and help in arresting the current downfall in exports. Now, total 5,012 tariff lines are eligible for MEIS benefit,” SC Ralhan, president, Fieo, said.