AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYYes
Tax-based export incentive
On 22 September 2016, the Indian Ministry of Commerce & Industry added additional products for incentives under the Merchandize Exports Incentive Scheme (MEIS). The MEIS scheme under the Foreign Trade Policy 2015-2020 provides incentives ranging from 2-5% (of realized FOB-Free On Board value) on products depending on the country they are exported to, with the countries divided into 3 groups. The total number of items incentivised under this scheme is now increased from 5012 to 7103 products. The scheme budget has also been increased from INR 22,000 crore (USD 330 million) to INR 23,500 crore (USD 350 million) per year.
2901 additional products have been made eligible for incentives under MEIS. These items include traditional medicines, marine products, processed food products, value added products made of plastics and leather, industrial products and engineering goods, fabrics and garments, chemicals, ceramics, glass products, newspapers & periodicals, wool products, tubes & pipes, etc.
Further, incentives for existing 575 products under 11 categories have been increased. These include products of iron and steel, handicrafts, moulded and extruded goods, rubber, ceramic, glass, auto tyres and tubes, industrial machinery & machine tools, Internal Comustion Engines, items of wood, paper, stationary, footwear, auto seats, steel furniture, prefabrications, dairy products, etc.
On 31 March 2020, the Ministry of Commerce and Industry announced that the existing Foreign Trade Policy 2015-2020, which was to expire on 31 March 2020, will be extended till 31 March 2021.
On 1 September 2020, the Ministry announced that incentives under the MEIS will be available until 31 December 2020.