Exporters slam Govt move to ‘disable’ incentive scheme under MEIS

Warning of a possible decline in exports and forex earnings, exporters have raised concerns over an abrupt disabling of rewards for them under the Merchandise Exports from India Scheme (MEIS) that was introduced to offset infrastructural inefficiencies, associated costs and encourage export of notified goods.

At a joint press meet, All India Spices Exporters Forum (AISEF) and Federation of Indian Coir Exporters Association (FICEA) expressed anxiety over the disappearance of benefits’ section from the Directorate General of Foreign Trade’s (DGFT) website since August.

Introduced in 2015 under the Foreign Trade Policy (FTP), the MEIS was created out of a merger of five existing reward schemes. It incentivises merchandise exports of more than 8,000 items and is the biggest of its kind.

Exporters earn duty credits at fixed rates of 2%, 3% and 5%, depending upon the product and the Country to which they export. Rewards under the scheme are payable as a percentage of realised free-on–board value and MEIS duty scrips can be transferred or used for payment of a number of duties, including basic customs duty.

All India Spices Exporters Forum Chairman Rajiv Palicha said, “We have absolutely no idea how to deal with this crisis. Initially, sources spoke of a technical glitch. However, there has been no clarity on the enabling of the system apart from some updates via tweets in from the DGFT.”

Exporters were shocked to find that their claims from August 1 were disabled by the DGFT as they were expecting MEIS to continue till March 31, 2020, when the new FTP comes into play.

“FTP has a good legal framework for trade facilitation. Sustained growth in exports needs policy continuity adhering to the duration clause of FTP,” said Palicha.

Since the entire export business in India is facing a crisis on account of this, several representations have been made to the Central Government in the last three months. Due to this uncertainty, India is losing out to other countries in terms of competitive pricing in the global market.

“If the benefit is not allowed in full from August 1, 2019, exporters will lose heavily in the current year. The Exporters Forum estimates a reduction in export of spices and spice products by 30 %,” Palicha said.

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