GOI puts Rs 2 crore cap on exports promotion scheme

The Rs 43,500 crore MEIS scheme was opposed by the finance ministry and the NITI Aayog, which plan to use scarce financial resources into new Production-Linked Incentive (PLI) schemes in select sectors with core competency and potential for global exports. The Commerce Department first resisted diluting the scheme, but has now proposed a new mechanism by which New Importer Exporter Codes (IECs) obtained on or after the date of the notification will be ineligible to submit any MEIS claim for exports made from 1 September.

The government claims that 98 percent of exporters claiming MEIS benefits will remain unaffected by the changes and less than 2 percent exporters are likely to be affected according to the analysis of claims in the relevant period of 2018-19.

But exporters do not agree with this. "At a time when the global economy is reeling from a demand shock and export orders are taking baby steps towards normalcy, this unilateral step comes a big blow to prospects of getting the sector to its feet," said a senior functionary of the Federation of Indian Export Organisations (FIEO).