New Delhi : The government on Tuesday topped up incentives by Rs 8,450 crore for exporters in sectors such as leather and agriculture as it looks to add muscle to outward shipments that have been disrupted by the implementation of the GST. Unveiling the contours in the ‘Mid-Term Review of the Foreign Trade Policy (2015-20)’ , Commerce and Industry Minister Suresh Prabhu said incentives have been increased by two per cent for merchandise as well as services exports in labour-intensive and MSME sectors.
The incentives are aimed at addressing hardships of exporters due to delay in tax refunds under the GST regime, which came into effect from July 1. Exports entered the negative terrain after over a year, contracting 1.12 per cent in October, primarily due to the liquidity problem faced by exporters following the GSTlaunch.While the government skipped the annual foreign trade assessment in 2016-17, this year the mid-term review — originally slated to be announced on July 1 — was delayed pending review of the impact of the GST on external trade, which accounts for 45 per cent of India’s USD 2.5-trillion GDP. The revised FTP provides for an across-the-board increase of two per cent in the existing Merchandise Exports from India Scheme (MEIS) for the shipments by MSMEs /labour intensive industries, involving an additional outgo of Rs 4,567 crore. This will benefit sectors such as leather, agriculture, carpets, handicraft and marine products.
Further, to give a fillip to services trade, the policy has raised the Service Exports from India Scheme by two per cent, envisaging an additional outgo of Rs 1,140 crore. Last month, the Commerce Ministry announced a similar two per cent additional incentive for garments and made-ups.