Commerce Ministry working on package to bail out exporters

Amiti Sen New Delhi | Updated on May 08, 2020 Published on May 08, 2020

Exports witnessed a 34.57% dip to $21.41 billion in March   -  Waldemarus

PMO asks Ministries to suggest measures to support respective sectors

Exporters struggling to survive the disruptions caused by the Covid-19 pandemic may soon get some relief if an incentive package being worked out by the Commerce Ministry gets final approval.

“There are hectic meetings going on in the Commerce Ministry to work out a suitable package to bail out exporters. It is likely to comprise higher incentives on existing schemes, extension of interest subsidy, amnesty on defaults and sops for farm goods sector,” an official aware of the development told BusinessLine.

The Prime Minister’s Office has asked all Ministries and Departments to suggest measures to support their respective sectors in the current economic downturn.

“The exporters’ package being put together by the Commerce Ministry will be examined by the Finance Ministry and the PMO before it is approved. As the government’s resources are constrained because of a dip in tax collections, all expenditure is being strictly monitored and approved at the highest level,” the official said.

Exports witnessed a sharp dip of 34.57 per cent to $21.41 billion in March as orders started declining due to the global pandemic. The overall goods exports declined 4.78 per cent to $314 billion in 2019-20.

In April-May, exporters fear the situation is likely to further deteriorate following the nation-wide lockdown and a large-scale cancellation of global orders.

“Exporters from diverse sectors, be it textiles, garments, handicrafts, leather or engineering items, have been seeking relief, such as higher sops and easier credit, to help them survive the crisis,” the official added.

To continue MEIS

While the Commerce Ministry has said that the popular Merchandise Export Incentive Scheme (MEIS) will continue at least till December and may get extended beyond, the exporters’ package could include higher incentive rates under the scheme.

The government has a plan for phasing out the MEIS scheme as it is not compliant with WTO norms but it is holding on to it temporarily during the on-going crisis and a proposal to increase the incentive rates is being seriously looked at, the official said.

Apart from examining the need to extend the interest subsidy scheme for exporters, called the ‘interest equalisation’ scheme, beyond March 31 and enhancing the rates, the Commerce Ministry is also considering an amnesty scheme for non-fulfilment of export obligation.

Amnesty scheme

“There is a big demand from exporters for an amnesty scheme as many beneficiaries of certain export promotion schemes have not been able to fulfil their export obligations due to fall in global demand,” the official said.

Agriculture exports, which have witnessed a surge in demand during the pandemic, may also attract some incentives, he added.

Published on May 08, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.