Policy

With garment exports in tatters, govt steps in with higher incentives

Amiti Sen Richa Mishra New Delhi | Updated on January 09, 2018

Commerce Minister Suresh Prabhu told BusinessLine that he had asked the NITI Aayog to come up with a package for exporters

Niti Aayog roped in to work on package for exporters: Prabhu

India’s apparel sector, which has witnessed a sharp fall in exports in the ongoing fiscal, is in for some immediate relief. The government will soon double the incentive for garment exporters under the Merchandise Export from India Scheme (MEIS).

A announcement raising incentives under MEIS from the current 2 per cent to 4 per cent is expected soon, sources said. In fact, Commerce & Industry Minister Suresh Prabhu also told BusinessLine that “some action is expected soon”.

The garments sector, which suffered a 39 per cent slump in exports in October to total $829.4 million this year, is one of the worse hit because of the GST’s implementation.

The MEIS is the most popular incentive for exporters, under which identified sectors are given duty exemption scrips that are fixed at a certain percentage of the total value of their exports. The scrips can be used to pay duties on inputs including customs duties.

India’s exports, which had begun looking up in the last few months of the fiscal after over two years of lacklustre performance, witnessed a decline of 1.12 per cent in October to $23.09 billion, mostly due to problems related to the GST roll-out.

Other export sectors, too, could expect more relief in the coming months as the Commerce Ministry has roped in the NITI Aayog to work on a package for exporters. “The Aayog will come out with an interim suggestion which will be taken into consideration,” Prabhu said.

On the recent decline in exports and the fact that exporters were attributing it to GST-related problems, Prabhu said that last month the government had responded to several procedural and operational problems that exporters were facing. “That will help them in a significant way. The impact of benefit will take some time (difficult to define the timeline),” he said.

Published on November 23, 2017

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor