A World Without Incentives
Nearly a year after the World Trade Organization (WTO) formally said that it breached core tenets of global trade, the Merchandise Exports from India Scheme (MEIS), the government’s key export incentive scheme, is finally being shut down. A government directive this week said that the scheme would be wound up by 31st December 2020 as it had failed to deliver on its promise of boosting exports, while liability under it had risen to “an unsustainable level”.
The withdrawal of the MEIS, while long expected, is going to jar the Indian export ecosystem that is already reeling from the impact of the COVID-19 pandemic. Particularly hard-hit will be micro, small and medium enterprise (MSME) exporters, who had to come to rely on the MEIS as a way of solving their working capital issues. MSME Minister Nitin Gadkari said this week that MSMEs contributed 48% of the country’s exports, and 30% of the GDP. Given their sizable contribution to the country’s economy, MSMEs must receive more support from the government to upgrade their capabilities and become competitive, even as they prepare for a world without the incentives of the MEIS.
Exports incentive scheme MEIS inefficient, failed to deliver, to be wound up by year end
The Merchandise Export from India Scheme (MEIS), a key incentive scheme for exports, will be wound up by 31st December, 2020 as the government has found it to have failed to deliver and not yield the desired result of boosting exports which have hovered around $300 billion in the last five years despite its liberal application across sectors. Government sources said the liability under MEIS ballooned from Rs. 20,000 crore to about Rs. 45,000 crore in FY20 “reaching an unsustainable level”.
GST fraud | Nearly 1,500 ‘risky exporters’ to face FinMin's wrath over fake IGST refund claims
The Finance Ministry will reportedly take stern action against exporters who claimed refunds under the integrated goods and services tax (IGST) and then absconded. It has also sought to allay genuine exporters that they will face no hindrance. As many as 1,474 such exporters, termed ‘risky exporters’, claimed IGST refunds worth Rs. 2,020 crore, but were untraceable at the addresses mentioned in their applications, sources told the Hindu BusinessLine.
48 pc of exports related to MSME sector, says Gadkari
Union Minister Nitin Gadkari on 27th July said about 48% of the country’s export was related to the MSME sector. Gadkari, who is Minister of Road Transport & Highways, and Micro, Small & Medium Enterprises, said MSMEs contribute 30% to the country’s GDP growth. “Forty-eight percent of our export is related to MSMEs and uptil now we have created 11 crore jobs,” Gadkari said addressing a webinar on Atma Nirbhar Bharat and MSMEs via video conferencing.
DGFT lays out procedure for exports of surgical masks, medical goggles, diagnostic kits
Online applications filed by exporters only from 5th to 8th August will be considered for getting license or permission by the Directorate General of Foreign Trade (DGFT) for shipments of 2- and 3-ply surgical masks, medical goggles and diagnostic kits, according to trade notices of the DGFT. This is part of the procedure laid out by the Directorate for exporters to file applications to seek licence for shipments of these goods.
Iran-India Preferential Trade Agreement: Tehran Keen To Have Russia, China & India On Its Side
Ahead of the proposed India-Iran bilateral Preferential Trade Agreement (PTA) meeting this week, the Iranian foreign ministry spokesperson has clarified about their “balanced foreign policy” and that it is not favoring Beijing at the cost of Delhi. “Iran has a longstanding policy of maintaining balanced, friendly relations w/ all Eurasian & E/S Asian powers. Our potential long term cooperation agreements w/ China & Russia, & our continued joint work w/ India in Chabahar prove this. We are determined to uphold this policy,” he said in a tweet.
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