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The Foreign Trade Policy (FTP) 2015-20 was unveiled by Ms. Nirmala Sitharaman, Minister of State for Commerce & Industry (Independent Charge), Government of India on April 1, 2015. Following are the highlights of the FTP:
FTP 2015-20 provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the ‘Make in India’ programme.
The Policy aims to enable India to respond to the challenges of the external environment, keeping in step with a rapidly evolving international trading architecture and make trade a major contributor to the country’s economic growth and development.
FTP 2015-20 introduces two new schemes, namely ‘Merchandise Exports from India Scheme (MEIS)’ for export of specified goods to specified markets and ‘Services Exports from India Scheme (SEIS)’ for increasing exports of notified services.
Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable.
For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2 per cent to 5 per cent. Under SEIS the selected Services would be rewarded at the rates of 3 per cent and 7 per cent.
Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objective of new FTP is to move towards paperless working in 24x7 environment.
Merchandise Exports from India Scheme (MEIS)
Under the FTP 2015-20, MEIS intends to incentive exports of goods manufactured in India or produced in India. The incentives are for goods widely exported from India, industries producing or manufacturing such goods with a view to making Indian exports competitive. To enhance the export Government of India initiated the MEIS scheme that provided duty credit scrips as export benefits. The export incentive was provided as a fixed percentage of the FOB (free-on-board) value of the notified goods and ranged between 2% / 3% / 5% of the Net FOB Value depending upon 3 categories of the market as provided in Appendix 3B. MEIS scheme is available upto 31st January 2022 after onwards, it would be be replaced with RoDTEP Scheme.
Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme
Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme
As a replacement for the MEIS scheme, RoDTEP Scheme aims to provide export benefits in India by reimbursing the exporters of the duties that are neither credited nor refunded to them. Such duties include:
Excise Duty and VAT on the fuel used for the following purposes:
Self-incurred transportation costs
Operating Machines and plants
Generating electricity via DG sets or power plants
Stamp duty paid on export documents
Electricity Duty paid for the purchase of electricity
Property Tax/ Mandi Tax/ Municipal Tax
GST [Compensation Cess/CGST/SGST/IGST], the credit of which is disallowed on certain items like food, beverages, works contract services, passenger transportation, etc.
Services Exports from India Scheme (SEIS)
Service exporters where they are provided transferable Duty Credit Scrips as export incentives based on a percentage of net Foreign Exchange earned in a financial year on the export of eligible services. These duty credit scrips can then be used for payment of Basic Customs Duty as well as duties listed in para 3.02 of FTP 2015-20.
To become eligible for the SEIS scheme, a service provider being a partnership firm/ LLP/ company shall, in the preceding financial year, have a minimum net free foreign exchange earnings of $15,000. Whereas, in the case of individual service providers or proprietorships, the amount is $10,000.
(Net Foreign Exchange = Gross earnings in foreign exchange – Total remittances, payments, or expenses of foreign exchange)
SEIS scheme is available upto 31st January 2022 after onwards, it might be be lapsed.
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