The government also announced that a fully electronic refund scheme on input tax for exporters would be in place by end of September.
The government on September 14 announced a new scheme - Remission of Duties or Taxes on Export Product (RoDTEP) - that will replace the existing Merchandise Exports from India Scheme (MEIS) in order to boost exports.
"The MEIS scheme will continue till December 31. Textile and other sectors that currently enjoy incentives up to 2 percent over MEIS will transit to RoDTEP from Jan 1, 2020," finance minister Nirmala Sitharaman said.
The revenue foregone for RoDTEP has been projected to be up to Rs 50,000 crore, the minister said.
MEIS was one of the two schemes introduced in Foreign Trade Policy of India 2015-20, as a part of Exports from India Scheme.
The other scheme is SEIS, Service Exports from India Scheme. The government brought MEIS, replacing five other similar incentive schemes present in the earlier Foreign Trade Policy 2009-14.
Data released by the commerce ministry showed India’s merchandise exports declined 6.05 percent in August while merchandise imports dropped 13.45 percent leading to the narrowing of trade deficit to $13.45 billion during the same month.
The government also announced that a fully electronic refund scheme on input tax for exporters would be in place by the end of September.
"This is expected to monitor and speed up input tax credit refunds for exporters," the minister said.
The government also announced that the scope of Export Credit Insurance Scheme (ECIS) will be expanded by the Export Credit Guarantee Corporation. This is expected to offer higher insurance cover to banks lending working capital for exports.
"Premium incidence for MSMEs will be moderated suitably. It is expected that the initiative will cost about Rs 1,700 crore per annum. This will enable reduction of overall cost of export credit including interest rates, especially to MSMEs," the minister said.
Interest rates for export credit to be below 8 percent for rupee credit and below 4 percent for foreign exchange credit, economic affairs secretary Atanu Chakrabarty said.
The government also said that the Revised Priority Sector Lending (PSL) norms have been examined and guidelines for the same are being studied by the Reserve Bank of India (RBI).
"This will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit under priority sector," Sitharaman said.
The government also announced the setting up of a Free Trade Agreement (FTA) Utilisation Mission which would be headed by senior officials from the commerce ministry.
"The Mission will work with export houses to utilise concessional tariffs in each FTAs. It will also work to enhance awareness of preferential duty benefits among MSMEs," the minister said.
An online original managment system for exporters would be set up to enable them to obtain certificates of origin and would be launched in the next few weeks.
"There will be time-bound adoption by industry of all necessary mandatory technical standards. Effective enforcement will elevate quality and performance, enhance competitiveness and address issue of sub-standard imports," Sitharaman said.To boost exports, India will also hold annual mega shopping festivals like Dubai Shopping Festival. It also aims to enable handicrafts industry to effectively harness e-commerce for exports.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .