Export Incentives Provided by Indian Government
India is a fast-growing hub for global trade, and to strengthen its position on the world map, the Indian government offers several benefits to support exporters. These export incentives provided by the Indian Government help businesses compete globally by reducing costs, increasing profitability, and encouraging more participation in international markets. Whether you’re an established exporter or just starting out, understanding the various export incentives provided by the Indian Government can significantly impact your growth strategy.
In this blog, we’ll break down the top schemes, benefits, and eligibility criteria so you can make the most of these opportunities.
Why Export Incentives Matter
Exporting products to international markets involves numerous challenges like currency fluctuations, high logistics costs, compliance regulations, and stiff global competition. This is where government incentives play a vital role. These schemes help reduce the financial burden and promote ease of doing business.
Some of the most common goals behind export incentives include:
- Improving India’s trade balance
- Promoting Indian-made goods
- Supporting small and medium enterprises (SMEs)
- Enhancing global competitiveness
Major Export Incentive Schemes in India
Let’s look at the most prominent schemes under which exporters in India can benefit:
1. Remission of Duties and Taxes on Exported Products (RoDTEP)
Introduced to replace MEIS, this scheme refunds embedded taxes and duties that were not previously reimbursed. RoDTEP covers all sectors and aims to create a level playing field for Indian exporters globally.
Key Features:
- Fully automated and digital refund process
- Available to all goods exporters (subject to compliance)
- Refunds are issued as transferable duty credit scripts
2. Export Promotion Capital Goods (EPCG) Scheme
This scheme allows import of capital goods at zero customs duty for pre-production, production, and post-production purposes.
Benefits:
- Zero import duty on machinery
- Encourages technological upgradation
- Valid for 6 years with export obligation
3. Advance Authorization Scheme
This allows duty-free import of inputs used in the manufacture of export products. It’s useful for industries with high raw material requirements.
Benefits:
- Reduced input costs
- Increased profitability
- Time-bound export obligations
4. Duty Drawback Scheme
The government refunds customs and central excise duties paid on inputs used in manufacturing exported products.
Highlights:
- Automatic refund based on shipping bill
- Simplifies post-export claims
- Available to manufacturers and merchant exporters
5. Interest Equalization Scheme (IES)
To make Indian exports more competitive, this scheme provides interest subsidies on pre-shipment and post-shipment rupee export credit.
Who Benefits:
- MSME exporters get a 3% subsidy
- Eligible manufacturers from select sectors
Sector-Specific Incentives
Some industries get additional support from the government. Here are a few:
- Textile Industry: Under the Rebate of State and Central Taxes and Levies (RoSCTL)
- Gems and Jewellery: Permitted duty-free import of gold for export
- Pharmaceuticals: Priority in export clearance and reduced compliance burden
These incentives make targeted sectors more globally competitive.
Compliance and Documentation
To avail these benefits, exporters must:
- Register with the Directorate General of Foreign Trade (DGFT)
- Apply through the ICEGATE portal
- Maintain digital and physical documentation
- Fulfill minimum export obligations (if applicable)
Challenges Exporters Face
While the export incentives provided by Indian Government are helpful, exporters may face hurdles such as:
- Delays in incentive disbursement
- Frequent changes in policy
- Complex documentation
Despite these challenges, timely updates and automation are making the process smoother.
Tips to Maximize Export Incentives
- Stay updated with DGFT notifications
- Hire a consultant for scheme selection
- Use digital tools to track applications
- Regularly audit your documentation
Conclusion
The export incentives provided by the Indian Government are designed to empower businesses to expand globally while maintaining competitiveness. From refunds and duty exemptions to financial subsidies and sector-specific schemes, these initiatives are powerful tools for growth. By understanding and strategically applying for these export incentives provided by the Indian Government, businesses can reduce costs, increase margins, and scale effectively in global markets.
Take the time to assess which schemes apply to your business model and begin leveraging these benefits to accelerate your export success.