Export Incentives for Indian Businesses

India has thousands of exporters selling various products and is making its mark in the international market. In the ever-expanding realm of exports, the Indian government actively recognizes the significance of supporting and empowering these exporters. Therefore, it offers various export incentives that benefit their businesses. Through these incentives, India embraces the global trade stage with confidence and vigour. So let’s learn more about what are these export incentives.

What are export incentives, and how do they help?

The government gives export incentives to exporters to encourage and support India’s exports in international trade. Through export incentives, the government provides subsidies, tax breaks, and financial support to exporters. These incentives lower the costs of exporting goods and services, making them more attractive to buyers from other countries. By reducing taxes and offering financial help, the government helps promote India’s exports and strengthens its position in the global trade arena.

Top Export incentives for exporters:

1. RoDTEP (Rebate of Duties & Taxes on Exported Products scheme): The government introduced the RoDTEP scheme in December 2020 to help India’s exports in international trade. It replaced the old MEIS scheme(Merchandise Exports from India Scheme) and provides refunds on different hidden taxes. These taxes, such as transportation fuel taxes and electricity duties for making goods, can now be refunded under the RoDTEP scheme. The RoDTEP scheme is a big step towards supporting India’s exports and creating a thriving global trade environment.

2. SEIS (Service Exports from India Scheme): SEIS aims to motivate vendors who trade in notified services outside the country. Participating service exporters receive a 3-7% reward on their net foreign exchange revenue to enjoy this export initiative. To qualify for the program, an exporter must have an active IEC and have earned at least US$15,000 (approximately INR 11 L) in net foreign exchange revenue.

3. RoSCTL (Rebate on State & Central Taxes and Levies scheme): The RoSCTL scheme actively supports India’s exports in international trade, specifically in the realm of readymade apparel and textiles like clothing, bedsheets, carpets, and rugs. It provides export incentives by refunding various taxes, including VAT on transportation fuel, captive power, ‘mandi’ tax, and electricity duty. If you’re involved in the export of clothing and textiles, the RoSCTL scheme can be a valuable opportunity for growth.

4. EPCG (Export Promotion Capital Goods Scheme): The EPCG scheme actively supports India’s exports in international trade by allowing the import of capital goods at 0% customs duty. It helps them in various stages of production of the final export products. The EPCG scheme is a valuable opportunity for goods exporters in India to excel in global trade.

5. GST refund for exporters:

In the world of international trade, exporters can take advantage of the GST refund scheme:

• Merchant exporters (exporting goods after purchasing them from manufacturers) enjoy the advantage of a 1% GST rate when procuring export goods from local suppliers. This concessional GST rate of 0.1% helps merchant exporters acquire goods at a lower tax rate.
• The LUT Bond Scheme enables exporters to obtain a bond that allows them to export goods without paying GST (Goods and Services Tax).
• With the IGST Refund scheme, exporters can pay the Integrated GST on their exports and subsequently claim a refund from the customs department for that amount.

Conclusion

India’s export industry thrives with the support of government-provided export incentives. These incentives are vital in encouraging exporters to contribute to the country’s export growth and competitiveness in the global market. By leveraging these incentives, exporters can use various schemes to reduce costs, obtain tax refunds, and enhance their overall export performance.

By availing of these schemes, Indian exporters have the opportunity to save money, which they can then invest back into their business. This additional capital can significantly boost them, enabling them to enhance their competitiveness, increase production capacity, improve quality, or even explore innovative marketing strategies.

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