In a bid to boost exports of readymade garments and made ups and employment generation in these labour-intensive sectors, the government has enhanced the incentive rates for them.
According to an official statement, the Directorate General of Foreign Trade (DGFT) issued a public notice on Friday by which rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two sub-sectors of textiles industry — readymade garments and made ups — have been enhanced from 2% to 4% of value of exports with effect from November 1, 2017 till June 30, 2018. “The estimated annual incentives will be Rs 1,143.15 crore for 2017-18 and ?685.89 crore for 2018-19,” it added.
Earlier, Union Commerce & Industry Minister Suresh Prabhu had said that “some action is expected soon” and the NITI Aayog is working on a package for exporters.
The garments sector, which suffered a 39 per cent slump in exports in October to total US$ 829.4 million this year, is one of the worse hit after GST was implemented.
MEIS happens to be the most popular incentive for exporters, under which identified sectors are given duty exemption scrips that are fixed at a certain percentage of the total value of their exports. The scrips can be used to pay duties on inputs including customs duties.
India’s exports, which had begun looking up in the last few months of the fiscal after over two years of lacklustre performance, witnessed a decline of 1.12 per cent in October to US$ 23.09 billion, mostly due to problems related to the GST roll-out.