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Export Incentives in India: Everything You Need To Know

India is home to hundreds of companies that export goods and services to other countries through a variety of channels, including the increasingly common e-commerce exports. The Government of India offers export incentives to exporters in order to encourage an increasing number of sellers to export from India and benefit them in their enterprises. If you are interested to know more about knowing how to make your business a flagship product, you can take up the import export course in Ahmedabad. Although the pandemic had an impact on the nation’s trade, September 2020 saw an increase in exports. Exports fell 19.05 percent to US$ 150.07 billion from April to October 2020. After a startling six consecutive months, India’s exports increased by 5.99 percent to US$ 27.58 billion in September 2020, but they decreased by 5.4 percent to US$ 24.82 billion in October 2020 as a result of a drop in shipments of engineering items, gems & jewellery, leather, and petroleum products.

What are Export Incentives?

Export incentives are given to exporters as a thank you for earning foreign cash as well as to cover the costs and infrastructure challenges they encounter. The numerous export incentives provided by the government through the Directorate General of Foreign Trade (DGFT), as amended and extended till September 2021, are highlighted in India’s Foreign Trade Policy (FTP) 2015–20.

How do Export Incentives work in India?

To make exports more competitive on the world market, the government collects less tax from them. The incentives offered guarantee greater exposure for local goods and the expansion of Indian export businesses. However, the incentives are given while taking the specific product/availability material’s into consideration. Depending on how scarce or plentiful a product is, these incentives are altered and updated.

Top export incentives for exporters

SEIS (Service Exports from India Scheme) – An incentive of 3–7 percent of the net foreign exchange earnings is given to service exporters under this export incentive programme. To be eligible for a claim under the system, an exporter must have an active IEC with minimum net foreign exchange revenues of US$ 15,000 (about INR 11L). EPCG (Export Promotion Capital Goods Scheme) – It is for capital goods used in all the phases of production which can be imported at 0% customs duty, and is referred to as Zero duty EPCG RoDTEP (Rebate of Duties & Taxes on Exported Products scheme) – The RoDTEP programme offers refunds on all additional taxes, including those that were not covered by other export incentive programmes. AAS (Advance Authorization Scheme) – AAS permits the import of raw materials, which are necessary for the production and manufacturing of final export products, at duty-free price. NIRVIK Scheme – The ECGC developed the NIRVIK scheme, which offers high insurance coverage, reduced premiums for small exporters, and a streamlined method for resolving claims (Export Credit Guarantee Corporation of India). It serves as a primary insurance cover guarantee programme, covering up to 90% of the principal and interest. EOU Scheme (Export Oriented Units) – It was implemented with the intention of promoting exports by offering a few exemptions from compliance requirements and tax discounts. GST refund for exporters – There are a number of sub-sections under this scheme such as – LUT Bond Scheme- Exporters that secure a “Letter of Undertaking” (LUT) bond are able to export goods free of GST. Refund for IGST – Exporters may pay Integrated GST on exports and then request a refund from the customs office. A 1% GST benefit is available to merchant exporters, who can purchase export items from local vendors for a reduced GST rate of 0.1%.

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