The duty incentives extended after recent amendments in the Merchandise Exports from India Scheme (MEIS) will boost the country's textile and apparel exports, government said today.
"Textile and apparel sector has emerged as one of the major beneficiaries of the latest amendments in MEIS," Textile Ministry said.
The government last week extended duty incentives to a large number of products, including textiles and electronics, to increase competitiveness of Indian exports and boost shipments.
Under MEIS, the Commerce Ministry has extended the duty benefits to 110 new tariff lines or products and increased rates or country coverage or both for existing 2,228 items.
"Indian textile and apparel exporters had been demanding a more comprehensive market coverage to set off the disadvantage that they faced due to factors such as lack of FTAs with EU and USA, and higher interest and power rates than competing countries.
"The recent amendment in MEIS has addressed these concerns of industry, thereby improving industry sentiments," the ministry said in a press release.
In the recent amendment, the country coverage for all eligible textile and apparel categories has been extensively extended. Eligible categories under HS Code Chapters 50 to 63 are now eligible for duty reward of 2 per cent to all countries of Group B, Group C and Group A countries.
"This means that the duty reward is now available to textile exporters in any country globally. For eligible apparel and made-ups categories under HS Code Chapters 61 to 63, the duty reward has been extended to all Group B countries in addition to Group A countries.
Group B comprises of 140 countries covering important emerging apparel and made-up markets like South Africa, Russia, China and Hong Kong, East and West African countries, etc. Incentives in these additional markets would prove extremely beneficial to exporters," the Textile Ministry said.
Under the MEIS scheme, the government provides duty benefits at 2 per cent, 3 per cent and 5 per cent depending upon the product and country.
These duty benefits are part of the allocations increased from Rs 18,000 crore to Rs 21,000 crore for MEIS.
Rewards under MEIS are payable as percentage of realised free-on-board value and the MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty.
The new products which have been added under this scheme include medical instruments, sports goods, value added processed products of natural rubber, chemicals and plastics.
Contracting for the 10th month in a row, India's merchandise exports dipped 24.33 per cent in September to USD 21.84 billion, mainly due to steep fall in shipments of petroleum products, iron ore, and engineering goods amid tepid global demand.
