Learn About Export Promotion Schemes and Agencies in India

Exports are essential for an economy's healthy growth. However, exports also carry a particular element of risk as they are subject to the laws of different countries, natural calamities, economic and political disturbances, currency fluctuations, and more. History has also shown that a country has to have diversity in what it exports instead of depending on one or two items.

This, in turn, means that there needs to be diversity in the type of businesses involved in export. In a country like India, several sectors, such as small and medium-sized enterprises, can add a lot of value but lack resources. The Indian government has worked to mitigate these issues with several export promotion schemes and agencies to encourage exports.

What are the various schemes Indian exporters have access to?

RoDTEP

The RoDTEP (Remission of Duties and Taxes on Exported Products) is a recent export promotion scheme launched in January 2021. Its aim is to help Indian exporters become more competitive in the international market. To this end, it refunds taxes and levies on exports, which are not part of other schemes. Unlike the earlier scheme MEIS, the RoDTEP Scheme complies with the rules of the World Trade Organization.

RoSCTL

The RoSCTL Scheme (Rebate of State and Central Taxes) encourages exporters in the apparel and made-up textile sectors. It was launched in March 2019 to make Indian textile products competitive globally by refunding levies and taxes not covered by GST. The taxes and duties covered under this scheme could include state taxes like fuel used for transportation, stamp duties, VAT (value-added tax) on electricity duties, and mandi tax.

EPCG

The Export Promotion Capital Goods (EPCG) scheme was started by the Indian government so that exporters could import capital equipment to manufacture goods they plan to export at lower or no customs duties. The concept behind this export promotion scheme is that Indian exporters can offer quality goods at reasonable prices to remain competitive in the global market. This scheme applies to all export-related businesses, even if you are an exporter’s vendor or supplier.

ECGC

This agency or government body has a vital role in the export business. The ECGC (Export Credit Guarantee Corporation of India) scheme provides credit risk insurance to exporters to protect them against potential non-payment or losses. It helps banks and financial institutions that support exporters have credit insurance coverage. You can also avail of overseas investment insurance for exporters who want to invest abroad.

GST concessions

The Indian government provides rebates on Goods and Services Tax (GST) to lessen the burden of GST. To this end, exporters can file a Letter of Undertaking (LUT) with GST authorities to export without paying GST during the export process.

IGST refund

When exporters pay integrated goods and service tax on exports, they can claim a GST refund when they file their returns. This allows exporters to get a refund for the IGST and lower related costs. This, in turn, means some relief for exporters regarding taxation.

SEPC

The State Export Promotion Committee has been established in 36 states and union territories across India. This government body assists exporters in resolving any export-related issues. Some related schemes, apart from RoDTEP and RoSCTL, mentioned above, are given below:

• Towns of Export Excellence (TEE): Under this scheme, towns that produce goods for exports worth INR 750 crores or above will get financial assistance to encourage exports
• Service Exports from India Scheme (SEIS): This scheme relates to the export of services and is provided to exporters who export eligible services, have an active Import-Export Code (IEC), and minimum revenue
• Gold Card Scheme: As per this scheme, the exporter gets a three-year credit limit with automatic renewal of the credit limit and other benefits
• Market Access Initiative (MAI) scheme: Exporters can leverage this scheme to conduct market research for newer markets, develop products, register product patents, etc.

Apart from being aware of the schemes and agencies, exporters must also streamline internal operations. These could include invoicing, maintaining export-related documents, setting up an inward remittance mechanism, and assessing trade finance solutions to ensure consistent growth.

At LeRemitt, we recognize that exporters need effective and technologically advanced solutions to cope with all these aspects. To that end, we offer exporters solutions for various elements. To learn more, click here.