EPCES welcomes Government decision regarding partial resolution of long pending MEIS issue

Bhuvnesh Seth, Vice Chairman, Export Promotion Council for EOUs and SEZs (EPCES) today welcomed Government decision regarding partial resolution of long pending   issue of incentives under the MEIS (Merchandise Exports from India Scheme) issue as far as exports for the duration from 1.9.2020 to 31.12.2020 are concerned. EPCES is also happy to note that concerns of MSMEs have been taken into account in the sense that 98% of exporters will be unaffected by this decision of capping of incentives. EPCES would like to place its appreciation on record for the efforts of Commerce and Finance Ministries in this regard.

However, Seth stated that EPCES would like to bring to Government’s attention the following points from the exporters point of view :

1. The present decision is with immediate effect. This sudden change in trade policies needs to be avoided at all costs as it brings uncertainties in the decision making and pricing policies of exporters. Any incentive basically makes our exports competitive and is taken into account while quoting our export prices in the highly competitive export market. These sudden changes in the policies, especially reducing the incentives, make exporters suffer financial losses as the international importers do not change their prices upwards. In view of this, we would urge the Government if this decision is applicable wef say 1.10.2020. Ideally when FTP has been extended till 31.3.2021, all changes in policies should be with effect from 1.4.2021.
2. There has been a cap of Rs 5000 cr for this period. This would create an uncertainty as that means that scheme can be withdrawn even earlier than 31.12.2020. EPCES would suggest that this uncertainty may be removed and scheme in whatever form should be available till a particular date.
3.  In these difficult times, suddenly changes in the incentive structure would hurt big exporters also, their recovery and job creation. Government may like to review this announcement of sudden change in policy for capping at present.
4. We would also urge the Government to resolve the issue of MEIS for the exports made with effect from 1.4.2020 to 31.8.2020. The present notification is silent on this aspect. This has also created uncertainty for the exporters.
5. Further, EPCES is happy that the committee for fixation of refund rates under RoDTEP has been set up. But, till the rates are decided, there is uncertainty in the minds of exporters as to how to price their product which will go into the international markets from 1.1.2021 onwards. In view of this, EPCES urges the Government to extend the validity of the latest notification from 31.12.2020 to 31.3.2021. This will create stability in incentive policies.
6. Incentives under the SEIS (Service Exports from India Scheme) for the exports made during 2019-20 and this financial year are still unresolved. EPCES urges the Government to resolve this issue at the earliest.
7. EPCES requests the Government to ensure a long term stable EXIM trade policy environment so that manufacturers, exporters and importers can take their business decisions from a longer term perspective.
8. EPCES also urges Government to take industry and exporters also in confidence while formulating changes in the EXIM policies so that Government can take into account their concern and fine-tune policies within the broad contours fixed by the Government and within the fiscal constraints facing the Government.