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Centre hikes incentive rate for handicraft exports under MEIS

Centre hikes incentive rate for handicraft exports under MEIS
Centre hikes incentive rate for handicraft exports under MEIS

Spelling relief for handicraft exporters struggling to cope with competition in the global market, the government has enhanced support to the sector under the popular merchandise export from India scheme (MEIS).

The office of the Directorate General of Foreign Trade (DGFT) has increased the rate of incentive under MEIS to 7 per cent from 5 per cent for a number of handicraft items, according to an official release.

“The items include attars, candles, jewellery boxes, wooden frames, statues, handmade paper, handmade lace, shawls, scarves, Kohlapuri chappals, bangles, glass artware and articles of brass and aluminium,” the release said.

Under the MEIS scheme, exporters are given duty- free scrips equivalent to a given percentage of the value of their exports which can be used to import inputs duty-free and are also freely transferable in the market.

While the MEIS rates for a number of handicraft items was increased by 2 per cent in the mid-term review of the Foreign Trade Policy 2015-20 in December 2017, there were a number of items that were left out.

The latest enhancement in rates seeks to cover the items that were left out when the rates were enhanced in December 2017.

Exports of handicrafts declined 9 per cent in 2017-18 to $11.75 billion compared to $12.91 billion in 2016-17, according to data from the Commerce and Industry Ministry.

The move will also help in baling out exporters suffering from a cash crunch due to stuck refunds of the Goods and Services Tax (GST).

The Export Promotion Council for Handicrafts (EPCH) Chairman OP Prahladka said the enhancement in MEIS rates will help handicraft exporters to recover some of the input costs involved in production of handicrafts and would also encourage them to have competitive pricing, which could boost exports.

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