MEIS (Merchandise Exports from India Scheme) was a flagship export promotion scheme launched under India’s Foreign Trade Policy (FTP) 2015–20. Its objective was to boost the export of specified goods by providing incentives in the form of duty credit scrips, calculated as a percentage of the FOB (Free on Board) value of eligible exports. These scrips could be used to pay customs duties and other taxes or transferred to others. MEIS covered a wide range of products and destination countries, encouraging product and market diversification. However, due to WTO compliance issues, MEIS was phased out and replaced by the RoDTEP Scheme in January 2021.
Features of MEIS Schemes:
-
Objective to Boost Export Competitiveness
The MEIS Scheme was introduced with the core objective of enhancing the competitiveness of Indian exports by compensating for infrastructural inefficiencies and other export-related costs. These could include high logistics expenses, export duties faced in target markets, and inadequate trade facilitation infrastructure. By offering financial rewards in the form of duty credit scrips, the government aimed to make Indian products more attractive in global markets. This incentive-driven structure enabled exporters to price their goods competitively, thus encouraging higher foreign exchange earnings and increasing India’s share in global merchandise trade.
-
Incentives through Duty Credit Scrips
Under MEIS, exporters were rewarded with duty credit scrips valued at 2% to 5% of the FOB (Free on Board) value of their exports. These scrips could be used to pay basic customs duty, excise duty, and service tax, or they could be freely transferred or sold in the open market. This made the scheme both beneficial and flexible, especially for smaller exporters who could monetize the scrips instantly. The duty credit helped offset operational and logistical costs, thereby improving profit margins for exporters and encouraging reinvestment into the export business.
-
Broad Product and Market Coverage
MEIS covered a wide range of thousands of product categories, from agricultural produce and textiles to electronics and machinery. Products eligible under MEIS were notified in Appendix 3B of the Foreign Trade Policy, and the coverage was expanded or revised from time to time. Similarly, specific countries were classified into different groups based on their trade importance to India. Export incentives were available only for exports to these notified countries. This encouraged exporters to diversify both products and markets, reducing over-dependence on limited geographies and promoting new trade opportunities in emerging markets.
-
Simple Compliance and Application Process
MEIS was designed to ensure ease of doing business, with a simplified online application process through the DGFT (Directorate General of Foreign Trade) portal. Exporters could file their claims electronically by uploading basic documents such as the shipping bill, e-BRC (Electronic Bank Realization Certificate), and invoice. The DGFT verified the claim and issued the scrip digitally. The automation of procedures and reduction in paperwork made it easier for exporters, especially MSMEs, to access government incentives without facing bureaucratic hurdles. This feature helped streamline export promotion mechanisms and reduce delays in reward distribution.
-
Applicability Across Exporters and Sectors
The MEIS scheme was open to all categories of exporters, including merchant exporters, manufacturer exporters, and service providers involved in physical exports. There were no restrictions on the scale of business, turnover, or export volume. This inclusive design encouraged participation from MSMEs and new exporters, who often struggle to access formal incentives. Additionally, there was no mandatory export performance threshold, making it especially accessible. The scheme also applied across sectors, covering both traditional industries (like handlooms and handicrafts) and modern sectors (like electronics), thereby promoting balanced export growth across India’s diverse economy.
-
Phasing Out and Transition to RoDTEP
Despite its success, MEIS was eventually phased out in January 2021 due to objections from the World Trade Organization (WTO), which classified the scheme as a prohibited subsidy that distorted global trade. In response, the Indian government replaced MEIS with the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme, which complies with WTO norms. RoDTEP aims to refund embedded taxes and levies that were previously non-recoverable, offering a more sustainable and compliant incentive structure. The smooth transition from MEIS to RoDTEP reflects India’s commitment to global trade regulations and reform while still supporting its exporters.
Duty drawbacks
Duty Drawback is a government incentive provided to exporters for reimbursing duties and taxes paid on imported inputs used in the manufacture of exported goods. It ensures that exported products are not burdened with domestic taxes, thus enhancing their competitiveness in international markets. In India, duty drawback is governed under Sections 74 and 75 of the Customs Act, 1962. Under Section 74, exporters can claim up to 98% refund of customs duty on goods re-exported without use. Under Section 75, exporters get a refund of duties on inputs or raw materials used in production. Drawbacks are provided as All Industry Rate (AIR) or Brand Rate, depending on the nature of export. It promotes exports and improves cash flow.
Functions of Duty drawbacks
-
Reimbursement of Customs and Excise Duties
The primary function of duty drawback is to refund customs, excise, and other duties paid on imported raw materials, inputs, or goods that are later exported. This ensures that export products are free from the burden of domestic taxes, allowing Indian goods to remain competitive in global markets. By reimbursing these costs, the scheme supports exporters in reducing their overall production expenses and improves profit margins without increasing prices for international buyers.
-
Promotion of Export Competitiveness
Duty drawbacks enhance export competitiveness by reducing the cost of production. When taxes and duties on inputs are reimbursed, exporters can offer their goods at more attractive prices globally. This function helps Indian exporters compete with suppliers from other countries that may have tax-free or subsidized production environments. By aligning Indian prices with international standards, the drawback scheme contributes to increased demand for Indian exports, expansion into new markets, and a rise in foreign exchange earnings.
-
Encouragement of Value-Added Manufacturing
Duty drawback incentivizes exporters to import raw materials and inputs, add value through domestic manufacturing, and export finished goods. This process encourages industrial growth, employment generation, and capacity building in sectors like textiles, engineering, electronics, and more. Since drawbacks are available only when exports occur, it motivates producers to focus on value addition, rather than just re-exporting imported goods. This function contributes to India’s larger goals of Make in India and export-led economic development.
Export House Schemes:
Export House Scheme, now known as the Status Holder Scheme, is a recognition program under India’s Foreign Trade Policy that awards export organizations based on their export performance. Exporters who achieve prescribed export thresholds are granted titles like One Star to Five Star Export House, depending on the value of exports in USD. The scheme aims to encourage excellence in exports, promote Indian products globally, and simplify procedures for high-performing exporters. Recognized Export Houses enjoy various benefits such as faster customs clearance, self-certification of documents, exemption from bank guarantees, and priority in incentive processing. This scheme boosts the confidence of exporters and improves India’s image as a reliable global trade partner, especially in competitive international markets.
Functions of Export House Schemes:
-
Recognition of High-Performing Exporters
The Export House Scheme functions to formally recognize exporters who achieve a specified level of foreign exchange earnings. It grants them titles such as One Star to Five Star Export House, based on their past export performance. This recognition builds credibility in international markets, enhances trust with foreign buyers, and allows exporters to differentiate themselves in global trade. The scheme promotes a performance-based reward system, motivating Indian exporters to improve their volumes and quality of exports for sustained competitiveness and higher global visibility.
-
Facilitation of Trade Procedures
A major function of the scheme is to simplify and expedite trade processes for recognized exporters. Status holders enjoy several procedural benefits, such as priority customs clearance, exemption from bank guarantees, and eligibility for self-certification of origin and quality. These privileges reduce administrative bottlenecks, minimize transaction costs, and speed up the movement of goods. By making export compliance more efficient, the scheme enables businesses—especially MSMEs—to scale operations smoothly, respond quickly to foreign demand, and maintain timely delivery schedules in competitive export markets.
-
Strengthening India’s Export Ecosystem
Export House Schemes play a strategic role in strengthening India’s export ecosystem by building a network of experienced and capable exporters. Recognized firms are often involved in government trade delegations, policy consultations, and capacity-building initiatives. Their performance data and feedback also help the government shape more effective trade policies and incentive schemes. Moreover, these status holders can act as mentors or aggregators for smaller exporters, contributing to overall ecosystem development and driving India’s larger goals of sustainable and inclusive export growth.