Dr. A. Sakthivel, President, FIEO, applauds the government’s decision to budget an amount of 56,027 crore to disburse all pending incentives due to exporters for exports made in the fourth quarter of FY20-21, stating that this move will assist the sector in meeting liquidity concerns and maintaining cash flow, thereby further facilitating in meeting export demand.
India’s economy has been recovering steadily after the deadly second wave of COVID-19. One of the factors that played a key role in the recovery is the improvement in merchandise exports. Merchandise exports from India hit a record high of US$ 35.2 billion in July 2021, the highest-ever monthly figure ever in the country’s history. It is an increase of 47.91 per cent over the US$ 23.78 billion in July 2020 and an increase of over 34 per cent over the US$ 26.23 billion in 2019.
Data released by the Ministry of Commerce indicates that Indian exports have gradually grown after the first wave of the COVID-19 disrupted world trade. In 2021, Indian exports seem to be rising faster than ever. “For merchandise exports, all sectors covered under the Merchandise Exports from India Scheme (MEIS), such as pharmaceuticals, iron and steel, engineering, chemicals, fisheries, agriculture and allied sectors, auto and auto components, would be able to claim benefits for exports made in earlier years. Benefits would help such sectors to maintain cash flows and meet export demand in international market, which is recovering fast this financial year,” said the commerce ministry.
Service sector exporters, including those in the travel, tourism and hospitality segments will be able to claim Service Exports from India Scheme (SEIS) benefits for the last year of the scheme – FY20 – for which ₹2,061 crore has been provisioned. “The SEIS for FY20 with certain revisions in service categories and rates is being notified,” the statement said.
Welcoming the government’s decision of budgeting an amount of 56,027 crore to disburse all pending export incentives due to exporters as claims related to different export promotion and remission schemes, including MEIS, SEIS, RoSL, RoSCTL, other scrip-based schemes relating to earlier policies and the remission support for RoDTEP and RoSCTL for exports made in the fourth quarter of FY20-21, Dr. A. Sakthivel, President, FIEO, said, “Such a move will help the sector in meeting the liquidity concerns and maintaining cash flow of the exports sector, thereby, further facilitating in addressing the export demand in the international market. Over 45,000 exporters will benefit from this, especially those in the MSME sector, for whom it will serve as a boost in their ability to complete their booked orders more efficiently.” The decision will lead to an even more rapid growth in exports in coming months.
The support to service sector exporters, including those in the travel, tourism and hospitality segments, with certain revisions in service categories and rates being notified will not only have a multiplier effect, but will also help in employment generation. Incentivising major labour-intensive sectors and all the stakeholders, including those from the supply chain, will help in strengthening their endeavours to meet the festive season demand in the international market.
Such support and handholding to the sector during these challenging times, when the whole exporting community is showing their commitment and resilience to perform impressively has definitely given a boost to the government vision of achieving US$ 400 billion exports for the fiscal. “These announcements have further infused confidence in exporters that the government is working hand in hand with exporters as promised,” continues Sakthivel.