Auto, drug firms corner export incentives1 min read . Updated: 03 Sep 2018, 01:28 PM IST
In 2017-18, the ministry disbursed about ₹31,000 crore to exporters under the export incentive scheme MEIS, while it was over ₹23,000 crore in the previous fiscal year
New Delhi: Automobile and pharmaceutical companies have emerged as big beneficiaries of the commerce ministry’s export incentive scheme MEIS, having received the major portion of the disbursals.
Under the Merchandise Exports from India Scheme (MEIS), the government provides duty benefits at different rates depending on product and country. Rewards are payable as percentage of realised free-on-board value and the MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty.
The top 10 companies that have obtained maximum disbursals during 2017-18 under the scheme include JSW Steel (Rs 301.5 crore), Ford India (Rs 272.8 crore), Bajaj Auto (Rs 246.5 crore), Dr Reddys Lab (Rs 240.6 crore), Aurobindo Pharma (Rs 211.3 crore), Mylan lab (Rs 192.9 crore), Hyundai Motor India (Rs 189.3 crore), Vedanta (Rs 180 crore), Lupin (Rs 155 crore), and Nissan Motor India (Rs 150 crore).
The other firms which have gained from the scheme include Tata Motors, Hindalco Industries, Hetero Labs, Maruti Suzuki India, Cipla, Reliance Industries, General Motors India and Shahi Exports.
Similarly in 2016-17, companies from the automobile and pharmaceutical sectors topped the charts in MEIS benefits.
In 2017-18, the ministry disbursed about ₹ 31,000 crore to exporters under the scheme, while it was over ₹ 23,000 crore in the previous fiscal year.
The government may have to change the scheme as it has been challenged by the US in the World Trade Organization’s (WTO) dispute settlement mechanism. The US had alleged that such incentive schemes were harming American companies and these were not in compliance with the global trade rules.
Government officials have stated that they may look at reviewing existing export incentive schemes to ensure that they comply with WTO norms. The US has alleged that thousands of Indian companies are receiving benefits totalling over $7 billion annually under various export promotion programmes.