The Merchandise Exports from India Scheme (MEIS) was introduced by the Government of India to promote exports of goods by providing financial incentives to exporters. It aimed to enhance India’s global competitiveness by offsetting infrastructural inefficiencies and associated costs. Although the scheme has now been phased out, it played a significant role in boosting export-driven businesses, especially MSMEs.
What is MEIS (Merchandise Exports from India Scheme)?
MEIS was part of the Foreign Trade Policy (FTP) and provided rewards to exporters of notified goods to specific markets.
Key points:
- Incentivised export of goods manufactured in India
- Provided duty credit scrips as rewards
- Encouraged diversification of export markets
- Supported MSMEs and small exporters
Current status of MEIS (discontinued and transition to RoDTEP)
MEIS has been discontinued and replaced by a new scheme.
- MEIS was phased out from 1 January 2021
- Replaced by the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme
- Transition due to compliance with WTO rules
- RoDTEP focuses on refunding embedded taxes and duties
- Exporters must now apply under the new scheme
Key benefits of the MEIS scheme
MEIS offered several advantages to exporters:
- Financial incentives through duty credit scrips
- Reduction in overall export costs
- Encouragement for new exporters
- Expansion into new international markets
- Improved global competitiveness
MEIS incentive rates and calculation method
The incentive was calculated based on export value.
- Incentive rates ranged from 2% to 5% of FOB (Free on Board) value
- Rates varied depending on product and destination country
- Rewards were issued as duty credit scrips
- Exporters could use scrips to pay customs duties
- Calculation based on notified tariff lines
Eligibility criteria for MEIS
To qualify under MEIS:
- Exporter must be based in India
- Goods must be manufactured in India
- Products must be listed under notified categories
- Exports must be made to eligible countries
- Valid Import Export Code (IEC) required
Products and sectors covered under MEIS
MEIS covered a wide range of sectors:
- Agriculture and food products
- Textiles and garments
- Leather goods
- Engineering products
- Chemicals and pharmaceuticals
Ineligible export categories under MEIS
Certain exports were not eligible:
- Re-exported goods
- Export of imported goods without value addition
- Goods exported through trans-shipment
- Deemed exports
- Supplies to SEZ units under certain conditions
How to apply for MEIS scheme
The application process included:
- Register on the DGFT (Directorate General of Foreign Trade) portal
- File shipping bill with MEIS declaration
- Submit online application for reward
- Upload required documents
- Track application status
Documents required for MEIS application
Applicants needed to submit:
- Import Export Code (IEC)
- Shipping bills
- Bank realisation certificates (BRC)
- Export invoices
- Digital signature certificate
- Any additional documents required by DGFT
How to use MEIS duty credit scrips
Duty credit scrips provided flexibility to exporters:
- Used to pay customs duties on imports
- Can be transferred or sold to other importers
- Help reduce cost of raw material imports
- Improve cash flow for exporters
MEIS scrip validity, transferability, and splitting rules
- Validity period was typically 24 months
- Freely transferable in the market
- Could be split into smaller amounts for ease of use
- Required proper documentation for transfer
MEIS vs. SEIS vs. RoDTEP
| Basis | MEIS | SEIS | RoDTEP |
|---|---|---|---|
| Full form | Merchandise Exports from India Scheme | Service Exports from India Scheme | Remission of Duties and Taxes on Exported Products |
| Coverage | Goods exports | Service exports | Goods exports |
| Status | Discontinued | Active | Active |
| Benefit type | Duty credit scrips | Duty credit scrips | Refund of taxes and duties |
| WTO compliance | Not compliant | Partially compliant | Fully compliant |
Conclusion
The MEIS scheme played a crucial role in supporting India’s export sector by offering financial incentives and improving global competitiveness. Although it has now been replaced by RoDTEP, understanding MEIS remains important for exporters to grasp the evolution of export policies in India.
Export-oriented businesses often require additional working capital to scale operations and meet international demand. In such cases, options like business loans can be useful. It is advisable to review the business loan interest rate to plan costs effectively. Additionally, using a business loan EMI calculator can help manage repayments and maintain financial stability.
