India is a nation that boasts of having a GDP trillion. The country has been ranked as one of the largest economies in the world as per IMF data and is projected to be one of the fastest-growing economies over the next five years. Providing a conducive environment for promoting exports is necessary to unlock India’s enormous economic potential and create millions of jobs in various sectors, including manufacturing, services, agri-businesses, etc.
To encourage exports from India, several policies have been introduced by the Indian Government in the last few years, which include the Advance Authorisation Scheme for Annual Requirement (AASAR), Duty-Free Import Authorisation (DFIA) Scheme, Export Promotion Capital Goods (EPCG) Scheme and Service Exports from India Scheme (SEIS). Each scheme uses its specific set of rules and conditions, but all these schemes provide benefits such as tax concessions on inputs & purchase orders under certain conditions, etc.
Advance Authorisation Scheme
The Advance Authorisation Scheme for Annual Requirement is aimed at promoting exports in India, allowing companies to obtain advance authorisation for their annual requirement of goods and services. The Department of Industrial Policy & Promotion (DIPP) offers the scheme. Companies wishing to participate in this program must be registered with DIPP, and manufacturers can only avail of it without authorization from any other government department or agency. Participants will receive funds while they wait for their annual export orders, which are issued after the receipt of an application along with required documents such as licenses and agreements related to exports etc.,
Advance Authorisation Scheme for Annual Requirement
The Advance Authorisation Scheme for Annual Requirement was started in 2012. It applies to exporters who have a turnover of Rs.1 crore or more, and it does not apply to service exporters who have a turnover of less than Rs.1 crore per year. The scheme allows for the advance authorisation of export orders with minimal documentation requirements and at a minimal cost. The beneficiary needs only sign an undertaking with the customs authorities stating that he they will not sell any goods outside India without obtaining prior approval from government or central bank.
Duty-Free Import Authorisation (DFIA) Scheme
The Duty-Free Import Authorisation (DFIA) scheme incentivizes capital goods, manufacturing, and exports. The Ministry of Commerce & Industry launched the DFIA Scheme on 27th April 2003, and the Ministry of Finance has implemented it since then. This program aims to provide certain benefits to exporters who export capital goods. At the same time, they import these items freely under their existing methodologies like Customs duty concessions or grants, etc.
Export Promotion Capital Goods (EPCG) Scheme
EPCG scheme is also known as Export Promotion Capital Goods Scheme. EPCG is a subsidy scheme not linked to any specific export product or sector. It provides credit-linked subsidies to exporters of capital goods, such as aircraft, locomotives, and ships. The Government of India has revised this scheme twice to improve its efficacy and efficiency. It was first introduced in 1962 with an annual expenditure of Rs 21 million. This scheme involves three components: demand-driven (DD), with emphasis on domestic demand; credit-based, where banks provide funds based on their assessment of risk factors in each project proposal submitted by companies seeking funding under this scheme.
Service Exports from India Scheme (SEIS)
Service Exports from India or SEIS Scheme is a scheme of the Government of India. It was launched in 2017 and implemented by the Ministry of Commerce, Industry, and Infrastructural Development to promote service exports, provide incentives to exporters of services, and create employment opportunities for youth.
SEIS provides benefits such as:
- Exemption from registration fee at CENVAT credit or drawback basis;
- Provisional duty exemption on GSP-eligible inputs used in the production process;
- Priority allotment under Export Promotion Capital Scheme (EPCCS)
As a result, the Government is providing these schemes which help promote exports. If you are looking forward to expanding your business through imports and exports, get in touch with SCS to strategize the plan and leverage benefits from the schemes, and ensure winning an edge against competitors.
The fourth round of UDAN regional connectivity airports are announced.
This time, the regions of Northeast India and the islands have received maximum attention.
