Exporters to get 50 per cent money back for testing their products in India

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With the dawn of the NPE 2.0 era, the government is expected to unveil policies that are certain to enhance exports. In this article, we look at a scheme that is expected to provide financial relief to those testing their products in India prior to exporting them.

By Baishakhi Dutta

The Market Access Initiative (MAI) is an export promotion scheme designed to promote India’s exports on a sustained basis during the 10th Five Year Plan period. Through this scheme, assistance is being provided to export promotion organisations, trade promotion organisations and exporters to reduce the costs related to testing products, accessing new markets and increasing their share in existing markets. In the process, India’s exports should get a much needed boost.

Till recently, the scheme allowed reimbursements to exporters only for tests that were done abroad. With effect from January 7, 2019, the government has allowed exporters to be reimbursed to a certain extent for tests done on their products in India—to qualify for the CE marking or get UL approval.

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Revised charges
When the MAI scheme was first launched, the Indian government allowed a maximum of ₹ 1 million per annum per exporter to test its products abroad. Last year, with effect from February 16, 2018, the government had revised the reimbursement rate and raised this ceiling to ₹ 5 million per annum per exporter. With the onset of the New Year, electronics exporters in the country received the good news that the government had extended the scheme to cover testing done in India too. Besides, the ceiling has been further raised to ₹ 20 million per annum per exporter, with the reimbursements from the government remaining 50 per cent only.

Ashish Saurikhia, policy coordinator, ELCINA, hails this move as a major step taken by the government to promote high quality, certified engineering products for export.

Important facts
The submissions for the scheme have to be done to the Engineering Export Promotion Council of India (EEPC). EEPC will examine the documents it receives from the exporters, and an Empowered Committee (EC) will consider and approve the proposals. The EC will also monitor the implementation of the sanctioned proposals. The proposals approved by the EC will be individually processed for financial sanction, as per the procedures laid down by the Indian government.

Unless otherwise specified under a specific provision, the scheme is open to the following organisations or agencies only—Central government departments and organisations of the Central/state governments including Indian missions abroad, export promotion councils, registered trade promotion organisations, commodity boards under the Department of Commerce, apex trade bodies recognised under the Centre’s Foreign Trade Policy, recognised industrial and artisan clusters, individual exporters (only where specifically indicated), national level institutions (e.g., the Indian Institutes of Technology, the Indian Institutes of Management, the National Institute of Design, etc), research institutions, universities, recognised laboratories, etc.

A quick quiz with Suranjan Gupta, executive director, Engineering Export Promotion Council of India (EEPC)

EB: Give us a brief introduction to the MAI scheme.
The 50 per cent reimbursement is towards charges that exporters of engineering goods incur when testing is done in India or abroad, subject to certain conditions.
Under this scheme, for the testing done abroad, the limit had been raised from the earlier ₹ 1 million to ₹ 5 million, with effect from February 16, 2018. From January 7, 2019, the limit has been raised to ₹ 20 million. The reimbursement will be 50 per cent of the total cost incurred. In addition, with effect from January 7, 2019, the charges for testing done in India are also eligible for reimbursement. The reimbursement for this too will be 50 per cent of the total cost incurred.

EB: How will the charges be shared?
The funding for each project will be shared on a 50-50 basis between the exporter and the government of India. However, the Empowered Committee may consider an enhancement or curtailment of the sharing pattern, depending on the territorial or product focus announced in the FTP (Foreign Trade Policy).

EB: What is the aim of this particular scheme?
The MAI scheme is a handholding measure by the government for exporters, especially those belonging to the MSME sector. The motive behind reimbursing 50 per cent of the testing charges is to reduce the cost of carrying out product testing of engineering products to make our goods competitive in global markets. Hence the scheme is expected to play a catalytic role in promoting exports and export-oriented activities for commodities and services.

EB: What is the scope of this scheme?
We intend to provide financial support to exporters to undertake the tests required for statutory compliance in the markets they are exporting to. This will include any direct or indirect activities for marketing, market research, capacity building and branding in the importing markets.

EB: What is the procedure for applying?
The member exporter, who wants assistance under the scheme, needs to fill the application form and send it along with the required documents (details available on the https://www.eepcindia.org/policy-info/P150323150721/54/mai-schemes), complete in all respects, to the EEPC India office. It should be preferably sent to the head office in Kolkata or to the head office cell in Delhi. On receiving the documents, EEPC India will examine them and, in case of any deficiency, seek clarifications and further documents. Thereafter, the application will be submitted to the government of India for due consideration and approval.

EB: How long will the approval process take?
As per the guidelines, the exporters have to apply within 90 days of receiving their product certification. And the entire clearance period depends upon whether the exporter has filed the documents properly. Once these are filed properly, the Department of Commerce assesses them and gives the reimbursement, as long as it is within the budgetary provisions for the year.

EB: Till when is the scheme valid?
The scheme is valid up to March 31, 2020.

EB: Are there any other important points about the scheme that applicants must know about?
Yes, the important points to note are:
The scheme is limited to five tests per annum per exporter.
The reimbursement is only for technical testing of engineering products.

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