New FTP policy extends Rs 369 crore MEIS benefit to ESDM sector


The government has recently unveiled ‘Mid Term review of Foreign Trade Policy’ with some positive changes for electronics and telecom industry. Under, the revised policy Rs 369 crores has been allocated for the enhanced Merchandise Exports for India Scheme (MEIS) incentive for electronics and telecom sector.

The changes made in this review majorly focus on reducing blockage of working capital and simplifying procedures for exporters, and self-certification. For MSMEs/labour intensive industries across-the-board, 2 percent incentive rate has been raised in existing MEIS for exports under revised policy with an intention to  supports manufacturing and promote export in the respective sectors. Beyond this, import of second hand goods for repair/refurbishing/re-conditioning/re-engineering has also been made free.

The Department of Commerce has abolished the GST for transfer and sale of these scrips to zero from 12 per cent and also increased the validity period for these tradeable papers to 24 months from 18 months. In addition, the government has cleared round-the-clock customs facility at the ports as well and extended this to 19 seaports and 17 air cargo complexes.


Further, through export promotion of capital goods and the 100 per cent EoU scheme, exporters have been extended the benefit of sourcing inputs and capital goods from abroad, as well as domestic suppliers for exports without upfront payment of the GST.  The revised FTP incentives now cover 8,000 of the total 12,000 lines of items.

Commenting on the Mid-Term Review of the India’s Foreign Trade Policy 2015-20, Rajoo Goel, Secretary General, ELCINA said, “It is noteworthy that most of the electronic components and products which are of interest to ELCINA members are covered under the revised MEIS rates”.

ELCINA believes that this is an overdue and positive step as it will largely reverse the damage caused by the reduction of MEIS rates across the board last year. The export industry was unpleasantly surprised by the reduction and lost export orders. Another positive is that the FTP is focusing on MSMEs and manufacturing. This is important as benefits should accrue to value added manufacturers which will drive the ‘Make in India’ initiative.”

“The electronics industry is also enthused by the several procedural simplifications and measures which will release blocked working capital and reduce finance costs which are highly debilitating in the highly competitive global free trade scenario.



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