Automobile, pharma firms big beneficiaries of export incentive scheme

Automobile and pharmaceutical companies have emerged as big beneficiaries of the commerce ministry's export incentive scheme 'MEIS' as they have 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 under the scheme are payable as percentage of realised free-on-board value and 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 includes 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 Ltd (Rs 180 crore), Lupin Ltd (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 Ltd, Reliance Industries, General Motors India and Shahi Exports.

Similarly in 2016-17 also, companies from automobile and pharmaceutical sectors topped the chart in getting the maximum benefit under the MEIS.

In 2017-18, the ministry disbursed about Rs 31,000 crore to exporters under the scheme, while it was over Rs 23,000 crore in the previous fiscal.

Going ahead, the government may have to change the scheme as it was challenged by the US in the World Trade Organisation's dispute settlement system.

The US had alleged that such incentive schemes were harming American companies and they are not in compliance with the global trade rules.

Government officials have earlier stated that they may look at reviewing the existing export incentive schemes to ensure that they comply with the WTO norms.

The US had alleged that thousands of Indian companies are receiving benefits totalling over USD 7 billion annually under various export promotion programmes.