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Top export schemes by the Indian government to boost foreign trade

Top export schemes by the Indian government to boost foreign trade

Imports & Exports

Vakilsearch Staff

Vakilsearch Staff

16 Oct 2019, 12:06 — 5 min read

Background: In recent times, the government has come up with various export-oriented schemes in order to boost the SME (small and medium enterprises) sector. This helps the economy to draw foreign exchange and make domestic companies competitive in the global market. Its main focus is to produce goods for international trade and increase exports.

 

As per the data recorded by RBI, India’s Foreign Capital Inflows were USD 405.64 billion up to the week of 15th March 2019. During the period of 2018-19, India witnessed a steep growth of 8.8% in its export of merchandise and services. India has also taken a leap in the Ease of Doing Business index from the 142nd position, which was four years back to the 77th rank. 

 

Around 40% of India’s export is contributed by SMEs. Indian government strongly feels SMEs have immense scope in making exports of plastic, processed packaged food, fine chemicals, etc. to countries like West Asia, Africa, and Latin America. These regions are emerging economies and can offer a striking customer base. The government has also taken initiatives to set up trade promotional bodies in 15 countries to boost exports from SMEs.

 

Special export schemes introduced by the government to boost entrepreneurs and MSMEs for smooth financing

 

  • In September 2018, the government launched a 59 minute Loan portal for a sanction of the loan value for MSME sector from INR 1 lakhs up to INR 1 crore. The small and micro enterprises can easily access credit and get their loan approved under this scheme in less than an hour.

 

  • Under the Pradhan Mantri Mudra Yojana Scheme, small manufacturing units and service sectors units can avail loans from financial institutions up to INR 10 Lakhs without giving any collateral deposit.

 

  • According to the Foreign Trade Policy of India (FTP 2015-20), the government has widened the scope and raised the reward incentives under MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme) by 2%.

 

  • Under the Zero Defect Zero Effect (ZED) model, which is launched by the government, SMEs and exporters are eligible to get rebates and concessions. This initiative was taken so that exports are made in adherence to particular standards and are certified. Thus, they do not get rejected and returned back to India.

 

  • As per the Credit Guarantee Scheme, banks and financial institutions can extend to each borrowing unit a loan capacity of INR 200 lakhs.

 

  • Introduced the platform of Trade Receivable Discounting System (TREDS) to finance the trade receivables. For SMEs financial assistance is very important as funds are limited. This shall ease their monetary crisis.

 

 

  • For all those MSMEs registered under GST shall receive an interest subvention of 2% up to 1 crore for every fresh or incremental loan.

 

  • Make in India project was undertaken to ensure infrastructural and technological advancements in the economy. The plan behind this idea was to repair and reform the out - dated processes with best class systems so that SMEs can explore more export opportunities.

 

 

Some of the other popular export promotion schemes that have helped SMEs to grow and make their place in different parts of the world are:

 

 

SMEs play a significant role in the Indian economy. With the government’s help and public sector interference, SMEs has the potential to take India to new heights. By providing the right quality of products and satisfying the end customers, it is expected that SMEs may one day overtake China in its volume. It is the right time when India SMEs should reap the advantages of such schemes and earn recognition worldwide.

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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker

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Vakilsearch Staff

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