Export Promotion Subsidies: Government Support for Global Expansion

Expanding into international markets can be a game-changer for businesses, but high operational costs, tariffs, and regulatory hurdles often pose challenges. To support Indian exporters, the government has introduced several export promotion subsidies aimed at reducing costs, enhancing global competitiveness, and encouraging MSME participation in international trade.

By leveraging these government-backed incentives, businesses can improve pricing efficiency, manage trade risks, and unlock new growth opportunities in foreign markets.

Key Export Promotion Subsidies & Schemes

1. Duty Drawback Scheme (DBK)

• Why It Matters: Reduces cost burdens by refunding customs and excise duties paid on imported raw materials used for export products.

• Key Benefits:

  • Enhances profit margins by lowering input costs.

  • Makes Indian exports more price-competitive in global markets.

2. Export Promotion Capital Goods (EPCG) Scheme

• Why It Matters: Supports exporters by allowing them to import capital goods at zero customs duty for manufacturing export-oriented products.

• Key Benefits:

  • Reduces initial capital investment costs.

  • Encourages modernization and capacity expansion for exporters.

3. Remission of Duties and Taxes on Exported Products (RoDTEP)

• Why It Matters: Provides rebates on embedded taxes and duties, ensuring that exporters are not disadvantaged by indirect taxation.

• Key Benefits:

  • Enhances pricing competitiveness.

  • Ensures full tax neutrality for exporters.

4. Merchandise Exports from India Scheme (MEIS) / Remission of Duties Scheme (RoSCTL)

• Why It Matters: Encourages sector-specific exports by providing incentives in the form of duty credit scrips.

• Key Benefits:

  • Supports exporters in textiles, agriculture, pharmaceuticals, and engineering goods.

  • Helps offset logistics and regulatory costs.

5. Interest Equalization Scheme

• Why It Matters: Reduces interest rates on pre-shipment and post-shipment credit, especially benefiting MSMEs.

• Key Benefits:

  • Lowers financing costs for exporters.

  • Enhances liquidity, making export businesses more sustainable.

6. Market Access Initiative (MAI)

• Why It Matters: Provides financial assistance for international trade fairs, buyer-seller meets, and overseas marketing initiatives.

• Key Benefits:

  • Expands business networks in global markets.

  • Helps MSMEs build international brand recognition.

7. Export Credit Guarantee Corporation (ECGC) Support

• Why It Matters: Mitigates risks associated with export payments and trade finance, protecting businesses from defaults.

• Key Benefits:

  • Covers exporters against payment delays and non-payment risks.

  • Enhances credibility with financial institutions for trade finance support.

Final Take

Government-backed export promotion subsidies provide Indian businesses with the tools they need to compete on a global scale, reduce financial risks, and boost profitability. Whether you are an MSME or an established exporter, leveraging these schemes can open new doors for sustainable international growth.