Indian Steel Export Rebate Capped
Indian Government has amended Foreign Trade Policy 2015-20 with regard to ceiling on the Merchandise Export from India Scheme benefits available to exporters on exports made from 01.09.2020 to 31.12.2020 with immediate effect. It said “The total reward which may be granted to an IEC holder under the Merchandise Exports from India Scheme shall not exceed INR 2 Crore per IEC on exports made in die period 0l.09.2020 to 31.12.2020, period based on Let Export Order date of shipping bilks. Any IEC holder who has not made any export with LEO date during the period 01.09.2019 to 31.08.2020 or any new IEC obtained on or after 01.09.2020 would not be eligible for submitting any claim for benefits under MFIS for exports mode with effect from 01.09.2020. The aforesaid ceiling may be subject to further downward revision to ensure that the total claim under the Scheme for the period 01.092020 to 31.12.2020 does not exceed the allocation prescribed by the Government, which is INR 5.000 Crore.”
This limitation of benefits is for all exporters in India, including steel producers. It will reduce price competitiveness of Indian exports, as suppliers will have to increase prices, risking reduction of sales. The current benefit under the MEIS to each contract was 1.9 percent
The government notification also said that benefits under MEIS shall not be available for exports made with effect from 01.01.2021.