The government is taking several measures to support Indian exporters amid the current global uncertainties due to tariff war. In this sequence, it has been decided to increase the duty drawback rates for the gems and jewelery sector. Apart from this, there is a plan to rapidly implement the ‘Export Promotion Mission’ worth Rs 2,250 crore. This will help in making Indian exports competitive.
According to the notification issued by the Finance Ministry on Thursday, the duty drawback rates for gold and silver jewelery have been increased. For example, the duty drawback rate for gold jewelery has been increased from Rs 335.5 to Rs 405.4 per gram of pure gold content in the article. Under the Duty Drawback Scheme, which comes under the Department of Revenue, Ministry of Finance, import duty is refunded on goods manufactured and exported in India.
The Commerce and Industry Ministry has also finalized the proposal for a Rs 2,250 crore Export Promotion Mission announced in the Union Budget in February to help exporters. A senior government official told Business Standard that the proposal is in the form of a note to the Expenditure Finance Committee (EFC) which is expected to be approved by next month. He said that after that the proposal will be sent to the Union Cabinet for approval.
“The EFC note has been finalized and will be sent for approval as soon as possible,” the official said. After that we will have to take approval from the Cabinet, which will also require inter-ministerial consultation. This initiative is being taken at a time when the US has announced the imposition of additional tariffs on its major trading partners. The cost of Indian exporters has increased due to US retaliatory duty.
US buyers are now renegotiating contracts, demanding discounts. Apart from this, America is continuously changing its tariff policies and its trade war with China is deepening. This has increased uncertainty in global trade and new orders have also been affected. The Ministry of Commerce and Industry has finalized half a dozen schemes under this mission.
It also includes Market Access Initiative (MAI) and Interest Equalization Scheme (IES) which expired on December 31. Apart from this, new schemes are being designed specifically for small exporters to help them get loans without collateral. This will help them ensure necessary compliance and address market risks for relief from non-tariff measures being implemented by developed countries. However, major changes will be required in IES as the funds allocated under this mission are very less.
IES is an interest subvention scheme. Under this, exporters are compensated for the interest charged by banks on export loans taken in rupees before and after sending the consignment. For this the government later compensates the lenders. This scheme was brought in 2015 for 5 years to reduce the pressure on exporters and especially micro, small and medium enterprises. Later this scheme has been extended from time to time. However, amid global uncertainties, the Commerce Department may need additional funds for schemes to help MSME exporters.
First Published – April 18, 2025 | 10:33 PM IST
