Merchandise Exports From India Scheme (MEIS), 2015: Promoting Indian Exports And Enhancing Global Competitiveness

Policy Update

Pritha Chowdhury

Background

Merchandise exports play an important role in economic growth by generating employment, earning foreign exchange, encouraging industrial development and integrating domestic producers into global value chains. However, Indian exporters have historically faced challenges such as high logistics costs, inadequate infrastructure, procedural complexities and competition from international producers. These constraints can reduce the price competitiveness of Indian goods in international markets, particularly for micro, small and medium enterprises (MSMEs).

To address these challenges, the Government of India introduced the Merchandise Exports from India Scheme (MEIS) on April 1, 2015 to boost India’s merchandise exports. According to the Press Information Bureau (PIB), MEIS consolidated five earlier export reward schemes into a single framework, simplifying the export incentive structure. Those five previous export incentive schemes from the Foreign Trade Policy (2009–14) were:

Focus Market Scheme (FMS)
Focus Product Scheme (FPS)
Vishesh Krishi Gramin Udyog Yojana (VKGUY)
Market Linked Focus Product Scheme (MLFPS)
Agri Infrastructure Incentive Scheme (AIIS)

The broader objective was to strengthen the competitiveness of Indian merchandise in international markets while supporting the government’s Make in India initiative and promoting employment and domestic value addition (Press Information Bureau, 2015, 2016).

Who qualifies for the MEIS Program?

The following are the MEIS Scheme’s eligibility requirements:

All Indian exporters, whether merchant exporters (traders) or manufacturer exporters, who export products listed in Appendix 3B-MEIS Schedule are eligible to claim incentives under the MEIS Scheme.
Eligibility is determined solely by the product sold, not by the country of export, because the MEIS Scheme is open to all countries, according to the most recent circulars.
Benefits under the MEIS Scheme are also available to Special Economic Zone(SEZ) and Export Oriented Unit(EOU) units.
MEIS does not have a minimum turnover requirement.
Goods shipped by courier from e-commerce platforms are also eligible
The exported products’ country of origin must be India; re-exported products are not eligible.
Only those Shipping Bills with a “Declaration of Intent” and a “YES” for the Scheme incentive option are eligible for the MEIS Scheme.

Functioning

The MEIS is implemented and administered by the Directorate General of Foreign Trade (DGFT), which operates under the Ministry of Commerce and Industry, Government of India. The DGFT is responsible for issuing duty credit scrips and monitoring the scheme’s implementation. At the time of introduction of MEIS on April 1, 2015, the scheme covered 4914 tariff lines at 8 digit level. As on date, 5012 Tariff Lines at 8 digit level are eligible for rewards under MEIS (PIB, 2016).

Exporters need to have a valid Importer-Exporter Code (IEC) and should have exported goods under the specified list of eligible sectors and products. An Importer-Exporter Code (IEC) is a mandatory 10-digit business identification number issued by the Directorate General of Foreign Trade (DGFT) in India for importing or exporting goods. The scheme covers a wide range of sectors, including manufacturing, agriculture, textiles, handicrafts, engineering goods, chemicals, and electronics. Under this scheme, exporters are granted transferable duty credits that can be used to pay various duties, including basic customs duty, countervailing duty, and special additional duty. These credits can be utilized for both the payment of customs duties on imported goods and the payment of excise duty on domestic procurements.

Initially, countries of the globe are grouped into 3 categories for grant of incentives under MEIS:-

Category A: Traditional Markets (34): Include European Union (28), European Free Trade Association(EFTA) (Switzerland, Norway, Iceland and Lichtenstein-4), USA and Canada(2).
Category B: Emerging & Focus Markets (140): Include Africa (55), Latin America and Mexico (45), CIS countries (12), Turkey and West Asian countries (13), ASEAN countries (10), Japan, South Korea, China, Hongkong and Taiwan(5).
Category C: Other Markets (64)

Products which were not eligible to get incentives in all markets required submission of a Landing Certificate as a proof of landing in the designated market. Out of total 5012 tariff lines under MEIS, incentives to 2787 lines were available only to limited countries (PIB, 2016). Therefore, it required submission of Landing Certificates for claims. The government had received many representations pointing out difficulties in obtaining landing certificates from Shipping Lines/Agents etc. Exporters also had to bear associated charges/cost on account of this procedure.

Performance

MEIS underwent several revisions during its implementation to broaden export coverage and provide additional support to selected industries. At its introduction in April 2015, the scheme covered 4,914 tariff lines at the eight-digit level. By April 2016, the government reported that 5,012 tariff lines were eligible for rewards. The annual resource allocation was also increased from ₹18,000 crore to ₹21,000 crore in October 2015, reflecting the scale of government support envisaged for merchandise exports (Press Information Bureau, 2016).

Early export data indicated a comparatively smaller decline in exports of products covered by MEIS. According to a PIB release dated 25 April 2016, India’s exports declined by 16.7% during April 2015-February 2016 compared with the corresponding period of the previous year, while exports of products covered under MEIS declined by 8.95%. This difference suggested that the covered products performed relatively better during that period. However, the comparison alone does not establish that MEIS caused the difference, since export performance is also influenced by international demand, commodity prices, exchange rates and other economic factors.

The government also expanded support for specific sectors. Amendments introduced in October 2015 increased incentives or market coverage for selected textile products, pharmaceuticals, auto components, engineering goods, electronics, processed products and other merchandise. Such revisions indicate that MEIS was used as a flexible export-promotion instrument, with incentives adjusted according to the government’s assessment of sectoral and market requirements.

Nevertheless, the scheme’s performance should be assessed not only through tariff-line coverage and expenditure allocations but also through additional exports generated, the distribution of benefits across firm sizes, employment creation and the cost-effectiveness of public expenditure. These indicators are necessary to determine whether the scheme generated sustained improvements in export competitiveness.

Impact

First, the duty credit scrip mechanism provided financial support to eligible exporters. By lowering certain export-related costs, the incentive could improve profit margins, provide additional working capital and make selected Indian products more competitive in overseas markets. Second, the scheme supported sectors such as textiles, garments, handicrafts, leather products and engineering goods, many of which have important employment and MSME linkages. Better export opportunities in these sectors could contribute to employment generation, production expansion and income growth, particularly among small manufacturers and export-oriented enterprises.

Third, MEIS complemented the broader objective of promoting domestic production and value addition. By supporting exports of notified goods manufactured or produced in India, it sought to strengthen the connection between domestic industrial activity and international demand. However, these benefits should be interpreted carefully. The availability of export incentives does not automatically lead to additional production, higher employment or sustained market expansion.

Emerging Issues

Export incentives require public expenditure, making it important to assess whether the resulting gains in exports, employment and domestic value addition justify the fiscal cost. MEIS was challenged by the United States at the WTO in dispute DS541 concerning India’s export subsidy programmes. The dispute raised questions about the compatibility of certain export-linked incentives with international trade rules. In 2019, a WTO panel found against India on relevant subsidy claims. The subsequent dispute was terminated following the notification of a mutually agreed solution between India and the United States (WTO dispute).

Financial rewards can provide short-term support, but lasting export competitiveness depends on productivity, technological upgrading, product quality, innovation, reliable logistics and access to international markets. Incentives alone cannot resolve these structural constraints. Exporters differ in their administrative capacity, scale of operations and access to trade finance. Smaller firms may face difficulties understanding eligibility rules and completing documentation, potentially limiting their ability to benefit fully from export-promotion programmes. Changes in aggregate exports cannot be attributed exclusively to MEIS. Global demand fluctuations, exchange-rate movements, trade restrictions and domestic production conditions also affect export outcomes.

Transition to a different export-support framework: MEIS operated for exports made between 1 April 2015 and 31 December 2020. The government subsequently introduced the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, which addresses certain duties, taxes and levies not otherwise refunded or exempted. However, the two schemes operate on different principles, and RoDTEP should not be treated as an identical continuation of MEIS (Ministry of Commerce and Industry, 2023).

Way Forward

First, export support should be consistent with WTO rules and designed to minimise the risk of international trade disputes. Policies that remit eligible unrefunded taxes and duties require transparent methodologies, verifiable records and regular review. Second, government support should be accompanied by investments in trade infrastructure, including ports, roads, warehousing, multimodal logistics and digital customs systems. Reducing turnaround times and transport costs can improve competitiveness across a wider range of exporters rather than benefiting only selected products.

Third, MSMEs require targeted assistance in accessing export finance, obtaining quality certifications, meeting international standards, using e-commerce platforms and identifying overseas buyers. Simplified procedures and accessible information can help smaller enterprises participate more effectively in international trade. Finally, India should focus on moving towards higher-value and more technologically sophisticated exports. Investment in research and development, skill development, product design, quality assurance and domestic supply-chain integration can help Indian firms compete on productivity and product differentiation rather than relying primarily on financial incentives.

References

Enrich Services. (n.d.). Merchandise exports from India scheme (MEIS). https://www.enrichservices.in/dgft-best-merchandise-exports-from-India-scheme-consultants.html
Directorate General of Foreign Trade. (n.d.). Merchandise exports from India scheme (MEIS). Government of India. https://www.dgft.gov.in/CP/?opt=meis
Press Information Bureau. (2015, April 1). Foreign Trade Policy 2015–2020 unveiled. Government of India. https://www.pib.gov.in/newsite/printrelease.aspx?lang=2&reg=48&relid=117917
Press Information Bureau. (2015, October 30). The government announces enhanced support for export of various products and covers some additional products through Merchandise Exports from India Scheme (MEIS). Government of India. https://www.pib.gov.in/newsite/PrintRelease.aspx?lang=2&reg=48&relid=130070

Press Information Bureau. (2016, April 25). Exports from the country. Government of India. https://www.pib.gov.in/newsite/PrintRelease.aspx?lang=2&reg=48&relid=142155

Press Information Bureau. (2016, May 5). As part of ease of doing business and reduction of transaction cost of the exporters, the Government decides to do away with the landing certificates required under Merchandise Export from India Scheme (MEIS) with effect from 4th May, 2015. Government of India. https://www.pib.gov.in/newsite/PrintRelease.aspx?lang=2&reg=48&relid=144890

Press Information Bureau. (2016, August 8). Merchandise Export from India Scheme. Government of India. https://www.pib.gov.in/newsite/PrintRelease.aspx?lang=2&reg=48&relid=148539

Press Information Bureau. (2020, March 13). Cabinet approves scheme for “Remission of Duties and Taxes on Exported Products (RoDTEP)” to boost exports. Government of India. https://www.pib.gov.in/newsite/PrintRelease.aspx?lang=2&reg=48&relid=200197
World Trade Organization. (n.d.). India-Certain measures on solar cells and solar modules (DS541). https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds541_e.htm

About the Contributor

Pritha Chowdhury is a postgraduate in Economics from Jadavpur University. Her academic interests include public policy, economic development, innovation policy, and data-driven policy analysis.

Reviewers: Tanisha Hooda, Karnavi Shende

Acknowledgment

The author extends sincere thanks to the IMPRI team for their guidance and support in developing this Policy Update.

Disclaimer

The views and opinions expressed in this policy update are those of the author and do not necessarily reflect the official position of IMPRI or any affiliated institution. While every effort has been made to ensure the accuracy of the information and data presented, readers are encouraged to verify facts independently before relying on them for any decision-making purpose.