India's trade relationship with Africa has been growing steadily, and the Indian government has introduced several incentives to encourage exporters to target this region. These incentives aim to boost exports, enhance competitiveness, and support the economic growth of both India and African nations.
Key Benefits and Incentives
Merchandise Exports from India Scheme (MEIS): This scheme provides incentives to exporters in the form of duty credit scrips, which can be used to offset infrastructural inefficiencies and associated costs. The incentives range from 2-5% of the Free On Board (FOB) value of exports.
Rebate of Duties and Taxes on Exported Products (RoDTEP): Replacing the MEIS, the RoDTEP scheme aims to refund all hidden taxes that were not previously refunded under any export incentive scheme. This includes central and state taxes on fuel used for transportation, duties levied on electricity used for manufacturing, and other related costs.
Export Promotion Capital Goods (EPCG) Scheme: This scheme allows duty-free imports of capital goods used for manufacturing export products. Exporters can invest in modern technology without heavy upfront costs, improving product quality and production efficiency.
Advance Authorisation Scheme: Exporters can import raw materials, components, and consumables without paying customs duties. This helps reduce upfront costs, ensuring better cash flow and competitive pricing.
Interest Equalisation Scheme: This scheme provides a reduced interest rate on pre-shipment and post-shipment export credit, making it easier for exporters to manage their finances.
Trade Infrastructure for Export Scheme (TIES): This scheme supports the development of trade infrastructure, such as export promotion centers and warehouses, to facilitate exports.
Focus Market Product Scheme (FPS): This scheme provides incentives to exporters targeting specific markets, including Africa, to enhance their competitiveness in these regions.
Why Target Africa?
Africa presents a vast market with significant growth potential. The continent's growing middle class, increasing urbanization, and improving infrastructure create favorable conditions for Indian exporters. Additionally, the African Continental Free Trade Area (AfCFTA) agreement aims to create a single market for goods and services across 54 countries, further enhancing trade opportunities.
In conclusion, the Indian government's incentives and benefits provide a strong foundation for exporters to tap into the African market. By leveraging these schemes, Indian exporters can enhance their competitiveness, reduce costs, and contribute to the economic growth of both India and Africa.