Export incentives help Indian businesses stay competitive in global markets by reducing the impact of duties and taxes on exported goods. This support becomes especially important as manufacturers and small exporters look to scale beyond India.
A major step in this direction was the Merchandise Exports from India Scheme (MEIS), introduced under the Foreign Trade Policy 2015–20. MEIS aimed to reward goods exporters through duty credit scrips, helping you offset infrastructural inefficiencies and associated costs that could not be refunded through other mechanisms. For several years, it formed the backbone of India’s merchandise export incentive framework.
Over time, global trade rules and compliance requirements reshaped this approach. As a result, MEIS was discontinued and replaced by the Remission of Duties and Taxes on Export Products (RoDTEP) scheme, which focuses on refunding embedded taxes more transparently. This article explores how MEIS worked, why it was replaced, what RoDTEP offers today, and how you can navigate the current export environment with confidence.
Key Takeaways
- Government export incentives have evolved to balance exporter support with global trade compliance, reshaping how Indian businesses plan international sales.
- MEIS played a key role in supporting merchandise exporters but was withdrawn after WTO rulings made export-linked subsidies not permissible.
- RoDTEP replaced MEIS with a WTO-compliant approach that refunds embedded taxes and duties that were earlier built into export costs.
- Understanding eligibility, exclusions, and benefit calculation under RoDTEP is now essential for exporters to protect margins and avoid compliance gaps.
What Was the Merchandise Exports from India Scheme (MEIS)?
The Merchandise Exports from India Scheme was a government export incentive introduced under the FTP 2015–2020 for goods exported from India. It focused on addressing gaps that regular tax refunds could not cover, especially for merchandise exporters.
Its core aim was to offset infrastructural inefficiencies and related costs, such as logistics bottlenecks and high transaction expenses, that reduced export competitiveness.
The scheme replaced several earlier export incentive scheme such as the Focus Product Scheme (FPS), Market Linked Focus Product Scheme (MLFPS), Focus Market Scheme (FMS), the Agri Infrastructure Incentive Scrip (AIIS), and Vishesh Krishi Gramin Upaj Yojana (VKGUY) with a single, simplified framework, making export incentives easier for businesses to understand and manage.
Under MEIS, exporters received duty credit scrips, which could be used to pay customs duties or transferred to other businesses, improving liquidity and cash flow.
Related Read : SEIS Scheme: Understanding Its Past and India’s Export Future
How Did the MEIS Scheme Work?
MEIS rewarded exporters based on the actual value of goods sold abroad. Incentives were calculated at 2%, 3%, or 5% of the realised Free on Board (FOB) value, and in select cases up to 7%, against exports realised in free foreign exchange. The scheme applied to nearly 5,000 notified products classified under specific Indian Trade Classification (Harmonised System) codes, clearly defining eligible goods. Benefits came as duty credit scrips, which you could use to pay basic customs duty, safeguard duty, or anti-dumping duty, or transfer to another importer.
However, MEIS did not cover IGST or GST compensation cess on imports, and it excluded domestic procurement of goods or services, keeping the incentive tightly linked to export activity.
Typical MEIS Incentive Rates (Illustrative)
Product Category: Fish And Other Aquatic Invertebrates
Indicative MEIS Incentive Rates: 5%
Product Category: Dairy Products
Indicative MEIS Incentive Rates: 2 – 5%
Product Category: Leather Products
Indicative MEIS Incentive Rates: 2 – 7% (Kolhapuri chappals up to 7%)
Product Category: Textiles & Garments
Indicative MEIS Incentive Rates: 4% – 5%
Product Category: Agricultural Products
Indicative MEIS Incentive Rates: 2 – 5%
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Who Was Eligible for MEIS Benefits?
MEIS covered a wide base of exporters to encourage merchandise trade.
Both merchant exporters and manufacturer exporters could claim benefits for products listed in Appendix 3B.
SEZ (Special Economic Zone) units and EOU (Export Oriented Unit) were also eligible for MEIS benefits.
E-commerce exports through the courier route qualified for MEIS, provided they met the prescribed value limits and documentation requirements.
What Was the Application Procedure for MEIS?
Exporters had to follow a structured but largely digital process to claim benefits.
Applications were filed online in ANF 3A using a digital signature on the DGFT portal.
Supporting documents included shipping bills, e-BRC, and a valid RCMC.
Claims had to be submitted within 12 months from the Let Export Order (LEO) date or 3 months from Electronic Data Interchange (EDI) upload on the DGFT system or shipping bill printing, whichever was later.
For EDI ports, most data flowed electronically.
For non-EDI ports, exporters needed to upload scanned copies of physical documents.
Why Was the Merchandise Exports from India Scheme Discontinued?
The decision to discontinue MEIS did not come from a policy shift alone. It followed a clear international ruling that forced India to rethink how it supports goods exporters. Since MEIS linked benefits directly to export performance, it fell foul of global trade rules that India is bound to follow.
Key reasons behind the discontinuation include:
WTO Non-Compliance: MEIS was classified as a prohibited export subsidy under the World Trade Organisation’s Agreement on Subsidies and Countervailing Measures (SCM Agreement).
Adverse WTO ruling: In 2019, a WTO dispute panel ruled against India, leaving no room to continue export-linked incentive schemes in their existing form.
Phased Withdrawal: MEIS benefits were gradually reduced and the scheme was officially replaced from 1 January 2021.
Benefit Cap in the Final Phase: For shipments between September and December 2020, MEIS benefits were capped at ₹2 crore per exporter, which led to concerns around pricing, contracts, and margin planning, especially for MSME exporters.
What Is the Remission of Duties and Taxes on Export Products (RoDTEP) Scheme?
The RoDTEP scheme replaced MEIS from 1 January 2021, marking a shift in how India supports goods exporters. Instead of rewarding exports directly, RoDTEP focuses on refunding taxes and duties that quietly add to your costs but are not recovered elsewhere.
In simple terms, RoDTEP works as the merchandise exports from India scheme replacement, built to meet global trade rules while protecting exporter margins.
Key features of the scheme include:
Clear Objective: Refund of embedded taxes at the central, state, and local levels that are not credited under GST or duty drawback.
WTO Compliant Design: Structured to avoid export-linked subsidies, addressing the issues that led to MEIS being withdrawn.
Form of Benefit: Transferable electronic duty credits issued as e-scrips, usable for customs duties.
Operational Clarity: Benefits are calculated at notified rates and credited digitally through the customs automated system.
Which Taxes and Duties Does RoDTEP Cover?
RoDTEP targets costs that often go unnoticed but directly affect your export pricing, including:
VAT and excise duty on fuel used for transport and power generation.
State electricity duties paid on electricity used in manufacturing.
Mandi tax and municipal or property taxes.
Stamp duty on export-related documents.
Certain non-creditable CGST, SGST, IGST, and Compensation Cess on specified inputs.
Who Is Eligible for RoDTEP Benefits?
The RoDTEP scheme is designed to cover a wide base of Indian goods exporters, with eligibility linked to the nature of exports and notified product lines.
Eligible categories include:
All Indian goods exporters, including manufacturer exporters and merchant exporters, for products notified under the scheme.
Product-specific benefits, calculated either as a percentage of FOB value (generally ranging from 0.3% to 4.3%) or as a fixed amount per unit, depending on the tariff line.
Advance Authorisation holders, EOUs, and SEZ exporters, with RoDTEP benefits restored for their exports effective 1 June 2025.
However, the scheme does not extend to deemed exports or re-exported goods, which remain outside its scope.
Pro Tip: If you receive funds from abroad without using a compliant payment route, your Electronic Bank Realisation Certificate (eBRC) may get delayed which can hold back your RoDTEP claim. Use RBI-approved payment channels with proper remittance codes to avoid delays in ledger credit.
MEIS vs. RoDTEP: Key Differences and Evolution of Export Incentives
India’s approach to export incentives changed when MEIS was replaced by the RoDTEP scheme. Instead of rewarding exports with additional benefits, the focus shifted to refunding taxes and duties that remain built into export costs. This change aimed to make incentives more transparent, and compliant with global trade rules.
The table below highlights how MEIS and RoDTEP differ across key aspects that matter to exporters.
Aspect: Core objective
MEIS: Promote exports through product-based incentives
RoDTEP: Refund embedded taxes and duties not otherwise refunded
Aspect: Trade compliance
MEIS: Considered WTO non-compliant
RoDTEP: Designed to be WTO compliant
Aspect: Nature of benefit
MEIS: Transferable duty credit scrips
RoDTEP: Electronic duty credit scrips (e-scrips)
Aspect: Scope of benefit
MEIS: Limited to select customs duties
RoDTEP: Covers a wider range of un-refunded central, state, and local taxes
Aspect: Eligibility
MEIS: Limited to notified products and destinations
RoDTEP: Available to most goods exporters, subject to notified rates
Aspect: Impact on exporters
MEIS: Encouraged exports through rewards
RoDTEP: Neutralises tax burden to protect margins
Aspect: Legal framework
MEIS: Foreign Trade Policy 2015–2020
RoDTEP: Ongoing scheme aligned with evolving global trade norms
Aspect: Period of operation
MEIS: Until 31 December 2020
RoDTEP: Applicable to eligible exports from 1 January 2021 onwards
Navigating the Modern Export Landscape: Beyond Traditional Incentives
With MEIS discontinued and RoDTEP focused mainly on tax refunds, exporters can no longer rely on incentives alone to protect margins. Today, success depends on how efficiently you manage operations, money flows, and compliance across borders.
Exporters now need to focus on operational efficiency and tighter financial management, as incentives no longer offset broader business costs.
Efficient cross-border payment solutions have become critical to reduce transaction fees, delays, and manual paperwork.
Common challenges include handling international payments, managing currency conversions, and staying compliant with evolving RBI and FEMA requirements.
To address this, many businesses are turning to specialised export accounts that simplify payment collection and offer clearer visibility into overseas receipts.
Pro Tip: As incentives play a smaller role in margin protection, focus on reducing friction in payment collection and reconciliation. Faster foreign inward remittances, clearer transaction visibility, and accurate documentation now have a direct impact on cash flow, compliance, and pricing decisions often more than incentive rates themselves.
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Designed to align with RBI and FEMA requirements, supporting compliant foreign inward remittances for goods and services exports.
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Conclusion
MEIS played an important role in supporting India’s merchandise exporters by easing cost pressures and encouraging global outreach during its time. However, changes in international trade rules led to its withdrawal and the introduction of a more compliant approach. This transition marked a clear shift from export promotion through incentives to a system focused on fairness and transparency.
Today, RoDTEP serves as India’s primary mechanism for refunding embedded taxes and duties that cannot be recovered elsewhere. As foreign trade policy continues to evolve, exporters must stay updated on regulatory changes and adapt quickly. Beyond policy awareness, using modern financial and payment tools can help you manage international transactions more efficiently, control costs, and stay competitive in global markets.
FAQs
1. What was the Merchandise Exports from India Scheme (MEIS)?
MEIS was an export incentive scheme under the Foreign Trade Policy 2015–2020 that rewarded eligible goods exporters with duty credit scrips.
2. Why was the Merchandise Exports from India Scheme (MEIS) discontinued?
MEIS was withdrawn because it did not comply with World Trade Organisation rules and was treated as a prohibited export subsidy.
3. What scheme replaced the Merchandise Exports from India Scheme (MEIS) for Indian exporters?
The Remission of Duties and Taxes on Export Products scheme replaced MEIS from 1 January 2021.
4. How does the RoDTEP scheme differ from MEIS?
MEIS rewarded exports through product-based incentives, while RoDTEP refunds embedded taxes and duties to ensure WTO compliance.
5. What types of taxes and duties are covered under RoDTEP?
RoDTEP refunds un-refunded levies such as VAT and excise duty on fuel, state electricity duty, mandi tax, municipal taxes, and certain non-creditable GST components.
6. Are SEZ units and Export Oriented Units (EOUs) eligible for RoDTEP benefits?
Yes. RoDTEP benefits have been reinstated for exports from Advance Authorisation holders, EOUs, and SEZ units with effect from 1 June 2025.
