TaxTMI 
TaxTMI 
TaxTMI 
Here’s a comprehensive explanation of the importance of WTO-compliant export promotion schemes for the Indian economy, followed by a list and brief description of all major export promotion schemes such as EPCG, Advance Authorization, Duty Drawback, ECGC, RoDTEP, RoSCTL, and others.
1. Ensuring Global Trade Legitimacy
- The World Trade Organization (WTO) sets rules to ensure fair competition in global trade.
- WTO compliance ensures that India’s export incentives are not viewed as trade-distorting subsidies, thereby preventing trade disputes and sanctions.
2. Sustainability of Export Incentives
- Non-compliant schemes (like MEIS) were challenged by countries such as the U.S.
- WTO-compliant schemes ensure long-term continuity and stability of export support, reducing policy uncertainty for exporters.
3. Enhancing Competitiveness of Indian Exports
- Compliant schemes reduce costs of production and logistics without directly subsidizing exports.
- This makes Indian goods more competitive in the global market while respecting WTO norms.
4. Promoting Ease of Doing Business
- Streamlined, rule-based schemes reduce bureaucratic hurdles.
- Schemes like RoDTEP (Remission of Duties and Taxes on Exported Products) simplify refund mechanisms and promote efficiency.
5. Attracting Foreign Investment
- WTO compliance improves India’s image as a responsible trading nation, enhancing investor confidence and attracting FDI in export-oriented sectors.
6. Boosting Employment and Industrial Growth
- Export-oriented production stimulates industrial activity, particularly in MSMEs and labor-intensive sectors such as textiles, leather, and handicrafts.
List of Major WTO-Compliant Export Promotion Schemes in India
Below are key export promotion schemes currently supporting Indian exporters:
Scheme | Full Form / Administered By | Objective / Benefit | WTO Compliance Status |
1. EPCG Scheme | Export Promotion Capital Goods Scheme (DGFT) | Allows import of capital goods at zero customs duty, subject to export obligation. | WTO-compliant (incentive linked to productivity, not direct export subsidy). |
2. Advance Authorization Scheme (AAS) | DGFT | Duty-free import of inputs used in export products. | Compliant (refund/remission of duties is WTO-allowed). |
3. Duty Drawback Scheme | CBIC | Refunds duties paid on inputs used in exported goods. | WTO-compliant (remission, not subsidy). |
4. RoDTEP | Remission of Duties and Taxes on Exported Products (CBIC/DGFT) | Refunds embedded taxes and duties not refunded under any other mechanism. Replaced MEIS in 2021. | Fully WTO-compliant. |
5. RoSCTL | Rebate of State and Central Taxes and Levies (for textiles & apparel sector) | Refunds embedded taxes on textile exports. | WTO-compliant. |
6. ECGC Scheme | Export Credit Guarantee Corporation of India | Provides export credit insurance to exporters to protect against payment risks. | Compliant (risk mitigation, not subsidy). |
7. SEZ Scheme | Special Economic Zones (Ministry of Commerce) | Offers duty-free imports and tax benefits for export-oriented production in SEZs. | Mostly compliant if benefits are linked to production and not direct export subsidy. |
8. EOUs / EHTPs / STPs / BTPs | 100% Export Oriented Units, Electronic Hardware Technology Parks, Software Technology Parks, Bio-Technology Parks | Facilitate 100% export production with duty exemptions. | Subject to review; structure evolving to ensure WTO compliance. |
9. NIRVIK Scheme | Niryat Rin Vikas Yojana (under ECGC) | Provides higher insurance coverage and simplified claim settlement for exporters. | WTO-compliant. |
10. TIES Scheme | Trade Infrastructure for Export Scheme | Assists states in developing export infrastructure (like ports, testing labs). | Compliant (infrastructure support, not subsidy). |
11. Interest Equalization Scheme (IES) | Ministry of Commerce / DGFT | Provides interest subvention on pre- and post-shipment export credit for MSMEs. | WTO-compliant (financial support mechanism). |
Transition from Non-Compliant to Compliant Schemes
Old (Non-Compliant) Schemes | Reason for WTO Non-Compliance | New (Compliant) Replacement |
MEIS (Merchandise Exports from India Scheme) | Direct export-based subsidy, not cost-remission. | RoDTEP (Remission of Duties and Taxes on Exported Products) |
SEIS (Service Exports from India Scheme) | Incentive linked to export performance. | New WTO-compliant service export support policy (under formulation). |
Conclusion
WTO-compliant export promotion schemes are crucial for India’s export-led growth strategy. They:
- Maintain India’s credibility in global trade,
- Protect exporters from disputes,
- Ensure equitable cost relief rather than direct subsidies, and
- Promote sustainable, competitive, and inclusive export growth.
***