Merchandise Export Incentive Scheme: How Export Incentive Policies Have Evolved

India’s export policy has undergone a major transformation over the last decade. The government has progressively moved from traditional reward-based mechanisms toward schemes designed to neutralise embedded taxes, reduce transaction costs, improve market access and strengthen the competitiveness of Indian exporters. This evolution is important for manufacturers, merchant exporters, MSMEs and businesses entering international markets.

The Merchandise Export Incentive scheme is commonly associated with India’s earlier export-promotion framework, particularly the Merchandise Exports from India Scheme (MEIS). While MEIS is no longer the current incentive framework, understanding its role helps explain how India moved toward newer mechanisms such as RoDTEP and the present export-promotion architecture.

For Indian businesses, the shift is more than a change in terminology. It represents a broader movement from rewarding exports to making exports structurally competitive.

Understanding the Merchandise Export Incentive Scheme

The Merchandise Exports from India Scheme, or MEIS, was introduced under the Foreign Trade Policy 2015–20 with effect from 1 April 2015. Its objective was to promote the manufacture and export of notified goods and products. Depending on the eligible product and export destination, incentives were provided through transferable duty credit scrips.

According to Directorate General of Foreign Trade records, MEIS rates included 2%, 3%, 5%, 7%, 10% and 20% of the FOB value for specified products during its operation. The scheme therefore provided exporters with a financial incentive linked to eligible merchandise exports.

This model was significant for Indian exporters because the benefit could help offset certain costs associated with international trade and improve price competitiveness. However, the policy environment eventually shifted toward a remission-based approach.

Why India Moved Beyond MEIS

Export incentive policies cannot remain static because international trade rules, domestic taxation and global competition continue to change.

One of the important developments was the increasing emphasis on ensuring that export incentives were compatible with India’s international trade commitments. The policy direction consequently moved away from a broad reward mechanism and toward the remission of duties and taxes that remain embedded in exported products.

This change was particularly relevant after the introduction of the Goods and Services Tax framework, which altered India’s indirect-tax structure. Exporters increasingly needed mechanisms that addressed taxes and duties that were not otherwise refunded or credited.

The result was the development of the Remission of Duties and Taxes on Exported Products, popularly known as RoDTEP.

From MEIS to RoDTEP

RoDTEP became operational for exports from 1 January 2021. Its central objective is different from the earlier Merchandise Export Incentive scheme approach.

Rather than functioning primarily as an export reward, RoDTEP seeks to neutralise certain central, state and local duties, taxes and levies that remain embedded in exported products and are not refunded through other mechanisms. DGFT describes the scheme as a WTO-compatible remission mechanism intended to ensure that such taxes and duties are not exported along with Indian goods.

Under RoDTEP, eligible exporters receive transferable electronic scrips based on notified rates and value caps applicable to specific products. The applicable rate is determined according to the relevant HS classification and the prevailing RoDTEP schedule.

This distinction is important for businesses searching for a Merchant Export Incentive scheme today. The phrase is sometimes used informally to describe export incentive support, but businesses should not assume that MEIS remains an active general export-reward scheme. Current eligibility must be examined under the applicable policy and notification.

The Role of RoDTEP in the Current Export Framework

The government has continued to revise and update the RoDTEP framework rather than treating it as a static programme. DGFT’s current RoDTEP information includes amendments to schedules, tariff alignment and changes affecting different categories of exporters.

For example, DGFT records show that RoDTEP was extended for specified categories, including DTA units, while its applicability to exports from Advance Authorisation, SEZ and EOU units was addressed through subsequent notifications. DGFT also lists tariff-alignment changes arising from amendments to the Customs Tariff framework.

This demonstrates an important characteristic of modern Indian export policy: exporters must monitor notifications rather than rely on older scheme information.

Export Schemes and Incentives: A Broader Policy Approach

India’s current framework is not dependent on one single Export Incentive Scheme. Instead, exporters can encounter different forms of policy support depending on the nature of their business, product, export model and compliance requirements.

Some important mechanisms include:

  • RoDTEP for remission of eligible embedded duties and taxes.
  • Duty Drawback for eligible customs and excise-related duties under the applicable framework.
  • Advance Authorisation for duty-free import of inputs subject to prescribed export obligations.
  • EPCG for importing capital goods at concessional or zero customs duty subject to export obligations.
  • RoSCTL for eligible exports from the apparel and made-ups sectors.
  • Export Promotion Mission initiatives aimed at improving finance, market access, branding, logistics and compliance capabilities.

Therefore, Export Schemes and Incentives should be evaluated as a complete policy ecosystem rather than as one uniform benefit.

The New Direction of Export Promotion

The evolution has become even more visible under Foreign Trade Policy 2023. Instead of relying exclusively on conventional financial incentives, the policy places considerable emphasis on trade facilitation, technology, process simplification and improving India’s participation in global value chains. DGFT’s Foreign Trade Policy framework was updated on 19 August 2026, demonstrating that the policy environment continues to evolve.

The Export Promotion Mission is another significant development. Recent DGFT measures under the mission include support for export credit, emerging export opportunities, e-commerce exporters, branding, market access and regulatory compliance. In July 2026, DGFT issued clarifications relating to interest-subvention support under the Niryat Protsahan component, while other initiatives have focused on branding and market-access assistance.

This represents a broader understanding of export competitiveness. Financial relief remains important, but exporters also require affordable finance, international certifications, reliable logistics, market intelligence, packaging, branding and regulatory support.

What Indian Exporters Should Do Today

Businesses should avoid basing their export planning solely on older information about MEIS or any other discontinued incentive.

Before claiming a benefit, exporters should verify:

  1. The current Foreign Trade Policy and applicable Handbook of Procedures.
  2. The correct ITC-HS classification of the product.
  3. The latest RoDTEP rate and value cap, where applicable.
  4. Whether the product and exporter meet the relevant eligibility conditions.
  5. Whether another duty-remission or exemption mechanism already covers the applicable taxes.
  6. Documentation, declaration and claim requirements.
  7. Changes introduced through DGFT, Customs or other government notifications.

Accurate classification is particularly important because an incorrect HS code can affect both eligibility and the amount of benefit available.

India’s merchandise exports remain an important component of the country’s external trade. The Ministry of Commerce reported merchandise exports of US$437.70 billion in 2024–25, while official TradeStat data has continued to provide updated export statistics for subsequent periods.

How Exim Advisory Can Help

As export policies become increasingly specialised, businesses need to evaluate incentives according to their products, supply chains and compliance position rather than simply selecting the scheme offering the highest apparent benefit.

Exim Advisory assists Indian exporters and importers with export-policy analysis, documentation, regulatory compliance and evaluation of applicable Export Schemes and Incentives. Professional guidance can help businesses understand the transition from older mechanisms such as MEIS to current remission and export-promotion programmes and make decisions based on the latest applicable rules.

Conclusion

The journey from the Merchandise Export Incentive scheme to RoDTEP reflects a fundamental change in India’s export-policy philosophy. Earlier programmes focused more heavily on export rewards, while the modern framework increasingly focuses on remission of embedded taxes, trade facilitation, access to finance and strengthening international competitiveness.

For exporters, the key lesson is simple: an incentive should never be evaluated only by its name. Eligibility, product classification, documentation, applicable rates and the latest government notifications determine whether a benefit can actually be claimed.

As India expands its presence in global markets, keeping track of changing Export Incentive Scheme provisions and wider Export Schemes and Incentives will remain essential for businesses seeking sustainable and compliant export growth.

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