For small and medium enterprises, international trade involves significant capital, risk, and operational challenges. Government schemes can:

• Reduce costs through duty exemptions or reimbursements

• Provide financial support for pre- and post-shipment needs

• Encourage export of specific products or imports of capital goods

• Improve global competitiveness

Effectively using these incentives can increase profit margins, improve cash flow, and strengthen your SME’s international credibility.

Table of Contents

1. Identify the Major Export Incentive Schemes

2. Import Incentives for SMEs

3. How to Apply for Export Incentives

4. Financial Integration

   
   

Identify the Major Export Incentive Schemes

1. RoDTEP (Remission of Duties and Taxes on Exported Products)

   • Replaces earlier MEIS scheme

   • Refunds embedded taxes not exempted under GST

   • Applicable to: All goods exported from India

   • Actionable Tip: Apply via DGFT portal and maintain correct HS codes and invoices

2. Duty Drawback Scheme

   • Refund of customs duties, excise duties, and GST on exported goods

   • Applicable to: Exporters who have paid taxes on inputs/raw materials

   • Actionable Exercise: Maintain input tax credit records and shipping bills

3. EPCG (Export Promotion Capital Goods) Scheme

   • Allows import of capital goods at reduced or zero customs duty

   • Obligation: Export products worth 6 times the duty saved over 6 years

   • Actionable Tip: Ideal for SMEs importing machinery to manufacture export goods

4. SEIS (Service Exports from India Scheme)

   • For service exporters, e.g., IT, consulting, education

   • Benefits: Duty credit scrips that can be used to pay customs duties

5. Agricultural Export Promotion Incentives

   • Specific to agriculture and processed food sectors

   • Includes subsidies for infrastructure, cold storage, and marketing

Import Incentives for SMEs

1. Import Duty Concessions / Exemptions

   • Capital goods, raw materials, or intermediates for export-oriented SMEs may enjoy reduced duty

   • Apply through DGFT and Customs

2. Advance Authorization Scheme

   • Duty-free import of raw materials used in export production

   • Obligation: Export finished goods of equivalent value

3. Interest Subvention Schemes

   • Some government-backed loans for importers offer lower interest rates

4. Subsidies for Technology & Machinery Imports

   • Encourages modernization and competitiveness in export manufacturing

Actionable Tip: SMEs should maintain an import/export incentive tracker to never miss eligible benefits.

How to Apply for Export Incentives

1. Identify Eligible Schemes

   • Based on product type, export value, and export market

2. Prepare Documents

   • Shipping bills, invoices, IEC, GST certificates, and bank realization certificates

3. Apply via DGFT Portal

   • Fill forms and upload documents

   • Track status online

4. Claim Benefits / Duty Credit Scrips

   • Scrips can be utilized for future imports or sold in some cases

Actionable Exercise: Pick one past export and simulate a claim under RoDTEP or Duty Drawback to understand documentation requirements.

Practical SME Example

Scenario: SME exporting handmade leather bags

• Incentives Applied:

  • RoDTEP refund of ₹50,000

  • Duty Drawback of ₹30,000

• Result:

  • Reduced overall shipment cost

  • Improved profit margin by 12%

• Key Takeaway: Properly claiming government incentives allows SMEs to compete internationally without inflating product prices

Financial Integration

• Bank Loans / Packing Credit: Banks often factor in expected government incentives as collateral

• Cash Flow Management: Advance or expected duty credits can be discounted or used to secure working capital

Actionable Exercise: Check with your bank if RoDTEP or Duty Drawback credits can be used to enhance pre-shipment liquidity.

Actionable SME Checklist

1. Identify all eligible incentives for your products

2. Maintain documentation checklist for each shipment

3. Apply via DGFT or Customs portals

4. Track status of claims regularly

5. Incorporate expected benefits into pricing and financing plans

SMEs leveraging government incentives can reduce operational costs, increase competitiveness, and scale exports confidently.

Lets now explore how to make the best of e-commerce and digital platforms to maximize reach.

Read: E-Commerce & Digital Platforms for IMPEX