The Indian Commerce Ministry is reportedly working on a new export incentive scheme for merchandise shipments compliant with the World Trade Organisation (WTO) to replace the merchandise exports from India scheme (MEIS), under which exporters of goods would be able to avail incentives and duty benefits depending on the product and country. It could be named ‘rebate of levies’.

The step assumes significance as the United States has complained to the WTO against India over export subsidies, claiming these incentives were harming US companies by creating an uneven playing field, according to a report.

The United States has also challenged other export benefit schemes, such as export-oriented units scheme, electronics hardware technology parks scheme, special economic zones, export promotion of capital goods scheme and duty-free imports. According to the Federation of Indian Export Organisations (FIEO), the new scheme should include the refund of indirect taxes like on oil and power, State levies like ‘mandi’ tax and embedded tax.