Friday, 4 September 2020

Continue MEIS Scheme for Covid Hit Aluminium Ind: EEPC

By 121 News

Chandigarh Sept.04, 2020:- Engineering Export Promotion Council (EEPC) of India in a letter has urged the Commerce Minister to continue with the Merchandise Exports from India Scheme (MEIS) Scheme without any ceiling/ limit for Aluminium exports to survive the current crisis situation.

This letter was sent in wake of DGFT Notification, dated September 1st imposing a limit of Rs 2-cr per IEC on total reward claims under MEIS for exports between Sept-Dec, 2020, which is also envisaging further downward revision to ensure the total claims are within prescribed allocation of Rs 5000 Crore, which is a significant cut in the funds outlay for MEIS  from Rs 45,000-cr in FY-20.

This move is a huge setback for Indian Aluminium exports, struggling to remain globally competitive due high incidence of unrebated taxes and duties and various global developments including depressed demand and crashed LME Aluminium prices by ~30% in last two years. The MEIS scheme has been there much before the pandemic and taking it away at this crucial time when the exports are keeping the economy afloat would be a big blow to the GDP which has already seen a drop of 24 % in Q1 FY21 on Y-o-Y basis.

  This has created an extremely precarious situation for Indian Aluminium exports which declined by 11% from $5.7 billion in FY-19 to $5 billion in FY-20, and further will render exports vulnerable and uncompetitive vis-à-vis global players in international markets.

EEPC also demanded expeditious implementation of Remission of Duties or Taxes on Export Products (RoDTEP) scheme on priority for Aluminium industry to make India's Aluminium exports competitive and create a level playing field for Indian exporters vis-à-vis global players in international markets.

Aluminium exports from India are struggling to remain globally competitive due high incidence of unrebated Central & State taxes and duties, constituting ~15% of Aluminium production cost which is amongst the highest in the world. This is adversely impacting the sustainability & competitiveness of the Aluminium industry.

Aluminium exports are currently eligible for a 2% MEIS reward rate which itself does not provide ample cushion to remain competitive against current bearish market condition which is likely to last long.

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