Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy. From textiles and handicrafts to engineering goods and electronic goods, Indian MSMEs are making a significant mark in global markets. To accelerate this growth further, the government offers a variety of MSME export incentives all through India that helps small and medium-sized enterprises compete with global competitors.

These incentives are duty refunds, subsidies, and schemes like SEIS and MEIS that reduce costs and widen profit avenues for exporters. If you are a registered owner of an MSME registered under Udyog Aadhar, you can access multiple benefits that help you scale your exports and enter new markets.

This article elucidates how export incentives can be claimed by MSMEs, duty drawback schemes, benefits of SEIS/MEIS and Udyam export subsidies and procedural steps for making an application.

Why Export Incentives Matter for MSMEs

Competition at the international level is hard for small business. International trade tariffs, cost of shipping and manufacture may make a product from India less competitive. Export incentives bridge this hole through:

• • Reducing cost through tax and duty refunds.
• • Aiding MSMEs into global markets.
• • Ensuring financial stability amidst trade fluctuations.
• • Augmenting long-term growth through government-supported benefits.

For example, funds from a refund through a duty drawback program can be redeployed back into improving product quality or raising production.

Available Export Incentives Applicable to MSMEs

1. Duty Drawback Scheme

Drawback of duty reimburses customs and excise duty paid on input used while making export goods. For the MSMEs, this means lower production cost and better international price.

Exporters can enjoy this refund through the submission of applications with customs offices and affixing all supporting documents like shipping bills and invoices.

2. MEIS (Merchandise Exports from India Scheme)

The MEIS scheme has been developed with a motive of encouraging export of notified goods to target nations. Rewards are paid to the exporters in exchange of transferable duty credit scrips used while paying customs dues or sold.

Even though MEIS has been replaced as part of updated trade modalities, some of the MEIS export duration continue to enjoy benefits from MEIS.

3. SEIS (Service Exports from India Scheme)

For IT in the service sectors, digital services, consultancy, hospitality, healthcare MSMEs the reward under the SEIS scheme is computed on the basis of net earnings of foreign exchange.

For instance, a small IT business exporting software products to the US may enjoy credits under SEIS and reduce its cumulative tax outgo.

4. Udyam Export Subsidy

Companies registered under Udyog Aadhar/Udyam Registration are eligible for extra export subsidies. These are as follows:

• • Subsidized trade fair attendance abroad.
• • Lower fees for patents, barcodes, and certifications.
• • Assistance towards export marketing and branding.

To register, MSMEs should first do their MSME registration online and subsequently make use of export-specific schemes from the Directorate General of Foreign Trade (DGFT) or Export Promotion Councils.

How to Apply for Export Incentives as an MSME

Here are the steps involved in claiming export benefits by MSMEs:

• • Register Your Business – First, you should register your Udyog Aadhar in order to become an MSME.
• • Obtain Import Export Code (IEC) – For all export business activities; issued by DGFT.
• • Maintain Appropriate Records – Invoices and receipts, bills of shipping, exchange and bank certificates.
• • Apply Online – File claims under duty drawback programme, SEIS or MEIS through DGFT’s online platform.
• • Track Status – Continuously monitor application status and reply to inquiries if necessary.

Advantages of Export Incentives for MSMEs

• • Better Profit Margins – Less tax and duty lead to better pricing.
• • Global Competitiveness – Prices are similar with global price standards.
• • Innovation Incentives – There are funds available for R&D and upgrading technology.
• • Market Growth – Venturing into international markets becomes less expensive with subsidies.

Problems with Accessing Export Incentives

While schemes exist, some MSMEs face hurdles:

• • Lack of knowledge about eligibility.
• • Bureaucratic paperwork and compliance.
• • Extension of refund due to technical or administrative issues.

For clearing through these, professional consultants or trade associations might be contacted or DGFT facilitation centers may be reached directly.

Government Initiative Towards Digital MSME Exports

The government is also actively promoting a digital ecosystem of MSME. With an online claims submission and paperless filings and schemes directly connected to an Udyam Registration, exporter’s time and energy can be saved.

Future priority entails simplifying incentives and their connection with GST and customs systems with a view to hastening disbursals.

Conclusion

Export incentives are a blessing for Indian MSMEs trying a global presence. From the disadvantage of duty to subsidy as part of MEIS and SEIS, they enhance profitability and reduce cost directly.

With export subsidies provided by Udyam, small enterprises get an added push toward promotion, trade fair exhibitions, and certifications. These schemes are utilized best after the MSMEs are registered with the correct authority under Udyog Aadhar. With further increases in global competition, export-enabled MSMEs will endure and actually thrive in international trade.