EEPC urges Commerce Minister to continue MEIS Scheme with no limit on claims for COVID hit aluminium industry

Engineering Export Promotion Council (EEPC) wrote a letter to the Commerce Minister, on Thursday, September 3, urging the continuation of the MEIS Scheme with no limit on claims for aluminium exports. The Council thinks this to be the best way to retain competitiveness in the market and survive the current crisis.

The letter was sent in wake of DGFT Notification, dated September 1, imposing a limit of INR 2 crore per IEC on total reward claims under MEIS for exports between September-December 2020.

According to EEPC, this move would be a big setback for Indian aluminium exports, resulting in a struggle to remain globally competitive amidst the high incidences of unrebated taxes and duties, depressed demand for the metal, and crashed LME aluminium prices.

The MEIS scheme has been there since long and much before the pandemic. Taking it away at this crucial time when the exports are keeping the country’s economy afloat would be a big blow to the GDP, which is already down by 23.9 per cent year-on-year in the first quarter of FY2021.

EEPC also pointed out that Indian aluminium exports declined by 11 per cent in FY20 from $5.7 billion in FY19 to $5 billion.

EEPC demanded expeditious implementation of Remission of Duties as well or taxes on Export Products (RoDTEP) scheme on priority for aluminium industry to make India’s aluminium exports further competitive in the global market.

In the wake of the COVID-19 pandemic, when domestic aluminium demand has slumped and is likely to take substantial time to recover, the only option left for the aluminium industry is to export the aluminium products to survive the plight. Being a continuous process industry, the Indian aluminium smelters are operating at around 90 per cent capacity.

Aluminium exports are currently eligible for a 2 per cent MEIS reward rate, which itself does not provide ample support to remain competitive against the current bearish market condition. The RoDTEP scheme, on the other hand, which was announced by the Hon’ble Finance Minister in September 2019, is yet to be formulated and implemented by the Government. While the domestic metal industry is striving hard to remain competitive, it is extremely important now for the Government to lend a helping hand to boost exports.

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