•  The World Trade Organisation’s dispute settlement body has set up a panel to examine the US complaint against certain export-subsidy measures by India as both the sides failed to resolve the issue at consultation level.

Background:

• In March, the US dragged India to the global trade body's dispute settlement mechanism over export subsidies, saying that these incentives were harming the American companies.
• The US has requested for the establishment of a dispute panel to examine the allegations on India's export incentive measures.
• Seeking consultation under the aegis of the WTO is the first step of dispute settlement process. If the two nations are not able to reach a mutually agreed solution through consultation, the complainant can request for a WTO dispute settlement panel to review the matter.
• The US has challenged India's export subsidy programmes such as Merchandise Exports from India Scheme in the WTO, asserting that these initiatives harm its companies by creating an uneven playing field.
• They have stated that all WTO members, including India, are required to provide subsidies consistent with provisions of the WTO's Agreement on Subsidies and Countervailing Measures, including refraining from providing subsidies contingent upon export performance.

About Merchandise Exports from India Scheme (MEIS)

• The Export Incentive Scheme- MEIS scheme grants benefits of up to 5% as compared to earlier scheme which offered benefits up to 7%. However, this scheme removes various kind of previous restriction. Product and market base is also significantly widened in comparison to earlier scheme. Unlike earlier schemes, this scheme has been made applicable to exports made by SEZ units. Benefits under MEIS scheme for exports are extended to developed country which was eligible for a very limited extent under the earlier schemes. The benefits of MEIS is also extended to e-commerce sector.

MEIS schemes are introduced with following objective

• To boost India’s export by offsetting infrastructural inefficiencies and associated costs involved
• To provide a level playing field to exporters
• Finally to increase export of Goods
• The Government of India has introduced Merchandise Exports from India Scheme (MEIS) through the Foreign Trade Policy (FTP) 2015-20 w.e.f. April 1, 2015.

Salient features of MEIS are as under :

• MEIS is result of major consolidation and simplification:
• Earlier there were 5 different schemes for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use. Now all these schemes have been merged into a single scheme, namely Merchandise Exports from India Scheme (MEIS).