Center offers export incentives for start-ups

The center has introduced export incentives for start-ups and new exporters, while reducing compliance for existing exporters. The move comes as India’s goods exports fell 13% yoy in June 2023.

As part of the Market Access Initiatives (MAI) program, startups and new exporters are now eligible for airfare reimbursement for attending events abroad. At the same time, the cap on this incentive for existing exporters was increased by 20%. Under the program, the government provides financial support for export promotion activities.

According to the Ministry of Trade and Industry, the Market Access Initiative (MAI) is an export promotion program that “is intended to serve as a catalyst for the sustained promotion of Indian exports”.

With this step, start-ups with an annual turnover of INR 50 lakh in the domestic market are eligible for export promotion. Such startups and exporters also benefit from higher airfare reimbursements when hosting foreign buyers at reverse buyer-seller meetings in India.

According to a quoted official, incentives are important as mega-exhibitions are being considered and exhibitions need to be expanded and foreign companies invited to exhibit in India. The country regularly plans major food, textile and auto component trade fairs such as Messe Frankfurt, Gulf Food and Canton Fair.

Ajay Sahai, Director-General of the Federation of Indian Export Organizations (FIEO), said, “The program’s coverage of zero-export airfare support new entrepreneurs is well thought out and pragmatic to encourage startups to enter the export space, especially as we target $1 trillion in exports by 2030.”

According to the latest figures from the Ministry of Commerce, India’s total exports (goods and services combined) were valued at US$60.09 billion in June 2023, down 13.16% from US$69.20 billion in June 2022.

While exports of goods fell from US$42.28 billion in June 2022 to US$32.97 billion in June 2023, exports of services increased slightly from US$26.92 billion last June to US$27.12 billion in June this year.

The government’s export stimulus will prompt more Indian startups to seek expansion in markets abroad, particularly those producing tangible goods. For example, D2C startups, drone makers and electric vehicle manufacturers can start looking at potential markets outside of India.

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