Special scheme for producing components
In order to give an impetus to the country’s component manufacturing ecosystem, the government is planning additional sops like the Modified Special Incentive Package Scheme (MSIPS) as it plans to end Merchandise Export from India Scheme (MEIS) from 1st January’20.
M-SIPS (2012-18) offered multiple incentives for 10 years, including a capital subsidy of 20% in special economic zones (SEZs) and 25% in non-SEZs, and reimbursements of countervailing duty or excise on capital equipment for non-SEZ units. The scheme also offered reimbursement of central taxes and duties for various high-capital projects.
“MSIPS should be continued since it has attracted large investment proposals. But MEIS and MSIPS both are essential to increase the scale of production. Increased volumes would attract the supply chain/component manufacturers to India,” however, stated a senior industry executive.