Export Promotion is a core economic concept and a set of government schemes and policies designed to encourage the sale of domestically produced goods and services in international markets. The primary objective is to increase foreign exchange earnings and enhance the global competitiveness of Indian products. Historically, India's trade policy shifted from an initial focus on import substitution towards export-led growth after the 1970s. The modern framework is rooted in the Foreign Trade (Development and Regulation) Act, 1992, which provides the legal basis for the Foreign Trade Policy (FTP).
The mechanism works through various schemes that offer fiscal incentives and duty neutralization. Key provisions include the Advance Authorization Scheme, which allows duty-free import of inputs for export production, and the Export Promotion Capital Goods (EPCG) Scheme, which permits the import of capital goods at zero or concessional customs duty subject to a specified export obligation. The entire framework is administered by the Directorate General of Foreign Trade (DGFT) and connects to institutions like the Export Promotion Councils (EPCs) and concepts like Special Economic Zones (SEZs).
A major recent change occurred when the incentive-driven Merchandise Exports from India Scheme (MEIS) was withdrawn on January 1, 2021. It was replaced by the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme, which is a WTO-compliant remission-based mechanism. This new scheme refunds embedded Central, State, and Local duties and taxes that are not otherwise credited or refunded, ensuring that "taxes are not exported". This transition reflects a strategic shift from direct subsidization to a sustainable, remission-based policy approach.