The commerce ministry has lined up a revival package for exporters, which includes greater incentives on existing schemes, extension of the interest subsidy scheme, amnesty on loan defaults and sops for farm exports.

The Covid-19 pandemic and the ensuing lockdown in the major export markets have led to the cancellation of orders with plants and machinery lying idle and minimum orders placed for the future, according to the Export Promotion Council of EoUs and SEZs.

A senior commerce ministry official said the package would be examined by the finance ministry and the PMO before it is approved.

They said due to the dip in revenue collection, the finance ministry is cautious in providing sops, which would result in a significant revenue outgo.

Officials said the government was also examining the request of units in SEZs to sell their products in the domestic market without the payment of customs duties.

The government should allow SEZs to sell in the domestic market after they pay the duty on the raw materials — the SEZs are exempted from paying this levy — allowing them to continue operations, utilise machinery and engage their workforce, which are lying idle, the council has said in a letter to commerce minister Piyush Goyal.

The SEZs however, want, the customs duty to be waived. Under SEZ Act 2005, SEZs can sell in domestic tariff area on payment of customs duty, which make their products uncompetitive.

The exporters want the government to extend the interest subsidy scheme, under which they get 3 per cent to 5 per cent subsidy on their loans. The five-year scheme expired in March, and the government has not extended the scheme even as it extended the Foreign Trade Policy, which had also lapsed in March.

The subsidy scheme covers 416 tariff lines, many of them labour-intensive sectors such as readymade garments, automobile parts, processed agriculture/food items, handicrafts glass and glassware, medical and scientific instruments and pharmaceuticals. The scheme also covers all items exported by the MSME (micro, small & medium enterprises) sector.

“Exporters from diverse sectors, be it textiles, garments, handicrafts, leather or engineering items, have been seeking relief, such as higher sops and easier credit, to help them survive the crisis,” the official added.

While the commerce ministry has said the popular Merchandise Export Incentive Scheme will continue at least till December and may get extended, it could now include higher incentive rates.

There is a big demand for an amnesty scheme as beneficiaries of certain promotion schemes have not been able to fulfil their obligations because of the fall in global demand, they said.

Agriculture exports, which have witnessed a surge in demand during the pandemic, may also attract incentives.

Exports plunged 34.57 per cent in March to $21.41 billion as orders started declining because of the global pandemic.

In April-May, exporters fear the situation is likely to deteriorate further following the nation-wide lockdown and a large-scale cancellation of global orders.