Government Initiatives
In 2022, the government of India approved the extension of the Interest Equalization Scheme (IES) till 2024. The rates for IES have been revised as 3% for MSMEs (tobacco products have MSME registration) and 2% for manufacturers and merchant exporters.
Duty Draw Back Scheme
The goal of the scheme is to cut the duty and tax chargeable on imported products that will be used to manufacture exported goods from India. Under this scheme, unmanufactured tobacco, cigars, cheroots, cigarettes, manufactured tobacco, products containing tobacco, reconstituted tobacco, nicotine, tobacco substitutes, etc. will receive a 0.15% drawback rate.
Interest Equalization Scheme (IES)
The scheme originally came into effect in 2015 and has received an extension till 2024. The interest equalization will be provided pre and post-shipment rupee export credit. As per the extension, the rates for IES will be 3% for MSMEs, and 2% for manufacturers and merchant exporters of 410 tariff-specified lines.
Tobacco Growers Welfare Scheme
The scheme is aimed at the welfare of the FCV tobacco growers and their dependent families. A Tobacco Board’s Growers’ Welfare Fund has been approved by the Ministry of Commerce and Industry of India under this scheme. The total corpus approved is Rs. 25 crore (US$ 3.14 million).