Ministry officials said the new incentive rates would be based on employment opportunities the exporting firms create, their export performance and contribution to poverty alleviation, besides value addition.

A preliminary report of the ministry talks about maintaining separate thresholds for the incentives. The official said they forwarded the draft report to the Department of Industry for its inputs. “Based on the feedback, the ministry will finalise how much incentive to be provided,” said the official, hinting at the possibility of raising the cash incentive rates.

Currently, the government offers 1-2 percent cash incentive to exporters on 30 goods with at least 30 percent value addition. The facility is applicable to exports to countries other than India.

As per the amended Cash Incentives Regulation 2013, exports of 10 products —processed coffee, semi-processed leather, handicrafts and wooden crafts, crust, handmade paper and its products, refined honey, tea, carpet and woollen products, pashmina and fibre products, and refined herbs —get 2 percent cash incentive. Exports of about two dozen other products, including flowers, readymade garment, herbs, large cardamom and carpets, get 1 percent incentive.

Exporters have long been demanding the government increase the cash incentives and simplify the process of claiming the facility.

They say a hike in the incentive will reduce their production cost, boosting their products’ competiveness in the international markets. The government, for the first time, had introduced the incentive package in 2011, but exporters started to benefit only from the following year.

As per the ministry official, it is considering simplifying incentive claiming process. Amid dismal exports performance, a revision to the cash incentive provision is expected to help boost exports. The country’s export grew 18.1 percent to Rs 91.36 billion in the last fiscal year.