India is likely to continue export incentives worth Rs 40,000 crore till next year as the government looks to cushion the impact of Covid-19 on the country’s outward shipments.

The commerce and industry ministry is considering a plan to extend the Merchandise Exports from India Scheme (MEIS) till March 31, 2021. The proposal was mentioned in a letter to development commissioners of special economic zones from the Department of Commerce. ET has reviewed the letter.

India’s exports shrank almost 35% to $21.41 billion in March from a year earlier. They declined 4.8% to $314.31 billion in FY20 from $330.08 billion in FY19.