In the Mid Term Review of the Foreign Trade Policy released in December 2017, incentive rates under the Merchandise Exports from India Scheme and the Services Exports from India Scheme were increased by how many percentage points each?

Introduction / Context:
India uses various export promotion schemes to support goods and services exporters. The Merchandise Exports from India Scheme and the Services Exports from India Scheme provide incentives in the form of duty credit scrips. In December 2017, a Mid Term Review of the Foreign Trade Policy was released, and one of its key announcements was an increase in incentive rates under these schemes for certain sectors and products.

Given Data / Assumptions:

• The Mid Term Review was released in December 2017.
• It focused on revising parts of the Foreign Trade Policy for the period 2015 to 2020.
• Incentive rates under Merchandise Exports from India Scheme and Services Exports from India Scheme were adjusted.
• The question asks specifically about the magnitude of increase in incentive rates for these schemes.

Concept / Approach:
The Merchandise Exports from India Scheme provides incentives to exporters of notified goods, while the Services Exports from India Scheme covers notified services. In the Mid Term Review, to support labour intensive and small and medium enterprises, the government announced an increase of 2 percentage points in existing incentive rates for many products and services under both schemes. Therefore, the correct answer is a 2 percent increase each, not a much larger jump such as 5 or 10 percent.

Step-by-Step Solution:
1. Identify the policy document mentioned: Mid Term Review of the Foreign Trade Policy in December 2017. 2. Recognise that the question refers to revisions in incentive rates, not to entirely new schemes. 3. From government announcements, note that the main change was an increase of 2 percentage points in selected incentive rates. 4. These increases applied under both the Merchandise Exports from India Scheme and the Services Exports from India Scheme. 5. Therefore, the correct choice is a 2 percent increase for each scheme.

Verification / Alternative check:
Official press releases and summaries of the Mid Term Review highlight that the total additional incentive outlay was several thousand crore rupees due to a 2 percentage point increase in rate for a large number of labour intensive product groups and certain services. If the increase had been 5 percent or more, the financial impact and media coverage would have been much larger and significantly different from the figures commonly quoted.

Why Other Options Are Wrong:
Option A and B: Increases of 5 percent or 10 percent would have been unusually large and are not supported by the policy document.
Option D: A 15 percent increase for each scheme would imply a radical change in export incentive structure, which did not occur in the Mid Term Review.
Option E: The Mid Term Review did announce changes to incentive rates; it was not a case of leaving them unchanged.

Common Pitfalls:
A common mistake is to confuse the absolute incentive rate with the incremental increase. For example, some product groups moved from 5 percent to 7 percent, which is a 2 percentage point increase but might be mis remembered as 5 or 7 percent change. Always distinguish between the rate itself and the amount by which it is revised. Another error is mixing up this review with separate announcements for other schemes or later years.

Final Answer:
2 percent increase for each scheme