The Central Government extended support for exports under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme till 30 June 2024. The RoDTEP support was originally notified until 30 September 2023, but this extension comes at a crucial time when the country’s exports are facing challenges due to the global economic slowdown.
Addressing Global Headwinds
The decision to extend the RoDTEP scheme is a strategic move by the government to support the exporting community in navigating the uncertain international trade landscape. Major economies around the world have been experiencing a slowdown, which has directly impacted the demand for Indian exports. By extending the scheme, the government aims to provide exporters with a better negotiating position for international contracts.
WTO-Compatibility and IT Implementation
One noteworthy aspect of the RoDTEP scheme is its alignment with World Trade Organization (WTO) rules and its implementation in an end-to-end IT environment. This ensures transparency and efficiency in the disbursement of benefits, making it easier for exporters to access the support they are entitled to.
Origins of the RoDTEP Scheme
The government introduced the RoDTEP Scheme as a duty remission scheme on exports, officially launching it on 1 January 2021. This scheme operates within a budgetary framework, with a budget allocation of Rs. 15,070 crore earmarked for the fiscal year 2023-24.
Key Features of RoDTEP
The RoDTEP scheme serves as a mechanism for the reimbursement of duties, taxes, and levies. These are costs that export entities incur during the manufacturing and distribution process of exported products. Importantly, these costs are not typically refunded through other mechanisms at the central, state, or local levels.
RoDTEP Committee’s Role
To ensure the scheme’s effectiveness and relevance, the RoDTEP Committee has been reconstituted within the Department of Revenue. This committee is responsible for recommending and reviewing the ceiling rates for different export sectors under the RoDTEP Scheme.
On 26 September 2023, the committee held its first interaction with the Export Promotion Councils (EPCs) and Chamber of Commerce to discuss the methodology and other issues related to the RoDTEP Scheme and its implementation.
EPCs’ Call for Increased Support
During the discussions with the RoDTEP Committee, the Export Promotion Councils (EPCs) emphasized the need for enhancing the RoDTEP budget allocation. They also advocated for higher rates to be made available for all export items, aiming to provide greater market access for Indian products abroad.
Between 1 January 2021 and 31 March 2023, a total of Rs. 27,018 crore was disbursed under the RoDTEP scheme. For the current financial year, approximately Rs. 15,070 crore has been allocated to support 10,610 product lines, indicating the government’s commitment to bolstering the Indian export sector.
Strengthening India’s Global Trade Position
The extension of the RoDTEP scheme until June 2024 is a proactive step by the Central Government to support the export community amid global economic challenges. By providing exporters with continued financial relief and ensuring WTO-compatibility, the government aims to strengthen India’s position in international trade and boost its exports.