Export Benefits of RoDTEP Extended to SEZ Units

The government of India has announced a major relief for the exporters in the special economic zones (SEZs) and other sectors by extending the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to them. The RoDTEP scheme is a flagship initiative of the government that aims to refund various embedded taxes and duties on exported products, enhancing their competitiveness in the global markets.

Background

The RoDTEP scheme was launched in January 2021 as a replacement for the Merchandise Exports from India Scheme (MEIS), which was challenged by the US at the World Trade Organization (WTO) for violating the subsidy rules. The RoDTEP scheme is based on the principle of WTO-compliant reimbursement of taxes and duties that are not rebated under any other scheme, such as GST or Duty Drawback.

The government had notified the rates of tax refunds under the RoDTEP scheme for 8,555 products in August 2021, covering sectors such as marine goods, yarn, dairy items, engineering, textiles, chemicals, pharmaceuticals and food processing. However, some export sectors such as SEZs, export-oriented units (EOUs) and advance authorisation (AA) holders were left out of the scheme at that time, causing discontent among them.

Extension of RoDTEP

The government has now decided to extend the RoDTEP scheme to these additional export sectors, recognizing their significant contribution to India’s exports. These sectors account for about 25 per cent of the country’s total exports. The extension of the RoDTEP scheme to these sectors will help them in handling the international headwinds caused by global economic uncertainties and supply chain disruptions.

The extension of the RoDTEP scheme to these sectors is effective from March 8, 2024 and will be valid till September 30, 2024, keeping in view the budgetary allocation for the scheme. The government has allocated Rs 15,070 crore for the RoDTEP scheme in the current financial year, with an additional increase of 10 per cent in 2024-25. The current RoDTEP rates range from 0.3 per cent to 4.3 per cent.

Impact

The extension of the RoDTEP scheme to these sectors is expected to boost their export competitiveness and growth prospects. By providing support to crucial export sectors, the government aims to not only enhance their competitiveness but also create employment opportunities and contribute to overall economic growth, aligning with the vision of building an Aatmanirbhar Bharat.

The government is confident that the proactive measures being taken, including efforts to negotiate new free trade agreements (FTAs), will further accelerate India’s journey towards achieving USD one trillion merchandise export levels.

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