With India’s exports momentum hit by waning global demand, the government on Wednesday decided to extend the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to the pharmaceuticals, chemicals and iron & steel sectors with effect from December 15.
The RoDTEP scheme, introduced in January 2021 to replace an earlier merchandise export incentive scheme, is meant to provide ‘zero rating’ of exports or ensure that no domestic taxes are added to goods meant for export. However, these sectors had been excluded from the scheme so far due to fiscal constraints as well as on the grounds that their exports were doing well even without such benefits.
India’s goods exports contracted by more than 16% in October this year, slipping below the $30-billion mark for the first time in 20 months. Engineering goods, the mainstay of India’s exports in recent years that also include steel products, dropped over 21% to $7.4 billion. Drugs and pharma exports had fell more than 9% in October, while chemical exports slid by a steeper 16.4%.
“In the present times, when exports are facing headwinds on account of signs of recession in some of the developed markets & supply chain disruptions on account of Russia-Ukraine conflict, extension of RoDTEP to uncovered sectors like chemicals, pharmaceuticals & articles of iron & steel is likely to enhance the export competitiveness of these sectors,” the Commerce Ministry said.
The government said it had thus accepted ‘a long-standing demand’ of industry and this ‘will go a long way in boosting and competitiveness in the global markets, generate employment and contribute to the overall economy’. The expanded list of eligible export items under the scheme will increase from the current 8,731 export items to 10,342 items, the Ministry said.
“It may be noted that government is leaving no stone unturned to support domestic industry and make it more competitive in the international markets. Export-centric industries are being reformed and introduced to better mechanisms so as to increase their competitiveness, boost exports, generate employment and contribute to the overall economy,” it added.
