India Extends RoDTEP Scheme to Boost Exports

March 11, 2024

In a significant move to bolster India’s exports amidst global economic uncertainties and supply chain disruptions, the government has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to companies in Special Economic Zones (SEZs), Export-Oriented Units (EOUs), and Advance Authorisation (AA) holders. The decision, announced by Union Minister of Commerce & Industry Piyush Goyal on March 8, 2024, recognizes the substantial contribution these sectors make to the country’s exports, accounting for approximately 25% of the total shipments.

RoDTEP Scheme: A Key Initiative

The RoDTEP scheme, launched in January 2021, aims to refund various embedded taxes and duties on exported products that are not rebated under any other scheme, such as GST or the Duty Drawback scheme. These include central, state, and local duties, taxes, and levies incurred during the manufacturing and distribution of exported products. The scheme has already provided support amounting to ₹42,000 crores to more than 10,500 export items at the 8-digit ITC HS Code level.

Budget Allocation and Extension Period

For the current financial year, the RoDTEP scheme has a budget of ₹15,070 crores, with an additional 10% increase planned for the fiscal year 2024-25. Considering the budgetary allocation, the extension of RoDTEP support to additional sectors is currently set until September 30, 2024.

Benefiting Key Sectors

The extension of the RoDTEP scheme is expected to benefit crucial export sectors, including engineering, textiles, chemicals, pharmaceuticals, food processing, and many others. By providing support to these sectors, the government aims to enhance their competitiveness in international markets, create employment opportunities, and contribute to the overall economic growth of the country, aligning with the vision of building an Aatmanirbhar Bharat (self-reliant India).

The commerce ministry stated that extending RoDTEP benefits to previously uncovered sectors like Advance Authorisation, EOUs, and SEZ units will help the exporting community handle international headwinds more effectively. The extension is aimed at enhancing India’s export competitiveness in the global market, particularly during times of economic uncertainty and supply chain disruptions.

RoDTEP Rates and Refunds

Under the RoDTEP scheme, various central and state duties, taxes, and levies imposed on input products are refunded to exporters. The current RoDTEP rates range from 0.3% to 4.3%. The scheme’s primary goal is to refund taxes and duties that are not rebated under any other scheme, ensuring that exporters are not burdened with additional costs.

Government’s view

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 1 trillion in merchandise export levels. The extension of the RoDTEP scheme to additional sectors is a crucial step in this direction, as it aims to support and promote the growth of India’s exports.

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