According to a senior official, the government is anticipated to expand the export benefits provided under the RoDTEP scheme to encompass the iron and steel, chemicals, and pharmaceutical sectors beyond September 30.
In December 2022, the government had already extended the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to include chemicals, pharmaceuticals, and iron and steel products, with the extension initially set to last until September 30 of the current year.
The official stated, “Due to the recent poor performance in exports over the past few months, there is a growing demand to extend these benefits for an additional six months, possibly until March 2024. The proposal is currently under consideration, and an extension is a distinct possibility.”
These three sectors were introduced relatively late into the RoDTEP scheme, which aims to reimburse duties, taxes, and levies imposed at the central, state, and local levels, thus reducing the cost of products meant for export.
It is noteworthy that the RoDTEP scheme was introduced as a replacement for the Merchandise Exports from India Scheme (MEIS), which concluded the previous year. Currently, more than 10,342 export items receive benefits under the RoDTEP scheme.
Exporters receive incentives in the form of transferable duty credit scrips, which can be used to offset import duties or sold in the market. When the RoDTEP scheme was initially announced in late 2020 and officially notified in August 2021, these sectors were excluded due to their strong export performance at the time.
However, global factors such as uncertainties and disruptions in supply chains stemming from the Russia-Ukraine conflict began to affect India’s exports last year. In the 2022-23 fiscal year, pharmaceutical exports accounted for 5.68 percent of India’s total exports, amounting to USD 23.5 billion. Iron and steel product exports reached USD 9.7 billion, constituting 2.17 percent of total merchandise exports, while chemical exports amounted to USD 14.9 billion, or 3.33 percent of total exports.
Between April and July of the current fiscal year, exports of organic and inorganic chemicals declined by 15.17 percent to USD 9.1 billion. Conversely, iron and steel exports saw an 8.81 percent increase to USD 9.9 billion, and pharmaceutical exports showed a growth of 3.99 percent to USD 8.71 billion. However, it’s worth noting that pharmaceutical exports declined in July.
In the 2022-23 fiscal year, the RoDTEP scheme supported exports worth USD 450 billion, incurring a cost of Rs 13,020 crore. Comparatively, in the 2021-22 fiscal year, the scheme facilitated USD 421 billion worth of exports, costing Rs 12,100 crore.
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