Government extends RoDTEP benefits to boost textile sector

The Indian government has announced a significant expansion of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, a popular export promotion program. This move aims to enhance India's competitiveness in the global market across several key sectors.

The program now covers Export Oriented Units (EOUs), units operating in Special Economic Zones (SEZs), and holders of Advance Authorizations (AA) – all of which were previously excluded. This extension aims to benefit major sectors like engineering, textiles (including specific products like saris and lungis), chemicals, pharmaceuticals, and food processing. These sectors contribute roughly 25 per cent of India's total exports. Due to budgetary considerations, the RoDTEP benefit for these newly included sectors is presently applicable until September 30, 2024. The government might extend it further based on evaluations.

The decision acknowledges the challenges faced by exporters due to global economic uncertainties and supply chain disruptions. Extending RoDTEP support is expected to help them navigate these headwinds and maintain their export competitiveness.

RoDTEP scheme reimburses exporters for various central and state level taxes and levies that are embedded in the cost of their exported products. This effectively reduces their production cost and improves their profit margins.

Since its launch in January 2021, RoDTEP has provided substantial support, amounting to Rs 42,000 crore, to over 10,500 export items. The scheme's budget for the current financial year is Rs 15,070 crore, with an additional 10 per cent increase planned for FY 2024-25, demonstrating the government's commitment to export promotion. The current RoDTEP rates vary depending on the product category, ranging from 0.3 to 4.3 per cent.

The inclusion of textiles in the RoDTEP scheme is expected to be particularly beneficial for the textile sector. The government has already specified benefits for 18 specific textile products, including sarees and lungis. This will likely provide a much-needed boost to textile exports and potentially create new job opportunities in the sector. Overall, the expansion of RoDTEP signifies the government's proactive approach to supporting Indian exports and strengthening the country's position in the global market.