Informist, Tuesday, Sep 24, 2024

By Krity Ambey

NEW DELHI – Senior commerce ministry and finance ministry officials are likely to meet this week to discuss the extension of the two export-related schemes – Remission of Duties and Taxes on Exported Products, or RoDTEP, and Interest Equalisation Scheme, an official aware of the matter said. Both the schemes are set to end on Monday.

Director General of Foreign Trade Santosh Sarangi is likely to meet Finance Secretary Tuhin Kanta Pandey to push for the extension of the two schemes, the official told Informist. "There are some budget constraints, so they will take that up at the meeting."

The Budget for 2024-25 (Apr-Mar) allocated 17 bln rupees for the Interest Equalisation Scheme, the lowest allocation for the scheme in the last three years. Under the interest equalisation scheme, exporters from micro, small and medium enterprises get interest subvention of 3% on pre- and post-shipment credit for all tariff lines. Till June, merchant exporters and manufacturers also got subvention of 2% on shipment credit for 410 tariff lines. A tariff line is a label that assigns a particular tax rate and rules for the trade of a specific type of product.

The commerce ministry is likely to advocate bringing both merchant exporters and small exporters under the equalisation scheme, the official said. Sarangi had in August said that the commerce ministry would advocate for coverage of merchant exporters as well under the scheme.

Under RoDTEP, the government reimburses the duties and taxes paid by exporters on imported inputs. The government has allocated 165.75 bln rupees for the scheme in the current fiscal year.

The government introduced RoDTEP in 2021 to replace the Merchandise Exports from India Scheme. The scheme was started with an initial deadline of Sep 30, 2021, but it has been extended several times since then.

This is a crucial time for Indian exporters as global trade is expected to rebound this year, the official said. The profitability of exporters may face headwinds if the schemes are not extended, the official added.

Amid concerns over global demand and supply disruptions due to geopolitical tensions, India's merchandise exports shrank 3% to $437.06 bln in the year ended March, the first contraction since the pandemic year of 2020-21. India's goods exports rose a meagre 1.1% on year to $178.68 bln in Apr-Aug. End

US$1 = 83.65 rupees

Edited by Saji George Titus

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