The proposed Remission of Duties or Taxes on Export Product (RoDTEP) scheme will come into force from January 1, 2020. It will incentivise exporters at an estimated cost of Rs 50,000 crore and replace the Merchandise Exports from India Scheme (MEIS), which was challenged by the US last year for violating global trade rules. Sitharaman said RoDTEP will “more than adequately incentivise exporters than all the existing schemes put together”.
Director General of Foreign Trade Alok Chaturvedi said the scheme would be taken to the cabinet soon and the rates would be worked out sector by sector.
The minister also said there would be a fully automated electronic refund route for input tax credits in GST for quick refunds. This would be implemented by the month-end.
She also announced revised priority sector lending (PSL) norms for exporters which would release an additional funding of Rs 36,000-68,000 crore to them. Export finance will be actively monitored by an inter-ministerial working group in the commerce department.
This is the latest set of measures after the government announced mergers of public sector banks, opened up foreign direct investment in contract manufacturing and eased norms for overseas investors in single brand retail and coal mining. Sitharaman had in August announced the rollback of enhanced surcharge on foreign portfolio investors and the lifting of angel tax on startups, among others.
India’s economic growth had plunged to a 25-quarter low of 5% in April-June. India’s exports growth contracted in August as global trade tensions and sluggish demand brought shipments down by 6.05%.
Terming the new measures as “decisive”, Director General of CII Chandrajit Banerjee said: “Urgent measures were needed to support exports, which have been declining in the current year. The new scheme to compensate exporters for all duties is going to help considerably.”
The Export Credit Guarantee Corporation will expand the scope of export credit insurance scheme at a cost of Rs 1,700 crore annually to enable reduction in overall cost of export credit, especially to MSMEs.
Sitharaman also announced that a Free Trade Agreement Utilisation Mission would be set up to help exporters optimally use the concessional tariffs under trade pacts that India has signed with several countries. Besides, annual mega shopping festivals along the line of the Dubai Shopping Festival will be organised at four places in the country. The focus will be on handicraft, yoga, tourism, textiles and leather.