STEADY HAND IN CHOPPY WATERS

THE Trump administration’s tariff turmoils have forced the world to find new markets and make exports easier—India is no exception. In June, the government provided relief to exporters by reinstating a scheme—remission of duties and taxes on exported products or RoDTEP—to reimburse exporters for taxes, duties, and levies at the central, state, and local levels that are not refunded under other programmes but are incurred during manufacturing and distributing export products.

- AMMU GEORGE Lecturer, international business, Queen's Business School, Belfast

The commerce ministry said on Tuesday it would extend the scheme until March 2026. It’s time to note what has been holding back the full effect of the incentive—the impact of frequent and often abrupt amendments done to keep up with the global trade rearrangement.

Implemented in 2021, RoDTEP is a key tax-based incentive extended to exporters operating with advanced authorisation and from export-oriented units and special economic zones. It aims to improve competitiveness by preventing double taxation. The current remission rates in India range from 0.3 to 4.3 percent of the free-on-board value of exports.

Such tax refunds on exports are allowed under World Trade Organization (WTO) rules and are standard practice in many countries, such as the Reintegra rebate programme in Brazil and China’s rebate on value-added tax on exports.

RoDTEP replaced the earlier merchandise export incentive scheme or MEIS after the US challenged India’s subsidies at the WTO. Under MEIS, exporters were reimbursed 2, 3, or 5 percent of the FOB value in the form of credit scrips. Rather than providing upfront incentives that offset costs, RODTEP was explicitly designed to comply with WTO rules, refunding the embedded taxes and duties. The new scheme also expanded product coverage and brought in digitalisation, with electronic scrips replacing physical credit scrips.