Govt extends export benefits under RoDTEP scheme to ecommerce exporters

Context: The government announced the extension of export benefits under the RoDTEP scheme for ecommerce exports through post or couriers.

News:

• The RoDTEP scheme, implemented three years ago, involves the refund of non-creditable central, state, and local levies embedded in exporters' inputs.
• Currently, e-commerce exporters are excluded from RoDTEP benefits.
• The Commerce Ministry is set to issue a notification stating that RoDTEP will be accessible for e-commerce.
• The ministry will facilitate any necessary IT enablement for the inclusion of e-commerce in the RoDTEP scheme.
• Estimating e-commerce exports is challenging as a significant portion is integrated into merchandise exports by major companies like Amazon and Walmart.
• India's e-commerce exports, considering postal and courier exports, are currently valued at approximately $1 to $1.5 billion, a fraction of the total $421 billion in exports.

RoDTEP Scheme

• The RoDTEP (Remission of Duties and Taxes on Exported Products) scheme aims to reimburse exporters for central, state, and local duties or taxes embedded in their products.
• It addresses a disadvantage faced by Indian exports by refunding duties that were not previously rebated or refunded.
• The scheme does not apply to duties and taxes that are already exempted, remitted, or credited.
• Launched in January 2021, it replaced the non-compliant Merchandise Export from India Scheme (MEIS), which provided additional benefits ranging from 2% to 7% on the Freight On Board (FOB) value of eligible exports.
• MEIS was deemed non-compliant with World Trade Organization (WTO) rules, as countries with a per capita income above $1000 cannot offer export subsidies. India lost the WTO case and introduced RoDTEP to comply with WTO norms.
• The Rebate of State and Central Levies and Taxes (RoSCTL) Scheme, separate for garment exporters, has been notified.
• Tax refund rates under RoDTEP range from 0.5% to 4.3% for different sectors.
• Rebates will be claimed as a percentage of the Freight On Board value of exports.
• Issued in the form of a transferable duty credit or electronic scrip (e-scrip), maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).

The Government has taken the following measures to boost exports and reduce trade deficit:

1. Foreign Trade Policy (2015-20) extended upto 31-03-2023.
2. Interest Equalization Scheme on pre and post shipment rupee export credit has also been extended upto 31-03-2024.
3. Assistance provided through several schemes to promote exports, namely, Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Scheme. 
4. Rebate of State and Central Levies and Taxes (RoSCTL) Scheme to promote  labour oriented textile export has been implemented since 07.03.2019.
5. Remission of Duties and Taxes on Exported Products (RoDTEP) scheme has been implemented since 01.01.2021.
6. Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase Free Trade Agreement (FTA) utilization by exporters.
7. 12 Champion Services Sectors have been identified for promoting and diversifying services exports by pursuing specific action plans.
8. Districts as Export Hubs has been launched by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district.
9. Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced.
10. Package announced in light of the COVID pandemic to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports.

Directorate General of Foreign Trade

• Establishment and Affiliation: The Directorate General of Foreign Trade (DGFT) is a branch of the Ministry of Commerce and Industry, Government of India, formed in 1991 to oversee and implement foreign trade policies.
• Policy Formulation: DGFT plays a crucial role in crafting the Foreign Trade Policy (FTP) for India, outlining guidelines, incentives, and regulations governing the import and export of goods and services.
• Licensing and Regulation: DGFT issues, regulates, and updates licenses, permits, and authorizations necessary for imports and exports. It manages lists of restricted and prohibited items.
• Export Promotion Schemes: The DGFT administers various schemes such as Export Promotion Capital Goods (EPCG), Merchandise Exports from India Scheme (MEIS), and Service Exports from India Scheme (SEIS) to encourage exports and boost India's competitiveness.
• Trade Facilitation: DGFT focuses on simplifying procedures, reducing bureaucratic obstacles, and promoting the digitization of trade-related processes to facilitate efficient international trade.
• Monitoring and Enforcement: DGFT actively monitors exporters' and importers' compliance with trade regulations, taking necessary actions to enforce export obligations and prevent the misuse of export incentives.