Govt Extends RoDTEP Benefits to E-Commerce Exports

Context: The Union government will extend export benefits under its duty remission scheme (RoDTEP)  to e-commerce exports.

India’s Roadmap For E-Commerce Exports 

• Present Export status: India’s exports of goods via e-commerce is about $1-1.5 billion (through postal and courier exports) in comparison to China’s e-commerce exports $300 billion annually.
• Target: India aims for USD 200 billion in exports through e-commerce by 2030, when total merchandise exports will touch USD 1 trillion.
• Encouraging MSMEs: MSMEs are expected to benefit to the tune of USD 1-2 billion in annual exports.
• • Beneficiary sectors:  Gem and jewellery, handloom, handicraft, AYUSH products, pharma, leather and textiles.
  • The government is actively roping in online marketplaces such as Amazon to handhold MSMEs at the district level under the District as Exports Hubs Program.

Government Initiatives to Promote E-Commerce Exports

• Foreign Trade Policy of 2023, has raised the limit per consignment of goods through e-commerce to Rs 10 lakh from Rs 5 lakh.
• Enabling e-commerce exports: DGFT (Directorate General of Foreign Trade) and Shiprocket has signed an MoU to  hold capacity building and handholding sessions as part of the ecommerce outreach under its Districts as Export Hubs Initiative.
  • DGFT  will put in place an  IT framework to enable the exporters for smooth navigation.
  • An  e-commerce export handbook for MSME was launched  to serve as a  comprehensive guide for new entrepreneurs looking to export through the ecommerce route.
  • District as Export Hubs Initiative: As part of the program, Amazon and DGFT will co-create capacity building sessions, training and workshops for MSMEs in districts identified by the DGFT.
    • The initiative will link local producers even in rural and remote districts with global supply chains.
  • Setting up export facilitating post-offices across the country.
  • Creating e-exports zones.

Remission of Duties and Taxes on Exported Products (RoDTEP) 

• About: The Scheme provides for refund of taxes, duties and levies that exporters incur in the process of manufacturing and distribution of goods.
• Under the scheme, a rebate is provided for all hidden taxes at every level on the exported product that has not been refunded under any other existing scheme.
• Budget: For 2023-24, a budget of Rs 15,070 crore is made available with the scheme already  supporting USD 450 billion worth of exports at the cost of Rs 13,020 crore.
• The RoDTEP scheme is WTO compliant. This means that it does not violate any international trade agreements. 
• Tax range: The refund rate under the scheme ranges from 0.5 per cent to 4.3 per cent of the product’s value, and it varies depending on the product and the country of export. Examples:
  • Textiles: 2.4% for exports to the United States
  • Machinery: 1.0% for exports to all countries
  • Agricultural products: 0.5% for exports to all countries

Also Read: Empowering MSMEs For Export Success

News source: The economic times

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