Exporters seek extension of restored RoDTEP rates

COIMBATORE: Exporters have welcomed the restoration of RoDTEP (Remission of Duties and Taxes on Exported Products) rates but termed it only a short-term relief. They urged the Centre to extend the tax refund scheme without any timeline to prevent export of embedded taxes and sustain export performance. This is essential amid ongoing geopolitical tensions and LPG shortages, according to them.

The RoDTEP scheme, introduced in January 2021, aims at refunding unrebated embedded taxes and enhancing global competitiveness.

Southern India Mills Association (SIMA) chairman Durai Palanisamy thanked Prime Minister Narendra Modi, Union finance minister Nirmala Sitharaman, commerce minister Piyush Goyal and textiles minister Giriraj Singh for restoring the rates.

He noted that RoDTEP scrips improve liquidity for MSMEs facing high interest costs. Exporters urged the Centre to extend the restored rates beyond March 31, as export orders are typically negotiated for at least six months in advance.

Under the scheme, textile exporters earlier received refunds ranging from 2.5% to 4.7%.

“We welcome the restoration of RoDTEP rates, but it offers only limited relief under the current conditions,” said M P Muthurathinam, president of the Tirupur Exporters and Manufacturers Association. “Ongoing geopolitical tensions, LPG shortages, rising containers and raw material costs have severely impacted the industry. Exporters are unable to confirm new orders, and the situation is like the Covid period, when supply chains were under extreme strain,” he added.

Exporters said Indian firms compete with countries like Vietnam, Bangladesh, Turkey and China, where strong remission mechanisms exist. Even a 1%–2% cost disadvantage could lead to diversion of orders.

They said the earlier cut in RoDTEP rates announced on Feb 23 had come as a shock, especially to powerloom, handloom and spinning segments already under stress. Stable rates were crucial to leverage free trade agreements with the UK, EU and the US, they said.