The government hopes to notify the tax refund rates for the much awaited Remission of Duties and Taxes on Exported Products (RoDTEP) scheme by August 13, Commerce Secretary BVR Subrahmanyam has said. The Foreign Trade Policy scheme should also be brought out by mid-September, he said.
Speaking at the virtual Annual Session held by Confederation of Indian Industry (CII) on August 11, the Secretary said the Commerce Department expects to notify the rates by Friday. He added that a new scheme called 'Districts as an export hubs scheme' will also be brought out later.
Live since January 1, 2021, the RodTEP scheme is the government's foremost export incentive scheme now after the shutdown of the erstwhile Merchandise Exports from India Scheme (MEIS).
It aims to refund to exporters the embedded duties and taxes such as VAT on fuel used in transportation, Mandi tax and Duty on electricity used during manufacturing, that were so far not being refunded. While the government has clarified that the rebate would be claimed as a percentage of the Freight on Board value of exports, it is yet to bring out the specific refund rates.
The district based scheme will work on a challenge mode whereby districts will be incentivised to compete with each other after substantial investment has been made in each (Rs 50-100 crore).
A market intelligence network will also be set up by the government. India has 140 embassies and 60 consulates globally. "All of them have a commercial wing with a minister, counsellor or attache. No one has been asking them what you do," Subrahmanyam said.
Now, they've been given targets for exports with the countries they are based in, identify export opportunities and report on sudden trade barriers put up by countries, he added.
The government also plans to ease the process of denotifying empty lands inside the 250-plus Special Economic Zones (SEZ) across the country. India will also be launching a 'Brand India' campaign later in the year to raise awareness about product standards and ensure Indian products are known globally for quality and value for money.
Need businesses to invest
Commerce Secretary BVR Subrahmanyam also appealed to India Inc to not sit on excess cash and raise investments into their businesses at a time when India's key export markets are seeing across the board growth.
The Secretary said the current year will be marvelous for exports, given that global trade and industrial revival is roaring forward.
"I would like to urge the entire business fraternity, if you're sitting on surpluses and piling up cash, I think it's good to reinvest because those who invest heavily when the going is bad will have wind in their sails when the going is good," Subrahmanyam said.
"The US is growing the fastest it has done since World War 2. All our trading partners including Europe are growing fast. The rest of the world has an opportunity to plug into this growth," the Secretary said.
Last month, the Commerce Department has conducted a detailed exercise breaking up exports to more than 200 countries and regions, across 31 commodity groups, he said. "That means 600 data points. An analysis was done of the last 5 years worth of export data - lost market share, trends and potential opportunities. Afterwards a cumulative annual export target of $ 419 billion has been set," he stressed.
According to Commerce & Industry Ministry data, exports have been static in nominal terms. They have been ranging between $290 to $330 billion over this time.
After missing it's self imposed annual targets for the last few years, the government is focused on meeting the target this time round, given that the Prime Ministers Office has taken a direct interest in the matter.
India expects $ 1 trillion worth of exports by 2027-28 according to modest calculations, the secretary said. That is the year when 20-30 percent of India's economy would consist of trade, similar to advanced export based economies like Japan, EU and US.
Agreeing that services exports remain an 'orphan' in terms of public policy or government schemes, the secretary said special focus is now being given to the large sector. The target for services exports is $700 billion by 2027-28, up from $ 200 billion currently.
Relying on scale
The PLI schemes have resulted in India becoming a net exporter of mobile phones from being a heavy net importer.
The secretary said the production-linked incentive scheme represents a distinct break from the past. "For the first time ever, rather than looking to only promote MSMEs, the government has taken a step forward to promote large scale industrial production. This was unthinkable a decade ago," Subrahmanyam said.
He also stressed that the government is firm in their commitment to support large scale manufacturing and big business. "Those of who who had been in business in the late 90s know that size was considered a punishment," the Secretary told industry captains.
Subrahmanyam stressed that 'Aatmanirbharata' does not mean isolation, but being an equal partner in the world economy and not a buyer or seller of particular goods.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
