Gokaldas Exports, Arvind, other textile stocks fall up to 6% as RoDTEP incentive cut by 50%

Gokaldas Exports, Arvind, other textile stocks fall up to 6% as RoDTEP incentive cut by 50%

Textile stocks like Gokaldas Exports, Arvind, others fell up to 6% on February 24 a day after the government on Monday halved the rate of duty benefits under the export support scheme RoDTEP.

The Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme, launched in 2021, provides for a refund of taxes, duties and levies that are incurred by exporters in the process of manufacturing and distribution of goods, and are not being reimbursed under any other mechanism at the Centre, state or local level.

With immediate effect, the Directorate General of Foreign Trade (DGFT) said the applicable RoDTEP rates shall be limited to 50% of the existing rates.

At 10 am on February 24, Vardhman Textile, Arvind, Gokaldas Exports shares were trading 6.2%, 5.8% and 5.5% lower, respectively.

Shares of Indo Count Industries, Welspun Living and Kitex Garments were trading 2.5%-3.1% lower.

Refunds under the scheme range from 0.3% to 3.9%.

"RoDTEP benefits shall be restricted to 50% of the notified rates and value caps with immediate effect," the DGFT said in a notification.

Commenting on the move, Federation of Indian Export Organisations (FIEO) President S C Ralhan said the reduction of rates and the cut in value caps by 50% came at a particularly challenging time when Indian exports are already facing significant global headwinds, including slowing demand, increasing uncertainty and rising protectionism.

"We request the government to reconsider the decision," he told PTI.

The country's exports rose marginally by 0.61% to $36.56 billion in January, while trade deficit widened to a three-month high of $34.68 billion, government data showed on Monday.