The RoDTEP scheme, announced in January 2021, refunds  general taxes  and  duties,  such as VAT on fuel used in  transport,  mandi tax and  electricity tax.

  It  replaces  the  WTO-inconsistent  Merchandise Exports from India Scheme  (MEIS),  which had faced several challenges from WTO members. 

  The  Union  government  has no plans  to  review the Duty Free  on Exported Products (RoDTEP) scheme after the United States  and the European Union (EU)  imposed anti-subsidy duties  last year  on four  products.  Indian  products,  citing  violations  of  global trade rules. A  government official said.  

 The US and EU  imposed countervailing duties  (CVD)  on paper  records,  common  aluminum  alloy  plates  and forged steel  following  an anti-subsidy investigation.  Countervailing duties  are  customs duties  on imported  products  that are imposed to  compensate for  subsidies  provided  by the exporting  country’s government to protect  the domestic industry.  “When US investigators  visit  manufacturing plants,  exporters  must demonstrate that they are receiving discounts, not incentives. They must  be able to  prove  that they  pay their  electricity  bill  and  value added  tax (VAT). But there are  document retention issues on  the  part of  our  exporters.  We are working on a process to  help  exporters  get acquainted  with the entire documentation process,” the official said. 

  “There is no need to  modify  the  project.  It is WTO compliant.  Very  few exporters  cannot present documents. Some  people mentioned  that  it  was  an incentive because there  had been an incentive before. Therefore,  our exporters will have to adapt to the documentation mechanism and the government will  help them  in the process,” the official added.  

 The RoDTEP scheme, announced in January 2021, refunds  general taxes  and  duties,  such as VAT on fuel used in  transport,  mandi tax and  electricity tax. 

 It  replaces  the  WTO-inconsistent  Merchandise Exports from India Scheme  (MEIS),  which had faced several challenges from WTO members.  The RoDTEP  program  operates  within  a budgetary framework and  in  FY 23-24, Rs 15,070 crore  has been  allocated to  promote  exports of  products  such as pharmaceuticals, organic and inorganic  chemicals,  iron  commodities steel,  among other  products.  

 “If our partner country  cannot explain  our  policy  then  that  is a problem. The  responsibility belongs to  us. Because we are looking  to reach the market.  For  example,  if partner countries  impose  standards, we  must comply with them.  So we need market access and so we will have to resolve these issues,” Biswajit Dhar, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, said.  

 Dhar added that implementation of the scheme assumes significance as other countries are more likely to scrutinize the scheme after the US and EU have imposed countervailing duties on Indian products. He added that RoDTEP is WTO compatible but WTO is about transparency and predictability and the government has to ensure that. 

  “Another thing is how we are implementing it. There is a problem of oversight. The industry  has rightly argued  that  this rate is  too low.  Whatever the  policy, it  needs  to be  continuously  reviewed and  monitored  to  ensure proper compliance.  

Because  because of a single  black sheep,  we cannot  let the  entire project  be called into question. The government  needs  to be  cautious in its  implementation because  as  our exports  decline,  we need to count  every penny.  Because we  might  lose,” Dhar added.  

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