Likely duty refunds for exports of steel, pharmaceuticals and chemicals

India could consider expanding a key export program to pharmaceuticals, chemicals and steel products, considering measures to support exports hit hard by falling demand in advanced economies. Discussions have started between the Ministries of Trade and Industry and Finance on the inclusion of these sectors in the Refund of Duties and Taxes on Exported Products or RoDTEP scheme.

The import duty rebate scheme for exporters was implemented from 1 January 2021 but had excluded these sectors. “A proposal to include these sectors in the RoDTEP is being discussed,” a government official familiar with the deliberations told ET.

A cabinet memo could be moved after discussions with the finance ministry, according to the official. The scheme offers an incentive of 0.3-4.3% to 8,555 products in many job-creating sectors such as marine, agriculture, leather and gemstones and jewellery.

The government has provided about Rs 13,000 crore under the RoDTEP for reimbursement of duties and taxes such as value added tax on fuel used in transport, mandi tax and duties on electricity used during the making. According to the official, the Commerce Department will need an additional Rs 2,000 crore to expand the coverage of the scheme.