Evaluating RoDTEP Scheme Extension to EOUs and SEZs

The government is currently assessing the financial viability of extending export benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to units located in export-oriented units (EOUs) and special economic zones (SEZs), according to official sources. While the proposal is under evaluation by the Directorate General of Foreign Trade (DGFT), a decision will ultimately depend on the availability of funds. The RoDTEP scheme, aimed at reimbursing all input taxes involved in the manufacturing of exported goods, was introduced for most sectors from January 1, 2021, covering over 8,500 products. However, units in SEZs and EOUs were excluded initially due to financial constraints. RoDTEP rates vary between 0.3 percent and 4.3 percent. The SEZ division of the Commerce Department forwarded a request from the Export Promotion Council for EOUs and SEZs (EPCES) to the DGFT, suggesting that EOUs could be covered under the RoDTEP scheme initially, with SEZs to be included later once systems were updated. While technical aspects can be addressed, the key consideration is the availability of funds to cover additional sectors. Even covering exports from EOUs alone may require a significant additional outlay of ₹600-700 crore, according to industry sources. In the fiscal year 2023-24, the outlay for RoDTEP was set at ₹15,070 crore, and it is expected to increase by 10 percent in the current fiscal year. Despite expectations of subdued export growth in 2024-25, the proposal to cover EOU exports requires thorough examination due to the substantial additional funds needed.