NEW DELHI: The government today brought in WTO-compliant export sops replacing an older incentive scheme for exporters a day after trade data revealed a 6 per cent dip in exports during August. The sops announced by Finance Minister Nirmala Sitharaman on Saturday to help rescue a flagging export sector also offered subsidized higher credit guarantee coverage for banks lending to exporters. The government also promised to help exporters take full advantage of free trade pacts already signed by India so as to push exports with major trading partners such as Asean, Japan and Korea.
The new export scheme called Remission of Duties and Taxes on Export Products (RODEPT) which promises to pay back all taxes and duties paid out while producing an exportable product, is similar to another scheme called Remisssion of state Levies (ROSL) meant only for the recession hit textiles sector, but has been rebadged and is now meant for all sectors.
Economists, however, said the measures announced today may not be enough to turnaround the sector. “Are these measures enough to revive exports? That is a question we have to ponder. It may help some exporters whose funds are stuck. However for a larger revival we need to look at input costs, import duties, and focus on labour-intensive export sectors where we have an advantage,” said Prof. N.R Bhanumurthy of the National Institute of Public Finance & Policy.
India’s trade officials had been working on replacing the older Merchandise export incentive scheme which gave incentives as a percentage of an exported products’ value as it was under challenge before WTO courts by a number of trading partners including the US, Japan and the European Union.Officials said the existing assistance given to the textile sector through MEIS and ROSL will however continue till end-December this year.The government will also subsidise export guarantees given by the state-run Export Credit Guarantee Corporation to banks for medium and small enterprises at a cost of `1700 crore.