RoDTEP Scheme Extended to Empower E-commerce Exports

In a significant move to boost e-commerce exports, the Indian government has announced the extension of export benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to e-commerce exports made through post or couriers. This announcement aims to provide a much-needed impetus to the MSME sector and enhance the country's overall export competitiveness.

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Enhancing Export Incentives for MSMEs

The RoDTEP scheme, introduced by the government, serves as a crucial mechanism for refunding taxes, duties, and levies incurred by exporters during the manufacturing and distribution of goods. These costs, which are not reimbursed through any other central, state, or local mechanism, can now be claimed by e-commerce exporters, thereby reducing their overall export costs and improving their profitability.

Potential Beneficiaries and Impact

The extension of RoDTEP benefits to e-commerce exports is expected to have a significant impact on various sectors, including gem and jewellery, handloom, handicraft, AYUSH products, pharma, leather, and textiles. These sectors, which have a strong presence in the e-commerce space, are poised to benefit immensely from the reduced export costs and increased competitiveness.

E-commerce as a Growing Export Channel

The decision to extend RoDTEP benefits to e-commerce exports aligns with the government's recognition of e-commerce as an emerging and rapidly growing channel for international trade. With global e-commerce exports projected to reach USD 2 trillion by 2030, India aims to capitalize on this opportunity and achieve USD 200 billion in e-commerce exports by the same year.

Budgetary Allocation and Scheme Performance

The RoDTEP scheme operates within a budgetary framework, and for the current financial year (2023-24), a budget of Rs 15,070 crore has been allocated. As of December, approximately Rs 12,000 crore of this allocation has been utilized. In the previous financial year (FY23), the scheme supported exports worth USD 450 billion at a cost of Rs 13,020 crore, while in 2021-22, it aided exports worth USD 421 billion at a cost of Rs 12,100 crore.

Tax Refund Rates and Product Coverage

The rate of tax refund under the RoDTEP scheme varies from 0.5 per cent to 4.3 per cent of the product's value. It currently covers business-to-business exports of 10,610 products, and the same products exported through e-commerce or courier will now be eligible for the RoDTEP benefit.

Handbook for MSME E-commerce Exporters

To further support MSMEs in harnessing the potential of e-commerce exports, the Commerce and Industry Minister, Piyush Goyal, released a comprehensive handbook specifically designed for MSMEs. This handbook, currently available in English, Hindi, Gujarati, and Kannada, provides valuable guidance and information to new entrepreneurs looking to venture into e-commerce exports. It aims to serve as a one-stop resource for understanding the intricacies of e-commerce exports and navigating the regulatory landscape.

Collaboration with E-commerce Platforms

Recognizing the importance of collaboration with e-commerce platforms and enablers, the Directorate General of Foreign Trade (DGFT) has signed an MOU with Shiprocket. This partnership aims to enhance capacity building and provide handholding support to e-commerce exporters through outreach sessions conducted by DGFT regional authorities under the Districts as Export Hubs Initiative. This initiative seeks to promote e-commerce exports by organizing training sessions in districts across the country.

The extension of RoDTEP benefits to e-commerce exports is a significant step towards empowering MSMEs and boosting India's overall export competitiveness. With a robust digital infrastructure, supportive government policies, and a growing online consumer base, the country is well-positioned to tap into the immense potential of the global e-commerce market. By providing financial incentives, capacity building support, and comprehensive resources, the government is paving the way for MSMEs to thrive in the dynamic landscape of e-commerce exports.