Home / Economy / Pharma, steel exports may get a leg-up

NEW DELHI : The commerce ministry is planning to extend its flagship export promotion scheme—Refund of Duties and Taxes on Exported Products (Rodtep)—to pharmaceuticals, steel and organic and inorganic chemicals, a person aware of the development said.

Until now, the duty refund scheme was applicable to labour-intensive sectors such as agriculture, leather, gems & jewellery and textiles.

However, with the demand slowdown in major markets such as China and the European Union, the ministry is pushing for extending the Rodtep scheme to more sectors.

India’s merchandise exports plunged 16.5% in October.

“The Merchandise Exports from India Scheme (MEIS) scheme was discontinued after we lost the case in WTO. We expected that Rodtep is going to extend to pharma API and formulations. Pharma exporters have been asking for an extension in every consultation, but if it is not going to be extended, it would be highly disappointing as the exports have suffered in October," Export council Pharmexcil’s director general Ravi Uday Bhaskar said.

The likely extension of the scheme to more sectors would substantially raise the cost to the exchequer from the present 13,699 crore annually, requiring additional allocation from the finance ministry.

Queries sent to the commerce ministry and the finance ministry remained unanswered till press time.

The engineering sector has also been seeking benefits after overall exports slipped for the fourth consecutive month.

The covid-induced lockdown in China and demand slowdown in Europe resulted in a sharp exports slowdown.

While engineering goods exports to China plummeted 64% in October, shipments to the EU were down 23%.

“Recent trends in India’s foreign trade point to challenging times ahead at least for the near term. Merchandise exports from India fell sharply for the first time in nearly two years in October 2022. The latest numbers seem to be in line with forecasts made by various global agencies. We, however, expect India to be much less impacted by the global slowdown as compared to many advanced major economies," Engineering Export Promotion Council (EEPC) India chairman Arun Kumar Garodia said.

Garodia said the government’s recent decision to withdraw the 15% export duty on steel products would help the engineering sector as the levy had impacted shipments of steel and its products. He added that the continuous decline in engineering exports has been led by both domestic and global constraints.

“Imposition of the 15% export duty on selected steel items from May 2022 caused exports of iron and steel to decline by 40% during April-October 2022 and by over 60% during September and October 2022. This particularly impacted the stainless steel segment," he added.

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