Govt may double Rs.10k cr export support fund
New Delhi, Feb. 25 -- Amid global headwinds and trade uncertainties, the government is considering doubling the size of the Rs.10,000 crore fund proposed for export support in the Union budget of 2026-27 so as to incentivise labour-intensive sectors, particularly processed food and agricultural exports, two officials said.
The government on Tuesday exempted agriculture and food processing sectors from its Monday order that halved the rate of the duty benefits for various exports and capped the maximum amount under the Remission of Duties and Taxes on Exported Products (RoDTEP). The scheme provides for rebate of levies borne on such exports that do not avail refunds under any scheme.
In a corrigendum to Monday's notification, the Directorate General of Foreign Trade (DGFT) said that "the reduced rates and value caps notified for the RoDTEP Scheme" on February 23 "would not be applicable to the export falling under ITC HS Chapter 0l to 24". The chapters of the Indian Trade Classification (ITC) based on the harmonized system (HS) of coding covers items such as tea, coffee, poultry, meat, cereals, fruits, vegetables, processed food, alcoholic and non-alcoholic beverages.
DGFT, an arm of the commerce and industry ministry, on Monday rationalised RoDTEP rates as the budget on February 1 proposed that the scheme could be included in the export promotion mission "after appraisal and approval", which is expected soon, one official said. The budget estimates (BE) for 2026-27 also proposed reducing the allocation for the RoDTEP scheme from Rs.18,232.50 crore in BE (budget estimates) of FY26 to Rs.10,000 crore, a reduction of over 45%. The revised estimate for 2025-26 kept the BE number unchanged. Based on feedback from stakeholders and given the volatile global trade scenario, the government is expected to review the allocation soon, he said. "The administrative ministry's note (to the finance ministry) has proposed about Rs.21,700 crore for the scheme. The matter will be deliberated soon. Considering the global trade situation, it is expected that the government may raise the budget of RoDTEP for financial year 2026-27," he added. The EFC note or the Expenditure Finance Committee (EFC) note is important inter-departmental consultation process to evaluate key schemes economic and social benefits. A final decision on the matter is, however, taken by the Union cabinet.
"Both developments are important. As exports continue to be an important growth engine of the Indian economy, there is a need to strengthen the RoDTEP mechanism for relevant exports. And, secondly, the rationalization of RoDTEP rates inadvertently included agriculture and processed food sectors, which has been rectified by the DGFT's corrigendum on February 24," a second official said.
The corrigendum is important as the Monday order of the DGFT halved the rate of duty benefits under the RoDTEP with immediate effect, inviting sharp criticism from exporters. Confederation of Indian Textile Industry (CITI) chairman Ashwin Chandran said: "This is the last thing the exporting community was expecting amid the continuing global uncertainty, which shows no signs of letting up."...
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