Remission of Duties and Taxes on Exported Products scheme

The RoDTEP (Remission of Duties and Taxes on Exported Products) scheme is India’s initiative to refund taxes and duties that were previously not reimbursed to exporters, such as VAT on fuel or taxes on electricity used in manufacturing exported goods. This helps make Indian exports more competitive by reducing their costs.

India is now discussing with the US to ensure that RoDTEP aligns with WTO rules since the US and EU have questioned its compatibility, considering it might be a form of unfair subsidy.

Here’s a simplified example of how RoDTEP works: If an Indian company exports clothes and has paid taxes on the electricity used to run its factory, the RoDTEP scheme would allow the company to get those taxes back, lowering the cost of making those clothes and enabling the company to sell them at more competitive prices internationally.