The Government of India has reinstated full benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exporters affected by the West Asia crisis. This move addresses rising logistics costs and supply chain disruptions stemming from the closure of the Strait of Hormuz, which has hampered Indian export competitiveness since late February. The RoDTEP scheme, which refunds uncredited taxes and levies on production and export, had previously operated at reduced rates due to fiscal limitations.
The full restoration of RoDTEP benefits is crucial for labor-intensive sectors like textiles, leather goods, and agricultural commodities, which face thin margins and have suffered from heightened freight rates and War Risk Surcharges. By reinstating these reimbursements, the government is effectively subsidizing the costs that exporters cannot shift to international buyers due to fixed-price contracts established before the crisis.
In another policy initiative, the government is considering a new framework allowing GIFT City-based shipping firms to register vessels under both foreign and Indian flags in a balanced manner. Furthermore, ceramic and rice exporters are sounding alarms over War Risk Surcharges and cargo congestion at ports, highlighting the urgent need for these interventions.
