RoDTEP Scheme Extended Till 31 December 2026

Why in News?

• The Department of Commerce has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme until 31 December 2026. 
• Existing RoDTEP rates and value caps will remain unchanged during the extended period. 

About RoDTEP Scheme

• RoDTEP was introduced by amending the Foreign Trade Policy 2015-20 and became effective from 1 January 2021. 
• It aims to refund Central, State and local duties, taxes and levies embedded in exported products that are not refunded through any other mechanism. 
• The scheme replaced the Merchandise Exports from India Scheme (MEIS). 
• It is designed in accordance with World Trade Organization (WTO) rules and operates through a digital system. 

Eligibility: The scheme covers:

• Domestic Tariff Area (DTA) units 
• Advance Authorisation (AA) holders 
• Special Economic Zone (SEZ) units 
• Export Oriented Units (EOUs) 
• Both manufacturer and merchant exporters are eligible. 
• Goods exported through courier and e-commerce platforms can also receive benefits. 
• The exported product must have India as its country of origin. 
• Re-exported goods are not eligible. 

How Does It Work?

• Rebate rates vary across sectors and are generally calculated as a percentage of the Free on Board (FOB) value of exports. 
• Benefits are provided through transferable duty credits or electronic scrips (e-scrips). 
• The credits are maintained electronically through the customs system. 
• The scheme does not cover taxes or duties that have already been exempted, refunded or credited through another mechanism. 

Significance

• It reduces the tax burden embedded in exported goods and improves the global competitiveness of Indian products. 
• It particularly supports labour-intensive sectors. 
• By returning otherwise unrecovered costs, the scheme can improve exporters’ working capital and cash flow. 
• The extension is intended to provide greater certainty to exporters and help create a level playing field in international markets. 

About World Trade Organization (WTO)

• The World Trade Organization (WTO) is an international organisation that establishes and oversees rules governing global trade. 
  • It was created through the Marrakesh Agreement, signed on 15 April 1994 by 123 countries after the Uruguay Round of GATT negotiations (1986–1994). 
  • The WTO formally came into existence in 1995, replacing the General Agreement on Tariffs and Trade (GATT). 
  • While GATT mainly dealt with trade in goods, the WTO covers goods, services and intellectual property rights. 
• Headquarters: Geneva, Switzerland 
• Members: 166 members, accounting for around 98% of global trade. 

Key Bodies

• Ministerial Conference: The WTO's highest decision-making body; it meets at least once every two years. 
• General Council: Handles the WTO's regular functioning and also acts as the Dispute Settlement Body (DSB) and Trade Policy Review Body (TPRB). 
• Sectoral Councils: Deal with: 
  • Trade in Goods 
  • Trade in Services 
  • Trade-Related Aspects of Intellectual Property Rights (TRIPS) 
• Secretariat: Based in Geneva; provides administrative, technical and research support. 
• Decision-making: WTO decisions are generally based on consensus, which promotes participation but can make negotiations and reforms slower. 

Major WTO Agreements

• Agreement on Agriculture (AoA): Covers agricultural subsidies, market access and related trade issues. 
• Trade Facilitation Agreement (TFA): Seeks to simplify customs procedures and make international trade faster and easier. 
• Agreement on Subsidies and Countervailing Measures (SCM): Regulates certain government subsidies and measures taken against their trade-distorting effects.

Practice Question

Q. With reference to the RoDTEP Scheme and the World Trade Organization (WTO), consider the following statements:

1. RoDTEP benefits are available to both manufacturer exporters and merchant exporters, and re-exported goods are eligible for this scheme. 
2. Under RoDTEP, rebate rates are generally determined as a percentage of the FOB value of exports, and the benefits are provided through transferable duty credits or e-scrips. 
3. The WTO succeeded GATT in 1995, but unlike GATT, it deals exclusively with trade in goods and does not cover services or intellectual property rights. 
4. The WTO General Council also functions as the Dispute Settlement Body and the Trade Policy Review Body.  

Which of the statements given above are correct?

(a) 2 and 4 only
(b) 1 and 3 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4

Answer: (a) 2 and 4 only

Explanation

• RoDTEP covers both manufacturer exporters and merchant exporters, while re-exported goods are not eligible. Hence, Statement 1 is incorrect. 
• RoDTEP rebate rates are generally calculated as a percentage of the FOB value of exports, and benefits are issued through transferable duty credits or e-scrips. Hence, Statement 2 is correct. 
• The WTO replaced GATT in 1995 and expanded its scope beyond goods to include services and intellectual property rights. Hence, Statement 3 is incorrect. 

The General Council performs regular functions of the WTO and also acts as the Dispute Settlement Body (DSB) and Trade Policy Review Body (TPRB). Hence, Statement 4 is Correct.