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Champion industry, aluminium, looks for 5% RoDTEP rate to boost exports
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SME Times News Bureau | 04 Mar, 2021
The Ministry of Finance announced implementation of
RoDTEP Scheme and extending benefit to all export goods with effect from
April 1, 2021. This announcement is a huge relief for exporters post
withdrawal of the MEIS and will provide much needed impetus to boost
Indian exports.
However, the pendency of notifying the
sector-wise remission rates under RoDTEP Scheme is creating a precarious
situation and uncertainty for Indian exporters due to ambiguity w.r.t.
pricing of goods and thereby impacting Indian exports.
The
recently announced Union Budget 2021-22 has kept provision of Rs 13,000
crore for RoDTEP, which has been significantly curtailed from Rs 50,000
crore allocation for RoDTEP Scheme when first announced by the Finance
Minister in September 2019.
The situation for exporters further
aggravates with withdrawal of MEIS, and till date the exporters are
unable to avail the MEIS benefit for exports already made during FY-20
and FY-21 (April-December) due to blocking of online MEIS module for
applying claims.
This has resulted in blockage of significant funds for already stressed non-ferrous metal sector exporters.
In
absence of any export incentives/ remission mechanism, the aluminium
exports are struggling to remain globally competitive as compared to the
major exporting countries, especially China, which extends various
support measures for export competitiveness.
In India, the high
incidence of numerous unrebated Central and State taxes/duties impedes
the growth potential of aluminium sector in India. The various taxes
constitute 15 per cent of aluminium production cost which is amongst
highest in the world. This adversely impacts the sustainability and
competitiveness of aluminium industry and further renders Indian
exporters vulnerable and uncompetitive vis-à-vis global players in
international markets.
These duties and taxes should not be
exported as such and should be remitted back to encourage domestic value
addition and export of finished products. Under MEIS, the aluminium
exports were eligible for a 2 per cent reward rate which itself does not
provide ample cushion to remain competitive against current bearish
market condition. The government support is extremely crucial at this
juncture to reduce burden of taxes/ levies with least 5 per cent
remission rate under RoDTEP to boost exports and survive this
challenging phase.
While the Production Linked Scheme (PLI) has
been extended to 13 sectors to boost domestic manufacturing, there is
currently no support available for aluminium sector, despite being
identified amongst the 12 Champion Sectors by Ministry of Commerce &
Industry, where India can be a global leader and major supplier.
Aluminium is a sector of strategic importance for the country and an
essential commodity for various other industries/SMEs due to its
critical role in diversified applications for in energy security,
national defence, infrastructure, electrification, aerospace,
automobile, consumer durables, packaging, etc.
The Indian
exports are struggling to retain competitiveness in international
markets. Being a strategic metal, the government support to enhance
competitiveness for Aluminum industry by way of various
incentives/subsidies for raw materials, tax benefits and export tax
incentives, low interest rate loans is prevalent globally, but heavily
supported in China and GCC countries.
On the other hand, the
Indian Aluminium industry is struggling with incidence of huge burden of
unrebated Central and State taxes and duties, constituting ~15 per cent
of Aluminium production cost which is amongst the highest in the world
and adversely impacting its sustainability and cost-competitiveness.
NITI Aayog in its report on "Need for an Aluminium Policy in India" also
highlighted the strategic importance of Aluminium for the country and
the huge burden of various taxes and duties on Aluminium production
costs.
The Aluminium industry seeks immediate support for
notifying at least 5 per cent remission rate for Aluminum Sector under
RoDTEP Scheme to ensure its global competitiveness and realise its
immense potential to double exports worth $ 10 billion Forex earnings
for the country.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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