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Aluminium industry reiterates urgency for 5% RoDTEP rate
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SME Times News Bureau | 12 May, 2021
The Aluminium Association of India (AAI) has pushed for
speedy implementation of the RoDTEP Scheme (Remission of Duties or Taxes
on Export Products) for the Indian Aluminium industry on priority to
survive these challenging times.
In a letter to senior officials
of ministries of Commerce & Industry and Finance & Corporate
Affairs, AAI expressed the urgent need for at least 5% remission rate
for the Aluminum Sector under RoDTEP Scheme to ensure its global
competitiveness. The AAI also requested a separate budget allocation for
the aluminium industry, being a strategic sector, to realize the
immense potential to double Aluminium exports over the next 2-3 years.
Highlighting
the urgency of the matter, the AAI said, the Government needs to notify
the actual remission rates as per actual sectoral data submitted to the
RoDTEP Committee. The inordinate delay in notifying the sector-wise
remission rates is creating a precarious situation and a high level of
uncertainty for the Indian exporters. It is adversely impacting exports
due to ambiguity w.r.t. pricing of exports goods and absence of any
clarity on the mechanism of duty remission/ drawback rates for exports.
The situation for exporters further aggravates with the withdrawal of
MEIS, as to date the exporters are unable to avail the MEIS benefit for
exports already made during FY- 20 and FY- 21 (Apr-Dec) due to the
blocking of the online MEIS module for applying claims.
The
Commerce Ministry / DGFT are yet to notify the rates due to Government's
current situation pertaining to budgetary constraints. Union Budget
2021-22 has allocated only Rs 13,000 Cr for RoDTEP Scheme against Rs
50,000 Cr announced by Hon'ble Finance Minister in Sept, 2019. This
allocation is just one-third of the Rs 39,097Cr allocated in FY-20 for
MEIS (Merchandise Exports from India Scheme).
Supporting the
rates calculated by RoDTEP by an extensive exercise conducted through
detailed discussions, due diligence and analysis done for various
sectors, AAI said that implementation of its rates will give flexibility
in increasing the rate in the future based on budget allocation to
increase exports without any objection from WTO.
Throwing light
upon the current dilemma of the Indian Aluminium industry, it further
highlights the plight of the Indian Aluminium exports struggling to
retain competitiveness in international markets as compared to the major
exporting countries, specially China, which extends various support
measures for export competitiveness. In India, the high incidence of
numerous unrebated Central & State taxes/ duties impedes the growth
potential of Aluminium sector in India. The various taxes constitute
~15% of Aluminium production cost which is amongst highest in the world.
This adversely impacts the sustainability & 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 the domestic producers to encourage domestic value addition and
export of finished products.
Under MEIS, the Aluminium exports
were eligible for a 2% reward rate which itself didn't provide ample
cushion to remain competitive against the current bearish market
condition. Government support is extremely crucial at this juncture to
reduce the burden of high taxes/ levies with an adequate remission rate
of at least 5% under RoDTEP to boost exports and survive this
challenging phase.
Recognized as one of the 12 champion sectors,
India has the 2nd largest Aluminium production capacity (4.1 million
tons/ annum) and is the 3rd largest Aluminium producer. Huge investments
of Rs 1.2 Lakh crore ($20 billion) have been made to enhance domestic
production capacity to cater to domestic demand as well as enhance
exports of high quality finished Aluminium products. The industry has
generated more than 8 lakh jobs and developed over 4000 SMEs in the
downstream sector. Aluminium exports alone contributed $5 billion to
India's Forex earning in FY-21, i.e. ~2% of India's export basket and
have massive potential to double the exports to the tune of $10 billion
Forex earning in future.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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87.50
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84.65 |
Euro
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75.65 |
Japanese
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56.85 |
As on 13 Aug, 2022 |
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