Export Competitiveness is an economic concept that defines a country's ability to produce and sell goods and services in global markets while maintaining or expanding its market share. It is determined by factors like cost efficiency, product quality, reliability, and the capacity to adapt to international demand. The drive to enhance this competitiveness in India is closely linked to the liberalization of trade and finance, which began in the early 1990s.
A key mechanism to boost this is the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, which is an integral part of India's Foreign Trade Policy (FTP). The scheme was introduced in January 2021 to solve the problem of embedded duties and taxes—such as electricity duty, VAT on fuel, and mandi taxes—that were not refunded under other mechanisms, thus making Indian exports more expensive.
RoDTEP works by reimbursing these non-refunded costs to exporters, with the rebate claimed as a percentage of the Freight On Board (FOB) value of exports. This refund is provided as a transferable e-scrip.
The scheme significantly changed the landscape by replacing the earlier Merchandise Exports from India Scheme (MEIS). The replacement was necessitated because the World Trade Organization (WTO) ruled that MEIS was a non-compliant, prohibited subsidy under the SCM Agreement. RoDTEP was specifically designed to be WTO-compliant, ensuring a transparent, rules-based system for tax remissions, while the core goal of reducing the cost burden on exporters to enhance global competitiveness stayed the same.