India: The Aluminium industry seeks for at least a 5% RoDTEP rate to foster exports

The Ministry of Finance, Govt. of India declared the implementation of the RoDTEP Scheme and extending the benefit to all export goods w.e.f 1^st April 2021. The announcement is considered a huge relief for exporters post-withdrawal of the MEIS and will deliver a much-needed push to boost Indian exports.

Although, the undecided of notifying the sector-wise remission rates under the RoDTEP Scheme is framing a precarious situation and uncertainty for Indian exporters due to uncertainty in regards to the pricing of goods and thereby affecting Indian exports.

The 2021-22 Indian Union Budget has kept a provision of INR 13,000 crore for RoDTEP, which has been exceptionally curtailed from INR 50,000 allocation for the RoDTEP Scheme when initially it was announced in September 2019 by the Finance Minister.

The situation for exporters further exasperate with the withdrawal of MEIS and as of today, the exporters are unable to avail of 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.

This has evolved in the blockage of significant funds for already stressed non-ferrous metal sector exporters.

The aluminium exports are scuffling to remain globally competitive as compared to the major exporting countries, especially China, which extends various support measures for export competitiveness in the unavailability of any export incentives/ remission mechanism.

The biggest impact of numerous un-rebated Central & State taxes/ duties in India disrupt the growth potential of the aluminium sector in India. The various taxes comprise 15% of aluminium production cost which stands as the highest in the world. This damages the sustainability and competitiveness of the aluminium industry and further renders Indian exporters unguarded and uncompetitive with global players in international markets.

The duties and taxes should not be exported as such and should be remitted back to boost domestic value addition and export of finished products. Under MEIS, the aluminium exports were eligible for a 2% reward rate which itself does not provide ample cushion to remain competitive against the current bearish market condition. Government support is extremely vital at this juncture to reduce the burden of taxes/ levies with at least a 5% remission rate under RoDTEP to foster exports and get through this challenging phase.

The Production Linked Scheme (PLI) has been extended to 13 Sectors to boost domestic manufacturing; however, there is currently no support available for the aluminium Sector, despite being identified amongst the 12 Champion Sectors by the Ministry of Commerce Industry, where India can be a global leader and major supplier.

The Aluminium industry seeks prompt support for notifying at least a 5% remission rate for Aluminum Sector under RoDTEP Scheme to secure its global competitiveness and realize its immense potential to double exports worth $ 10 billion Forex earnings for the country.