Budget 2023: What will help India ship $1 trillion worth of goods?
India's exports witnessed unprecedented growth over the last two years, reaching a record high of $420 billion during the financial year 2022. India achieved this growth despite disruptions in the global supply chain due to the Covid-19 pandemic.
The growth is heartening, but the country still has immense potential. It contributes 3.1% to global GDP but lags behind in export share with only 1.6%. Can India achieve the target of $1 trillion in manufacturing exports by 2028 or before that? While all eyes are on the February 1 budget, here’s what industry experts and exporters want:
RoDTEP in focus: The Remission of Duties and Taxes on Export Products (RoDTEP) Scheme, which became effective January 1, 2021, replaced the Merchandise Exports from India Scheme (MEIS) with the sole aim of boosting exports. The scheme allows exporters to receive refunds on the embedded central taxes and state duties that were previously non-recoverable on input products.
The budget under RoDTEP is around Rs 40,000 crore. Exporters have requested an increase in this in the budget.
According to Mumbai-based exporter and Chairman of Bombay Textile Research Association, Sharda Kumar Saraf, RoDTEP is an important tool to support export marketing, but its present budget limit of about Rs 40,000 crore is inadequate. "We hope the finance minister will take cognisance of this fact and provide a suitable budget for RoDTEP," Saraf said.
Customs duties: Exporters want high import duties on finished goods in specific sectors. According to Plastics Export Promotion Council of India Chairman Arvind Goenka, the import duty on plastic finished goods should be at least 5% higher than that of polymer raw materials.
Meanwhile, Council for Leather Exports (CLE) Chairman Sanjay Leekha recommended the reinstatement of the exemption for duty-free import of critical inputs for leather garments and footwear; and the extension of the basic customs duty exemption for the import of lining and interlining materials. Leekha has also requested the reinstatement of basic customs duty on the import of wet blue, crust, and finished leathers, as the exemption was removed last year.
India’s own shipping line: Once again, the country’s exporting community has asked the Centre to give support to developing an Indian shipping line of global standards. India's dependence on global shipping companies has remained a major pain point for exporters, and the problem has been exacerbated further by rising freight costs.
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