Export body flags impact of RoDTEP cut on textile competitiveness.
MATEXIL has urged the government to roll back the recent reduction in RoDTEP (Remission of Duties and Taxes on Exported Products) rates, warning that the move could significantly affect the competitiveness of India’s manmade fibre and technical textile exports.
According to Shaleen Toshniwal, Chairman of MATEXIL, exporters were taken by surprise after the Directorate General of Foreign Trade reduced RoDTEP rates and the notified value caps for all HS lines by 50 per cent. He described the abrupt decision as a major setback for exporters.
Toshniwal said the immediate implementation of the revised rates is likely to adversely impact the export performance of manmade fibre textiles and technical textiles, as the reduction could weaken their price competitiveness in global markets.
The RoDTEP scheme was introduced to offset embedded taxes and levies at the central, state and local levels that are incurred during the production and distribution of exported goods but are not otherwise refunded or credited. These include prior-stage cumulative indirect taxes on inputs and services that remain embedded in export products.
He noted that the reduction has compounded challenges for exporters at a time when the industry is already grappling with volatility and uncertainty in global markets. The development has intensified concerns within the sector, particularly as businesses navigate shifting demand conditions and rising competitive pressures.
While the government-appointed RoDTEP committee is currently reviewing the existing rates, Toshniwal said the sudden cut has created uncertainty among exporters of manmade fibre and technical textiles.
MATEXIL has called on the government to reinstate the earlier RoDTEP rates and maintain them until revised rates are formally finalised and notified, aiming to provide stability and confidence to exporters during the ongoing review process.
Industry impact: The 50 per cent RoDTEP rate cut could weaken price competitiveness of India’s manmade fibre and technical textile exports, impacting margins and export volumes. Heightened uncertainty may delay investments and strain exporters until the government reviews the decision, as urged by MATEXIL.