Pharma exports exclusion from RoDTEP scheme will hit competitiveness: Industry bodies

The government on Tuesday announced rates of tax refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for 8,555 products, such as marine goods, yarn and dairy items, to boost exports.

However, three sectors -- steel, chemicals and pharmaceuticals -- were excluded from getting the benefits of RoDTEP.

Indian Pharmaceutical Alliance (IPA) Secretary General Sudarshan Jain said, "The exclusion of pharma exports from the RoDTEP scheme will adversely impact the pharma sector's competitiveness."

The exclusion deprives pharmaceutical exporters of the level playing field vis-a-vis global manufacturers. This is a highly regulated sector and calls for huge capital investment for setting up manufacturing infrastructure, he added.

"The industry presented the data to the RoDTEP committee for consideration," Jain said.

For sustaining India's export competitiveness, RoDTEP benefits should be extended to the pharmaceutical sector, given its importance in providing access to affordable medicines to patients in India and around the world, he added.

Indian Drug Manufacturers' Association (IDMA) Executive Director Ashok Kumar Madan said consequent to the announcement of the RoDTEP scheme, the pharma industry had been waiting anxiously for the announcement of rates.

During these times of pandemic there has been an overall increase in prices of raw materials, packing materials and overseas freight rates.

"The redemption of the taxes paid could have helped us to sustain and further the exports," he added.

The exclusion will have a severe impact on exports from small and medium enterprises in the sector, Madan said.

Commerce Secretary B V R Subrahmanyam on Tuesday had said that Rs 19,400 crore would be available for 2021-22 for both the RoDTEP and the Rebate of State and Central Taxes and Levies (RoSCTL).

The RoSCTL scheme was announced for the export of garments and apparels.

For the RoDTEP scheme, the amount is Rs 12,454 crore and the remaining Rs 6,946 crore for RoSCTL.

The government had announced the RoDTEP scheme in March 2020. It was to come into effect from January 1 this year. The rates have been finally notified after seven-and-a-half months in August 2021.