Industry seeks RoDTEP-like scheme for service exports: Check details here

The industry has urged the Centre to roll out a scheme to boost services export and incorporate it as a part of the new foreign trade policy that is expected to kick in from October.

The scheme — Duty Remission of Export of Services Scheme or DRESS — will reimburse the un-refunded taxes and duties embedded in services exports, Maneck Davar, chairman, Services Export Promotion Council (SEPC) told Business Standard, adding that the scheme, if imple­mented, will increase competitiveness of services exporters in the country. 

The scheme will support services exports and focus on issues such as employment generation, look into the needs of specific sectors, support small businesses, and remove the burden of un-refunded taxes, levies on the lines of Remission of Duties and Taxes on Export Products (RoDTEP) scheme for merchandise exports.

SEPC has submitted its recommendations and urged the government to ensure that the new scheme is broad-based and simplified, including all service exports created in India.

Currently, Service Exports from India Scheme (SEIS) is the only central service export incentive scheme. It was rolled out six years ago as a part of the foreign trade policy 2015-2020. However, the outlay for the scheme was nearly halved to little over Rs 2,000 crore in 2019-20.

The SEIS scheme for 2019-20 is yet to be notified and inordinate delay in notifying the scheme has dampened the spirits of the sector, Davar said. Exporters are yet to get the SEIS dues for FY20.

Exports target

In a meeting with the export promotion councils, Commerce and Industry Minister Piyush Goyal asked the export community to target $2 trillion exports by 2030, comprising $1 trillion for merchandise exports and services exports, respectively. Besides, two separate divisions are being set up in the department of commerce in order to achieve the $1-trillion services exports target.

SEPC has urged the government to focus on increasing the competitiveness of the services sector by ensuring parity between manufacturing and services in the upcoming foreign trade policy.

According to Davar, services do not get the due attention from the government even as it contributes significantly to India’s growth.

“Services exports are poised for growth this year. The overall services exports increased by 16 per cent in June which is the highest ever exports (in the month of June) in the past four years, despite sectors like travel and tourism losing more than 70 per cent of their business. Services exporters want parity with merchandise exporters, in terms of the benefits, so that even they are competitive,” Davar added.

India’s total services exports contracted only 3 per cent on year to $206 billion in 2020-21, despite the pandemic.

Services exports are estimated to grow around 16 per cent on year to $240 billion in 2021-22. According to Davar, it can go up to $250 billion, if the travel and tourism sector opens up during the latter half of the year.