India slashes export tax rebates by 50%: Here's why
India just slashed its export tax rebates (RoDTEP) by 50%, impacting over 8,500 product categories.
This move follows a big budget cut for the scheme and takes effect right away, meaning exporters will now get much less support.
Rebate rates now range from just 0.01% for gems
Rebate rates now range from just 0.01% for gems to 4.3% for woven fabrics.
For example, raw cotton's rebate dropped from 3.1% to 1.55%.
These refunds help cover taxes that exporters can't recover otherwise.
India's trade deficit ballooned to $34.68 billion
While exports inched up slightly in January, India's trade deficit ballooned to $34.68 billion—raising concerns among industry groups.
Indian goods could become pricier abroad
Experts warn this could make Indian goods pricier abroad, giving countries like Vietnam and Bangladesh an edge.
S.C. Ralhan from FIEO said the reduction "came at a particularly difficult juncture" and asked the government to reconsider the decision.