NEW DELHI
India’s pharmaceutical sector could gain access to export incentives if the Commerce Ministry manages to secure higher budget allocations for the RoDTEP (Remission of Dutys and Taxes on Export Products) scheme, Union Minister Piyush Goyal said on Friday.
The government had exempted sectors such as iron and steel, chemicals and pharmaceuticals, which are now India’s fifth-largest export contributor, from the RoDTEP scheme, notified last August and effective from January 2021.
“I was just editing a note we’re working on,” Mr. Goyal said. “We are trying to get higher budget allocations. When we get that, we’ll absorb the pharmaceutical industry. Our efforts to do this are ongoing, and you should strive to do the same,” he said in an interaction at the Indian Drug Manufacturers’ Association convention.
Mr Goyal said the three main sectors were omitted due to “resource constraints” amid the COVID-19 pandemic, leaving him with limited options by the time the program was finalized.
“Either I cut the RoDTEP [rates] for all … that would be agricultural products, handicrafts, handlooms, which are labor intensive and which have suffered badly during the pandemic, which would also have affected their export competitiveness. We decided to leave out two to three sectors – iron and steel, chemicals and pharmaceuticals – after much deliberation and consultation with everyone,” said Mr. Goyal.
Justifying the omission of those sectors, the minister said iron and steel was “already booming” and the pharmaceutical industry’s business had also increased during the pandemic. “So they had some cushion while other industries suffered badly. And for chemicals, I analyzed their added value in relation to their overall profitability and made an informed decision based on that,” he added.
“There could be some pros and cons, and if some struggled. I’m sorry. But I had no choice – within a limited budget I had to implement the entire RodTEP system,” he said.
