- November 9, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
- The Centre has notified the rates and norms for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.
About the scheme:
- Announced in 2020 as a replacement for the Merchandise Export from India Scheme (MEIS), it ensures compliance with the rules of the World Trade Organisation.
- Aims to refund embedded central, state, and local duties or taxes, thus removing the disadvantage faced by Indian exports.
- Aims for zero rating of exports by refunding all domestic taxes, including those levied by States and local bodies.
- Refunds under RoDTEP, deemed WTO-compliant, range from 0.5% to 4.3% of the Free On Board value of outbound consignments.
- Certain sectors like steel, pharma, and chemicals excluded due to their strong export performance.
- Helps exporters meet international standards for exports with affordable testing and certification within the country.
- Aims to make tax assessment fully automatic, granting businesses access to GST refunds via an automatic route, thereby increasing the economy and working capital.
Free Trade Agreement (FTA):
An arrangement between two or more countries or trading blocs aimed at reducing or eliminating customs tariffs and non-tariff barriers on substantial trade between them.
Categories of FTAs:
- Preferential Trade Agreement (PTA)
- Comprehensive Economic Cooperation Agreement (CECA)
- Comprehensive Economic Partnership Agreement (CEPA)
Spaghetti Bowl Effect:
- The multiplication of free trade agreements (FTAs), supplanting multilateral World Trade Organization negotiations as an alternative path toward globalization.
- Coined by Jagdish Bhagwati in 1995.
- Criticized as counter-productive in promoting freer and more open global trades due to the proliferation of crisscrossing FTAs.
- According to Bhagwati, the proliferation of FTAs can lead to the adoption of discriminatory trade policies, reducing the economic benefits of trade.
Ease of Doing Business
- World Bank’s Ease of Doing Business Report assesses business regulation across 190 economies.
- India became the top-ranked country in South Asia for the first time and third among the BRICS.
- Ease of doing business index annually released by World Bank in its Ease of Doing Business Report since 2004.
- 10 indicators include starting a business, dealing with construction permits, paying taxes, and more.