The scheme, which aims to replace the World Trade Organization (WTO) non-compliant incentives, is expected to reimburse the taxes/duties/levies incurred in the manufacture and distribution of exported products. 

In fact, the reports claim India’s government has been ‘sitting on’ tax refunds and arrears from earlier schemes that were abandoned due to arguments around compliance with global trade rules.

India’s commerce and finance ministries have agreed to widen the scope of the scheme to cover all products, which means there is still some paperwork to be completed. The widening of the scheme will include higher budgetary allocation, with both ministries earlier agreeing to increase the allocation from Rs13,000 to Rs17,000.

The Times of India has also reported that government sources believe the refunds will be handy at a time when costs such as fuel and freight have risen.

Last week both The Hindu Business Line and Financial Express  reported the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, which allows textile exporters to receive a rebate on central and state taxes, is being extended until March 2024.

The reports explain the extension aims to ease liquidity flow to the critical labour-intensive apparel sector in the aftermath of the pandemic.

The Hindu Business Line even states the extension will bring in stability for India and help fight competition from Vietnam, Bangladesh and Cambodia.