RoDTEP for green coffee increased by 40 bps to 1.4%

Remission of Duties and Taxes on Export Products (RoDTEP) for green coffee has been increased by 40 basis points from 1 per cent to 1.4 per cent.

The new RoDTEP rate notified on January 9 will come into effect from January 16, 2023, according to the Director General of Foreign Trade (DGFT). For all other plantation commodities such as tea, cardamom and pepper, the RoDTEP rates are unchanged.

Move welcomed

Ramesh Rajah, President, Coffee Exporters Association said the increase in RoDTEP rates will help the exporters in the short-term and the growers as long as it is not reduced suddenly.

India, the seventh largest coffee producer, exports over two thirds of its produce. The hike in RoDTEP could help boost the shipments of green coffee, which had seen a decline in the calendar 2022 over previous year. Though overall Indian coffee shipments, including re-exports, were up 2.1 per cent, the green coffee exports were down by 1.5 per cent at 2,65,221 tonnes during 2022 over previous year’s 2,69,300 tonnes.

“With 70 per cent of the Indian coffee exported, any support is welcome, however marginal,” said Jeffry Rebello, President, The United Planters Association of South India (UPASI), the apex trade body for the plantation sector.

UPASI in its recent pre-budget memorandum to the Finance Minister had urged to fix a higher RoDTEP for plantation commodities. “Export benefits under RoDTEP Scheme for plantation commodities such as tea, coffee, cardamom and pepper should be fixed at least at 5 per cent and for value-added plantation commodities at 7 per cent,” UPASI had said in its pre-budget memorandum making a case for increased RoDTEP.

The RoDTEP rates were fixed for tea, coffee, pepper and cardamom at 1 per cent, except for black tea (leaf and dust in bulk) which was kept at 1.7 per cent [with a cap of ₹3.60 per kg] and for natural rubber at 1.4 per cent. “This was very disappointing and such lower RoDTEP rates will have serious implications on the competitiveness and export of plantation commodities from India,” it said.

“Tea Board and Coffee Board had earlier carried out detailed exercises as per RoDTEP format, in estimating the compensation value to neutralise all government levies. As per the workings, duties and taxes constitute 6.23 per cent in tea and 8.34 per cent in coffee respectively. In view of the above, the benefits under RoDTEP Scheme for plantation commodities viz. tea, coffee, cardamom and pepper should be at least fixed at 5 per cent and for value-added plantation commodities be fixed at 7 per cent. For sustained growth of exports, there is a need for policy continuity and any abrupt measures like this will have far reaching implications and may result in losing out our established markets,” UPASI had said.

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