Govt notifies RoDTEP rates to boost exports; autos disappointed

The government has notified the Remission of Duties and Taxes on Exported Products (RoDTEP) rates for export companies in order to boost exports. It has been received with a bit of disappointment as the RoDTEP rates are lower than the earlier Merchandise Exports from India Scheme (MEIS) rates.

However, companies like Bajaj Auto told CNBC-TV18 that it's unfair to compare the two schemes as the purpose of the two schemes is different. According to them, the RoDTEP scheme is a good incentive for the two-wheeler sector.

RoDTEP scheme: Bajaj Auto says rates fair compensation for two-wheelers

For auto companies, the RoDTEP rates are around 1-1.5 percent on exports compared to 2 percent under the MEIS.

Earlier, Rajiv Bajaj had said that the MEIS benefit was about Rs 25 crore per month and the RoDTEP benefits amount to about Rs 18 crore per month.

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Among brokerages, Axis Capital said that the EBITDA impact on auto companies will be negligible and since the policy was supposed to come in on January 1, 2021, and was deferred, they are not building in any benefits in FY22-23 -- and that's perhaps the reason why there is less movement in the stocks.

Watch the accompanying video of CNBC-TV18’s Sonia Shenoy for more details.