RoDTEP follows the global principle that taxes and duties should not be exported, exporters are given refunds of embedded Central, State and local taxes that are not otherwise rebated.
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UGURHAN
In a major blow to Indian exporters, the government has restricted benefits under the popular Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to 50 per cent of the notified rates and value caps. Trade experts have expressed concern at the reduction in RoDTEP rates, especially as they come at a time when Indian exporters are facing heightened global uncertainty and tariff fluctuations, especially from the US.
Exporters have called for a review of the decision, arguing that the sharp drop in the remission of input duties under the scheme would increase costs and affect competitiveness at a time when global demand was slowing down.
Under RoDTEP, which follows the global principle that taxes and duties should not be exported, exporters are given refunds of embedded Central, State and local taxes that are not otherwise rebated.
“RoDTEP benefits shall be restricted to 50 per cent of the notified rates and value caps, with immediate effect. This is issued with the approval of the Minister of Commerce & Industry,” a notification issued by the Directorate-General of Foreign Trade on Monday said.
Drop in budgetary allocation for RoDTEP
This follows a sharp reduction in the budgetary allocation for RoDTEP for FY27 to ₹10,000 crore, from the previous fiscal’s allocation of ₹18,232.5 crore. However, there were expectations that funding could be topped up in the revised budget estimate after the rate rationalisation exercise for the scheme concluded.
“The reduction in RoDTEP rates and the value caps by 50 per cent come at a highly challenging juncture, when Indian exporters are already contending with slowing global demand, heightened uncertainty, and rising protectionist trends across key markets. We sincerely urge the government to review and reconsider this decision with immediate effect,” said Ajay Sahai, Director-General, Federation of Indian Export Organisations (FIEO).
The move will raise the cost of exporting from India as it reduces refunds of domestic taxes that exporters cannot otherwise recover, pointed out Ajay Srivastava from research body Global Trade and Research Initiative. “In price-sensitive sectors, even a 1–2 per cent increase in costs can decide whether orders are won or lost. The cut comes when global demand is weak, logistics and compliance costs remain high, and competitors such as Vietnam and Bangladesh still enjoy lower costs and preferential market access,” Srivastava noted.
India’s goods exports in January 2026 were almost flat, growing at a marginal 0.61 per cent (year-on-year) to $36.56 billion, while the trade deficit widened to a three-month high of $34.68 billion due to higher imports.
Published on February 23, 2026