India Reinstates RoDTEP Benefits for Exporters Effective June 1, 2025

Posted by Written by Archana Rao Reading Time: 4 minutes

India has reinstated the benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exporters, and it will come into effect on June 1, 2025. While the move has been welcomed by trade and policy experts, they emphasize the need for a stable, five-year implementation framework to reinforce India’s credibility in global trade.

India has reinstated the RoDTEP scheme benefits for exporters under Advance Authorization (AA), Export-Oriented Units (EOUs), and Special Economic Zones (SEZs). As per the official notification issued on the website of the Directorate General of Foreign Trade (DGFT), under the Union Ministry of Commerce and Industry, on May 26, 2025, the central government has allocated INR 182.33 billion (US$2.13 billion) under RoDTEP in the financial year 2025-26 for various product categories.

These export benefits will apply to eligible exports of goods manufactured in special economic zones and export-oriented units from June 1, 2025, onward.

RoDTEP benefits restored for select export categories

Starting June 1, 2025, exporters operating in India under AAs, EOUs, and SEZs will once again be eligible for reimbursements on embedded duties, taxes, and levies that are not covered under other central government schemes.

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As per the central government, this move is part of broader efforts to enhance India’s competitiveness in global trade. The benefits were previously available until February 5, 2025. The export incentives have been brought back to ensure fair support across various export categories. The scheme will cover various sectors, including textiles, chemicals, pharmaceuticals, cars, agriculture, and food processing.

By March 31, 2025, the scheme had disbursed over INR 579.76 billion (US$6.78 billion), highlighting its role in boosting India’s merchandise exports. For FY 2025–26, the scheme will cover 10,780 HS lines for Domestic Tariff Area (DTA) exports and 10,795 for AA/EOU/SEZ exports.

The RoDTEP scheme is eligible for all exporters in respect of physical goods manufactured in the country. The benefits are provided to the exporter in the form of transferable duty credit/electronic scrip known as e-scrips. These are granted based on product-specific rates determined by the central government, either as a percentage of the Free on Board (FOB) value or a fixed amount per unit. Exporters must declare their RoDTEP claim when filing the shipping bill at the time of export. Once the export is completed and verified through the customs system, the e-scrip is credited to the exporter via the ICEGATE portal. These scrips can be used to pay basic customs duty on future imports or transferred to other importers.

Experts welcome RoDTEP revival, caution against frequent policy changes

New Delhi-based think tank Global Trade Research Initiative (GTRI) has welcomed the government’s decision to reinstate benefits under the RoDTEP scheme. However, it stressed the need for a stable five-year policy framework to strengthen India’s position as a dependable and competitive export hub.

Ajay Shrivastav, founder of GTRI, stated that to position India as a consistent and credible player in global exports, the central government must ensure uninterrupted RoDTEP coverage for at least five years. He cautioned that frequent policy changes can erode exporter confidence, damage policy credibility, and ultimately weaken India’s export competitiveness on the global stage.

The rebate under the scheme is allowed, based on the allowed percentage of FOB (also known as freight on board) value of exports, and issued in the form of an e-scrip, the details of which are maintained in a digital ledger by the Central Board of Indirect Taxes and Customs (CBIC).

The Associated Chambers of Commerce & Industry of India (ASSOCHAM) has said that the restoration of this scheme will benefit micro, small, and medium enterprises (MSMEs), improve export logistics, and enhance investors’ confidence in India’s industrial corridors.

The secretary general of ASSOCHAM believes this move will correct the gap that created cost disadvantages for smaller manufacturing units and exporters and is aligned with India’s WTO commitments.

The scheme has been structured to comply with World Trade Organization (WTO) norms, thereby avoiding classifications that could label it as a trade-distorting subsidy. This alignment became particularly important after the country had to phase out the Merchandise Exports from India Scheme (MEIS), which was challenged at the WTO for violating global trade rules.

Understanding India’s export rebate scheme

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India first launched the RoDTEP scheme on January 1, 2021, to provide systematic support to its domestic exporters. The objective of this scheme is to reimburse embedded taxes, duties, and levies incurred during the manufacturing and distribution of exported goods, which are not refunded under any other existing export incentive schemes.

The reimbursement includes a wide range of unrebated charges at the central, state, and local levels. These include the following:

  1. Value added tax (VAT) and excise duty on fuel used for self-incurred transportation, electricity generation (via power plants or diesel generator sets), and running machinery or industrial plants;
  2. Electricity duty on purchased electricity;
  3. Local taxes such as municipal taxes, and property taxes;
  4. Stamp duty paid on export-related documentation;
  5. Uncreditable GST components, including CGST, SGST, IGST, and compensation cess on items like passenger transport vehicles, food and beverages, rent-a-cab services, and works contract services.

By offsetting these costs, RoDTEP enhances the global price competitiveness of Indian goods, making exports more attractive in international markets.

Conclusion

The reinstatement of RoDTEP benefits for exporters operating under AA, EOU, and SEZ can bolster India’s global trade competitiveness. By addressing embedded and previously unreimbursed costs, the scheme enhances the pricing power of Indian exports across diverse sectors. However, the long-term efficacy of RoDTEP will depend on India’s commitment to policy continuity. As global trade dynamics evolve, consistent and transparent incentive structures like RoDTEP will play a vital role in reinforcing India’s position as a reliable and competitive trading partner.

(US$1 = INR 85.38)

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