The government is likely to extend the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme beyond its September 30 deadline, providing relief to exporters, according to government sources.
Sources said the government has formed a committee to strengthen the RoDTEP framework and consider adding new components. The scheme is being reviewed through internal discussions and inter-ministerial consultations.
Until the new framework is finalised, the existing RoDTEP scheme is expected to be extended within the next few days, sources said.
The scheme currently provides exporters with a refund of certain embedded taxes, duties and levies that are not otherwise reimbursed. These can include state taxes on fuel and electricity-related duties, as well as mandi charges.
The Commerce Ministry had earlier sought a longer extension and a higher allocation for RoDTEP. The scheme was extended for six months from April 1 to September 30, 2026, with the rates and value caps that were in force on March 31 continuing during the period.
RoDTEP rates restored in March
The latest move comes months after the government withdrew a 50% restriction on RoDTEP rates and value caps.
In March, the government restored the rates that were in force on February 22, citing higher freight costs and disruptions to maritime trade linked to the West Asia situation.
RoDTEP is intended to make exports tax-neutral by remitting domestic taxes and levies that exporters cannot otherwise recover, rather than providing a conventional export subsidy.
Why exporters want the scheme continued
Industry analysts have argued that lower RoDTEP rates can increase the effective cost of exporting from India because exporters would receive smaller refunds for taxes embedded in their production and distribution costs.
The Global Trade Research Initiative (GTRI) has said that even a 1%-2% increase in costs can matter in price-sensitive export markets, particularly when global demand is weak and exporters are facing high logistics and compliance costs.
Lower remission rates could therefore put pressure on exporters’ margins and make it harder for Indian companies to compete on price, particularly smaller firms seeking to expand overseas.
