The Centre has restored full benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for agriculture and processed food exports, just a day after halving refund rates due to budgetary constraints.
The reversal follows concerns raised by exporters over shrinking competitiveness in an already volatile global trade environment. A notification issued by the Directorate General of Foreign Trade (DGFT) clarified that the reduced rates and value caps under RoDTEP would not apply to exports classified under ITC HS Chapters 1 to 24 — covering live animals, agricultural produce, vegetable products and processed food items.
The move comes after the government had slashed RoDTEP refund rates by half, citing lower budgetary allocation for FY27. Refund rates, which earlier ranged between 0.3% and 4.3% of export value, were cut to 0.15% to 2.15%. These refunds are issued as transferable duty credit scrips that exporters can use to pay import duties or sell in the open market.
Budgetary Pressures Behind the Cut
The RoDTEP scheme operates within a fixed budget framework. For FY27, the allocation stands at ₹15,728 crore, of which ₹5,346 crore has been earmarked for clearing past dues. This leaves an effective ₹10,382 crore available for fresh benefits in the coming financial year.
In comparison, the revised estimate for FY26 had allocated ₹19,080 crore, including ₹991 crore for arrears.
The Commerce Ministry had sought ₹21,729 crore for FY27 to sustain the scheme’s benefits. Following exporter pushback, a fresh proposal has reportedly been sent to the Department of Expenditure seeking enhanced allocation.
Exporters Flag Competitiveness Concerns
The abrupt reduction in benefits had sparked concern among export bodies, including the Federation of Indian Export Organisations (FIEO), which warned that lower refunds would erode the competitiveness of Indian products in global markets.
Market reaction was swift, with shares of several textile exporters declining by as much as 6% during Tuesday’s trade before the partial relief was announced.
RoDTEP, introduced in 2021, aims to refund embedded taxes and duties not otherwise reimbursed under existing schemes, thereby making exports more competitive. It currently covers 10,642 export products, with items under HS Chapters 1 to 24 accounting for nearly 20% of the eligible list.
The scheme’s current extension is set to expire on March 31, 2026, and has undergone multiple revisions since its inception.
With the latest decision, the government has sought to shield agriculture and food exporters from immediate disruption, even as broader questions remain over the adequacy of funding for the scheme in FY27.