Govt cuts duty benefits for exporters under RoDTEP scheme by 50%

New Delhi, Feb 23: The Government of India has halved duty benefits for exporters under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, triggering sharp criticism from the exporting community at a time when Indian trade is already grappling with mounting global pressures.

The Directorate General of Foreign Trade (DGFT) issued a notification with immediate effect, stating that applicable RoDTEP rates shall be capped at 50 per cent of the previously notified rates and value limits. Refund rates under the scheme, which currently range between 0.3 per cent and 3.9 per cent, will now be effectively halved across the board.

The RoDTEP scheme, launched in 2021, was designed to reimburse exporters for taxes, duties, and levies incurred during the manufacturing and distribution of export goods — costs that are not offset by any other mechanism at the central, state, or local level. The scheme has been a cornerstone of India’s export promotion strategy, providing critical financial relief to thousands of exporters across sectors.

The Federation of Indian Export Organisations (FIEO) has come out strongly against the move. FIEO President S.C. Ralhan described the timing of the cut as particularly unfortunate, noting that Indian exporters are already navigating significant global headwinds, including weakening demand in key markets and an uncertain geopolitical environment. The organisation has called on the government to reconsider the decision and restore the original benefit rates.

Industry observers warn that the reduction could undermine India’s export competitiveness at a critical juncture, potentially discouraging manufacturers from scaling up production for overseas markets. With global trade conditions remaining volatile, many exporters had been counting on the RoDTEP scheme as a financial buffer.