Kashmir exporters stare at higher costs after sudden RoDTEP cut

Srinagar, Feb 24: The Centre’s decision to slash rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme by 50 percent has sparked serious concern among exporters in J&K, with trade bodies warning of a direct hit to the Valley’s export-driven economy.

The reduction, notified by the Directorate General of Foreign Trade (DGFT) on February 23, has halved rebate rates and value caps across product categories. Exporters say the move will sharply raise costs at a time when global demand remains fragile, and competition from other exporting nations is intensifying.

Reacting strongly, president of the Kashmir Chamber of Commerce and Industry (KCCI), Javid Ahmad Tenga, said the decision has come as a shock for exporters in the Union Territory.

“This sudden cut in RoDTEP rates is a serious setback for exporters from Jammu and Kashmir, who already operate under geographical and logistical disadvantages,” Tenga said.

“Our exporters depend heavily on policy support to remain competitive in global markets, and any dilution directly affects their viability.”

He said sectors such as handicrafts would be among the worst affected. “These are labour-intensive sectors that sustain thousands of artisans, weavers. Reducing remission support will erode margins and threaten livelihoods,” he added.

Tenga said the timing of the decision was particularly troubling. “Exporters are already facing higher input costs, freight charges and uncertainty due to global geopolitical tensions. Instead of strengthening support, the government has reduced it, which sends a negative signal to international buyers,” he said.

He urged the Centre to immediately review the decision and restore RoDTEP rates. “If the government of India wants export-led growth, especially from sensitive regions like Kashmir, policy stability and adequate incentives are essential. We appeal to the government to reconsider this cut before irreversible damage is done,” Tenga said.

The RoDTEP scheme, launched in 2021, was intended to refund embedded taxes such as electricity duties, fuel levies and mandi taxes that are not otherwise reimbursed, ensuring that Indian exports remain price-competitive. Exporters fear that the halving of rates will make Kashmiri products costlier in already price-sensitive international markets.

Trade observers also point out that the reduction follows a sharp cut in budgetary allocation for RoDTEP in the Union Budget for FY27, raising concerns about the government’s commitment to sustaining export momentum.

Export bodies in J&K are now preparing to take up the issue with the Union Commerce and Finance Ministries, warning that unless corrective steps are taken urgently, the Valley’s export ecosystem could face long-term disruption.