India has reduced RoDTEP benefits to 50% of notified rates, aligning with lower FY27 allocation. Experts warn the move could raise export costs and dent competitiveness in price-sensitive global markets.
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India has halved benefits for exporters under the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme through a Directorate General of Foreign Trade notification (No. 60 dated February 23, 2026). The notification limits RoDTEP benefits to 50% of the earlier notified rates and value caps.
Trade economist Professor Biswajit Dhar said the reduction aligns with the lower budgetary allocation for FY27.
Rates have been cut by half across all applicable tariff lines, and value caps have also been reduced proportionately. For example, the rebate on unginned raw cotton of staple length not exceeding 20 mm has been reduced from 3.1%, capped at ₹1.60 per kg, to 1.55% with a cap of ₹0.80 per kg.
Ajay Srivastava, Founder of GTRI, said RoDTEP is not an export subsidy but a refund of embedded taxes and levies incurred during production, such as state taxes on fuel, electricity duties and mandi charges, which are otherwise not rebated. World Trade Organization rules permit such remission as it neutralises domestic taxes on exports.
However, he cautioned that cutting these rates will raise exporters’ costs at a time of weak global demand, supply disruptions and rising compliance burdens.
GTRI noted that even a 1–2% increase in costs can determine whether orders are won or lost in price-sensitive sectors. Lower remission, it said, could squeeze margins, affect competitiveness and discourage smaller firms from scaling exports.
(Edited by : Sheersh Kapoor)
