In a major setback for Indian exporters, the government has restricted benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to 50 per cent of the notified rates and value caps. Trade experts have raised concerns over the reduction, noting that exporters are already facing heightened global uncertainty and tariff fluctuations, particularly from the US.

Exporters have urged a review of the decision, stating that the sharp reduction in remission of input duties will increase costs and weaken competitiveness at a time when global demand is slowing.

RoDTEP is based on the principle that taxes and duties should not be exported. Under the scheme, exporters receive refunds of embedded Central, State and local taxes that are not otherwise rebated.

The decision follows a significant cut in the budgetary allocation for RoDTEP for FY27 to Rs 100 billion, down from Rs 182.325 billion in the previous fiscal. There were expectations that funding might be enhanced in the revised budget estimate after the rate rationalisation exercise concluded.