In a move aimed at strengthening India’s export competitiveness, the government has constituted a review committee to reassess the incentive rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Rebate of State and Central Taxes and Levies (RoSCTL) schemes. The panel, comprising senior officials and trade experts, will evaluate the current rate structure to ensure exporters are adequately compensated for embedded taxes and levies not refunded through other mechanisms. The review is expected to align India’s export incentives with global trade norms while addressing long-standing industry concerns over declining margins and compliance challenges.
Government Reassesses Export Incentive Framework
The Union government has established a high-level committee to review and rationalize the existing rates under the RoDTEP and RoSCTL schemes, two key pillars of India’s export support framework. The decision comes at a crucial time when exporters are grappling with subdued global demand, rising logistics costs, and narrowing profit margins.
The committee, led by officials from the Department of Commerce and supported by representatives from the Central Board of Indirect Taxes and Customs (CBIC) and the Department of Revenue, will examine whether the current remission rates adequately reflect the actual incidence of unrefunded taxes borne by exporters.
According to sources, the panel will also engage with key industry bodies, export promotion councils, and sectoral stakeholders to gather feedback on rate revisions and procedural simplifications.
RoDTEP and RoSCTL: The Backbone of Export Refund Mechanisms
Introduced in 2021, the RoDTEP scheme replaced the earlier MEIS (Merchandise Exports from India Scheme) following recommendations from the World Trade Organization (WTO) that certain export subsidies violated global trade rules. RoDTEP reimburses exporters for hidden taxes and duties — such as electricity tax, mandi fees, and fuel excise — that are not recoverable through the GST framework.
Similarly, RoSCTL, applicable primarily to the textile and apparel sector, provides rebates on both central and state taxes embedded in the manufacturing process. Together, these schemes play a pivotal role in offsetting domestic tax costs, thereby enhancing the price competitiveness of Indian exports in global markets.
The review committee’s mandate is to reassess the rates and coverage under these schemes, ensuring that they remain consistent with evolving trade dynamics and cost structures.
Exporters Seek Timely Rate Revision and Wider Coverage
Exporters have long advocated for a periodic review of RoDTEP and RoSCTL rates, arguing that delays in updates have led to under-compensation, particularly in high-cost manufacturing sectors such as engineering goods, chemicals, and textiles. The current remission rates, they claim, no longer reflect the escalating costs of energy, transportation, and raw materials.
Industry associations have also urged the government to extend RoDTEP benefits to sectors currently excluded, such as steel, pharmaceuticals, and certain service-linked manufacturing categories, which have seen sharp fluctuations in global demand and pricing. A more inclusive framework, they argue, would help sustain export momentum amid tightening international trade conditions.
Ensuring Global Compliance and Domestic Support
India’s export incentive regime has faced scrutiny under the WTO’s Agreement on Subsidies and Countervailing Measures, which restricts direct export-linked subsidies. By refining remission-based schemes such as RoDTEP and RoSCTL, the government aims to maintain WTO compliance while safeguarding domestic exporters’ interests.
Experts believe that the review could also lead to enhanced transparency in rate calculation and digitalization of refund processes through the ICEGATE platform, reducing paperwork and improving speed of disbursal.
The committee’s findings will likely form the basis for an updated rate notification expected ahead of the 2026–27 financial year, aligning with India’s broader trade policy overhaul and export promotion initiatives.
A Balancing Act Between Fiscal Prudence and Export Growth
While exporters welcome the review, policymakers are cautious about balancing fiscal expenditure with export competitiveness. Remission payouts under RoDTEP and RoSCTL collectively account for several thousand crores annually, making them a significant component of India’s trade support budget.
Economists suggest that a data-driven revision, grounded in actual cost incidence rather than across-the-board hikes, would ensure both fiscal discipline and fairness across sectors. The move is seen as part of the government’s strategy to transition from broad subsidies toward targeted, WTO-compliant trade facilitation measures that enhance productivity and competitiveness.
Looking Ahead
The formation of the review committee signals the government’s intent to make India’s export ecosystem more resilient, transparent, and globally competitive. With merchandise exports projected to reach USD 500 billion by FY26, timely rate revisions and procedural reforms under RoDTEP and RoSCTL could play a crucial role in sustaining momentum.
As global trade undergoes structural realignment, India’s ability to adapt its export policies swiftly—while maintaining fiscal discipline—will determine the long-term success of its manufacturing and export diversification agenda.
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