RoDTEP Rates for Exports Halved

“RoDTEP benefits will be restricted to 50 per cent of the notified rates and value caps with immediate effect," the government said in a notification.

The scheme is not an export incentive, but remission of duties and taxes paid on the exported products. The World Trade Organisation complaint scheme, that came into force in 2021, refunds duties, taxes and levies at the central, state and local level, including prior stage cumulative indirect taxes on goods and services used in production. The duties on distribution of exported products too are refunded under the scheme.

The rates as a percentage of Freight on Board value covers 8555 tariff lines. The rates range between 0.01 per cent for a few gems and jewellery products to 4.3 per cent for woven fabric.

These rates have been cut by 50 per cent across all tariff lines where the rebate applies, and value caps have also been reduced by half.

“For instance, the rebate on unginned raw cotton of staple length not exceeding 20 mm has been reduced from 3.1 per cent, capped at Rs 1.60 per kg, to 1.55 per cent with a cap of Rs 0.80 per kg,” said GTRI.

“In price-sensitive sectors, even a 1–2 per cent increase in costs can decide whether orders are won or lost. The cut comes when global demand is weak, logistics and compliance costs remain high, and competitors such as Vietnam and Bangladesh still enjoy lower costs and preferential market access,” it said.

WTO rules permit such remission because it merely neutralizes domestic taxes on exports. Cutting these rates therefore raises exporters’ costs at a time when India’s shipments are already facing weak global demand, supply disruptions and rising compliance burdens, eroding competitiveness in price-sensitive markets.

Further, revising RoDTEP rates frequently makes it difficult to build rebates into long-term pricing and contracts.