India Extends Export Incentive Scheme Until March 2026

Post by : Monika

On September 30, 2025, the Government of India announced the extension of its flagship export incentive program, the Remission of Duties and Taxes on Export Products (RoDTEP), until March 2026.

This decision is designed to provide continued support to exporters during a period of global economic challenges and growing trade competition. By extending this program, the government aims to maintain the competitiveness of Indian goods in international markets and provide financial relief to businesses that face rising costs and tariffs abroad.

What Is the RoDTEP Scheme?

The RoDTEP scheme is a government initiative that reimburses exporters for the taxes, duties, and levies paid on goods that are exported from India. Many of these costs are embedded in the production and distribution process and are not refunded under other government schemes. The goal of RoDTEP is to ensure that Indian exporters are not financially disadvantaged because of domestic taxes that increase the cost of their products in overseas markets.

The scheme covers taxes and duties at different levels, including central, state, and local government charges. For example, it reimburses exporters for sales tax, excise duties, and various other levies that are incurred when manufacturing or transporting export goods. By providing these refunds, the government makes Indian goods more price-competitive internationally, helping businesses win orders and maintain market share abroad.

Why the Extension Is Important

The extension of the RoDTEP scheme comes at a time when Indian exporters are facing significant challenges in global trade. One major concern is the increase in tariffs on Indian goods imposed by other countries, particularly the United States.

Under the administration of former U.S. President Donald Trump, tariffs on several Indian products, such as textiles, leather items, and certain food products, were raised to as much as 50%. These tariffs have increased the cost of Indian goods in the U.S. market, making them less competitive compared to products from other countries.

Indian exporters have been urging the government to continue providing support to offset these costs. The extension of the RoDTEP scheme is seen as a key response to these demands. By continuing to reimburse taxes and duties, the government helps exporters reduce their production costs, maintain reasonable pricing for international buyers, and protect their market share in the face of higher tariffs.

Scope and Coverage of the Scheme

The RoDTEP scheme currently covers over 10,000 products across a wide range of industries, including agriculture, textiles, engineering goods, chemicals, and manufactured items. The incentives provided under the scheme typically range from 1% to 4% of the value of the exported goods. The exact percentage depends on the sector and product type, reflecting the specific costs that exporters incur for each category.

This broad coverage ensures that exporters from diverse sectors benefit from the program. For example, textile manufacturers exporting garments to Europe or the U.S. can claim reimbursement for taxes paid during production. Similarly, agricultural exporters sending spices, rice, or processed food items abroad receive financial relief that offsets the extra costs caused by domestic duties.

By supporting a wide range of products, the RoDTEP scheme helps promote balanced growth across India’s export sector. It ensures that both traditional industries, such as textiles and agriculture, and modern industries, such as engineering and chemicals, can compete effectively in global markets.

Financial Benefits for Exporters

The financial impact of the RoDTEP scheme is substantial. By reimbursing embedded taxes and duties, the scheme reduces the cost burden on exporters. This makes Indian goods more affordable for international buyers and encourages continued business relationships.

For small and medium-sized exporters, these reimbursements can be particularly significant. Smaller companies often operate on thin profit margins and face difficulty absorbing additional costs caused by taxes or tariffs. The RoDTEP scheme allows these businesses to maintain profitability while remaining competitive in overseas markets.

In addition to helping exporters save money, the scheme contributes to job creation in India. By enabling companies to maintain and expand production, it supports employment in manufacturing, logistics, and related industries. This has a positive effect on local economies and contributes to India’s broader economic growth.

Government’s Commitment to Export Promotion

The extension of the RoDTEP scheme underscores the Indian government’s strong commitment to promoting exports. Exports play a crucial role in India’s economy by generating foreign exchange, supporting domestic industries, and creating jobs. Recognizing this, the government has implemented a range of policies and initiatives to assist exporters.

Besides the RoDTEP program, other measures include trade agreements with countries around the world, development of export infrastructure such as ports and logistics hubs, and financial support for marketing Indian products abroad. Together, these initiatives aim to create a favorable environment for exporters to thrive and expand their presence in global markets.

Addressing Challenges in Global Trade

Global trade has become increasingly complex and competitive. Indian exporters face challenges such as changing tariffs, protectionist policies in other countries, and fluctuating demand in key markets. Programs like the RoDTEP scheme are essential tools for helping exporters navigate these challenges.

For example, when tariffs rise unexpectedly, the reimbursement provided by RoDTEP can partially offset the increased costs. This allows exporters to maintain stable pricing for their products and avoid losing international contracts. Similarly, when global demand fluctuates, financial support from the government can help businesses sustain operations until conditions improve.

Encouraging Competitiveness and Innovation

The RoDTEP scheme also encourages exporters to focus on innovation and efficiency. By reducing the financial burden of taxes and duties, businesses can invest more resources into research and development, product quality improvement, and process optimization.

Companies that receive reimbursements under the RoDTEP scheme can reinvest these funds into modernizing machinery, adopting new technologies, or training employees. This not only enhances the quality and competitiveness of Indian products but also strengthens the overall export ecosystem in the country.

Long-Term Outlook for Indian Exports

The extension of the RoDTEP scheme is expected to have a positive impact on India’s export performance in the short and long term. In the immediate term, exporters will continue to benefit from reduced costs and financial support, helping them remain competitive despite global trade challenges.

In the longer term, the scheme encourages diversification of export products and markets. Exporters are motivated to explore new destinations, expand their product range, and adopt international standards for quality and efficiency. By doing so, India can increase its share in global trade and reduce dependency on a few key markets.

Additionally, the government’s support through programs like RoDTEP contributes to building resilience in the export sector. Companies that receive consistent financial backing are better equipped to handle unforeseen challenges such as sudden changes in trade policy, currency fluctuations, or economic slowdowns in major markets.

The extension of the RoDTEP export incentive scheme until March 2026 is a clear demonstration of the Indian government’s commitment to supporting exporters. By reimbursing taxes and duties, the program reduces production costs, encourages competitiveness, and strengthens India’s position in the global market.

With coverage across thousands of products and multiple industries, the RoDTEP scheme benefits both large and small exporters. It enables companies to maintain profitability, invest in innovation, create jobs, and contribute to India’s economic growth.

As global trade becomes more competitive and complex, continued government support will remain critical. Programs like RoDTEP ensure that Indian businesses are equipped to face international challenges, explore new opportunities, and strengthen India’s reputation as a leading exporter.

By fostering a supportive environment for exporters, India is laying the foundation for sustained economic growth, job creation, and global trade success. The extension of the RoDTEP scheme is a timely measure that will help businesses navigate current challenges while preparing for a stronger and more competitive future in international markets.

India export incentive RoDTEP scheme