Government Clarifies RoDTEP Rate Cut Not Applicable to Agricultural Exports

New Delhi, February 24: The government on Tuesday clarified that the recently reduced rates and value caps under the Remission of Duties and Taxes on Exported Products scheme do not apply to agricultural and processed food exports.

The clarification comes a day after duty benefit rates under the RoDTEP scheme were halved with immediate effect, triggering concern across the exporting community. Industry representatives had expressed disappointment and urged a reconsideration of the decision.

DGFT Notification Exempts ITC HS Chapters 01 to 24​

In a notification issued under Notification No 60 dated February 23, 2026, the Directorate General of Foreign Trade stated that the reduced RoDTEP rates and value caps are not applicable to export products falling under ITC HS Chapters 01 to 24.

These chapters cover agricultural and processed food products, effectively shielding the sector from the recent benefit reduction.

The RoDTEP scheme, launched in 2021, provides refunds of taxes, duties, and levies incurred by exporters during the manufacturing and distribution of goods. These reimbursements apply to costs that are not refunded under any other central, state, or local mechanism.

Refund rates under the scheme range between 0.3 per cent and 3.9 per cent. The scheme remains valid until March this year.

Budget Allocation and Funding Concerns​

For the financial year 2025 to 2026, the scheme was allocated Rs 18,232 crore. The proposed allocation for 2026 to 2027 was Rs 21,709 crore. However, the allocated budget stood at Rs 10,000 crore.

According to sources, the Ministry of Commerce has sent a note to the Department of Expenditure seeking enhanced allocations through the Expenditure Finance Committee route. Comments from relevant ministries have also been forwarded to the department.

Officials said they are awaiting a date for the Expenditure Finance Committee meeting.

Exporters Voice Concerns Over 50 Percent Rate Cut​

Exporters have expressed concern over the sudden reduction in RoDTEP rates.

Sharad Kumar Saraf, exporter and founder chairman of Technocraft Industries India, said the 50 per cent cut has come as a shock to the exporting community. He noted that there has been no change in duties and that RoDTEP is meant to reimburse taxes and levies already incurred.

According to him, exporters had booked orders based on existing RoDTEP rates, and many products operate on margins of 1 to 2 per cent. He said such a reduction could lead to increased losses for exporters.

Saraf added that the decision has come at a time when exporters are dealing with tariff-related challenges, and that policy stability is crucial for maintaining confidence.

Ramesh Juneja, Chairman of the Council for Leather Exports, stated that during a period of global trade turbulence and intense competitive pressure, the leather and footwear industry requires sustained policy backing. He said a stable incentive framework is essential to safeguard growth, protect market share, and strengthen India’s position in the global value chain.

Export Performance and Trade Deficit​

India’s exports rose marginally by 0.61 per cent to USD 36.56 billion in January. However, the trade deficit widened to a three month high of USD 34.68 billion.

The latest clarification on agricultural exports under the RoDTEP scheme provides relief to a key segment of exporters even as discussions continue on funding and future allocations for the export support mechanism.