DGFT Caps RoDTEP Rates at 50% With Immediate Effect
New Delhi, February 23: The government has reduced the rate of duty benefits under the Remission of Duties and Taxes on Exported Products scheme, commonly known as RoDTEP, by half with immediate effect. The move has triggered concern across the exporting community, which has urged authorities to review the decision.In a notification issued on Monday, the Directorate General of Foreign Trade announced that RoDTEP benefits will now be restricted to 50 per cent of the notified rates and value caps. The revised rates come into force immediately.
Refunds under the RoDTEP scheme currently range from 0.3 per cent to 3.9 per cent. With the latest revision, exporters will receive only half of the previously applicable benefits.
What the RoDTEP Scheme Provides
Launched in 2021, the RoDTEP scheme was designed to reimburse exporters for taxes, duties, and levies incurred during the manufacturing and distribution of goods that are not refunded under any other mechanism at the central, state, or local level.The scheme has been positioned as a key export support measure, aiming to improve cost competitiveness for Indian goods in global markets by neutralising embedded taxes.
Exporters Flag Timing Amid Global Headwinds
Reacting to the decision, S C Ralhan, President of the Federation of Indian Export Organisations, said the reduction in rates and value caps comes at a particularly challenging time for Indian exporters.He noted that exporters are already navigating slowing global demand, rising uncertainty, and increasing protectionism across major markets. He urged the government to reconsider the move, citing the difficult external trade environment.
Exports Show Marginal Growth; Trade Deficit Widens
According to government data released on Monday, 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 reduction in RoDTEP benefits comes against this backdrop of modest export growth and a widening trade gap, adding to concerns within the exporting community over competitiveness and margin pressures.
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