Export Rebate Scheme Back In The Game After February Pause, GTRI Wants Policy Stability

India will reinstate benefits under a crucial scheme that reimburses exporters for embedded duties, taxes, and levies not refunded through any other government programme, the Ministry of Commerce and Industry announced on Tuesday. The benefits will once again be available to exports by Advance Authorisation (AA) holders, Export-Oriented Units (EOUs) and Special Economic Zone (SEZ) units for all eligible shipments from June 1, 2025, onwards.

"The decision comes as part of the government’s sustained efforts to boost India’s export competitiveness in global markets," the ministry said in a statement.

The benefits under Remission of Duties and Taxes on Exported Products (RoDTEP) for these categories were previously available until February 5, 2025, and their reinstatement is expected to provide a level playing field for exporters across sectors.

Operational since January 1, 2021, the RoDTEP scheme is designed to reimburse exporters for embedded duties, taxes and levies that are not otherwise refunded under any other existing scheme. It is compliant with World Trade Organisation (WTO) norms and is implemented via a comprehensive end-to-end digital platform to ensure transparency and efficiency. RoDTEP replaced existing export incentive scheme, Merchandise Exports from India (MEIS).

"As of 31st March 2025, total disbursements under the RoDTEP scheme have crossed Rs 57,976.78 crore, underscoring its significant role in supporting India's merchandise exports," the statement read.

From next month, the scheme will cover various sectors including textiles, chemicals, pharmaceuticals, cars, agriculture and food processing.

However experts like Ajay Srivastava, founder at New Delhi-based think tank Global Trade Research Initiative (GTRI), feels that the the government’s stop-and-start approach to RoDTEP undermines the scheme’s purpose. He notes that exporters struggle to price products or plan long-term deals when they cannot rely on steady refunds.

"To position India as a stable and competitive export hub, the government must ensure uninterrupted RoDTEP coverage for at least five years. Frequent policy shifts hurt credibility, weaken trust, and ultimately damage India’s export competitiveness," Srivastava adds.

The rebate under the scheme is allowed, based on the allowed percentage of FOB (Freight On Board) value of exports and issued in the form of a transferable duty credit/electronic scrip (e-scrip), the details of which are maintained in a digital ledger by the Central Board of Indirect Taxes and Customs (CBIC).

The US had challenged India’s key export subsidy schemes in the WTO (World Trade Organisation), claiming they harmed American workers and gave an unfair advantage to Indian exporters. A WTO dispute panel ruled in favour of the US, stating that the subsidies offered by the Indian government violated WTO norms, which prohibit export-contingent subsidies for countries above a certain income threshold. The panel further recommended that the export subsidy programmes be withdrawn, leading to the birth of the RoDTEP Scheme.