The government has extended the RoDTEP export incentive scheme by three months until December 31, 2026. While this prevents an immediate loss of benefits, the Confederation of Indian Industry (CII) is urging a longer five-year commitment. Industry leaders argue that short-term extensions make it difficult to fix prices for long-term international contracts and manage thin profit margins.
The Ministry of Commerce and Industry has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for three months, maintaining the program until December 31, 2026. This move ensures that exporters continue to receive refunds on taxes and duties paid on exported goods, helping them remain price-competitive in global markets. However, the Confederation of Indian Industry (CII) has expressed that this short-term bridge is insufficient for the needs of large-scale exporters and is pushing for a five-year policy horizon.
Why Exporters Need Long-Term Certainty
The RoDTEP scheme, which provides refunds typically ranging between 0.3 percent and 3.9 percent of the free-on-board value of exports, acts as an essential buffer for companies operating on thin profit margins. Industry leaders emphasize that the current three-month extension creates uncertainty. Exporters often sign supply agreements with international buyers that last for a year or longer. When the government policy is extended only for a few months at a time, it becomes difficult for companies to calculate costs and set fixed prices for these long-term contracts.
Without a medium-term policy guarantee, firms face the risk of absorbing costs if the scheme is modified or reduced mid-contract. This lack of predictability can hinder an exporter's ability to commit to large international orders, potentially impacting their market share. The CII has advocated for a five-year commitment to provide the stability required for accurate financial forecasting and to secure sustainable global partnerships.
This policy development comes amid a period of high activity in India’s external trade. Between April and August of the current fiscal year, exports grew by 17.85 percent to reach USD 215.91 billion. However, this growth has been accompanied by a rise in imports, which increased by 18.21 percent to USD 363 billion. As India works toward an ambitious annual export target, the government faces the challenge of managing fiscal support schemes while balancing its budget.
For investors and companies involved in sectors like textiles, engineering, and chemicals—which rely heavily on these incentives—the primary monitorable remains whether the government will announce a longer-term extension as the December 31, 2026, deadline approaches. The continuation and predictability of these duty refunds will be a key factor in how companies manage their operating margins in the coming quarters.