Good News for Exporters as Key Tax Refund Scheme RoDTEP Set to Return

India is set to reinstate a vital tax refund scheme for exporters from June 1, a move aimed at boosting the country’s competitiveness in global trade, the Commerce Ministry announced on Tuesday. The scheme, known as the Remission of Duties and Taxes on Exported Products (RoDTEP), had been on hold since February 5 but will now resume operations.

RoDTEP reimburses various duties and taxes that exporters incur but are not covered by any other government programs. The scheme applies across multiple major sectors, including textiles, pharmaceuticals, automobiles, chemicals, agriculture, and food processing. By reinstating the program, the government hopes to level the playing field for exporters across these diverse industries.

“Their reinstatement is expected to provide a level playing field for exporters across sectors,” the trade ministry said, emphasizing that the disbursal of benefits would be conducted through a digital platform to ensure transparency and efficiency.

Understanding RoDTEP

Launched in January 2021, the RoDTEP scheme has already disbursed over Rs 57,977 crore (approximately $7 billion) in tax rebates to exporters as of March 31, 2025. The scheme helps exporters reclaim certain embedded taxes and levies, which makes their products more competitively priced in international markets.

Earlier this year, the scheme was temporarily paused so the government could reassess the level of support required by exporters in a changing economic environment. A senior official told Reuters that, considering the current trade climate, the government recognized the need to continue providing such financial benefits to exporters.

Strategic Timing

The revival of RoDTEP comes at a crucial moment for Indian exporters. India has recently concluded a trade deal with the United Kingdom and is actively working to finalize an agreement with the United States. These efforts are particularly important ahead of the expiration of a 90-day reprieve from the steep tariffs imposed by the US administration under former President Donald Trump.

By reinstating RoDTEP, the Indian government aims to strengthen the export sector, helping businesses maintain competitiveness amid global challenges and trade uncertainties. The scheme’s return is expected to ease cost pressures on exporters and enable them to expand their reach in international markets.

Overall, the revival of the RoDTEP scheme signals positive support from the government for the export community, reflecting a commitment to enhancing India’s position in global trade and economic growth.

IT.