India is likely to extend an export incentive programme, called the Remission of Duties and Taxes on Export Products (RoDTEP), for exporters for five years beyond its scheduled end on September 30, according to a government trade source. As reported by Reuters, this extension was confirmed on Wednesday by a government trade source, providing continued support to the country's export sector and maintaining the incentive framework for exporters. The confirmation came from a government trade source in New Delhi, with the programme set to continue supporting India's export-oriented industries. The textile industry has also sought a five-year extension of RoSCTL and a doubling of its outlay, with the final decision resting with the finance ministry's Department of Expenditure.
The commerce ministry sought ₹23,000 crore from the finance ministry under the programme for 2026/27, according to a trade ministry official who spoke on condition of anonymity to reporters. However, the Department of Commerce has now asked the expenditure department to raise the export incentive scheme's FY27 allocation to ₹23,000 crore from the budgeted ₹10,000 crore, as reported by Business Standard. The Department of Expenditure will take a final call on the extension of the scheme and its allocation, with the Department of Commerce expecting clarity by September 30. The government likely spent ₹18,233 crore on the scheme in FY26, according to the revised estimate in the FY27 Budget. The textile industry has also asked the DoE to double the outlay under RoSCTL from ₹5,000 crore allocated for the current financial year, with the government estimated to have spent ₹10,010 crore on RoSCTL in 2025-26 (FY26).
The Commerce Ministry's request for a higher allocation comes amid strong export performance data that shows merchandise exports rose to $43.8 billion in August from $34.7 billion a year earlier, according to the latest trade data. Merchandise imports increased 14.1% to $70.6 billion from $61.96 billion, while India's merchandise trade deficit narrowed marginally to $26.86 billion in August from $27.2 billion a year ago. As reported by NDTV Profit, the Commerce Secretary noted that overall exports rose 25.4% to $82.7 billion in August from around $66 billion a year earlier, with rupee terms showing export growth at 37.6%. This strong performance demonstrates the continued relevance of export incentive schemes like RoDTEP in supporting India's competitive export sector.
The government has set ambitious targets for the textile sector, aiming to raise textile exports to $100 billion by 2030 from around $37 billion currently and increase the sector's size to $350 billion by 2030 from around $190 billion. Industry estimates suggest that such growth would require investment of at least $60 billion, as noted by Updeep Singh Chatrath, chairman of industry body Assocham's National Council on Textiles and Technical Textiles. "Policy consistency is a key factor that influences investment decisions, and the textile sector requires investments on a sustainable basis to reach the 2030 goals set for it by the government," Chatrath emphasized. The government's extension of RoDTEP and RoSCTL schemes is part of broader efforts to provide certainty and policy consistency needed for achieving these ambitious export targets.
The RoDTEP scheme is a key export incentive programme designed to support Indian exporters by reimbursing exporters for embedded non-creditable central, state and local levies paid on inputs. As reported by Business Standard, the scheme ensures the zero-rating of exports, making them competitive in global markets. The programme was initially launched in January 2021 to replace the Merchandise Exports from India Scheme (MEIS) and ensure that India's export incentives complied with World Trade Organization (WTO) guidelines. It was initially launched for a 27-month period ending in March 2023, with an allocation of ₹27,018 crore. Since March 2023, the government has extended the scheme at least five times for periods ranging from six months to one year. RoDTEP refund rates currently range from 0.3% to 3.9% of export value, depending on the product, with the government examining a framework to provide exporters with greater certainty over the scheme's continuation and refund rates.
Export associations have long demanded predictability in the RoDTEP scheme, with industry representatives noting that "the government has extended the scheme so many times but it has always been only for a short six month to one year period, which leaves some degree of uncertainty." As reported by Business Standard, an export association representative emphasized that "there is already enough uncertainty for mitigation; at least we can have a clearer picture here." The representative added that "the government should rather take a long-term view of the RoDTEP scheme and extend it sustainably." The industry expects the final decision on the extension of both schemes by September 30, with certainty and predictability in the RoSCTL scheme being long-standing demands of the textile industry. The government last extended both RoDTEP and RoSCTL schemes by six months in March to support exporters amid the conflict in West Asia.
