Govt restores full RoDTEP duty benefits amid war

THe regime on mon restored replete(p) tariff benefits to exporters unnatural by disruptions linked to the West Asia war, withdrawing its February 22 decision that had halved rebate rates and imposed caps under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.“In view of the evolving geopolitical situation and its implications for maritime trade, the Government of India has decided to restore the rates and value caps under RoDTEP scheme for all eligible export products with effect from March 23, 2026,” the commerce ministry said.The restored rates will revert to those in force as of February 22, effectively rolling back the 50% reduction notified a day later. “The restored rates shall be those that were in force as on February 22, 2026, thereby withdrawing the earlier restriction of 50%,” the ministry said, adding that the latest notification supersedes the February 23 order and its February 24 corrigendum, except for actions already taken.RoDTEP is based on the principle that taxes and duties should not be exported, and that levies incurred during production and logistics should be refunded to exporters if not covered under any other scheme.The earlier curbs had triggered sharp criticism from exporters, especially as global trade faced volatility and freight costs surged due to disruptions in key maritime routes. The government had, however, exempted agriculture and food processing exports from the reduction. A corrigendum issued by the Directorate General of Foreign Trade (DGFT) clarified that reduced rates would not apply to items under ITC HS Chapters 01 to 24, covering products such as tea, coffee, cereals, meat, fruits, vegetables and beverages.The February rationalisation was linked to fiscal constraints, with the Union Budget for 2026-27 proposing to cut the scheme’s allocation from ₹18,232.50 crore to ₹10,000 crore. The scheme was also proposed to be subsumed under a broader ₹25,060 crore export promotion mission, subject to approval.Officials indicated that the allocation may now be reviewed in light of stakeholder feedback and the uncertain global trade environment.“The decision is intended to provide timely support to Indian exporters facing elevated freight costs and war-related trade risks arising from disruptions in the Gulf and the wider West Asia maritime corridor,” the ministry said, underscoring its commitment to maintaining export competitiveness.Launched in 2021, RoDTEP refunds taxes and levies borne at the central, state and local levels that are not reimbursed through other mechanisms, with rebates calculated as a percentage of the FOB value, subject to notified caps.