Commerce and Finance Ministries Discuss Long-Term Extension of RoDTEP and RoSCTL Schemes

The Commerce Department is seeking a five-year extension of the export support schemes, while the Finance Ministry remains unconvinced about their effectiveness. The latest three-month extensions are due to expire on December 31, 2026.

The Commerce Department is holding consultations with the Finance Ministry to secure a longer-term extension of two key export support schemes: the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Rebate of State and Central Taxes and Levies (RoSCTL). Their latest three-month extensions are set to expire on December 31, while the Finance Ministry has yet to be convinced about their effectiveness in boosting exports, according to sources.

“The Commerce Department had sought a five-year extension of the two schemes before they lapsed on September 30, arguing that remission of embedded input taxes was reimbursement, not an incentive. But it was ignored. It is trying again as the schemes are key export supports amid geopolitical crisis affecting trade,” a source said.

RoDTEP covers most exported products, subject to specified exclusions, and refunds embedded Central, State and local duties, taxes and levies that have not been rebated through other mechanisms. The scheme is considered an important support for micro, small and medium enterprise (MSME) exporters, including those in labour-intensive sectors. Its notified rates vary by product and are linked to the eligible duties and taxes borne by exporters.

RoSCTL follows a similar principle but is specifically designed for exports of apparel, garments and made-ups.

Exporters Seek Policy Certainty

The short extension has increased concerns among exporters about the future of the schemes. In April, the government granted a six-month extension, whereas the latest extension covers only three months.

“Some exporters fear that the Finance Ministry may be in a mood to discontinue the scheme altogether, as all pleas for a long-term extension have been ignored so far, even amid uncertainties such as the ongoing West Asia crisis,” a Mumbai-based exporter of engineering goods said.

Exporters have urged the government to extend both schemes for five years, arguing that repeated extensions lasting only three to six months do not provide the policy stability needed to navigate growing uncertainty in global markets.

Commerce Department Seeks Higher RoDTEP Allocation

Separately, the Commerce Department has requested an increase in the RoDTEP allocation to ₹23,000 crore for 2026-27, compared with the Budget estimate of ₹10,000 crore. The department has cited growth in merchandise exports in support of the higher allocation.

According to Commerce Ministry data, India's merchandise exports rose 18.51 per cent year-on-year to $259.89 billion in April-September 2026-27, compared with $219.30 billion in the corresponding period last year.