Centre Clarifies on Reduction in Tax Incentives

Although tax incentives under the export support scheme have been reduced, the Central Government clarified yesterday that the cuts will not apply to agricultural and processed food products. Under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, exporters are reimbursed for duties and taxes incurred during the manufacturing, transportation, and distribution of goods. On Monday, the Directorate General of Foreign Trade (DGFT) announced that the existing rates under the scheme would be reduced by half with immediate effect.

However, the DGFT clarified that the revised lower rates will not apply to export products classified under ITC HS Code Chapters 1–24. These chapters primarily cover agricultural and processed food products. For the financial year 2025–26, an allocation of ₹18,232 crore was made for the RoDTEP scheme and there was a proposal to increase it to ₹21,709 crore in 2026–27. However, the latest Budget has allocated only ₹10,000 crore for the scheme.