New Delhi: The government on Tuesday clarified that the reduced rates and value caps under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme are not applicable to the export of agricultural and processed food products.The clarification came a day after the government halved the rate of duty benefits under the scheme with immediate effect, prompting exporters to seek a review of the decision.Also read: India halves remission benefits to exportersThe commerce and industry ministry moved a note to the expenditure finance committee (EFC) for a higher allocation of ₹21,000 crore in 2026-27 for the scheme against ₹10,000 crore provided in the budget, said people familiar with the development. “Comments from all line ministries have also been sent to the department. We are seeking a date for the EFC meeting,” said one of the persons, who did not wish to be identified, adding that the date had yet to be communicated. Under the scheme, a rebate will be granted to eligible exporters at a notified rate as a percentage of free on board value with a value cap per unit of the exported product, wherever required, on export of items which are categorised under the notified eight-digit HS (Harmonised System) code or tariff code.Live EventsThe RODTEP scheme operates within a given annual budget. The remission is extended to various sectors based on the assessment of their comparative needs and overall budget allocation.Also read: India’s refund rollback lands exporters with a bigger bill”This year, in spite of higher allocation, the expenditure on remission is likely to cross the budgeted amount due to higher exports and also extension of the remission benefits to the units in SEZs (special economic zones) and EOUs (export-oriented units), etc., during the year,” the person said.Under the RoDTEP scheme, taxes and duties that are not covered under any other scheme are refunded, with rates ranging between 0.3-4.3%.”The reduced rates and value caps of RoDTEP benefits notified under Notification… dated February 23, 2026, are not applicable for the export products falling under ITC HS Chapter 01 to 24,” the Directorate General of Foreign Trade said in a notification on Tuesday.Chapters 1-24 deal with agri and processed food products.Trade experts said that the government should restore original value caps because cutting both rates and caps reduces the effective benefit to exporters to one-fourth, not one-half. Industry asked for restoration of rates for labour-intensive sectors especially cotton, silk and other farm-based fibres.The reduction in rates under the scheme deals a setback to exporters, who are reeling under the 25% tariffs imposed by the US, rendering many sectors uncompetitive vis-a-vis other countries.”Sudden reduction of RoDTEP by a whopping 50% is a bolt from the blue for the exporters. There is no change in any duties. Exporters have already booked orders based on RoDTEP rates. Many products and commodities are exported at 1-2% margins. They all will suffer a loss,” said Sharad Kumar Saraf, founder chairman of textile and tools firm Technocraft Industries India.The Rebate of State and Central Taxes and Levies (ROSCTL) scheme – the sister mechanism for garments and made-ups used by over 15,000 exporters – is currently extended only until March 31.
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