🚢 RoDTEP Restoration for SEZs, EOUs & AA Exporters: Boost or Band-Aid for India’s Trade Policy?

Vivek Harsora
6 days ago
2 min read

Effective June 1, 2025, the Indian government has reinstated RoDTEP (Remission of Duties and Taxes on Exported Products) benefits for Advance Authorization (AA) holders, Export-Oriented Units (EOUs), and Special Economic Zones (SEZs).

Reversing an earlier decision to withdraw these incentives.

But this sudden shift raises a pressing question:

Is policy instability undermining India’s export credibility?

🔍 What Happened?

In a surprising move, RoDTEP benefits were suspended on February 6, 2025, for AA/EOU/SEZ exporters, restricting refunds to Domestic Tariff Area (DTA) exporters only.

➡️ After intense lobbying from FIEO (Federation of Indian Export Organisations) and sector stakeholders, the benefits were restored via DGFT Notification No. 11/2025-26, to take effect from June 1, 2025.

📅 Timeline of the Policy Whiplash

Until Dec 31, 2024: RoDTEP available to all eligible exporters
Feb 6, 2025: DGFT suspends benefits for AA/EOU/SEZ units
Feb–May 2025: Exporters face contract and pricing issues
June 1, 2025: Benefits reinstated, but with ongoing gaps

💸 Why This Matters to Exporters

RoDTEP refunds 0.3% to 4.3% of export value, covering non-creditable taxes like electricity duty, mandi tax, etc.

Industries like:

🧪 Pharmaceuticals
👕 Textiles
⚙️ Engineering goods
🐟 Marine exports
Rely on these refunds for margin protection and pricing consistency. The suspension created chaos in planning, negotiations, and cash flow.

⚠️ Key Concerns from the Export Community

1. Policy Volatility

2. Coverage Gaps

3. Competitiveness at Risk

💰 What’s the Benefit for Exporters?

The restoration of RoDTEP benefits is more than a policy correction, it’s a lifeline for exporters navigating global competition and tight margins. Here's how:

Cost Relief: Refunds 0.3–4.3% of export value by covering hidden taxes like fuel, electricity, and local levies.
Cash Flow Boost: Faster refunds ease working capital pressure, especially for SMEs.
Price Stability: Enables exporters to maintain competitive global pricing despite rising input costs.
Level Playing Field: Matches incentives offered by competing countries like Vietnam and Bangladesh.
Confidence to Scale: Restored benefits allow long-term planning, investments, and contract stability.

In sectors like engineering goods or chemicals with long lead times, this assurance is key

➡️ In short: More margin. Less uncertainty. Better global reach.

This move restores momentum for India’s $2 trillion export goal, but exporters need long-term certainty, not just relief.

✅ What Needs to Change?

✅ Long-Term Policy Commitment

Legislate a 5-year RoDTEP roadmap
Lock eligibility criteria and refund rates

✅ Harmonization of Schemes

Merge RoDTEP with SEIS and e-commerce export incentives
One-window portal, single compliance system

✅ Smart Digital Infrastructure

AI-powered customs validation
Reduce processing time from 90 to 30 days
Blockchain-based documentation

💬 Over to You:

How did the RoDTEP suspension affect your business?
What would a “trustworthy” export policy framework look like to you?

Let’s start a dialogue that pushes for predictability over patchwork.

📌 Stay Informed. Stay Competitive.

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