DGFT Restores Duty Reversal Rates for Some Sectors, GTRI Suggests More Relief

A day after halving the Remission of Duties and Taxes on Exported Products rates for all covered products, the DGFT on Tuesday restored the RoDTEP Rates for agriculture, dairy, meat and marine products — sectors that together accounted for $54.5 billion, or 12.3% of India’s merchandise exports in calendar year 2025, according to a report by GTRI.

While the correction is welcome, several gaps remain that warrant urgent policy attention, said Ajay Srivastava, the founder of GTRI.

GTRI recommended few more steps to help exporters:

1. Restore original value caps. 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. When the RoDTEP rate falls from 2% to 1% and the value cap from ₹50 to ₹25 per kg, the refund can drop from ₹20 to ₹5 for a 20-kg shipment. This sharp decline does not reflect any reduction in embedded domestic taxes and shifts costs back onto exporters, undermining tax neutrality

2. Restore rates for cotton, silk and other farm-based fibres. Cotton, silk and other agriculture-linked fibres remain outside the latest restoration, leaving their RoDTEP rates halved. These products sustain large rural value chains and export potential. Extending restoration to these fibres would strengthen farm incomes, rural employment and textile supply chains.

3. Reinstate RoDTEP support for labour-intensive sectors. Sensitive sectors such as textiles, leather, handicrafts, sports goods and engineering products continue to face weak global demand and intense competition from Vietnam, Bangladesh and other low-cost exporters. Restoring RoDTEP rates would help prevent further erosion of competitiveness.

4. Align RoDTEP with the Duty Drawback framework. RoDTEP and Duty Drawback both refund unrebated domestic taxes embedded in exports, making them WTO-compliant neutralszation mechanisms rather than subsidies. Duty Drawback refunds are not subject to budget caps, but RoDTEP operates under fiscal limits. Aligning the two schemes would ensure exporters receive full tax remission and policy predictability.