RoDTEP Scheme Extended: A Boost for Indian MSME Exporters

The Government of India has announced a six-month extension of the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme, now valid until 31st March 2026. Introduced in January 2021, the scheme reimburses hidden taxes and duties borne by exporters, helping Indian products remain competitive in global markets. For MSMEs, which often operate on thin margins, this extension is a critical relief. Small and medium exporters in sectors such as textiles, handicrafts, engineering goods, and pharmaceuticals can continue to benefit from reduced costs and improved cash flow, ensuring that their products remain attractive to international buyers despite global uncertainties.

The extension of RoDTEP was officially notified by the Ministry of Commerce and Industry on 25th September 2025. The scheme allows exporters to claim reimbursement of embedded taxes, including electricity duty, mandi tax, fuel tax, and transport charges, which are not refunded through GST or other export incentives. The reimbursement is calculated as a percentage of the Free on Board (FOB) value of the exported goods and is credited in the form of electronic scrips. These scrips can be used to pay customs duties on imports or even be traded with other businesses. Since its inception, RoDTEP has supported exports worth over ₹1 lakh crore, particularly aiding MSMEs in labour-intensive sectors. The extension ensures continuity of benefits at a time when global economic pressures and tariff fluctuations have made exports increasingly challenging. For more info: https://www.dgft.gov.in/CP/?opt=RoDTEP&utm 

Impact on Indian MSMEs

For MSMEs, the RoDTEP extension is a significant support measure. Many small exporters face high operating costs due to embedded taxes on inputs and services, which often make their products less competitive abroad. By reimbursing these taxes, the scheme reduces costs, improves margins, and allows MSMEs to remain competitive in key markets such as the United States, the European Union, the Middle East, and ASEAN countries. Labour-intensive sectors, including textiles and handicrafts, benefit by lowering production costs for fabrics, garments, and handloom products. Engineering goods and auto components also gain relief from high electricity and logistics costs. In the pharmaceuticals and chemicals sector, MSMEs can reinvest the refunded duties into quality testing, compliance, or research and development. The continuity of RoDTEP also enhances cash flow, reduces dependence on expensive credit, and helps exporters plan long-term strategies with greater certainty.

MSMEs should act proactively to maximize the benefits of the extended RoDTEP scheme. Exporters need to ensure their products are eligible and maintain proper documentation, including shipping bills, GST records, and input tax details, to file claims efficiently. Registered MSMEs can use the scrips to pay customs duties or trade them with other businesses to improve liquidity. It is also important to align export strategies with cost-sensitive international markets where RoDTEP advantages improve competitiveness. Engaging with Export Promotion Councils and participating in trade fairs can provide guidance, networking, and market insights to strengthen export performance.

The six-month extension of RoDTEP provides MSMEs a critical opportunity to stabilize costs and expand their global footprint. By strategically leveraging the scheme, small and medium exporters can maintain margins, enhance competitiveness, and confidently navigate volatile international markets. ISF encourages MSMEs to integrate RoDTEP into their export strategy while exploring new geographies and trade partnerships for sustainable growth.