India is planning to strengthen financial support for exporters by enhancing the Remission of Duties and Taxes on Export Products (RoDTEP) scheme as the ongoing Iran conflict and broader West Asia tensions continue to disrupt trade flows and increase logistics costs.
Government officials said discussions are underway between the finance and commerce ministries to increase allocations under the export incentive programme and extend its tenure by another five years. The RoDTEP scheme currently refunds exporters for embedded taxes and levies not reimbursed under other mechanisms, covering more than 10,000 export products across sectors including engineering goods, textiles, chemicals, agriculture, and pharmaceuticals.
The move comes as Indian exporters face mounting pressure from soaring freight rates, war-risk insurance premiums, and shipping disruptions linked to instability in the Gulf region. Trade through key maritime corridors has been affected by security concerns around the Strait of Hormuz, impacting shipments to major markets such as the UAE and Saudi Arabia.
India’s merchandise exports fell 7.4% year-on-year in March, with 24 of 30 major export categories recording declines amid rising logistics costs and weakening regional demand. Exporters have also reported severe cash-flow pressures due to prolonged transit times and higher operating expenses.
Industry bodies have urged the government to restore and revise RoDTEP incentive rates, arguing that current support levels do not adequately compensate exporters for escalating costs. Officials said the government is evaluating revised reimbursement rates and larger financial outlays to help Indian exporters remain competitive in global markets during the ongoing geopolitical uncertainty.
The government has already introduced additional relief measures, including a ₹181 billion emergency credit guarantee programme and insurance support for cargo moving through high-risk Gulf routes. Exporters believe these measures will help stabilise shipments and reduce the impact of disruptions on India’s trade sector.
