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Govt clarifies RoDTEP benefits not reduced for agricultural, food products exports

February 24, 2026 4 min read Economics GS Paper III
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What Happened

  • The Directorate General of Foreign Trade (DGFT) rationalized benefits under the RoDTEP scheme by reducing rates to 50% of existing levels for most export sectors.
  • The government clarified that this reduction does not apply to agricultural and processed food product exports, which will continue to receive RoDTEP benefits at the originally notified rates.
  • The exemption for agricultural exports is significant as it protects farmer-linked export incentives at a time when several other sectors face reduced support.
  • Budget allocation for RoDTEP in FY 2025-26 stands at ₹18,232 crore, covering 10,780 HS lines for Domestic Tariff Area (DTA) exports.
  • The scheme covers employment-oriented sectors including marine, leather, gems and jewellery, and agriculture, as well as electrical/electronics, automobiles, and plastics.

Static Topic Bridges

RoDTEP Scheme — Remission of Duties and Taxes on Exported Products

RoDTEP (Remission of Duties and Taxes on Exported Products) is an export incentive scheme launched by the Union Cabinet on 13 March 2020 and operationalized from 1 January 2021. It is administered by the Ministry of Commerce and Industry through the DGFT. The scheme reimburses embedded central, state, and local duties and taxes incurred during the manufacturing and distribution of exported goods that are not refunded under any other existing mechanism — making Indian exports more competitive in global markets.

  • Nodal ministry: Ministry of Commerce and Industry (DGFT implements)
  • Effective from: 1 January 2021 (announced March 2020)
  • Refund format: Transferable electronic scrips credited to an electronic ledger
  • Rate range: 0.3% to 4.3% of the FOB (Free On Board) value of exports
  • Coverage: 10,780+ HS lines for DTA exports in FY 2025-26
  • Budget: ₹18,232 crore allocated for FY 2025-26
  • Eligible entities: Both manufacturer exporters and merchant exporters (traders)

Connection to this news: The DGFT has rationalized rates by 50% for most sectors to manage budgetary allocations, but has specifically carved out agricultural and food exports from this cut to protect farmer-linked trade incentives.

WTO Compatibility and Export Subsidies

India's export incentive architecture has historically faced scrutiny under World Trade Organization (WTO) rules. Under the WTO Agreement on Subsidies and Countervailing Measures (ASCM), direct export subsidies linked to export performance are prohibited for countries above a certain per capita income threshold. RoDTEP was designed specifically to comply with WTO norms by remitting only genuine embedded taxes — rather than providing new financial support — thereby acting as a rebate rather than a subsidy. The previous MEIS (Merchandise Exports from India Scheme), which RoDTEP replaced, was challenged at the WTO by the US as a prohibited subsidy.

  • WTO Agreement on Subsidies and Countervailing Measures (ASCM) prohibits export-linked subsidies above income thresholds
  • MEIS (replaced by RoDTEP) was found non-compliant; RoDTEP was designed as a tax rebate to ensure WTO compliance
  • The distinction: RoDTEP reimburses actual taxes paid (permissible), not additional financial incentives (prohibited)
  • Agricultural products often receive different treatment under WTO's Agreement on Agriculture (AoA), which has separate disciplines

Connection to this news: The decision to maintain full RoDTEP rates for agriculture reflects both domestic food security priorities and the special treatment accorded to agricultural trade under WTO disciplines.

India's Agricultural Export Policy

India is among the world's largest exporters of rice, spices, marine products, and processed food. Agricultural exports are a key source of rural income and foreign exchange. The government's export policy for agriculture is shaped by a balance between domestic food security (which can lead to export bans or quantitative restrictions) and providing incentives to boost exports during surplus years. Schemes like Agricultural and Processed Food Products Export Development Authority (APEDA) promotion, export-oriented units, and incentive schemes like RoDTEP operate in tandem to support agri-exports.

  • India's agricultural and processed food exports are overseen by APEDA under the Ministry of Commerce
  • Key agricultural exports: basmati rice, non-basmati rice, marine products, spices, cotton, buffalo meat
  • India periodically imposes export restrictions on key commodities during domestic shortages (e.g., rice export bans in 2023)
  • Agri-exports benefit from special incentive frameworks given their linkage to rural farmer incomes

Connection to this news: By exempting agricultural and food products from the 50% RoDTEP rate cut, the government is signaling continued support for agri-export competitiveness even as it trims incentives for industrial sectors.

Key Facts & Data

  • RoDTEP scheme launched: 13 March 2020; operational from: 1 January 2021
  • Nodal ministry: Ministry of Commerce and Industry (DGFT)
  • Refund rates: 0.3% to 4.3% of FOB export value
  • FY 2025-26 budget: ₹18,232 crore (~US$2.13 billion)
  • Coverage: 10,780 HS lines for DTA; 10,795 for AA/EOU/SEZ exports
  • Rate cut for non-agri sectors: 50% of previously notified rates
  • Agricultural and food product exports: exempted from rate cut, continue at original rates
  • MEIS (predecessor scheme) was challenged at WTO for non-compliance; RoDTEP designed to be WTO-compliant