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Exports grow at estimated 20 pc CAGR between FY24- 26 due to RoDTEP scheme: Official

March 24, 2026 5 min read Economics GS3
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What Happened

  • Government officials have projected that exports under the RoDTEP (Remission of Duties and Taxes on Export Products) scheme have grown at an estimated 20% Compound Annual Growth Rate (CAGR) between FY2023-24 and FY2025-26.
  • The MSME sector's share in RoDTEP-benefiting exports has increased significantly, reaching approximately 75% by FY2025-26, up from earlier years — indicating the scheme has increasingly benefited smaller exporters.
  • India's total goods and services exports for FY2025-26 are estimated to have reached approximately $714.73 billion, reflecting broad export momentum.
  • The RoDTEP scheme was extended by the DGFT (Directorate General of Foreign Trade) through March 2026, and its continuation into FY27 is under discussion, though the Budget 2026-27 has reportedly reduced allocation by 45% to Rs 10,000 crore from Rs 18,233 crore.
  • The scheme now covers Advance Authorisation holders, Export Oriented Units (EOUs), and Special Economic Zone (SEZ) units following extensions in 2024.

Static Topic Bridges

RoDTEP Scheme: Full Name, Design, and WTO Compliance

RoDTEP stands for Remission of Duties and Taxes on Export Products. It is an export incentive scheme launched on January 1, 2021, administered by the Department of Commerce and the DGFT (Directorate General of Foreign Trade), Ministry of Commerce and Industry. RoDTEP replaces the earlier MEIS (Merchandise Exports from India Scheme), which was struck down as WTO-incompatible in 2019 when the US challenged India's export subsidy programmes before the WTO Dispute Settlement Body and the panel ruled against India. Unlike MEIS (which was a direct subsidy), RoDTEP only remits embedded taxes and duties actually paid in the production and export chain — making it WTO-compliant under the principle that countries may rebate indirect taxes on exports.

  • Full name: Remission of Duties and Taxes on Export Products.
  • Launch: January 1, 2021; replaces MEIS (Merchandise Exports from India Scheme).
  • Administered by: DGFT, Ministry of Commerce and Industry.
  • WTO basis: Permitted under WTO law — rebate of embedded domestic taxes on exports is not a prohibited subsidy.
  • Benefit rate: 0.3% to 4.3% of FOB (Free on Board) export value, varies by product.
  • Mechanism: Credits issued as transferable scrips via electronic ledger — exporters use them to pay Customs duties or sell on the market.
  • MEIS was found WTO-incompatible in 2019 US challenge — RoDTEP was designed to pass WTO scrutiny.

Connection to this news: RoDTEP's design as a tax remission rather than a direct subsidy is what enables India to provide export support without triggering WTO disputes — a critical distinction as India balances export promotion with its WTO commitments.

India's Export Policy Framework: From EXIM Policy to FTP 2023

India's export promotion operates through the Foreign Trade Policy (FTP), which is formulated by the Ministry of Commerce and Industry and notified every five years. The current FTP 2023-28, notified in April 2023, marks a shift from export incentives to a facilitation-driven approach. Key schemes under FTP include: RoDTEP (duty remission), Advance Authorisation (duty-free inputs for export production), EPCG (Export Promotion Capital Goods — concessional duty on capital equipment), and the SEZ framework. India's merchandise exports crossed $450 billion in FY2022-23 and total exports (goods + services) crossed $770 billion in FY2023-24.

  • Foreign Trade Policy 2023-28: Notified April 1, 2023; "Amrit Kaal" export framework.
  • Target: Reach $2 trillion in exports by 2030 (goods + services combined).
  • Key schemes: RoDTEP, Advance Authorisation (AA), EPCG, SEZ framework, DESH (Development of Enterprise and Services Hubs) Bill.
  • DGFT: Directorate General of Foreign Trade — nodal agency for FTP implementation, under Ministry of Commerce.
  • India's total exports FY2023-24: ~$776 billion (goods ~$437 billion + services ~$339 billion).
  • MSME exports: Contribute ~45-50% of India's total merchandise exports.

Connection to this news: The 75% MSME share in RoDTEP benefits aligns with FTP 2023's stated goal of democratising export benefits — ensuring that SMEs, not just large corporations, are the primary beneficiaries of the trade facilitation architecture.

MSMEs in India's Export Ecosystem

Micro, Small and Medium Enterprises (MSMEs) are defined under the MSMED Act 2006 (as amended in 2020): Micro enterprises have investment up to Rs 1 crore and turnover up to Rs 5 crore; Small enterprises have investment up to Rs 10 crore and turnover up to Rs 50 crore; Medium enterprises have investment up to Rs 50 crore and turnover up to Rs 250 crore. MSMEs account for approximately 30% of India's GDP, 45-50% of total exports, and over 110 million jobs. The MSME Ministry runs several export promotion programmes including the Market Access Initiative (MAI) scheme, the International Cooperation Scheme, and MSME Export Hubs. The Udyam registration portal tracks registered MSMEs — over 4 crore enterprises registered as of 2026.

  • MSMED Act 2006 (amended 2020): Changed classification from investment-only to investment + turnover criteria.
  • Micro: Investment ≤ Rs 1 cr, Turnover ≤ Rs 5 cr.
  • Small: Investment ≤ Rs 10 cr, Turnover ≤ Rs 50 cr.
  • Medium: Investment ≤ Rs 50 cr, Turnover ≤ Rs 250 cr.
  • MSMEs: ~30% of GDP, ~110 million jobs, ~45-50% of merchandise exports.
  • Udyam Portal: Government portal for MSME registration; over 4 crore registrations.
  • MSME export schemes: MAI (Market Access Initiative), International Cooperation Scheme.

Connection to this news: The rise of MSME participation in RoDTEP to 75% is significant because smaller exporters historically had less access to export incentive schemes — the RoDTEP's electronic scrip mechanism has lowered the participation barrier.

Key Facts & Data

  • RoDTEP full form: Remission of Duties and Taxes on Export Products.
  • Launch date: January 1, 2021; replaces MEIS.
  • Benefit rate: 0.3%–4.3% of FOB export value; varies by product HS code.
  • Administering body: DGFT, Ministry of Commerce and Industry.
  • Mechanism: Transferable electronic scrips credited to exporter's ledger.
  • MSME share in RoDTEP benefits: ~75% by FY2025-26 (up from earlier years).
  • Export growth (RoDTEP-covered): ~20% CAGR FY2023-24 to FY2025-26 (official estimate).
  • India's total exports FY2025-26: ~$714.73 billion (goods + services).
  • Budget 2026-27 RoDTEP allocation: Rs 10,000 crore (down 45% from Rs 18,233 crore in FY26).
  • FTP 2023-28 export target: $2 trillion by 2030.
  • MEIS: Found WTO-incompatible in 2019 US challenge; replaced by RoDTEP.
  • RoDTEP extended to: AA holders, EOUs, SEZ units (following 2024 extension).