Export Incentives in India: A Comprehensive Guide for Traders

Exporting is about managing thin margins in a competitive global market, not just selling products. To ensure Indian goods remain price-competitive, the Government of India offers a range of fiscal export incentives designed to offset infrastructural inefficiencies and tax burdens.

However, the policy landscape has shifted significantly. With the transition from MEIS/SEIS to WTO-compliant schemes like RoDTEP and RoSCTL, many exporters are leaving money on the table simply because they don’t know what they are eligible for.

Whether you are an MSME or a large Star Export House, understanding these incentives can directly increase your net profit by 5% to 10%. This expert guide breaks down the active export promotion schemes under the Foreign Trade Policy (FTP) 2023.

Export incentives are financial assistance programs provided by the government to exporters. They are not profits but rather reimbursements of taxes and duties paid during the manufacturing and distribution process.

Key Benefits:

• Cost Competitiveness: Lowering the final price of your product in international markets.
• Cash Flow Management: Schemes like GST refunds and Duty Drawback provide critical liquidity.
• WTO Compliance: Modern schemes (RoDTEP) are designed to reimburse “embedded taxes,” making them legally safe under World Trade Organisation rules.

Below is a detailed breakdown of the active schemes you can leverage today.

These schemes are designed to refund taxes and duties that have already been paid during the manufacturing or distribution process. They operate on a “pay first, claim later” mechanism, ensuring that exported goods do not carry the burden of domestic taxes.

RoDTEP is the flagship scheme that replaced MEIS.

• What it covers: It refunds embedded taxes that are not subsumed under GST, such as VAT on fuel, Mandi Tax, and Electricity Duty.
• Incentive Rate: Ranges from 0.5% to 4.3% of FOB value, depending on the product HS Code.
• Eligibility: Available for almost all export sectors.

• Target Sector: Specifically for Apparel and Made-ups (Textiles).
• Benefit: Since the textile sector has high un-refunded state levies, RoSCTL offers higher rates than RoDTEP to ensure Indian garments remain competitive against Bangladesh and Vietnam.

• Concept: Refund of Customs Duty paid on imported inputs, and Central Excise paid on domestic inputs.
• Types: All Industry Rate (AIR) or Brand Rate (specific to your product).

Unlike remission schemes, these authorisations provide relief upfront. They allow you to import inputs or machinery without paying Customs Duty in the first place, thereby preventing your working capital from getting locked in taxes.

• Purpose: Allows duty-free import of raw materials (inputs) required for manufacturing export products.
• Benefit: You pay 0% Customs Duty (saving 10% to 25% upfront).
• Condition: Subject to specific “Input-Output Norms” (SION) and an export obligation.

• Purpose: Allows duty-free import of Machinery/Capital Goods.
• Benefit: 0% Customs Duty on machinery.
• Obligation: You must export goods worth 6 times the duty saved within 6 years.

• Similar to Advance Authorisation, but used for products where Standard Input Output Norms (SION) are fixed. The authorisation is transferable after export.

These incentives focus on reducing the operational costs of doing business internationally. They provide financial support for marketing activities and subsidise the interest rates on export loans to keep Indian traders competitive.

• Purpose: To lower the cost of capital.
• Benefit: Provides an interest subsidy on Pre-shipment and Post-shipment export credit (loans).
• Rate: 2% to 3% interest subvention for MSMEs and specific tariff lines.

• Purpose: Reimbursement of costs incurred for marketing abroad, such as participating in international trade fairs, exhibitions, or conducting market research.

• Benefit: Based on export performance (Turnover), firms are recognised as One Star, Two Star, up to Five Star Export Houses.
• Perks: Self-certification of origin, priority customs clearance, and exemption from Bank Guarantees (BG).

Many exporters and importers in India still ask about these schemes.

• MEIS (Merchandise Exports from India Scheme): Discontinued since Jan 1, 2021. Replaced by RoDTEP.
• SEIS (Service Exports from India Scheme): Discontinued under FTP 2023. Currently, there is no direct replacement for service exporters, though discussions on a new SEZ policy (DESH Bill) are ongoing.

Introduced for large-scale manufacturing, PLI is not a traditional trade incentive but a “production” subsidy.

• Sectors: Electronics, Pharma, Textiles (MMF), Auto Components, etc.
• Goal: To create global manufacturing champions in India by offering 4% to 6% incentives on incremental sales.

The procedure varies by scheme, but the central hub is the DGFT (Directorate General of Foreign Trade).

• For Remission (RoDTEP/RoSCTL): You must declare your intent to claim the benefit on the Shipping Bill itself at the time of export. The scrips are generated electronically via the ICEGATE portal.
• For Exemptions (AAS/EPCG): You must apply online on the DGFT Website before importing goods.
• For GST Refund: Filed via the GSTN portal (LUT mechanism preferred).

Claiming incentives often requires precise documentation (e-BRC, valid RCMC, Digital Signature). A missing declaration on the Shipping Bill can lead to a permanent loss of RoDTEP benefits.

In 2026, export incentives are moving away from direct cash subsidies to “duty neutralisation.” The government’s message is clear: Export the goods, not the taxes.

For Indian traders, the key to maximising profits lies in layering these benefits correctly, using EPCG for machinery, Advance Authorisation for inputs, and RoDTEP for the final product exit. Ignoring these can mean losing a significant competitive edge.

Confused about which scheme fits your business?

Navigating between RoDTEP, Duty Drawback, and Advance License requires expert calculation. DGFT Guru helps you structure your exports to ensure 100% compliance and maximum benefit utilisation.

Que: Can I claim both Duty Drawback and RoDTEP? 

Yes. In most cases, you can claim the All Industry Rate (AIR) of Duty Drawback along with RoDTEP, provided the Drawback rate doesn’t already account for the taxes covered by RoDTEP.

Que: Is the SEIS scheme available for service exporters in 2025? 

No. The SEIS scheme has been discontinued. As of now, service exporters do not have a direct duty scrip incentive, though they benefit from GST exemptions (LUT) and SEZ/EOU status.

Que: What is the deadline to claim RoDTEP? 

There is no separate “application” deadline like MEIS. You must flag “Yes” for RoDTEP in your Shipping Bill at the time of export. The scroll is generated automatically on ICEGATE.

Que: How do I apply for the Interest Equalisation Scheme? 

You do not apply to DGFT. You must submit your request to your Bank along with your RCMC and export proofs. The bank will adjust the interest rate (subvention) directly on your loan.

Que: Is GST refund considered an export incentive? 

Technically, yes. Exports are “Zero-Rated” supplies. You can export under LUT (Letter of Undertaking) without paying IGST, or pay IGST and claim a full refund. This ensures Indian taxes don’t stick to exported goods.