Budget 2025: FM likely to increase outlay for 2 key tax remission schemes for exporters by 10%

The finance ministry will likely increase allocations for two key tax remission schemes for exporters by about 10% each in the upcoming budget for 2025-26 amid calls for sustained support to blunt the impact of external headwinds, people aware of the development said.

In the July 2024 budget, the government had allocated ₹16,575 crore for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for this fiscal. Another ₹9,246 crore was earmarked for the Rebate of State and Central Taxes and Levies (RoSCTL), meant for textiles and garments exporters alone.

The expenditure department is also evaluating a commerce department proposal to provide additional funds for the RoDTEP scheme this fiscal to tide over a shortfall of about ₹1,800 crore amid increased tax remission demand, and a decision on the matter will be made soon, a senior official told ET.


Under these remission schemes, the government reimburses eligible exporters for various state and central taxes and levies on inputs consumed in exported products. The idea is to keep exports zero-rated, in sync with the global best practices. Both the expenditure and commerce departments are also in talks on the extension of the RoDTEP support for companies in special economic zones (SEZs) and export-oriented units, and the interest equalisation scheme beyond the December 2024 deadlines, said another official.

Export bodies have called for heightened support to exports to beat a demand slowdown in some advanced countries. They also seek sustained support to take advantage of opportunities that may come in India's way if a tariff war breaks out between the US and China during the Trump presidency.

The quantum of the refunds under the remission schemes varies, depending on the products. For instance, under the RoDTEP scheme, eligible exporters get refunds in the range of 0.3% to 4.3% of the freight-on-board value of the exported products.

In the pre-budget meeting with finance minister Nirmala Sitharaman on December 26, export bodies had underscored the need for sustained support. Federation of Indian Export Organizations president Ashwani Kumar, for instance, had cited additional export opportunities worth $25 billion to the US in sectors, including electronics & electricals, auto parts, chemicals and apparel & textiles, due to the expected tariff war.

Merchandise exports rose marginally by 1.6% on-year until December this fiscal to $322 billion. The World Trade Organisation had in October last year predicted global trade volume growth to improve to 3% in 2025 from 2.7% in 2024 if the West Asian conflict got resolved.