Ludhiana
The Chamber of Industrial and Commercial Undertakings (CICU) has expressed serious concern over the reduction in incentives under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme announced in the Union Budget 2026–27 and the subsequent notification issued by the Directorate General of Foreign Trade (DGFT).
According to Budget documents, the allocation under the RoDTEP scheme has been cut from ₹18,232.50 crore in Financial Year 2025–26 to Rs10,000 crore in Financial Year 2026–27. Further, DGFT Notification on February 23 has restricted RoDTEP rates to 50 per cent of the earlier notified rates and value caps with immediate effect.
Upkar Singh Ahuja, president CICU stated that the combined impact of the reduced allocation and rate cut would lead to an effective erosion of nearly 65–75 per cent of the benefit earlier available to exporters. He pointed out that the textile sector, dominated largely by MSMEs and operating on thin margins, would be the worst hit. Exporters are already grappling with high logistics costs, expensive power tariffs, elevated interest rates and stiff competition from Bangladesh, Vietnam and China.
Industry representatives said several exporters have begun receiving requests for price revisions from overseas buyers, while some export orders are at risk of being diverted to competing countries. Since the RoDTEP scheme is meant to reimburse embedded taxes not refunded under GST, the reduction effectively amounts to exporting taxes, thereby weakening India’s competitiveness in global markets.
{{/usCountry}}Industry representatives said several exporters have begun receiving requests for price revisions from overseas buyers, while some export orders are at risk of being diverted to competing countries. Since the RoDTEP scheme is meant to reimburse embedded taxes not refunded under GST, the reduction effectively amounts to exporting taxes, thereby weakening India’s competitiveness in global markets.
{{/usCountry}}Ahuja also underlined that the textile sector is among the largest employment generators, particularly for semi-skilled and women workers. Any slowdown in exports, it warned, could directly affect livelihoods and manufacturing output. The Chamber added that frequent and abrupt policy changes dent buyer confidence and long-term sourcing commitments from India.
The Chamber has submitted a detailed representation to the Prime Minister’s Office, the Ministry of Commerce and Industry, the Ministry of Finance, the Ministry of MSME and the DGFT, seeking immediate restoration of earlier RoDTEP rates and adequate budgetary support, especially for labour-intensive MSME sectors.
Urging the Government to ensure a stable and predictable export incentive regime, CICU said sustained policy support was essential to achieve the national objectives of Make in India, Atmanirbhar Bharat and growth in exports