Prior to the announcement of the Union Budget 2025, the government is considering extension of key schemes for exporters that have recently lapsed, including the popular Remission of Duties and Taxes on Exported Products (RoDTEP) from which SEZ units and EOUs have got excluded and the interest equalisation scheme important for ensuring cheap export credit, sources have said. The idea is to continue extending some relief to exporters amidst volatility in global demand.

An additional provision of ₹1,600-1,700 crore is being considered to extend RoDTEP to SEZs and EOUs till the end of the fiscal year, while the Commerce Department has also made a case for extending the interest equalisation scheme in a “slightly modified form” for four to five years, sources said.  

“Last week the PMO discussed a key grievance of SEZs and EOUs of having being cut off from the RoDTEP scheme from January 1 2025 while the scheme continues for other exporters. The government is now considering an additional provision of about Rs 1,600-1,700 crore to extend RoDTEP benefits  to EOUs and SEZs till the end of the ongoing fiscal.Once that happens further extensions can be considered in the next fiscal when more funds will be available,” officials tracking the matter told businessline.

The RoDTEP scheme, announced in January 2021, refunds embedded duties and taxes, such as VAT on fuel used in transportation, mandi tax and duty on electricity used during manufacturing of the exported items.

Units in SEZs and EOUs and Advance Authorisation holders were  included in the RoDTEP scheme in March 2024 but have been excluded from January 1, 2025, while other exporters are eligible till September 30, 2025, per a notification issued by the DGFT in September 2024. 

In representations made to the Department of Expenditure and Department of Commerce, the Export Promotion Council for EOUs and SEZs had noted that there was no justification for denying the benefits to one set of exporters (SEZ/EOU/AA holders) vis-a-vis other exporters in the domestic area outside the zones (DTA).

If there are budget constraints, product categories/sectors may be reduced rather than one small set of exporters exporting the same product being put to disadvantage, it suggested.

In case of the interest equalisation scheme, which lapsed on December 31 2024, the DGFT is trying to persuade the Finance Ministry to extend it to all initial beneficiaries but is also ready to negotiate on limiting the beneficiaries to the MSME sector if funds are a big constraint, the source said.

The interest equalisation scheme, under which beneficiaries are extended export credit by banks at a subsidised interest rate, was first implemented in April 2015 and has been in place for five years. It covered non-MSME exporters of about 410 identified products and all exporters from the MSME sector. 

The scheme was subsequently extended for limited periods of time and the last extension, which was only for MSME exporters, lapsed on December 31 2024.

“The DGFT has made a case for extending the interest equalisation scheme for four-five years with the initial budget of an annual Rs 3000 crore. Various formats have been proposed to choose the beneficiaries,” the official said.

With goods exports from the country still facing rough weather as geopolitical risks continue to affect global demand, existing schemes play an important role in ensuring competitiveness of Indian exporters, per the Commerce Department.

Exports of goods from India in April-December 2024 increased  1.6 per cent (year-on-year) to $321.71 billion while exports in the last two months registered consecutive declines.