The government on Monday restored full benefits under the remission of duties and taxes on exported products (RoDTEP) scheme, reversing a recent cut, in a move aimed at supporting exporters grappling with disruptions caused by the ongoing West Asia conflict.

The decision comes amid rising freight costs, shipping delays, and increased insurance premiums due to escalating tensions in the Gulf region, which have impacted key maritime trade routes.

Rollback of earlier cuts

According to a notification by the directorate general of foreign trade (DGFT), the government has reinstated RoDTEP rates and value caps to levels prevailing as of February 22, 2026.

This effectively withdraws the earlier decision to halve the benefits by 50%, which had been implemented through a February 23 notification and had drawn criticism from exporters.

The restored rates will be applicable from February 23 to March 31, 2026, covering all eligible export products.

Support amid rising trade disruptions

In its statement, the government said recent developments in West Asia have disrupted maritime logistics, with changes in routing and transit patterns increasing both costs and uncertainty for exporters.

The crisis has pushed up:

• Sea and air freight rates

The move to restore RoDTEP benefits is intended to offset these pressures and maintain India’s export competitiveness in a challenging global environment.

Scheme aimed at neutralising tax burden

Launched in 2021, the RoDTEP scheme provides refunds of taxes, duties and levies incurred during the manufacturing and distribution of goods that are not reimbursed under any other mechanism.

The benefits under the scheme typically range from 0.3% to 3.9% of export value, depending on the product category.

The export sector has been facing multiple headwinds in recent months.

In addition to geopolitical disruptions, exporters have been dealing with elevated tariffs in key markets and rising logistics costs.

India’s merchandise exports declined marginally by 0.81% year-on-year to $36.61 billion in February, while the trade deficit stood at $27.1 billion.

The full impact of the West Asia conflict is expected to reflect in March export data, as hostilities escalated towards the end of February.

The scheme had seen a reduced allocation in the recent Budget, with ₹10,000 crore earmarked for 2026-27, lower than earlier expectations.