Budget 2026-27: Govt lowers funding for key export boosting schemes

Export incentive allocations have been pared back in Budget 2026-27, with sharp cuts to RoDTEP and RoSCTL even as exporters face geopolitical risks and higher US tariffs

Union Budget 2026-27 saw reduction in spending on some key export boosting schemes, at a time when exporters are grappling with geopolitical uncertainties, including protectionist policies implemented by the United States (US).

 

The allocation for the commerce department’s key Remission of Duties and Taxes on Export Products (RoDTEP) scheme has been slashed by 45 per cent to ₹10,000 crore for FY27, Budget documents showed. The government had allocated ₹18,233 crore for the current financial year.

 

Total outgo for Rebate of State and Central Taxes and Levies (RoSCTL) — a similar scheme for garments and made-ups — has been halved to ₹5,000 crore in the upcoming financial year. The revised estimate for the allocation for current financial year stood at ₹10,010 crore, while the Budget estimate (BE) at the beginning of the year was ₹10,170 crore.

 

 

Both schemes aim to refund to exporters the embedded non-creditable central, state and local levies paid on inputs. The schemes are based on the principle that taxes should not be exported. These taxes were not refunded earlier. 

 

Allocation for the recently approved Export Promotion Mission (EPM) was ₹2,300 crore. As much as ₹2,250 crore will be spent on the Mission in the current financial year.

 

In November, the Union Cabinet had approved EPM for a six-year period, with the aim to strengthen India’s export competitiveness, and support first-time exporters and labour-intensive sectors, such as textiles, leather, gems and jewellery, engineering goods, and marine products, grappling with challenges due to the imposition of 50 per cent tariff by the US. EPM will be implemented through two sub-schemes — Niryat Protsahan worth ₹10,401 crore, which will provide trade finance support and Niryat Disha, worth ₹14,659 crore, that will drive international market access.

 

Till now, three schemes have been launched — market access support interest subvention, collateral support scheme.

 

In the April-December period of FY26, India exported goods worth $330 billion, as compared to $322 billion during the same period last year.