Incentives & Schemes
Export Incentives in 2026: RoDTEP, EPCG & Advance Authorisation — The Complete Guide
In short
India's export-incentive framework in 2026 rests on three pillars. RoDTEP refunds embedded taxes as e-scrips (typically 0.3–4.3% of FOB value, HS-code-wise) — but 2026 saw a 50% rate cut, a full restoration, and then a rewritten rate schedule from 1 May 2026, so last year's rate assumptions are dead. EPCG lets you import capital goods at zero duty against an export obligation of 6× the duty saved over 6 years. Advance Authorisation gives duty-free inputs against SION norms with a value-addition requirement. All three carry compliance strings — missed shipping-bill declarations, unrealised proceeds or unmet obligations turn incentives into recoveries with interest. For an MSME exporter running 5–12% net margins, getting this stack right is often the entire profit differential.
Exporters in Delhi NCR — from Noida apparel houses to Faridabad engineering units — routinely leave incentive money unclaimed, and just as routinely walk into recovery notices for benefits claimed carelessly. This guide covers what each scheme pays, who qualifies, the exact claim mechanics, and where the traps are.
RoDTEP: the workhorse rebate
The Remission of Duties and Taxes on Exported Products scheme exists because of a simple principle: taxes should not be exported. It refunds the embedded levies no other mechanism touches — electricity duty, mandi tax, fuel levies on transport, stamp duty on export documentation — as a percentage of your FOB value, credited as transferable e-scrips in your ICEGATE ledger. It replaced MEIS after the WTO struck MEIS down, which is why RoDTEP is structured as tax remission rather than a subsidy.
The 2026 rate turbulence — and why it matters
- February 2026: rates and value caps cut to 50% of notified levels for most HS lines (chapters 01–24 exempted from the cut by corrigendum).
- 23 March 2026: a superseding notification restored full rates for eligible exports made from 23 February to 31 March 2026.
- 1 May 2026: revised Appendix 4R and 4RE took effect — roughly 142 tariff lines added, ~50 omitted, and rates/value caps revised across food, chemicals, herbal extracts and industrial goods, aligned to the amended Customs Tariff.
Practical consequence: any incentive forecast or pricing model built on pre-May-2026 rates is stale. Verify your 8-digit HS codes against the current appendices on the DGFT site before quoting your next order.
How to claim — and where claims die
- Declare at the shipping bill. The RoDTEP claim must be flagged when the shipping bill is filed on ICEGATE. No declaration = rebate forfeited for that shipment. This is the single most common (and most avoidable) loss.
- Generate scrips. After EGM filing and Customs processing, open a RoDTEP credit-ledger account on ICEGATE (IEC + DSC needed), select processed shipping bills and generate e-scrips.
- Use or transfer. Scrips pay Basic Customs Duty on imports, or can be sold/transferred to any valid IEC holder.
- Realise your proceeds. The benefit is conditional on realising export proceeds within the FEMA window — non-realisation triggers recovery with interest. A 2026 CBIC circular allows relief in specific short-realisation cases (including ECGC compensation) subject to RBI write-off compliance — but only with clean documentation.
Note: AA holders, EOUs and SEZ units get RoDTEP through the separate Appendix 4RE (generally lower rates), extended to them from mid-2025.
EPCG: zero-duty capital goods, with strings
The Export Promotion Capital Goods scheme lets you import machinery and capital goods (pre-production, production and post-production) at zero customs duty, with IGST and compensation-cess exemption also available. In exchange, you accept an export obligation — generally exports worth 6 times the duty saved, fulfilled over 6 years, in addition to maintaining your average exports.
- Who can use it: manufacturer exporters, merchant exporters tied to a supporting manufacturer, and service exporters — hotels, tour operators, logistics and construction companies routinely use EPCG for imported equipment.
- Validity: the authorisation is valid for import for 24 months; revalidation is not permitted, so time your procurement.
- The trap: unmet obligation means repaying the proportionate duty saved with interest, often years later when the numbers have compounded. Model the obligation against conservative export projections before you sign, and track fulfilment block-wise with shipping bills correctly linked to the authorisation.
Advance Authorisation: duty-free inputs
Where EPCG covers machines, Advance Authorisation covers inputs — raw materials physically incorporated in the export product, plus packing material, fuel and catalysts consumed in production, imported duty-free. Quantities follow Standard Input-Output Norms (SION) (or self-declared norms where none exist), with:
- an actual-user condition — the inputs are for your own manufacturing, not resale;
- a minimum value-addition requirement (generally 15%); and
- a defined export-obligation period for the resultant product.
It suits manufacturers with a stable, predictable input–output relationship. For irregular product mixes, duty drawback (the all-industry or brand rate refund of customs duties on inputs) is often the simpler instrument — and it stacks with RoDTEP, which covers the levies drawback doesn't.
Building the right incentive stack
| Your situation | Likely stack |
|---|---|
| Merchant exporter, domestic sourcing | RoDTEP + GST refund on exports + drawback where applicable |
| Manufacturer, imported inputs, stable product line | Advance Authorisation + RoDTEP (4RE rates) + GST refunds |
| Manufacturer expanding capacity with imported machinery | EPCG + RoDTEP + drawback/AA on inputs |
| Service exporter (hotel, logistics, tours) | EPCG for imported equipment + GST refund route on zero-rated services |
The schemes are designed to be complementary, not overlapping — RoDTEP covers what nothing else refunds. The wrong combination either double-claims (recovery risk) or under-claims (margin left on the table). On 5–12% net margins, a 1% swing in recovered incentives on a ₹10 crore export book is ₹10 lakh a year.
How Startup Advisory helps exporters
From our Saket office we support exporters across Delhi, Noida, Gurgaon, Ghaziabad and Faridabad with the finance-and-compliance side of the incentive stack:
- HS-code and rate verification against the current Appendix 4R/4RE — the foundation every claim stands on.
- Claim hygiene: shipping-bill declaration checks, ICEGATE ledger and scrip management, so no shipment's rebate is forfeited.
- Obligation tracking for EPCG and Advance Authorisation, with realisation monitoring under FEMA so benefits don't turn into recoveries.
- GST refunds on exports — IGST and accumulated-ITC routes (see our Annexure-B refund guide) — reconciled with RoDTEP and drawback.
- Clean, audit-ready bookkeeping and Virtual CFO oversight of the whole export P&L.
If you export — or are pricing your first export order — call 9311972982 or book a free consultation. We'll audit what you're currently claiming versus what you're entitled to.
This article is general information, not financial or legal advice. Rates, appendices and scheme conditions are set by DGFT/CBIC notifications and change frequently — verify your HS codes against the current Appendix 4R/4RE on dgft.gov.in before acting.
