DGFT Export Promotion Schemes: RoDTEP, Advance Authorisation and EPCG

India does not pay exporters to export. Every scheme DGFT runs gives back taxes and duties already collected somewhere in your supply chain, because anything more would be an actionable subsidy under WTO rules. That single constraint explains why RoDTEP is a small percentage of FOB, why Advance Authorisation forces you to actually export, and why EPCG hands you duty-free machinery only against a six-year obligation.

The logic: remit, do not subsidise

India lost a WTO dispute over its older incentive schemes, MEIS among them, because they gave exporters more than they had paid in taxes. The Foreign Trade Policy 2023 and Handbook of Procedures 2023 therefore reimburse embedded taxes and duties but do not reward exporting as such. That produces three families:

• Remission (RoDTEP, Duty Drawback) refunds taxes already suffered. Automatic, small, no obligation beyond realising proceeds.
• Exemption (Advance Authorisation) skips duty at import rather than paying and reclaiming. Bigger cash benefit, legally enforceable export obligation.
• Capital goods (EPCG) defers duty on machinery against a multi-year commitment. The largest benefit available to an SME, and the easiest to get badly wrong.

The four schemes compared

RoDTEP: the default, and its 30-09-2026 cliff

RoDTEP refunds central, state and local levies that are not otherwise creditable: VAT on transport fuel, electricity duty, mandi tax. Rates are notified in Appendix 4R and 4RE against eight-digit HS codes, with per-unit value caps on many lines, so your HS code classification directly determines what you receive.

Claiming it. There is no separate application. Your CHA must declare intent in the shipping bill at item level, marking the RoDTEP declaration "Y". If that flag is missed the claim is lost for that shipping bill, with no retrospective fix. Check every draft shipping bill.

Scrips. Once the Export General Manifest is filed and the shipping bill processed, credit appears in your RoDTEP ledger on ICEGATE. Log in with your DSC, select the shipping bills and generate an e-scrip: valid one year, usable against Basic Customs Duty on your own imports, and freely transferable. If you do not import, sell it; the market clears at 97% to 99% of face value. An exporter shipping INR 5 crore (about USD 570,000) a year at 1.5% earns roughly INR 7.5 lakh of scrip.

Exclusions. RoDTEP does not apply to services, re-exports, or trans-shipment. Treatment of SEZ units, EOUs and goods exported against Advance Authorisation has changed more than once by notification, so verify your category against the current notification rather than older guidance.

How RoDTEP and Drawback interact

They are not alternatives. Drawback at the All Industry Rate refunds customs duty embedded in inputs; RoDTEP refunds non-creditable indirect taxes drawback does not touch. You can normally claim both on the same shipment, and most exporters do. The conflict arises with Advance Authorisation: if inputs were imported duty-free there is no duty to draw back, so drawback is limited to remaining duty-paid inputs. Brand Rate fixation is worth the costing submission only when your actual duty content materially exceeds the industry rate.

Advance Authorisation: when it beats drawback

Advance Authorisation lets you import inputs for export production without paying duty at all. That is a cash-flow benefit, not merely a refund: with drawback you pay and wait; with AA you never pay.

Norms. The duty-free quantity is fixed by Standard Input Output Norms (SION). Where a SION exists, application is largely mechanical; where it does not, you apply on self-declaration and the Norms Committee fixes an ad hoc norm, which takes time. Two star and above status holders and AEO-certified units can instead use the Self Ratification Scheme with a Chartered Engineer certificate.

Value addition. Minimum 15%, computed as (FOB of exports minus CIF of imported inputs) divided by CIF of imported inputs, with higher minimums in some sectors. If your product is mostly assembly of imported components at thin margins, check this before applying; failing value addition at redemption is expensive.

Periods. Import validity is 12 months from issue; the export obligation period is 18 months, or 12 where a pre-import condition applies, with up to two six-month extensions against composition fees. To buy an input domestically instead, request an invalidation letter or Advance Release Order: your domestic supplier then supplies against it and claims deemed export benefits, which is often the cleaner route and is underused by SMEs.

The redemption trap. The authorisation is not closed when you have exported. You must file for the Export Obligation Discharge Certificate (EODC) in ANF 4F with shipping bills and e-BRCs, after which the Regional Authority informs Customs and your bond and bank guarantee are released. Exporters routinely finish the exports and leave EODC pending for years: the bank guarantee stays blocked, and if the file is eventually treated as unfulfilled you face customs duty plus interest on the duty-free imports. Diarise EODC as a step in its own right.

EPCG: the arithmetic of a 6x obligation

EPCG allows import of capital goods at zero customs duty. In exchange you must export six times the duty saved amount within six years from the date of issue of the authorisation.

Work the numbers first. Import machinery of CIF INR 1 crore (about USD 114,000) at an effective duty rate of 15% and the duty saved is INR 15 lakh. The specific obligation is 6 x 15 lakh = INR 90 lakh over six years, roughly INR 15 lakh of exports a year, and the INR 15 lakh saved is real cash.

What catches people is the average export obligation. On top of the 6x specific obligation you must maintain the average export level of the three preceding licensing years, every year, for the full six years, and only exports above that average count towards the specific obligation. An exporter already shipping INR 4 crore a year discharges nothing with INR 4 crore of exports.

Block-wise reporting. At least 50% of the specific obligation falls in the first four years, the balance in years five and six, reported to the Regional Authority within three months of each block ending. Separately, an installation certificate is due within six months of import completion.

If you miss it. A first-block shortfall can usually be regularised by extension against a composition fee of 2% of the proportionate unfulfilled duty saved amount, and the six-year period extended by up to two further years. If the obligation is ultimately not met you pay the proportionate duty saved plus interest, which can exceed the original benefit. EPCG suits exporters with a contracted order pipeline, not a business hoping exports will materialise.

What you need before any of this

Nothing above is available until the basic registrations are in place, and they are sequential:

1. IEC. Must be updated every financial year between April and June, even if nothing changed, or it is deactivated. See our guide to IEC registration.
2. Class 3 DSC for the authorised signatory, registered against the IEC. Authorisation applications and EODC filings cannot be submitted without it.
3. RCMC from your Export Promotion Council or commodity board via the DGFT common digital platform, valid five years. Mandatory for AA and EPCG; not needed for RoDTEP or drawback.
4. ICEGATE registration to view your RoDTEP ledger, generate e-scrips and operate the credit ledger.
5. e-BRC. Proceeds realisation is evidenced by electronic Bank Realisation Certificates, largely self-certified on the DGFT portal. Every scheme's closure depends on them.

Other support worth knowing about

The Interest Equalisation Scheme lapsed on 31-12-2024, succeeded by the interest subvention component of the Export Promotion Mission: 2.75% per annum on pre- and post-shipment rupee export credit, capped at INR 50 lakh per firm per financial year, for MSME exporters in notified HS lines. Obtain a UIN on the DGFT portal before the loan is disbursed; old UINs do not carry over. Administration moved from RBI to Exim Bank from 01-04-2026.

Market Access Initiative funding for trade fairs and buyer-seller meets still runs through Export Promotion Councils, and is best accessed via your council. Status Holder recognition starts at USD 3 million of exports for One Star and rises to USD 800 million for Five Star, measured over the current and three preceding financial years, and is now largely issued automatically from customs data. Its benefits, chiefly self-certification of origin and relaxed bank guarantee requirements, matter more as volumes grow.

Which scheme actually suits a first-time exporter

Honestly: RoDTEP and All Industry Rate drawback, and nothing else for the first year or two. Both are claimed inside the shipping bill, need no separate authorisation, create no obligation you can default on, and cost nothing.

Advance Authorisation earns its compliance load when imported inputs are a substantial share of cost and you have repeat orders, not one-off enquiries. EPCG is a capital equipment decision, not an export decision: take it only if you were buying the machine regardless and can model six years of exports against a signed order book. For a first-time exporter the higher-return work is elsewhere, in getting your Incoterms and price basis right, securing payment through a letter of credit, and issuing a correct certificate of origin. A 1.5% scrip is worth far less than a 5% pricing error.

Where OZIANT and ZJELL fit

OZIANT is a B2B cross-border marketplace that connects overseas buyers with Indian suppliers, so the export orders these schemes depend on actually exist. ZJELL Limited, the group's export consulting arm, handles the registrations and compliance filings behind them, from IEC and RCMC to Advance Authorisation applications and EODC closure. If you have an authorisation nearing its obligation date or are unsure which scheme fits your product, contact the team.