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Centre clarifies, processed foods to be exempt from reductions in export benefits
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Wednesday, 04 March, 2026, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The Government of India has clarified that agricultural and processed food products will be exempt from recent drastic reductions in export benefits.
The clarification follows a period of intense anxiety within the exporting community. Earlier the Directorate General of Foreign Trade (DGFT) issued a notification aimed at ‘rationalising’ the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. Citing significant budgetary constraints, the government initially moved to halve the rebate rates and value caps across all product categories with immediate effect.
DGFT notification reads, “With immediate effect, the applicable RoDTEP rates for all HS Lines as notified in Appendix 4R and Appendix 4RE shall be limited to 50% of the existing rates and, where applicable, 50% of the notified value caps.”
For many Indian exporters operating on narrow profit margins, this sudden 50% reduction in duty refunds—intended to offset local taxes—was viewed as a major threat to global competitiveness.
Meanwhile, the farm traders/exporters raised the issue with the competent authority and secured the rebate.
And subsequently the DGFT issued a follow-up directive on February 24, 2026. This order explicitly excludes products under HS Chapters 01 to 24 of the trade classification code from the cuts.
“The reduced rates and value caps of RoDTEP benefits notified under Notification No 60 dated 23.02.2026 are not applicable for the export products falling under ITC HS Chapter 01 to 24,” reads the corrigendum issued by the DGFT.
As per an industry insider this decision ensures that essential goods—including cereals, spices, dairy, marine products, and processed foods—will continue to receive their original refund rates, which typically range from 0.3% to 3.9%. By maintaining these levels, the government aims to stabilise food supply chains and ensure Indian produce remains priced competitively against international rivals.
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