9/12 : Every Government Export Incentive Available to Indian Exporters in 2026

How to Use This Part

This part covers every major government export incentive available to Indian exporters in 2026 — including the critical February 2026 RoDTEP rate reduction that every exporter must recalibrate their pricing around. Each scheme is presented with a card showing benefit, mechanism, eligibility, and current 2026 status, followed by operational depth on how to claim it and the mistakes that forfeit entitlements. The master eligibility matrix at the end maps every scheme against exporter type, so you can identify at a glance which incentives apply to your specific situation.

Part	Title (LINKS)
Part 1	Before You Export, You Must Be Export-Ready
Part 2	The Registration Stack Every Indian Exporter Must Complete
Part 3	The Complete Export Documentation Journey
Part 4	Incoterms 2020 Decoded for Indian Exporters
Part 5	Export Promotion Councils and How to Extract Real Value
Part 6	ECGC and the Role of Export Credit Insurance
Part 7	Export Finance and Working Capital
Part 8	Customs, Freight, and Logistics
Part 9	Every Government Export Incentive in 2026
Part 10	Payment Terms, Currency Risk, and the Art of Getting Paid
Part 11	Destination Country Regulations Every Indian Exporter Must Know Before Shipping
Part 12	Building a Sustainable Export Business From the Ground Up

The Government's Rs. 23,922 Crore Commitment And Why Most of It Goes Unclaimed

The Government of India set aside Rs. 23,922 crore for export incentive schemes in FY 2024-25 alone. By the end of FY 2024-25, total RoDTEP disbursements since the scheme's launch in January 2021 had crossed Rs. 57,976.78 crore. The Advance Authorisation and EPCG schemes have together facilitated duty savings estimated in excess of Rs. 1 lakh crore since FY 2000. The MSME sector, which accounts for 97% of India's export units by count, receives a disproportionately small share of these benefits, not because of eligibility restrictions, but because of operational gaps: the wrong Shipping Bill type declared at filing, an IEC not registered on ICEGATE with a DSC, an EPCG licence where export obligations were not monitored, or an Advance Authorisation applied for after the goods were already imported.

Export incentive schemes in India are not automatic. Every single one of them requires a proactive action, a declaration at the time of Shipping Bill filing, a licence application before goods are imported, a return filed within a deadline, a UIN generated before credit is drawn. Miss the action and you miss the money. This part of the India Export Decoded series treats every scheme as an operational system, describing not just what each incentive is, but precisely what you must do, in what sequence, and by what deadline, to ensure that every rupee the government has put on the table actually reaches your account.

THE FEBRUARY 2026 WAKE-UP CALL

On February 23, 2026, DGFT Notification No. 60/2025-26 reduced RoDTEP rates and value caps to 50% of their existing notified levels across all HS lines under Appendix 4R and 4RE, with immediate effect. A corrigendum issued February 24, 2026 exempted ITC HS Chapters 01 to 24 (agricultural and food products) from this reduction. For exporters of manufactured goods, engineering products, textiles, chemicals, and pharmaceuticals, this means RoDTEP rates, already modest at 0.3 to 4.3% of FOB, are now effectively 0.15 to 2.15% for most categories. Any exporter who has built their pricing model on pre-February 2026 RoDTEP rates must recalibrate immediately. The scheme is extended to March 31, 2026, and a replacement framework under the Export Promotion Mission is anticipated for FY 2026-27.

The Complete Government Export Incentive Landscape, Nine Schemes at a Glance

#	Scheme	Benefit Type	Mechanism	Annual Budget	2026 Status
1	RoDTEP	Remission of embedded taxes	Transferable e-scrip via ICEGATE	Rs. 18,233 Cr	Active — rates cut 50% Feb 2026
2	Duty Drawback	Refund of customs + excise duties on inputs	Cash refund via designated bank account	Rs. 9,500 Cr approx.	Active — stable rates
3	Advance Authorisation	Duty-free import of inputs for export production	DGFT licence — duty exemption at import	Part of scheme pool	Active — EOP extended to Aug 2026
4	EPCG Scheme	Zero duty import of capital goods	DGFT licence — 6x export obligation in 6 years	Part of scheme pool	Active — EOP extended to Aug 2026
5	GST Refund for Exporters	Refund of IGST paid or ITC accumulated	Automatic (IGST) or manual ITC refund via GST portal	Demand-driven	Active — GSTN matching improved
6	RoSCTL (Textiles)	Rebate of state and central taxes for apparel and madeups	Transferable e-scrip via ICEGATE	Separate textile allocation	Active — textiles separately from RoDTEP
7	SEZ and EOU Benefits	Duty-free imports, income tax exemptions, GST benefits	Unit-level scheme — requires DTA registration	Infrastructure-linked	Active — operational ongoing
8	Deemed Exports	Supplier gets export benefits even without physical export	Advance payment refund or duty drawback on supply	Demand-driven	Active
9	Export Promotion Mission (EPM)	Successor to IES and market promotion schemes	Rs. 25,060 Cr outlay FY26-31 — framework pending	Rs. 25,060 Cr (5 Yr)	Announced — notifications awaited

Sources: DGFT FTP 2023-28, Union Budget 2026-27, PIB, afleo.com, tallysolutions.com, March 2026

RoDTEP: Remission of Duties and Taxes on Exported Products

01  RoDTEP — Remission of Duties and Taxes on Exported Products   |   WTO-compliant successor to MEIS — refunds embedded taxes GST cannot recover

Benefit: Rates 0.15–2.15% of FOB (post-Feb 2026 cut; Chapters 1-24 exempt from cut)

Mechanism: Transferable e-scrip on ICEGATE — used to pay BCD on imports or transferred

Who Qualifies: All manufacturer and merchant exporters with valid IEC and ICEGATE registration

2026 Status: Active — rates cut to 50% by DGFT Notification 60/2025-26 dated Feb 23 2026

RoDTEP is the WTO-compliant export incentive scheme that replaced MEIS (Merchandise Exports from India Scheme) from January 1, 2021. Its design is fundamentally different from MEIS: while MEIS was a subsidy calculated as a percentage of realised export value, RoDTEP is structured as a remission, meaning it refunds specific embedded taxes that are incurred during production and distribution but are not recoverable under any other mechanism including GST. These taxes include electricity duty on power consumed in manufacturing, VAT on fuel used in self-incurred transportation, mandi tax on agricultural inputs, and central excise duty on certain fuel used in production.

The February 2026 Rate Cut — Understanding the Impact on Your Pricing

DGFT Notification No. 60/2025-26, dated February 23, 2026, reduced all RoDTEP rates and value caps to 50% of their previously notified levels under Appendix 4R and 4RE. The corrigendum of February 24, 2026 clarified that ITC HS Chapters 01–24 (agricultural products, food items, beverages, tobacco) are exempt from this reduction and retain their original rates.

Product Category	Pre-Feb 2026 Rate	Post-Feb 2026 Rate	Impact
Agricultural Products (Chapters 1–24)	Original notified rate	UNCHANGED — exempt from cut	No pricing impact
Textiles and Apparel	0.8–4.3% of FOB	0.4–2.15% of FOB	Reduce FOB by 0.4–2.1%
Engineering Goods	0.5–2.0% of FOB	0.25–1.0% of FOB	Moderate impact on margins
Chemicals	0.5–1.5% of FOB	0.25–0.75% of FOB	Small but material for thin-margin exports
Pharma (not separately covered by RoDTEP)	Sector-specific rates	50% of previous rates	Review sector-specific rates on DGFT portal
Electronics / Hardware	0.3–1.5% of FOB	0.15–0.75% of FOB	Recalibrate pricing for US/EU buyers

Based on DGFT Notification No. 60/2025-26 dated Feb 23 2026 and Corrigendum Feb 24 2026

How to Claim RoDTEP — Step by Step

Step	Action
1	Declare RoDTEP claim in the Shipping Bill. In the SW_INFO_TYPE table of the Shipping Bill on ICEGATE, enter INFO TYPE as DTY and INFO QFR as RDT. This declaration must be made at Shipping Bill filing, it cannot be added or amended after EGM is filed. If missing, the benefit is permanently lost for that shipment.
2	EGM is filed by carrier after vessel departs. Customs processes the Shipping Bill and generates a RoDTEP scroll, a list of all individual Shipping Bills with the admissible remission amount for each. This typically takes 7–21 days from EGM filing.
3	Create a RoDTEP Credit Ledger Account on ICEGATE. Log into ICEGATE with your IEC and Class 3 DSC. Navigate to Credit Ledger tab and create the ledger. This is a one-time setup, the ledger persists and accumulates credits from all subsequent shipments.
4	Select eligible Shipping Bills and generate e-Scrips. Once credits appear in your ledger (visible on ICEGATE after scroll processing), select the relevant Shipping Bills and generate an electronic scrip. Scrip transfer uses OTP validation, the OTP is valid for 15 minutes and goes to your registered mobile and email.
5	Use or transfer the scrip. Scrips can be used to pay Basic Customs Duty on imports (deducting from your import duty liability). They can also be transferred electronically to any other IEC holder with a RoDTEP ledger, effectively selling the scrip for cash. Scrip transfer market rates are typically 97–99% of face value.
6	File Annual RoDTEP Return (ARR) if total RoDTEP claims exceed Rs. 1 crore in a financial year. This return must be filed on the DGFT portal by the notified deadline (currently June 30 for the preceding FY, with a grace period to September 30). Failure to file forfeits all RoDTEP credits claimed in that year above the threshold.

Sources: tallysolutions.com RoDTEP GST Interaction Guide March 2026, razorpay.com RoDTEP Guide, DHL India RoDTEP Guide

RoDTEP AND DUTY DRAWBACK — BOTH CAN BE CLAIMED

RoDTEP and Duty Drawback cover different taxes on the same export, they do not overlap. RoDTEP remits embedded taxes not recoverable under GST (electricity duty, mandi tax, fuel VAT). Duty Drawback refunds customs and central excise duties paid on imported inputs used in export production. An exporter can legally claim both on the same shipment. Exporters who claim only one and not the other are leaving legitimate government money unclaimed. Both declarations must be made in the Shipping Bill at the time of filing.

Duty Drawback: Recovering Customs and Excise Duties on Export Inputs

02  Duty Drawback — All Industry Rates (AIR) and Brand Rate   |   Oldest export incentive — refunds duties paid on imported inputs used in export products

Benefit: Refund of customs duty and central excise on inputs used in manufactured exports

Mechanism: Cash refund credited directly to exporter's designated bank account within 72 hours of LEO

Who Qualifies: All manufacturer exporters producing goods using imported inputs or duty-paid domestic inputs

2026 Status: Active and stable — AIR rates notified annually, Brand Rate on application

Duty Drawback is India's oldest and most straightforward export incentive, a direct cash refund of customs duties and central excise duties paid on imported or excisable raw materials, components, or packaging materials that are used in the manufacture of exported goods. Unlike RoDTEP's scrip mechanism, Duty Drawback is paid directly in cash to the exporter's designated bank account, usually within 72 hours of the Let Export Order being granted, making it the fastest-settling export incentive in the system.

There are two types of Duty Drawback. All Industry Rates (AIR) are pre-notified rates for broad product categories, a fixed percentage of the FOB value of exports. They are simpler to claim but may not fully reflect the actual duties paid on inputs for a specific manufacturer. Brand Rate, applied for case by case, is calculated based on the actual duties paid by a specific exporter on their specific inputs, and is appropriate when the AIR significantly under-compensates the actual duty burden. Brand Rate applications are more documentation-intensive but can yield significantly higher refunds for manufacturers using high-duty imported components.

AIR vs. Brand Rate — When to Use Which

Dimension	All Industry Rate (AIR)	Brand Rate
Calculation Basis	Pre-notified % of FOB value — announced annually by CBIC.	Actual customs and central excise duties paid on specific inputs used in the specific export product.
Application Required?	No — declared in Shipping Bill. Paid automatically after LEO.	Yes — application to DGFT/Customs with full input cost details and supporting invoices. Takes 30–90 days.
Refund Speed	Within 72 hours of LEO — immediate.	After Brand Rate fixation — 30 to 90 days.
Best For	Most exporters — simple, fast, no additional application burden.	Manufacturers with high-duty imported inputs where AIR significantly under-compensates actual duty cost.
Typical Rate Range	0.5% to 3.5% of FOB value depending on product category.	Calculated case by case — can be significantly higher than AIR.

Sources: CBIC Drawback Circular, cleartax.in Drawback Guide, briskpe.com Drawback vs RoDTEP

Critical Filing Requirement: Like RoDTEP, Duty Drawback must be declared in the Shipping Bill at the time of filing — with the correct Drawback Shipping Bill type (green-coloured in legacy, Drawback flag in ICEGATE). If the CHA files a Free Shipping Bill instead of a Drawback Shipping Bill, the drawback claim is permanently forfeited for that shipment. Verify with your CHA before every filing which Shipping Bill type is being used.

The Concurrent Claim Rule: You cannot claim Duty Drawback on the same component of duty that is also being claimed under Advance Authorisation or EPCG. Duty Drawback applies to duty that has actually been paid — if inputs were imported duty-free under Advance Authorisation, there is no duty to draw back on those inputs. However, you can claim Duty Drawback on inputs not covered by Advance Authorisation.

Advance Authorisation: Importing Inputs Duty-Free for Export Production

03  Advance Authorisation (AA) — Duty-Free Import Licence   |   Pre-shipment scheme — duty-free import of inputs that will be incorporated into export products

Benefit: Zero customs duty + zero IGST on imported inputs (BCD, IGST, Cess all exempt)

Mechanism: DGFT licence — applied before import; export obligation discharged within 18 months

Who Qualifies: Manufacturer exporters with confirmed export orders; minimum 15% value addition required

2026 Status: Active — export obligation period auto-extended to Aug 31 2026 for EOs expiring Mar-May 2026

The Advance Authorisation Scheme is India's most powerful pre-production incentive for manufacturer exporters who import inputs, components, or raw materials to produce export goods. Under an Advance Authorisation, the exporter imports specified inputs at zero customs duty, zero Basic Customs Duty, zero IGST, zero Compensation Cess — on the condition that the imported inputs are used to manufacture and export goods of equivalent or higher value within the stipulated export obligation period.

The commercial logic is straightforward: instead of paying 10–20% import duty on Rs. 40 lakhs of imported components, and then claiming it back later through Drawback over several months, the manufacturer pays zero upfront and uses all Rs. 40 lakhs for production. The working capital saving, the time value of money on the duty amount that was not blocked, is the direct commercial benefit, in addition to the administrative simplification of not running a parallel claim process.

The Four Types of Advance Authorisation 

Type	When to Use
Standard AA (SION-based)	For products where the government has pre-notified Standard Input-Output Norms (SION) — specifying the quantity of each input required per unit of output. Fastest to apply and process. Covers thousands of products across chemicals, engineering, textiles, food processing, and electronics.
Ad-hoc Norms (Self-Declared)	Where SION does not exist for the specific product. The exporter self-declares their input-output norms and applies for an AA. Norms are subsequently ratified by the Norms Committee. Takes longer to process but allows custom products not covered by SION.
Annual Requirement AA	For exporters with consistent, high-volume import requirements. Covers all imports of specified inputs for 12 months against projected export quantities — eliminating the need for individual AA applications per shipment.
Self-Ratification Scheme (SRA)	Introduced for exporters with at least 2 years of RCMC membership and valid GSTIN. Allows instant self-declaration and ratification of norms for products not covered by SION, without waiting for Norms Committee approval. Significantly faster than standard Ad-hoc process.

Sources: DGFT FTP 2023-28 Chapter 4, afleo.com Advance Authorisation Guide

The 15% Minimum Value Addition: Advance Authorisation requires a minimum value addition of 15% — meaning the FOB value of exported goods must be at least 15% higher than the CIF value of duty-free inputs imported. For tea, the minimum is 50%. Value addition is calculated as (FOB of exports minus CIF of duty-free imports) divided by CIF of imports, expressed as a percentage. Shipments where value addition falls below 15% result in the Advance Authorisation being invalid and duty demands being raised with interest.

The 2026 Export Obligation Extension: DGFT Public Notice No. 51/2025-26 dated March 6, 2026 automatically extends the Export Obligation Period for all Advance Authorisations where the EOP was expiring between March 1, 2026 and May 31, 2026. The extension runs to August 31, 2026. This automatic extension — without any application or fee — was granted in recognition of global supply chain disruptions. No separate application is needed; the extension is operative by notification.

EPCG: Zero-Duty Capital Goods for Export Manufacturing

04  Export Promotion Capital Goods (EPCG) Scheme   |   Investment-linked incentive — zero customs duty import of machinery against export commitment

Benefit: Zero BCD + zero IGST on imported capital goods, accessories, spares, and second-hand equipment

Mechanism: DGFT licence — 6x export obligation in 6 years; 25% less EO on domestic sourcing

Who Qualifies: Manufacturer exporters, merchant exporters tied to manufacturer, and service exporters

2026 Status: Active — EO period auto-extended to Aug 31 2026 for block periods expiring Mar-May 2026

The EPCG (Export Promotion Capital Goods) scheme is India's investment-linked export incentive, and the most powerful tool available to any manufacturer planning to modernise or expand their production facility for export purposes. Under EPCG, a manufacturer can import machinery, equipment, tooling, jigs, fixtures, dies, and accessories at zero customs duty, including zero IGST, provided they commit to exporting goods worth six times the duty saved within six years from the date of licence issuance.

The commercial arithmetic is compelling. If a company imports a CNC machining centre worth Rs. 50 lakhs with a Basic Customs Duty of 10% (Rs. 5 lakhs) and IGST of 18% (Rs. 9 lakhs), the total duty payable without EPCG is Rs. 14 lakhs. Under EPCG, Rs. 14 lakhs is saved upfront. The export obligation is 6 times the duty saved = Rs. 84 lakhs to be exported within 6 years, approximately Rs. 14 lakhs in annual exports. For any manufacturer already exporting or planning to export, this obligation is achievable, and the Rs. 14 lakh upfront saving funds the machinery purchase more affordably.

Understanding the Two Export Obligation Types

Obligation Type	What It Means	Key Condition
Specific Export Obligation (SEO)	Export goods or services manufactured using the EPCG machinery worth six times the duty saved within the 6-year period.	At least 50% of SEO must be met in the first 4 years. Remaining 50% in years 5 and 6. Balance block-wise obligation auto-extended to Aug 2026.
Average Export Obligation (AEO)	Maintain the average export turnover of the relevant product category from the 3 years preceding EPCG licence issuance, throughout the 6-year period.	For new exporters with no 3-year history, AEO is nil. For existing exporters, AEO prevents EPCG from being used to replace existing export capacity rather than expand it.

Sources: razorpay.com EPCG Guide February 2026, afleo.com EPCG Guide, DGFT FTP 2023-28 Chapter 5

Domestic Sourcing Advantage: If you source capital goods domestically (from an Indian manufacturer) instead of importing under EPCG, the SEO is reduced by 25% — meaning the obligation is only 4.5x the notional duty saved (on domestic purchase cost) instead of 6x. This domestic sourcing preference simultaneously supports Indian capital goods manufacturers and reduces the export obligation burden for EPCG holders.

Second-Hand Capital Goods: EPCG permits import of second-hand capital goods without any age restriction. This makes EPCG particularly valuable for exporters who need quality machinery at lower cost, a refurbished German CNC machine imported under EPCG at zero duty can be significantly cheaper than a new equivalent, while carrying the same export obligation structure.

Failure Consequences — Do Not Ignore: Failure to fulfil export obligations by the end of the EPCG period results in payment of all saved duties plus 15% annual interest from the date of import. For a Rs. 14 lakh duty saving imported 6 years ago, the liability could exceed Rs. 25 lakhs. EPCG licences must be monitored through a compliance calendar, quarterly tracking of export performance against the 50% first-4-year block obligation, and annual tracking against AEO.

GST Refund for Exporters: The Two Routes and How Each Works

05  GST Zero-Rated Export Refund   |   Post-shipment — refund of GST paid on inputs that contributed to exported goods

Benefit: IGST paid on export: automatic refund via ICEGATE-GSTN matching. ITC on inputs: manual refund via GST portal

Mechanism: Automatic (IGST route) or manual application Form RFD-01 (ITC route)

Who Qualifies: All GST-registered exporters — mandatory for those exporting under LUT

2026 Status: Active — GSTN matching improved in 2025; still occasional mismatches

Exports are zero-rated supplies under GST, meaning you do not charge GST to your overseas buyer. However, you have paid GST on your inputs, raw materials, packaging, freight, services and you are entitled to recover that tax. There are two routes, and the choice between them determines how quickly money reaches your account and how much compliance work you take on.

Route	IGST Refund Route	ITC Refund Route (with LUT)
How It Works	You pay IGST on the export invoice at the applicable rate (12–18%). ICEGATE automatically matches Shipping Bill with GSTR-1 Table 6A. Refund processed after EGM is filed — credited directly to bank account.	You export under LUT — paying zero IGST on the export invoice. ITC accumulated on inputs is claimed back through Form RFD-01 on the GST portal.
Speed	Fastest — usually 7–21 days from EGM filing if data matches correctly.	Slower — typically 30–60 days after submission of RFD-01 with all supporting documents.
Working Capital Impact	Negative — IGST amount is blocked until refund. On Rs. 50L export at 18% IGST, Rs. 9L is tied up for 7–21 days.	Positive — no IGST paid upfront under LUT. ITC claimed separately but working capital is not blocked.
LUT Required?	No — LUT not needed. IGST is paid and then refunded.	Yes — LUT must be filed and active before the export invoice is raised.
Documentation	Automatic matching — but GSTR-1 export invoice details must match Shipping Bill exactly (invoice number, SB number, port code). Mismatches block refund.	Form RFD-01, CA certificate, purchase invoices, GSTR-2B reconciliation, input tax credit details — more work but more control.
Recommendation	Only if you have large accumulated ITC that you want to liquidate quickly through export invoices.	RECOMMENDED for most exporters — zero working capital block, LUT filing is free and takes 10 minutes.

Source: GST Council Circulars, cleartax.in GST Refund for Exporters Guide, MYGSTRefund.com

THE GSTR-1 / SHIPPING BILL MISMATCH — THE MOST COMMON IGST REFUND BLOCKER

The automatic IGST refund requires ICEGATE to match your Shipping Bill data with your GSTR-1 export invoice declaration in Table 6A. The most common reason IGST refunds are held: the invoice number on the Shipping Bill does not match exactly the invoice number in GSTR-1. A space, a hyphen, a capitalisation difference, all break the match. After each shipment, verify within 48 hours that GSTR-1 Table 6A shows the exact invoice number and value as on the Shipping Bill. Mismatches must be corrected through an amendment in GSTR-1, or the refund is manually processed and delayed by 30–90 days.

Scheme 6 — RoSCTL: The Textile Sector's Dedicated Incentive

06  RoSCTL — Rebate of State and Central Taxes and Levies (Textiles)   |   Sector-specific remission for apparel and made-ups — separate from RoDTEP

Benefit: Rebate of state and central taxes on apparel and made-up exports at product-specific rates

Mechanism: Transferable e-scrip via ICEGATE — same mechanism as RoDTEP

Who Qualifies: Exporters of apparel (Chapters 61 and 62) and made-ups (Chapter 63) — textiles only

2026 Status: Active — separate allocation from RoDTEP; rates unaffected by Feb 2026 RoDTEP cut

RoSCTL (Rebate of State and Central Taxes and Levies) is the textile sector's dedicated export incentive, specifically covering apparel (HS Chapters 61 and 62) and made-ups (Chapter 63). It was created because textiles were historically excluded from RoDTEP's predecessor (ROSL covered state taxes, and the textiles sector was kept separate when RoDTEP replaced MEIS). RoSCTL covers taxes and levies that are embedded in the garment production process but not recoverable under GST or other mechanisms, mandi fees on cotton, stamp duties on trading transactions, electricity duties on spinning and weaving mills, and transport fuel levies.

The February 2026 RoDTEP rate cut does NOT apply to RoSCTL, textile and apparel exporters claim under RoSCTL separately and their rates are determined by their own scheme notification. Apparel and made-up exporters should verify they are claiming RoSCTL (not RoDTEP) for their Chapter 61, 62, and 63 exports, the Shipping Bill declaration code for RoSCTL is different from RoDTEP.

SEZ and EOU: Unit-Level Export Infrastructure Benefits

07  Special Economic Zone (SEZ) and Export Oriented Unit (EOU) Status   |   Unit-level scheme — comprehensive duty and tax benefits for dedicated export production units

Benefit: Duty-free imports + income tax exemptions + GST concessions on DTA supplies

Mechanism: Unit registration with Development Commissioner or SEZ authorities; customs bonded unit

Who Qualifies: Manufacturers committing minimum 75% of production (EOU) or all production (SEZ) to export

2026 Status: Active — both operational; RoDTEP restored for AA/EOU/SEZ from June 1 2025

Special Economic Zones (SEZs) and Export Oriented Units (EOUs) are the two unit-level structures that offer the most comprehensive export incentive package in India, but they are also the most operationally complex, as they require the entire unit's production and accounting to be maintained on a bonded basis. They are appropriate for manufacturers who are primarily or exclusively export-focused and who can justify the compliance overhead of bonded status.

SEZ vs. EOU — Key Differences 

Feature	SEZ Unit	Export Oriented Unit (EOU)
Location Requirement	Must be physically located within a notified SEZ — cannot operate from outside.	Can be set up anywhere in India in a customs bonded area — does not require special geography.
Customs Status	Treated as foreign territory for customs purposes — imports and exports are domestic clearances from customs perspective.	100% customs bonded unit — all imports and exports go through bonded clearance with Development Commissioner oversight.
Export Commitment	All production must be exported or supplied to DTA under deemed export provisions.	Minimum 75% of production must be exported (FOB). Up to 25% can be sold domestically subject to full duty payment.
Income Tax Benefits	100% income tax exemption on export profits — subject to sunset provisions under Income Tax Act.	Limited income tax benefits since 2011 sunset — primarily customs and GST benefits now.
RoDTEP Restoration	Restored from June 1, 2025 under Appendix 4RE rates.	Restored from June 1, 2025 under Appendix 4RE rates.

Sources: DGFT FTP 2023-28 Chapter 6, SEZ India (sezindia.nic.in), osganconsultants.com RoDTEP Restoration

Deemed Exports: Export Benefits Without the Goods Leaving India

08  Deemed Exports — Supply to SEZ/EOU/Government Projects   |   Domestic supplier of goods to export-oriented buyers gets the benefits of an exporter

Benefit: Advance payment refund or duty drawback on qualifying supplies; no foreign exchange required

Mechanism: Supplier applies to DGFT or through EPC — supported by deemed export declaration from buyer

Who Qualifies: Manufacturers supplying to SEZs, EOUs, AA holders, EPCG holders, or Government-funded projects

2026 Status: Active

Deemed Exports is the least understood incentive category in the Indian export system — and for domestic manufacturers supplying to SEZs, EOUs, defence establishments, or government-funded infrastructure projects, it is among the most financially significant. Under Deemed Exports, certain categories of domestic supply are treated as exports for the purpose of granting benefits, even though the goods never physically leave Indian territory. The rationale is that the final product incorporating these inputs will be exported, and therefore the input supplier deserves the same benefits as an exporter.

Who Can Claim: The supplier — the company making the domestic supply to an SEZ, EOU, Advance Authorisation holder, EPCG holder, or Government project, is the deemed exporter. The deemed exporter can claim Advance Authorisation benefits (duty-free import of inputs for production of the supplied goods), Duty Drawback on customs and excise duties paid on inputs, and refund of terminal excise duty/GST paid on the supply.

What Qualifies: Supply to EOU/STP/EHTP/BTP units; supply against Advance Authorisation; supply of capital goods against EPCG Authorisation; supply to UN and other notified international organisations; and supply to nuclear power projects, defence establishments, and other government-funded projects on the notified list. Check DGFT Appendix 7B for the complete qualifying supply list.

The Export Promotion Mission: The New Architecture Coming for FY 2026-31

09  Export Promotion Mission (EPM) — Union Budget 2026-27   |   Successor framework to IES and market promotion schemes — under implementation

Benefit: Rs. 25,060 crore over FY 2026-27 to FY 2030-31 — specific scheme structure pending

Mechanism: DGFT notification — framework to consolidate IES, market development, and MSME export support

Who Qualifies: All exporters — specific eligibility by category to be notified

2026 Status: Announced — operational notifications awaited. Monitor DGFT trade notices.

The Export Promotion Mission (EPM) was announced in Union Budget 2026-27 with an outlay of Rs. 25,060 crore over the five-year period from FY 2026-27 to FY 2030-31. As of March 2026, the EPM's operational framework, the specific scheme structures, eligibility conditions, rate tables, and application mechanisms, has not yet been notified by DGFT. The Budget announcement indicates the EPM will consolidate and succeed the current Interest Equalisation Scheme and several market development incentives, expanding MSME export finance support and providing structured market promotion funding.

The EPM is positioned as the policy response to the expiry of the current IES (scheduled to transition from its existing structure) and as the government's commitment to export growth under the $2 trillion export target by 2030. The Rs. 25,060 crore five-year allocation is substantially larger than the combined budget of the schemes it is expected to replace, signalling a meaningful expansion of export support coverage.

What Exporters Should Do Right Now: Monitor DGFT Trade Notices at dgft.gov.in for the EPM operational notification. Register your IEC, RCMC, and Udyam certificate on DGFT to ensure your profile is current and verified, as these are the baseline credentials for any DGFT scheme registration. Exporters currently benefiting from IES should continue claiming under the existing framework until the EPM's transition provisions are formally notified.

The Master Eligibility Matrix — Which Incentives Apply to You

The following matrix maps every incentive scheme in this part against five exporter profiles. Use this to identify at a glance which schemes apply to your business and should be actively claimed on every shipment.

Scheme	MSME Mfr. Exporter	Large Mfr. Exporter	Merchant Exporter	Service Exporter	Notes
RoDTEP	YES — full	YES — full	YES	NO	Rates cut 50% Feb 2026. Chapters 1-24 exempt from cut.
Duty Drawback	YES — full	YES — full	YES	NO	Declare in Shipping Bill. Both AIR and Brand Rate available.
Advance Authorisation	YES	YES	Limited	NO	Must import before export. 15% min. value addition.
EPCG	YES	YES	Yes (tied to mfr.)	YES (service equip.)	6x EO in 6 years. Auto-extended to Aug 2026.
GST Refund (LUT+ITC)	YES	YES	YES	YES	Universal — file LUT before first export invoice.
RoSCTL	Textiles only	Textiles only	Textiles only	NO	Chapters 61, 62, 63 only. Separate from RoDTEP.
SEZ / EOU Status	If >75% export	If >75% export	NO	NO (goods only)	Unit-level scheme. High compliance overhead.
Deemed Exports	If supplying SEZ/EOU	If supplying SEZ/EOU	NO	NO	Supplier — not exporter — is the beneficiary.
IES Benefit (current)	YES — 3%	Yes (2%) — 410 lines	Limited (2%)	NO	On rupee export credit only. Generate UIN before drawdown.
Export Promotion Mission	Expected YES	Expected YES	Expected YES	Expected YES	Operational framework awaited. Monitor DGFT notices.

SpheraLink Ventures 360 Export Incentive Eligibility Matrix, March 2026

The Eight Most Costly Incentive Claim Mistakes — and How to Avoid Every One

#	Mistake	Consequence	Prevention
1	Not declaring RoDTEP/Drawback in the Shipping Bill	Benefit permanently forfeited for that shipment. Cannot be declared after EGM is filed.	Brief your CHA explicitly before every filing. Include Drawback and RoDTEP declaration in your standard CHA instruction template.
2	GSTR-1 invoice number does not match Shipping Bill	IGST refund auto-processing fails. Manual reconciliation delays refund by 30–90 days.	Verify GSTR-1 Table 6A within 48 hours of each shipment. Invoice number and value must match Shipping Bill exactly.
3	Not monitoring EPCG export obligations quarterly	Missing 50% first-4-year block obligation triggers duty recovery with 15% annual interest.	Create an EPCG compliance calendar. Track export performance against obligation quarterly. Report shortfall and request extension early.
4	Importing before Advance Authorisation is issued	Imports before AA issuance are dutiable. No retroactive duty-free benefit. AA must precede the import.	Apply for AA as soon as the export order is confirmed. AA processing under SION takes 3–5 working days.
5	Not filing Annual RoDTEP Return (ARR) when total claim exceeds Rs. 1 crore	All RoDTEP credits above Rs. 1 crore threshold are forfeited for that financial year.	Track cumulative RoDTEP claims monthly. If approaching Rs. 1 crore, note ARR deadline (June 30, grace to September 30).
6	Claiming Drawback on inputs that were duty-free under Advance Authorisation	Drawback can only be claimed on duties actually paid. AA inputs were duty-free — no drawback entitlement.	Segregate AA-imported inputs from duty-paid inputs in production records. Drawback applies only to the duty-paid portion.
7	Filing under Free Shipping Bill when Drawback Shipping Bill was required	Drawback claim permanently forfeited for that shipment. Wrong Shipping Bill type cannot be amended after LEO.	Decide whether to claim Drawback before the Shipping Bill is filed. Brief CHA with explicit Shipping Bill type in every filing instruction.
8	Not recalibrating export prices after the February 2026 RoDTEP rate cut	Export price built on pre-cut RoDTEP rates overestimates actual incentive income. Net margin is lower than projected.	Review all forward export contracts and price lists. Recalculate contribution from RoDTEP at 50% of previous rates. Adjust FOB pricing for non-agricultural product categories.

SpheraLink Ventures 360 Export Incentive Error Analysis, March 2026

Incentives Are Not Bonuses — They Are the Margin That Makes Export Viable

The nine incentive schemes covered in this part of the India Export Decoded series are not optional enhancements to an export business. For most Indian manufacturers, the combined value of RoDTEP, Duty Drawback, Advance Authorisation, EPCG, and GST refunds constitutes the difference between an export margin that is commercially sustainable and one that is not. India's domestic market competes on volume and relationship. International markets compete on price and quality. The government incentive stack is what keeps Indian exporters price-competitive on a global stage, and every rupee of unclaimed incentive is a direct reduction in that competitive position.

The February 2026 RoDTEP rate cut is a reminder that these schemes are not permanent entitlements, they are policy instruments that governments adjust in response to fiscal pressure, WTO compliance requirements, and strategic priorities. The Export Promotion Mission's Rs. 25,060 crore allocation signals continued commitment; the rate cut signals fiscal constraints. The exporter who watches both signals, recalibrates pricing promptly, and builds a margin structure that is not entirely dependent on any single scheme is the one who survives the inevitable policy adjustments that every government makes over time.

Part 10 of this series covers payment terms, currency risk, and the full mechanics of getting paid internationally, from the Letter of Credit discrepancy checklist to FEMA compliance, SWIFT banking, and the cross-border payment infrastructure available in 2026.

HOW SPHERALINK CAN HELP

SpheraLink Ventures 360 provides comprehensive export incentive advisory, RoDTEP declaration audit, Duty Drawback rate verification and claim assistance, Advance Authorisation applications under SION and Self-Ratification, EPCG licence management and obligation tracking, GST refund filing and GSTR-1/Shipping Bill reconciliation, and state-level scheme identification. We help exporters claim every rupee they are entitled to, including the schemes most exporters do not know they qualify for. Visit www.spheralink.com to book a free consultation.