Foreign Trade Policy (FTP) 2023 introduced by the Government of India aims to promote exports, improve ease of doing business, and enhance the competitiveness of Indian exporters in international markets. The policy focuses on moving from an incentive-based approach to a remission and facilitation-based approach, where exporters receive support through duty remission, exemptions, technology upgradation, and trade facilitation measures.
The major incentives and support schemes under FTP 2023 help exporters reduce production costs, improve export capacity, encourage manufacturing, and increase India’s share in global trade
1. Remission of Duties and Taxes on Exported Products (RoDTEP)
Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is one of the major export promotion incentives introduced by the Government of India to improve the competitiveness of Indian exporters. The scheme was implemented from 1 January 2021 and continued under the Foreign Trade Policy (FTP) 2023. The main objective of RoDTEP is to refund embedded central, state, and local taxes and duties that are not refunded through other existing mechanisms.
During the production and export process, exporters pay various indirect taxes such as electricity duty, fuel-related taxes, and local levies. These costs increase the final price of exported products and reduce competitiveness in international markets. RoDTEP provides exporters with a refund of such unrebated taxes through electronic duty credit scrips.
Example: A textile exporter manufacturing garments for overseas markets pays electricity duty and local taxes during production. These taxes increase the cost of garments. Under RoDTEP, eligible taxes are refunded through duty credit, reducing the exporter’s overall cost and improving competitiveness.
Features of RoDTEP
- Refund of Unreimbursed Taxes
- Electronic Credit Syste
- Applicable to Various Export Sectors
- Digital Processing
Benefits of RoDTEP
- Reduction in Export Cost
- Improvement in Competitiveness
- Increase in Export Opportunities
- Support for MSME Exporters
2. Rebate of State and Central Taxes and Levies (RoSCTL)
RoSCTL Scheme provides rebates on embedded state and central taxes and levies for specific labour-intensive export sectors, particularly textiles and apparel. It aims to improve the competitiveness of Indian textile exporters by reducing the impact of domestic taxes on export products.
Under this scheme, exporters receive transferable duty credit scrips that can be used to pay customs duties. RoSCTL encourages textile industries to expand exports, generate employment, and compete effectively in international markets.
Example: A garment manufacturer exporting shirts to foreign buyers faces competition from countries with lower costs. RoSCTL refunds eligible taxes, allowing the exporter to offer competitive prices internationally.
Features of RoSCTL
- Sector-Specific Scheme
- Refund of Taxes
- Transferable Duty Credit
- Encourages Textile Exports
Benefits of RoSCTL
- Reduces Production Cost
- Improves Global Competitiveness
- Promotes Employment
- Supports Export Growth
3. Advance Authorisation Scheme
Advance Authorisation Scheme allows exporters to import raw materials, inputs, and components without payment of customs duty, provided these inputs are used for manufacturing export products.
This incentive reduces the cost of production for exporters and improves their price competitiveness in global markets. It is particularly beneficial for manufacturing industries that require imported raw materials. Exporters must fulfil the specified export obligation within the prescribed period.
Example: A pharmaceutical company importing active ingredients for producing medicines for export can use Advance Authorisation to import these inputs without customs duty, reducing production costs.
Features of Advance Authorisation
- Duty-Free Import of Inputs
- Export Obligation
- Applicable to Manufacturers
- Supports Value Addition
Benefits
- Reduces input costs.
- Improves export competitiveness.
- Encourages manufacturing for exports.
- Supports value addition in India.
4. Export Promotion Capital Goods (EPCG) Scheme
Export Promotion Capital Goods (EPCG) Scheme allows exporters to import capital goods at concessional or zero customs duty for producing export goods and services.
The objective of EPCG is to encourage technological upgradation and modernization of industries. Exporters can import advanced machinery, equipment, and technology to improve productivity and product quality.
Example: An automobile component exporter importing advanced manufacturing machinery under EPCG can improve production quality and increase export capacity.
Features of EPCG Scheme
- Import of Capital Goods
- Export Obligation
- Technology Upgradation
- Applicable to Goods and Services
Benefits
- Access to modern machinery.
- Reduces investment costs.
- Improves production efficiency.
- Enhances global competitiveness.
5. Duty Drawback Scheme
Duty Drawback Scheme is an important export promotion measure that allows exporters to claim a refund of customs duties and certain taxes paid on imported inputs used in the manufacture of exported goods. The main objective of this scheme is to reduce the cost burden on exporters and improve the competitiveness of Indian products in international markets.
When exporters use imported raw materials, components, or inputs for producing goods meant for export, they may pay various duties at the time of import. The Duty Drawback Scheme allows reimbursement of these duties after the goods are exported. This encourages industries to use quality inputs and manufacture products suitable for international markets.
Example: A leather goods manufacturer imports certain materials required for producing handbags for export. The duties paid on these imported inputs increase production costs. Under the Duty Drawback Scheme, the exporter receives a refund of eligible duties after exporting the handbags, reducing the final cost.
Features of Duty Drawback Scheme
- Refund of Dutie
- Export-Oriented Benefit
- Government-Determined Rates
- Supports Various Industries
- Simple Claim Process
Benefits
- Refund of duties on inputs.
- Reduction in export costs.
- Improvement in profit margins.
- Encouragement of export manufacturing.
6. Status Holder Recognition Scheme
Status Holder Recognition Scheme under Foreign Trade Policy 2023 recognizes exporters who have achieved significant export performance. The scheme encourages exporters to expand their international business activities by providing recognition and additional facilities.
Exporters are classified into different categories based on their export performance, such as One Star Export House, Two Star Export House, Three Star Export House, Four Star Export House, and Five Star Export House.
The scheme motivates exporters to improve their performance and contribute more significantly to India’s export growth.
Example: A company exporting engineering goods regularly to international markets achieves high export turnover. Based on its export performance, it receives Star Export House recognition, improving its reputation among global buyers.
Features of Status Holder Scheme
- Performance-Based Recognition
- Different Levels of Status
- Encourages Export Expansion
- Recognition at National Level
- Supports Export Reputation
Benefits
- Recognition in national and international markets.
- Priority services from government authorities.
- Simplified export procedures.
- Improved business credibility.
This scheme encourages exporters to increase their export performance.
7. Duty-Free Import Authorisation (DFIA)
Duty-Free Import Authorisation (DFIA) scheme allows exporters to import inputs required for manufacturing export products without payment of basic customs duty. The scheme aims to encourage value-added exports and reduce the production cost of export goods.
DFIA is provided after completion of export obligations and is mainly useful for exporters who require imported raw materials for producing finished goods.
Example: A food processing company exporting packaged products requires imported ingredients. Through DFIA, it can import eligible inputs without basic customs duty, reducing production expenses.
Features of DFIA
- Duty-Free Import Facility
- Post-Export Benefit
- Supports Manufacturing
- Transferable Authorization
- Product-Specific Scheme
Benefits
- Duty-free import of inputs.
- Reduction in production costs.
- Encouragement of export manufacturing.
- Support for small and medium exporters.
8. Towns of Export Excellence (TEE) Scheme
Towns of Export Excellence (TEE) scheme recognizes towns that have significant export potential and contribute substantially to India’s foreign trade. The objective of this scheme is to develop export clusters and provide support to traditional and specialized industries.
These towns are known for producing specific products with international demand, such as handicrafts, textiles, leather goods, agricultural products, and engineering items.
Example: A town famous for handicraft production may receive TEE recognition, helping local artisans access international markets through better infrastructure and export support.
Features of TEE Scheme
- Recognition of Export Clusters
- Infrastructure Support
- Product-Based Development
- Promotion of Local Industries
- Encourages Regional Growth
Benefits
- Development of export clusters.
- Better infrastructure facilities.
- Promotion of traditional industries.
- Increased employment opportunities.
This initiative encourages regional export growth.
9. Market Access Initiative (MAI) Scheme
Market Access Initiative (MAI) Scheme is an export promotion programme introduced by the Government of India to help exporters develop and expand international markets. The scheme provides financial assistance for activities that improve the visibility and competitiveness of Indian products and services in foreign markets.
Under FTP 2023, market development and international promotion are important components of export growth. MAI supports exporters, export promotion councils, trade bodies, and other organizations in conducting promotional activities in global markets. The scheme is especially useful for small and medium exporters who may face difficulties in independently promoting their products internationally.
Example: A handicraft exporter from India wants to participate in an international trade exhibition in Europe. Through MAI assistance, the exporter can receive support for exhibition participation, product display, and marketing activities, helping attract foreign buyers.
Features of Market Access Initiative Scheme
- Financial Assistance for Promotion
- Support for New Markets
- Assistance to Export Organizations
- International Marketing Support
- Focus on Product Promotion
Benefits
- Helps exporters enter new markets.
- Promotes Indian products globally.
- Provides international marketing support.
- Encourages export diversification.
10. Trade Infrastructure for Export Scheme (TIES)
Trade Infrastructure for Export Scheme (TIES) is an initiative of the Government of India aimed at improving export-related infrastructure. Efficient infrastructure plays an important role in reducing logistics costs, improving supply chain efficiency, and increasing the competitiveness of Indian exporters.
Under FTP 2023, strengthening trade infrastructure is considered essential for achieving higher export growth. TIES provides financial assistance to government agencies and eligible organizations for developing facilities such as testing laboratories, cold storage, logistics centres, and export-related infrastructure.
Example: A region producing agricultural products requires cold storage and testing facilities for exports. Through TIES support, such infrastructure can be developed, helping farmers and exporters maintain product quality during international shipments.
Features of TIES
- Infrastructure Development Support
- Focus on Export Competitiveness
- Support for Different Sectors
- Development of Testing Facilities
- Improvement of Logistics Facilities
Benefits
- Improves export infrastructure.
- Reduces logistics costs.
- Enhances supply chain efficiency.
- Supports smooth movement of export goods.
11. Interest Equalisation Support on Export Credit
Interest Equalisation Scheme on Export Credit is an export support measure designed to reduce the interest burden on exporters while obtaining bank credit. Exporters require working capital for purchasing raw materials, production, packaging, and shipment activities. High interest rates can increase export costs and reduce competitiveness.
The scheme provides interest support on pre-shipment and post-shipment export credit through banks. It is particularly beneficial for Micro, Small and Medium Enterprises (MSMEs) involved in export activities.
Example: A small engineering goods exporter requires bank finance to purchase raw materials before shipment. Interest equalisation support reduces the loan interest burden, helping the exporter compete effectively in global markets.
Features of Interest Equalisation Scheme
- Interest Rate Support
- Covers Export Credit
- Supports MSME Exporters
- Implemented Through Banks
- Improves Working Capital Availability
Benefits
- Reduces cost of export finance.
- Improves cash flow.
- Supports MSME exporters.
- Encourages export expansion.
12. E–Commerce Export Facilitation
Foreign Trade Policy (FTP) 2023 gives special importance to promoting e-commerce exports to help Indian businesses, especially MSMEs, artisans, and small entrepreneurs, access international customers through digital platforms.
E-commerce export facilitation aims to simplify export procedures, encourage online trade, and create opportunities for businesses to sell products globally without depending only on traditional export channels. The initiative supports India’s growing digital economy and helps small businesses participate in international trade.
Example: A handicraft entrepreneur selling handmade products through an international e-commerce platform can reach customers in different countries without establishing physical stores abroad, increasing export opportunities.
Features of E-Commerce Export Facilitation
- Digital Export Opportunities
- Support for MSMEs
- Simplified Procedures
- Promotion of Digital Trade
- Export Growth Through Online Platforms
Benefits
- Provides global market access.
- Supports MSME exporters.
- Encourages digital trade.
- Reduces dependence on traditional channels.
