Exporting goods from India involves many taxes and duties on raw materials, fuel, packaging, and services used to make export products. To keep Indian exports competitive globally, the Government of India offers Export Duty Savings Schemes, also called Duty Exemption and Remission Schemes. These schemes are explained in Chapter 4 of the Foreign Trade Policy (FTP) 2023 .
This guide explains these schemes in plain, non-technical language.
What Are Export Duty Savings Schemes?
In simple terms, these schemes help exporters by:
- Allowing duty-free import of raw materials, or
- Refunding taxes and duties already paid on inputs used to make export goods
The idea is straightforward: exports should not carry the burden of Indian taxes.
Major Types of Duty Saving Schemes in India
India broadly follows two approaches:
A. Duty Exemption Schemes
(You don’t pay duty at all)
B. Duty Remission Schemes
(You pay duty first, then get it refunded)
Advance Authorisation (AA) – Most Common Scheme
What it means: You can import raw materials without paying customs duty, provided you use them to manufacture goods for export.
Example: If you export garments, you can import fabric, buttons, or lining duty-free and then export the finished garments.
Key points in simple words:
- Inputs must be actually used in exported goods
- You must complete exports within a fixed time
- Minimum value addition is required
- Widely used by manufacturers and merchant exporters
This scheme is designed to reduce upfront cost and working capital pressure on exporters .
Duty Free Import Authorisation (DFIA)
What it means: You export goods first, and then get the right to import inputs duty-free later.
Difference from Advance Authorisation:
- AA → Import first, export later
- DFIA → Export first, import later
Why exporters like DFIA:
- DFIA licences are transferable
- Suitable for exporters who don’t want pre-export conditions
Minimum value addition under DFIA is higher compared to AA .
Duty Drawback Scheme
What it means: If you paid customs duty or excise/GST on inputs used in exported goods, the government refunds a fixed amount.
Simple example: You imported packing material with duty, used it for export, and now get a refund based on notified rates.
Important to know:
- Administered by Customs
- Rates are pre-notified
- Very useful for small exporters
This scheme ensures exporters are not burdened with domestic taxes .
RoDTEP – Refund of Hidden Taxes
Full form: Remission of Duties and Taxes on Exported Products
Why it was introduced: Some taxes (electricity duty, mandi tax, local levies) were not refunded under GST or drawback. RoDTEP refunds these hidden costs.
How it works:
- Exporter gets an electronic duty credit (e-scrip)
- The credit can be used to pay Basic Customs Duty
- Rates are linked to HS codes
RoDTEP applies to most goods exports unless specifically excluded .
RoSCTL – Special Scheme for Textiles
Who benefits: Exporters of garments and made-ups
What it refunds: State and central taxes not covered elsewhere
This scheme is specifically notified for the textile sector and works alongside RoDTEP for eligible products .
Which Scheme Should an Exporter Choose?
| Exporter Situation | Suitable Scheme |
| Manufacturer importing raw materials | Advance Authorisation |
| Exporter wants post-export benefit | DFIA |
| Small exporter with duty-paid inputs | Duty Drawback |
| Exporter facing hidden local taxes | RoDTEP |
| Garment & textile exporter | RoSCTL |
Often, exporters use a combination of schemes depending on eligibility.
Common Mistakes Exporters Should Avoid
- Wrong HS code selection
- Claiming multiple benefits on same duty
- Missing export timelines
- Poor documentation
- Not matching inputs with export product
Most rejections and audits happen due to documentation gaps.
Final Takeaway
India’s export duty saving schemes are designed to make exports tax-neutral, competitive, and globally viable. Understanding the right scheme can significantly improve profit margins and cash flow.
For exporters, these schemes are not incentives or subsidies. They simply ensure that Indian taxes do not travel outside India with exported goods.
If used correctly, they are powerful tools for sustainable export growth under India’s Foreign Trade Policy 2023 .