CITI Flags 50% Cut In RoDTEP Benefits, Seeks Immediate Restoration

New Delhi, Feb 24 (KNN) Confederation of Indian Textile Industry (CITI) has expressed concern over the halving of benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and has urged the government to restore the earlier rates and value caps with immediate effect.

CITI Chairman Ashwin Chandran said, “The decision has come as a bolt from the blue and is a real shock, as it is the last thing the exporting community was expecting amid the continuing global uncertainty, which shows no signs of letting up.”

Chandran added, “Given the steadfast commitment of the government to promote exports, we remain hopeful that the decision would be re-examined since exporters had booked orders keeping the RoDTEP scheme mechanisms in mind. We earnestly request that the earlier applicable RoDTEP rates and value caps be restored with immediate effect for the textile industry, as policy predictability is essential to raise global competitiveness.”

RoDTEP rates currently range from 0.5 per cent to 3.6 per cent.

Impact on Industry

According to CITI, the reduction in benefits would hurt margins in an industry already facing multiple challenges. Textile exports declined 2.35 per cent during April 2025–January 2026 compared to the same period last year.

The sector is also grappling with weak global demand, geopolitical uncertainties, supply chain shifts, and higher tariffs in key markets such as the US and EU relative to competing countries. Average return on capital employed (RoCE) in the industry stands at around 12 per cent, lower than sectors such as IT.

Export orders in textiles are typically booked two to three months in advance, with prices finalised based on prevailing policy incentives. CITI said the immediate 50 per cent cut in RoDTEP benefits could make ongoing contracts financially unviable and impose unforeseen costs on exporters.

Call for Policy Stability

Chandran said stable and predictable policies are essential to enhance global competitiveness and support the government’s ‘5F’ vision — Farm to Fibre to Factory to Fashion to Foreign — aimed at strengthening the textile value chain.

He emphasised, “Any abrupt reduction, without adequate consultation or transition time, would disrupt the export ecosystem, distort cost structures, undermine the global competitiveness of Indian exports, thereby endangering the livelihood of millions of people engaged directly or indirectly in the textile sector.”

(KNN Bureau)