Export Market Promotion Scheme

Export Market Promotion Scheme: A Complete FY 2026-27 Guide for Indian Exporters

Indian exporters operating under the Foreign Trade Policy 2023 can recover 4–10% of their FOB export value every year through a stack of overlapping government schemes — RoDTEP for embedded duty refunds, Advance Authorisation for duty-free inputs, EPCG for capital goods, and Interest Equalisation for cheaper working capital. These are not aspirational benefits; they are legally enforceable entitlements that most exporters either underuse or mis-claim. This guide tells you exactly how each scheme works, what it costs to get it wrong, and what to do this financial year.

What the Export Market Promotion Ecosystem Covers

The Export Market Promotion (EMP) framework is not a single scheme — it is an ecosystem of at least eight distinct programmes administered across three central agencies: the Directorate General of Foreign Trade (DGFT) at dgft.gov.in, ICEGATE (Indian Customs EDI Gateway) at icegate.gov.in for duty-related refunds, and the Department of Commerce for market-access grants.

The ecosystem operates on three distinct pillars:

1. Duty and tax refunds — RoDTEP, RoSCTL, and legacy MEIS redemptions neutralise embedded duties that inflate your cost of production.
2. Input and capital duty waivers — Advance Authorisation (AA) and the Export Promotion Capital Goods (EPCG) scheme eliminate import duties at the front-end against a binding export commitment.
3. Market access and working capital support — the Market Access Initiative (MAI), Market Development Assistance (MDA), Interest Equalisation Scheme, and Trade Infrastructure for Export Scheme (TIES) fund participation in overseas trade fairs, lower your credit cost, and fund export-related infrastructure.

Each pillar has its own application portal, its own penalty structure, and its own documentation trail. Treating them as one is the first mistake.

RoDTEP: Your Primary Duty Refund in FY 2026-27

Remission of Duties and Taxes on Exported Products (RoDTEP) replaced MEIS as India's WTO-compliant duty-rebate mechanism from January 2021. It refunds embedded central, state, and local taxes and levies — electricity duty, mandi tax, transport fuel levies, stamp duty on export documents — that are not rebated under any other scheme, including GST.

How RoDTEP Credits Work in Practice

RoDTEP is a no-application scheme at the transaction level. You claim it directly on the shipping bill in ICEGATE. The process:

1. While filing the shipping bill, set the RoDTEP claim flag to 'Y'.
2. Declare the correct 8-digit HSN code and the FOB value in Indian rupees.
3. After the Customs officer issues the Let Export Order (LEO), the system automatically calculates the credit based on the notified rate for that HSN line.
4. The credit is posted as a transferable e-scrip in your ICEGATE RoDTEP ledger within a few working days of the LEO.

The e-scrip has three uses: pay Basic Customs Duty (BCD) on your next import, transfer it to another importer through the ICEGATE portal, or sell it through registered banks or brokers in the secondary market.

Notified rates (as per the latest CBIC Customs notification, periodically revised) range from approximately 0.3% to 4.3% of FOB value depending on the product's HSN chapter. Higher rates generally apply to labour-intensive and MSME-dominated sectors. Check the current notification on the CBIC website before costing a new export order — the rate for your specific 8-digit HSN may differ from the broad chapter average.

Products and Exporters Excluded from RoDTEP

Not every export shipment qualifies. Exclusions include:

• Export of goods manufactured in Special Economic Zones (SEZs) or Export Oriented Units (EOUs) — these have separate fiscal frameworks.
• Goods exported through merchant exporters (the manufacturer must claim, not the merchant, unless specific conditions are met).
• Products whose RoDTEP rate has been notified as 'NIL' in the schedule.
• Exports made against Advance Authorisation (because those inputs were already imported duty-free — you cannot layer RoDTEP on top of duty-free inputs for the same consignment).

This last exclusion is critical. If you use Advance Authorisation for inputs, you forfeit RoDTEP on those exports. Factor this trade-off into your scheme-selection decision at the costing stage.

Advance Authorisation: Duty-Free Inputs Against a Binding Export Commitment

An Advance Authorisation (AA) is a DGFT licence that allows you to import specified inputs — raw materials, components, packing materials — free of Basic Customs Duty, Additional Customs Duty, and IGST, before you manufacture and export. The licence is governed by Chapter 4 of the Foreign Trade Policy 2023 and issued against Standard Input-Output Norms (SIONs), which define exactly how much of each input goes into one unit of the exported product.

Applying for an Advance Authorisation: Step by Step

1. Log in to the DGFT portal (dgft.gov.in) with your IEC (Importer Exporter Code), which is now PAN-linked and lifelong-valid.
2. Navigate to Services → Advance Authorisation and file ANF 4A (Aayaat Niryat Form 4A).
3. Specify the export product (with HSN), the applicable SION or self-declared norms (if no SION exists, apply for a fixation of norms to the Norms Committee), and the quantity/value of inputs required.
4. Pay the application fee (as notified; nominal for most categories).
5. DGFT issues the AA within around 3 working days for SION-based applications under the auto-approval route.
6. Carry the AA to Customs and execute a bond-cum-legal undertaking (BG/LUT) before beginning duty-free imports under the licence.

The AA specifies: items permitted to be imported, quantities, CIF values, the export product, the FOB export obligation, and the validity period — 12 months for import and 18 months for fulfilling the export obligation from the date of issue.

Managing Your Export Obligation Under AA

The export obligation (EO) under an AA is the FOB value of exports you must achieve using the duty-free inputs. If you fail to fulfil the EO within the prescribed period:

• Duty payable = The customs duty (BCD + IGST) that would have been paid on the actual duty-free imports.
• Interest = 15% per annum (as applicable under the Customs Act, 1962) on the duty amount, from the date of importation to the date of payment.
• Penalty = Up to three times the duty amount in cases of wilful default.

You can apply for extension of the EO period — twice, each for six months — by paying a composition fee to DGFT. Extensions are not guaranteed; document your application early, not a week before the licence expires.

Once you fulfil the EO, file the Export Obligation Discharge Certificate (EODC) with DGFT through the portal. Keep this process ongoing, not retrospective.

EPCG: Zero-Duty Capital Goods for Production Competitiveness

The Export Promotion Capital Goods (EPCG) scheme lets you import capital goods — machinery, equipment, plant, spares, moulds — at zero customs duty against a commitment to export finished goods worth six times the duty saved over six years. It is the scheme that funds your production capacity without locking working capital in import duties.

Export Obligation Under EPCG: The Arithmetic

The duty saved includes BCD, Social Welfare Surcharge, and IGST that would otherwise have been payable. You are required to export 6 × (duty saved) in FOB value of eligible export goods within 6 years from the date of issue of the EPCG authorisation.

How to apply: File ANF 5A on the DGFT portal. Specify the capital goods (with HSN), the quantity, estimated CIF value, and the export products to be manufactured. After authorisation is issued, import the machinery and execute a bond-cum-LUT with Customs before clearing the goods.

Post-import compliance: Obtain a Certificate of Installation from the jurisdictional GST/Customs authority confirming the machinery has been installed at your manufacturing premises. File installation certificates within the prescribed timeline (generally 6 months of import). Track exports shipment-by-shipment against your EO ledger.

RoSCTL: The Apparel Sector's Parallel Mechanism

If you manufacture and export apparel, garments, or made-ups (HS Chapters 61, 62, 63), your primary duty-refund mechanism is RoSCTL — Rebate of State and Central Taxes and Levies, not RoDTEP. RoSCTL typically carries higher rebate rates than RoDTEP for the same products, reflecting the greater embedded tax burden in the textile value chain.

RoSCTL is claimed similarly — at the shipping bill stage on ICEGATE — and credited as a transferable e-scrip. It is administered by the Ministry of Textiles but integrated into the Customs/ICEGATE workflow. Do not claim both RoDTEP and RoSCTL on the same shipment — the system prevents this, but confirm your shipping bill correctly reflects the RoSCTL flag and not RoDTEP if your product falls in the notified apparel categories.

Interest Equalisation Scheme: Lower Working Capital Cost for MSME Exporters

Pre- and post-shipment export credit is expensive. The Interest Equalisation Scheme (formerly the Interest Subvention Scheme) provides a subvention of up to 2% per annum on rupee export credit for MSME manufacturer exporters, and for exporters in specified product categories (as notified periodically by RBI and the Department of Commerce).

The subvention is passed on by your bank directly — your effective borrowing cost on export credit is reduced without you filing a separate claim. What you must do:

• Confirm with your bank that they are enrolled under the scheme.
• Ensure your export credit account is specifically tagged to export transactions.
• Maintain loan account reconciliation because the subvention is reclaimed from banks if export documents are not submitted within the prescribed time.

The scheme is extended by fresh Government notifications. Verify the current validity and rate applicable to your sector on the RBI website before building the subvention into your costing.

Market Access Initiative and Market Development Assistance

MAI (Market Access Initiative) provides financial support — up to 100% of eligible costs subject to a per-activity ceiling — for Export Promotion Councils (EPCs) and trade bodies organising trade fairs, buyer-seller meets, reverse buyer missions, and brand promotion activities in notified focus countries. Individual exporters access MAI benefits through their relevant EPC (e.g., EEPC India for engineering, APEDA for agriculture, CLE for leather).

MDA (Market Development Assistance) provides assistance to status holder exporters and small exporters for participation in approved international trade fairs. Reimbursement covers stall rental, to-and-fro airfare (economy class), and exhibition charges up to the prescribed ceiling.

How to claim: Applications are filed through your EPC, which consolidates and submits to the Department of Commerce. Keep your original invoices, proof of participation (exhibitor badges, photographs), and bank statements showing expenditure.

TIES (Trade Infrastructure for Export Scheme) funds state governments, export promotion industrial parks, and agencies to build or upgrade export-related infrastructure — common facility centres, testing labs, cold chains, dry ports. Individual exporters benefit indirectly through improved logistics.

Worked Example: An MSME Engineering Exporter's Annual Incentive Stack

Profile: Stainless steel kitchen equipment manufacturer, Rajkot (Gujarat). Registered MSME. Annual exports: Rs. 3,00,00,000 (Rs. 3 crore) FOB. Principal export market: UAE and Europe.

Scheme 1 — RoDTEP (on non-AA shipments)

• FOB value eligible for RoDTEP (approximately 60% of total exports, since 40% of shipments use AA inputs): Rs. 1,80,00,000
• Illustrative RoDTEP rate for the relevant HSN (as notified): 1.6%
• Annual RoDTEP e-scrip credit: Rs. 1,80,00,000 × 1.6% = Rs. 2,88,000

Scheme 2 — Advance Authorisation (on 40% of shipments using imported SS coils)

• CIF value of duty-free imports: Rs. 75,00,000
• BCD saved (7.5%): Rs. 5,62,500
• SWS saved (10% of BCD): Rs. 56,250
• IGST saved (18% of Rs. 81,18,750): Rs. 14,61,375
• Total duty saving: Rs. 20,80,125 per year — this is cash not going to Customs, which stays as working capital in your business.

Scheme 3 — EPCG (one-time on a CNC press, CIF Rs. 40 lakh)

• BCD at 7.5%: Rs. 3,00,000
• SWS at 10% of BCD: Rs. 30,000
• IGST at 18% on Rs. 43,30,000: Rs. 7,79,400
• Total duty saved at import: Rs. 11,09,400
• Export obligation: 6 × Rs. 11,09,400 = Rs. 66,56,400 in FOB value over 6 years — that's roughly Rs. 11.1 lakh per year, which is 3.7% of this exporter's annual FOB. Achievable.

Scheme 4 — Interest Equalisation (MSME manufacturer, 2% subvention)

• Average export credit utilisation: Rs. 80,00,000 p.a.
• Annual interest saving: Rs. 80,00,000 × 2% = Rs. 1,60,000

Total annual benefit (approximate): | Scheme | Annual Benefit | |---|---| | RoDTEP e-scrip | Rs. 2,88,000 | | Advance Authorisation duty saving | Rs. 20,80,125 | | EPCG duty saving (amortised over 6 years) | Rs. 1,84,900 | | Interest Equalisation subvention | Rs. 1,60,000 | | Total | Rs. 27,13,025 |

That is approximately 9% of this exporter's Rs. 3 crore FOB turnover flowing back as duty savings, working capital release, and interest subvention. It is the difference between a 3% net margin and a 12% net margin for many manufacturers.

Common Mistakes That Cost Exporters Lakhs

1. Claiming RoDTEP on AA-covered exports. The system does not always catch this at the shipping bill stage. If discovered during a Customs audit, the e-scrip is reversed with interest and a penalty may be imposed.

2. Ignoring SION limits and importing excess under AA. Any imports above the SION-permitted quantity are not covered by the AA. Those excess quantities attract full duty plus interest retrospectively.

3. Missing the EPCG installation certificate deadline. If you fail to obtain and file the installation certificate within the prescribed period (generally 6 months from import), the EPCG authorisation is treated as void and full duty becomes payable immediately.

4. Letting export obligation expire without an extension application. EPCG and AA both require proactive extension applications before the original validity expires. A missed deadline is expensive: the EPCG shortfall penalty on Rs. 11.09 lakh duty saved with a 30% EO shortfall amounts to Rs. 3.33 lakh in duty + Rs. 1 lakh in interest at 15% p.a. for 2 years + penalty potentially matching the duty amount again.

5. Failing to file BRC/FIRC on time and losing FEMA compliance. Export proceeds must be realised within 9 months of shipment (as per current FEMA regulations). Non-realisation triggers reversal of all scheme benefits, FEMA penalties, and RBI reporting obligations. Tag every export invoice to its inward remittance and obtain the Foreign Inward Remittance Certificate (FIRC) or Bank Realisation Certificate (BRC) promptly.

6. Treating the EODC as optional paperwork. The Export Obligation Discharge Certificate is what formally closes your AA or EPCG licence. Without it, the bond executed with Customs remains open, and Customs can initiate recovery proceedings even if you have fulfilled the EO in substance.

Step-by-Step FY 2026-27 Compliance Calendar

Follow this sequence for every financial year:

1. April — Review scheme eligibility: Check revised RoDTEP rates for your HSN codes on CBIC's latest notification. Confirm Interest Equalisation validity with your bank.
2. April–May — File new AA and EPCG applications: Align with your production plan for the year. File on the DGFT portal before import orders are placed.
3. Ongoing (every shipping bill): Flag RoDTEP claim correctly. Reconcile e-scrip credits against ICEGATE statements monthly.
4. Ongoing (every month): Update your AA and EPCG export obligation discharge trackers. Map each shipping bill's FOB value to the relevant licence.
5. October — Mid-year EO review: If EO fulfilment is running behind schedule, explore extension applications or enhanced export push for H2.
6. January–February — EODC preparation: Compile all supporting documents — shipping bills, BRCs, FIRCs, e-BRC reports — for EODC filing.
7. March — Pre-expiry audit: Identify any licences expiring in Q1 FY 2027-28. File extension applications proactively. Do not let a licence expire without EODC filed or extension in hand.

Key Takeaways

• RoDTEP is a no-application scheme — you claim it at the shipping bill stage on ICEGATE. Miss the flag, miss the money; there is no retroactive mechanism.
• Advance Authorisation and EPCG are not compatible with RoDTEP on the same exports — choose your scheme combination at the product/consignment level, not as a blanket policy.
• EPCG makes sense for capital-intensive manufacturers: zero duty on a Rs. 40 lakh machine saves over Rs. 11 lakh upfront against an export obligation that a Rs. 3 crore exporter can meet in under 4 months of normal trading.
• Interest Equalisation is nearly free money for MSME manufacturers — your bank applies it automatically, but only if your credit account is correctly tagged and the scheme is currently notified.
• Export obligation discharge is non-negotiable paperwork: a shortfall on a Rs. 11 lakh EPCG duty saving can translate into a Rs. 15+ lakh recovery demand once duty, interest, and penalty compound.
• Build a shipping-bill-wise master tracker: map every export consignment to its applicable scheme, the e-scrip or EO credit generated, and the BRC/FIRC status. This single document resolves 90% of compliance queries from Customs or DGFT.
• The exporters who treat EMP schemes as a profit centre — not an afterthought — recover 5–10% of FOB value annually, transforming marginal export margins into sustainable, competitive businesses under the Foreign Trade Policy 2023.