RoDTEP vs Duty Drawback vs EPCG: Which Export Incentive Scheme Should You Choose?

Indian exporters have access to several government incentive schemes designed to offset embedded taxes and duties — but with multiple schemes overlapping in purpose, it's easy to either miss out on benefits you qualify for or misunderstand which ones can be combined. Here's a clear comparison of the three most common: RoDTEP, Duty Drawback, and EPCG.

Duty Drawback vs RoDTEP: The Difference at a Glance

Both schemes refund taxes built into the cost of an export, but they refund different taxes and pay out in different ways.

Point	Duty drawback	RoDTEP
What it refunds	Customs duty paid on imported inputs used to make the export product	Embedded taxes not refunded elsewhere, such as duty on fuel, electricity and mandi tax
How the rate is set	All Industry Rate (AIR) per tariff item, or a Brand Rate for your own costs	A notified percentage of FOB value per tariff line
How you receive it	Paid to your bank account	Credited as a transferable e-scrip in your ICEGATE ledger
How you use it	Cash, use as you like	Pay basic customs duty on imports, or sell the scrip
Claimed through	The shipping bill	The shipping bill, with the RoDTEP declaration

Most exporters can claim both on the same shipment, because they cover different taxes. Check the current rates for your tariff item and any scheme restrictions, such as shipments under Advance Authorisation, before you price your quote.

RoDTEP Scheme — How It Works

RoDTEP (Remission of Duties and Taxes on Exported Products) reimburses exporters for embedded central, state, and local taxes and duties that aren't otherwise refunded through GST — things like electricity duty, mandi tax, and fuel used in transportation. The rebate is issued as a percentage of the FOB (Free On Board) value of exports, credited as transferable duty credit scrips, and rates vary by product (HS code).

Duty Drawback Scheme — How It Works

The Duty Drawback scheme refunds customs duty paid on imported inputs that are used in manufacturing goods that are subsequently exported. Unlike RoDTEP, which covers a broader basket of embedded taxes, Duty Drawback is specifically about recovering customs duty on imported raw materials — making it especially relevant for exporters who rely on imported components or materials.

EPCG Scheme — How It Works

The EPCG (Export Promotion Capital Goods) scheme works differently — it allows import of capital goods (machinery, equipment) at zero or concessional customs duty, on the condition that the business fulfills a specified export obligation within a set timeframe, typically calculated as a multiple of the duty saved. This scheme suits manufacturers investing in new equipment specifically to scale export production.

Can You Claim More Than One Scheme Together

In many cases, yes — RoDTEP and Duty Drawback address different components (embedded taxes vs. customs duty on inputs) and can often be claimed together on the same export, subject to scheme-specific conditions. EPCG, being tied to capital goods import rather than a specific shipment's tax component, can also run alongside RoDTEP and Duty Drawback claims. That said, eligibility rules change periodically, so it's worth verifying current applicability for your specific product category before assuming combinability.

Which Scheme Is Right for Your Export Business

If you're a regular exporter looking to recover embedded taxes on an ongoing basis, RoDTEP is usually your baseline scheme. If a meaningful share of your product's cost comes from imported raw materials, layering in Duty Drawback can meaningfully improve margins. And if you're planning to invest in new machinery to scale export production, EPCG is worth evaluating against your projected export obligation timeline.

Getting scheme eligibility and documentation right — and tracking obligations like EPCG's export commitment — is where many exporters either leave money on the table or run into compliance issues down the line.

Frequently asked questions