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.

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.