RoDTEP (Remission of Duties and Taxes on Exported Products) and duty drawback are two Indian government schemes that refund the exporter for taxes and import duties embedded in the cost of goods that are exported. They are claimed by the Indian exporter through the shipping bill, not by you as the buyer. You never see the money directly, but it affects how your supplier prices the goods and how much room there is in a negotiation.
This article explains what each scheme covers, how it flows into a quotation and what to watch for in your contract. It is a general description rather than tax or legal advice, and the exporter's accountant and your customs broker remain the right people to confirm specifics.
What each scheme refunds
- Duty drawback refunds customs duty paid on imported inputs, such as dyes, chemicals, accessories or machinery parts, that went into the exported product. Rates are published per HS code by the Indian government and the refund is credited after export.
- RoDTEP refunds other embedded taxes that are not covered by GST input credit, such as fuel duty, electricity duty and local levies that accumulate through the supply chain. It is also paid per HS code as a percentage of the FOB value and arrives as a transferable credit.
- Both are administered through the DGFT and customs systems, and both depend on the exporter declaring the claim correctly on the shipping bill at the time of export.
- Both are set by India and can be revised, suspended or capped at any time, which is why a quotation that leans heavily on them is only as stable as the scheme.
How it shows up in your price
Most exporters price on an FOB basis net of the refund they expect to receive. In practice that means the quoted price already assumes the exporter will get RoDTEP and drawback back, and the quote is lower than it would otherwise be. If the exporter has not factored it in, there may be room to negotiate; if they have, asking for a further discount on the same basis will not get far.
Ask the supplier whether the quote is net of export benefits and what happens to the price if those benefits change. A short clause stating that the price is fixed for the order regardless of scheme changes protects you from a mid-order revision, and a supplier who refuses that clause is telling you how much of the margin depends on the refund.
Where the buyer can be affected
The refund requires the exporter to file the shipping bill with the right HS code and claim flag, and to receive payment through a bank in India within the time allowed. If payment is routed in an unusual way or delayed well past the agreed terms, the exporter can lose the benefit, and some will try to recover it from you. Keeping to the agreed payment terms and letting the exporter use a standard bank route avoids that argument.
The scheme also does not change the duty you pay at your end. Import duty in your country is set by your own tariff, your HS code and any preference you qualify for, and RoDTEP has no bearing on it.
How we help
We ask for FOB quotes that state whether export benefits are included, so you are comparing suppliers on the same basis. Before the container leaves we check that the shipping bill and invoice match, which protects the exporter's claim and your document pack at the same time. If you want to understand how a supplier has built a price, book a free 20-minute sourcing review.