Govt extends support for textile exporters as global uncertainty persists

New Delhi: The government on Wednesday extended a key export incentive scheme for apparel, garments, and made-ups till 30 September, aiming to support the labour-intensive textile sector amid global uncertainties triggered by the West Asia war.

The extension of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, effective 1 April, follows directions from the finance ministry's Department of Expenditure and comes after the scheme’s earlier validity ended on 31 March this year.

According to a notification by the ministry of textiles, the scheme will continue without any change in its scope, structure, coverage, rates or eligibility criteria, with all provisions applicable during the 15th Finance Commission period (FY21-FY26) remaining in force. The government also clarified that guidelines issued in August 2021 will continue to govern implementation.

Under the RoSCTL scheme, the government refunds certain taxes and levies to textile exporters to boost their competitiveness in the global markets. Made-ups are ready-to-use textile items like bed sheets, towels, and curtains that are made from cloth but not worn as garments.

The decision gains significance as India’s readymade garment (RMG) exports stood at about $14.55 billion in FY24, rising to around $16.01 billion in FY25, indicating a steady recovery in outbound shipments, even as exporters continue to navigate pricing pressures and intense competition in key global markets.

“The extension is seen as significant for India’s apparel and made-ups exporters, who have been seeking continuity in export incentives amid stiff competition from countries such as Bangladesh and Vietnam, as well as ongoing global trade disruptions,” said Abhash Kumar, a trade economist.

As per the notification, benefits under RoSCTL will continue to be issued through duty credit scrips or e-scrips via a fully digitized customs ledger system. The notification said that scrips will be issued without insisting on realization of export proceeds.

To ensure expenditure remains within allocated limits, a committee led by the Department of Expenditure, with representatives from the Departments of Revenue and Commerce and the ministry of textiles, will review the scheme on a quarterly basis, it said.

As per the notification, the government has also retained the flexibility to revise rates and caps depending on underlying conditions, while keeping eligibility criteria unchanged.

According to the Indian Council for Research on International Economic Relations (ICRIER) policy brief “Stitching India’s Apparel Export Competitiveness”, released in December 2025, India’s share in global apparel exports is around 3%, significantly lower than Bangladesh, which accounts for about 7%, and Vietnam at roughly 6%.

The policy brief noted that India’s apparel exports have grown at a slower pace than these competing countries, resulting in a decline in its relative global position over time.

The ICRIER report highlighted that Bangladesh enjoys duty-free access to key markets such as the European Union, while Indian exporters face tariff disadvantages in several destinations.

Further, it stated that delays in tax remission schemes such as RoSCTL and RoDTEP (remission of duties and taxes on exported products) can lead to liquidity constraints for exporters, affecting their ability to price products competitively in global markets.

The government introduced the RoSCTL scheme in 2019 to refund embedded taxes and levies that are not otherwise reimbursed under any other mechanism, specifically for exports of apparel, garments and made-ups. These include state-level taxes such as VAT (value added tax) on fuel used in transportation, mandi taxes, electricity duties and certain central levies that remain outside the goods and services tax (GST) framework. The aim was to ensure that Indian exporters are not disadvantaged due to hidden costs and can compete more effectively in global markets.

Under the scheme, exporters receive benefits in the form of transferable duty credit scrips or e-scrips, which can be used to pay basic customs duty or sold in the market.