Positive Decision on the Road Tap Scheme
04-Oct-2025 11:06 AM
The Central Government's positive decision to extend the Road Tap Scheme for the next six months to facilitate and support exporters in light of US tariffs is expected to improve the export performance of Indian products.
The Road Tap Scheme was originally scheduled to expire on September 30, 2025, but has now been extended to March 31, 2026.
A notification regarding this extension has been issued. Consequently, the scheme will remain in effect, and exports from units located in domestic customs jurisdictions, advance authorization holders, units operating in Special Economic Zones, and export-oriented units will continue to benefit from it.
Financial benefits are provided for exports under the Road Tap Scheme, providing significant relief to exporters. The imposition of a high 50% customs duty in the US, a leading export market for Indian commercial goods and services, has increased the challenges faced by Indian exporters.
The Government of India is taking all possible steps to minimize its impact, including extending the deadline for the Road Tape Scheme.
Previously, the 11% import duty on cotton was withdrawn to help the domestic textile industry import cheaper raw materials from abroad and reduce the cost of finished products.
It is worth noting that the Central Government launched this flagship export promotion scheme in 2021 to promote exports. It provides for a refund of non-tradable Central, State, and Local Government levies paid on inputs to manufacturers to reduce input costs.
The scheme is based on the principle that taxes should not be exported. It ensures zero-rating of exports, making exports significantly more competitive.
The Union Budget allocated ₹16,000 crore for this scheme in the 2024-25 fiscal year, which has been increased to ₹18,232 crore for the 2025-26 fiscal year.
In the first five months of the current fiscal year, April-August 2025, merchandise exports increased by 25 percent to reach $184 billion, while exports to the United States jumped 18 percent to over $40 billion. This momentum needs to be maintained going forward.