Amid geopolitical uncertainty, supply-chain disruptions and rising import costs, the government has extended the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for apparel and made-ups exporters by three months until 31 December. The scheme helps exporters contain costs and compete on price overseas.
The extension comes as the government works on a proposal to continue it for another five years, as Mint reported on 28 September.
Here is what the scheme does, who benefits and why its longer-term continuation matters.
What is RoSCTL?
Introduced in March 2019, RoSCTL refunds eligible state and central taxes, duties and levies embedded in exported apparel and made-ups that are not refunded through other mechanisms.
The principle is straightforward: domestic taxes and levies incurred on goods meant for export should not remain embedded in their overseas selling price and make Indian products less competitive.
The scheme is therefore different from a direct export subsidy. Its stated purpose is to remit eligible domestic taxes and levies that would otherwise remain embedded in export costs.
Who benefits from the scheme?
RoSCTL primarily covers exporters of apparel, garments and made-ups, with a significant share of beneficiaries being micro, small and medium enterprises (s).
According to the Ministry of Textiles, more than 15,400 exporters across over 444 districts benefited from the scheme in fiscal year 2026 (FY26). Eligible receive rebates ranging from 1.7% to 8.2%, depending on the product.
The scheme’s reach matters because textile and garment manufacturing is spread across multiple clusters rather than concentrated in a few industrial centres.
The is also labour-intensive and, according to the government, provides direct employment to more than 45 million people, making export competitiveness relevant not only to foreign-exchange earnings but also to employment.
Why is the extension significant?
The government has retained existing RoSCTL rates and guidelines until 31 December, ensuring that the scheme does not lapse while a longer-term decision is worked out.
That short horizon is a concern for an industry in which orders are planned months in advance. Industry executives argue that RoSCTL should have a longer policy horizon because it is intended to refund domestic taxes and levies rather than provide an export incentive.
Repeated short-term extensions can complicate decisions on orders, pricing and investment. A longer continuation would give exporters greater policy certainty and help them price overseas orders with greater visibility.
Why does RoSCTL matter for textile exports?
The government aims to raise textile exports to $100 billion by 2030, making export competitiveness a key policy objective for the sector.
India’s apparel exports stood at $35.49 billion in 2019 fell to $29.61 billion in 2020 and rebounded to $41.47 billion in 2021, according to government data. They then declined to $38.31 billion in 2022 and $34.23 billion in 2023, before recovering to $36.71 billion in 2024 and $36.95 billion in 2025.
The uneven recovery points to continued competitive pressure as Indian producers compete with lower-cost manufacturing destinations and contend with geopolitical tensions, supply-chain disruptions and higher input and import costs.
How much does the government spend on RoSCTL?
Government spending on RoSCTL stood at ₹9,176 crore in FY22, fell to ₹7,659 crore in FY23 and then rose to ₹8,033 crore in FY24, ₹8,565 crore in FY25, and to ₹10,010 crore in FY26.
For FY27, the allocation is ₹5,000 crore.
The industry argues that the scheme is important because Indian exporters should not effectively carry domestic tax costs into overseas markets.
“With US and EU apparel imports contracting 5-8% year-on-year, gaining market share is critical. In this highly competitive, price-sensitive industry, RoSCTL refunds unrebated embedded taxes and levies, helping Indian exports compete on a level playing field. Every additional apparel order creates a multiplier across fabric, processing, yarn and fibre, while supporting large-scale employment,” said Prabhu Dhamodharan, convenor, Indian Texpreneurs Federation (ITF).