India’s export strategy is evolving in response to global tariff hikes, supply-chain challenges, and rising compliance demands. To stay competitive, the government is leveraging targeted incentives such as the Export Promotion Mission (EPM), duty-free cotton imports, revised jewellery duty drawback, and the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme designed to refund unrebated domestic levies that inflate export costs.
These measures not only ease input burdens and support key sectors but also enable Indian exporters to pursue growth in high-opportunity markets like the UAE, where deepening trade ties and logistical advantages are accelerating international expansion
The Export Promotion Mission (EPM): Strengthening the Policy Framework
The Export Promotion Mission (EPM) is a central component of India’s renewed export strategy, designed to address systemic challenges and enhance the country’s global trade competitiveness (the Mission). Backed by a financial outlay of ₹25,000 crore over six years, the mission is coordinated by the Department of Commerce and serves as the policy backbone for a more predictable and efficient export ecosystem.
- Objectives of the Mission
The EPM focuses on strengthening both the financial and operational capabilities of Indian exporters through targeted interventions:
- Broader Access to Export Credit:
Expanding the availability of affordable trade finance, particularly for MSMEs, through enhanced credit guarantee mechanisms and streamlined lending practices.
- Development of Cross-Border Factoring Mechanisms:
Facilitating safer and faster payments for exporters by promoting regulated cross-border factoring systems that reduce credit risk and improve liquidity.
- Support for MSMEs to Meet International Technical Standards:
Assisting smaller exporters with compliance, certification, and testing requirements necessary to enter regulated markets with stringent quality norms.
- Reducing Non-Tariff Barriers and Diversifying Export Markets:
Addressing regulatory hurdles in overseas markets while encouraging exporters to expand beyond traditional destinations toward newer, high-opportunity geographies.
This Article is a Part of Our Why Indian Businesses Consider the UAE as a Global Expansion Hub.
Alignment with India’s Broader Trade Strategy
The Mission complements India’s evolving trade agenda, particularly its focus on deepening bilateral economic partnerships. It plays a crucial role in supporting the implementation of trade agreements such as the Comprehensive Economic Partnership Agreement (CEPA) with the UAE by enabling Indian firms to leverage preferential market access more effectively.
By reinforcing the policy environment, easing compliance, and expanding financial support, the EPM helps create the foundation needed for sustained export growth and strengthens India’s positioning within global supply chains.
RoDTEP: Neutralizing Hidden Costs in Exports
The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme serves as India’s primary mechanism to eliminate the residual domestic taxes and levies that are not refunded through any other export incentive or GST credit pathway. These embedded costs though individually modest accumulate across the supply chain and ultimately inflate the final export price.
RoDTEP provides relief by refunding a range of non-creditable charges, including electricity duties, fuel taxes, mandi fees, and other state or central levies that are inherently built into production and transport costs. By doing so, it ensures that exported goods are effectively free from domestic tax incidence.
The scheme operates entirely through a digital, automated framework, where rebates are issued as electronic duty credit scrips that can be utilised for customs duty payments or transferred within the trade ecosystem. This system enhances transparency, reduces processing delays, and provides exporters with predictable access to duty remission.
RoDTEP covers a broad selection of sectors critical to India’s export profile, including textiles, chemicals, pharmaceuticals, agriculture, and automobiles, ensuring that both traditional and high-value industries benefit from embedded tax neutralisation.
By reducing these hidden cost components, RoDTEP directly improves the price competitiveness of Indian products in global markets, enabling exporters to offer more competitive quotations, strengthen their position in international supply chains, and take fuller advantage of preferential access under agreements such as the India–UAE CEPA.
Duty-Free Cotton Imports: Securing Input Supply for Textiles
The continuation of duty-free cotton imports until December 2025 forms a critical part of India’s strategy to stabilise raw material availability for its textile and apparel industry. By extending the exemption, the government effectively removes the 11% import duty that previously applied to raw cotton, resulting in significant cost savings for manufacturers operating in a sector where margins are increasingly constrained by global pricing pressures.
This measure directly benefits apparel exporters, who face competitive challenges from low-cost producing countries. Lower input costs help maintain export viability, support order fulfilment during periods of domestic supply volatility, and strengthen India’s presence in international markets that demand consistent quality at competitive prices.
The textile sector is a major employer particularly across MSMEs, small powerloom units, and decentralised rural clusters and the availability of duty-free cotton helps preserve jobs and production stability across these labour-intensive segments. By easing input costs, the policy also supports downstream activities such as ginning, spinning, weaving, and garmenting that form the backbone of India’s broader employment ecosystem.
Additionally, duty-free access to cotton aligns with India’s evolving trade relationship with the UAE. Lowering production costs enhances the ability of Indian firms to integrate into UAE-based manufacturing, value addition, and re-export channels, particularly under the preferential framework of the India–UAE CEPA. This strengthens India’s role within regional supply chains and expands opportunities for textile exporters seeking to tap into Middle Eastern, African, and European markets via the UAE’s logistics hubs.
Jewellery Sector Relief: Enhancing Liquidity and Competitiveness
The recent increase in duty drawback rates on gold jewellery exports provides critical support to one of India’s highest-value export segments. By allowing exporters to recover a larger portion of duties paid on inputs, the revised drawback structure directly improves working capital availability, enabling businesses to manage procurement cycles more efficiently and maintain healthier cash positions in a capital-intensive industry.
Higher drawback benefits also strengthen export margins, particularly for MSME-driven manufacturing clusters that operate on thin price differentials in global markets. This relief is especially relevant given that gems and jewellery consistently rank among India’s largest export categories by value, making policy stability and liquidity support essential for sustaining international demand.
The measure further aligns with India’s trade dynamics with the UAE. Dubai home to one of the world’s most active gold markets serves as a complementary hub for sourcing, refining, value addition, and re-export. Enhanced liquidity for Indian exporters, combined with the trading ecosystem available in Dubai, reinforces the sector’s ability to participate more competitively in global supply chains and to leverage the India–UAE CEPA for wider market access.
Broader Economic Implications
India’s suite of export incentives plays a strategic role in advancing the country’s ambition of achieving $1 trillion in exports by 2030. By reducing input costs, improving liquidity, and enhancing competitiveness across key sectors, these measures encourage outward-looking strategies, enabling exporters to establish manufacturing, distribution, and re-export bases in partner economies such as the UAE.
These policies also support the diversification of export markets, reducing dependence on traditional destinations that are increasingly exposed to tariff pressures, regulatory hurdles, or geopolitical uncertainties. By facilitating access to new high-opportunity regions, Indian exporters can mitigate risks while expanding global market share.
Furthermore, the incentives are closely integrated with trade agreements, including the India–UAE CEPA and other bilateral frameworks. This alignment ensures that exporters can fully leverage preferential market access, compliance support, and regional logistics networks, reinforcing India’s position as a competitive, reliable supplier in global value chains.
Legal and Compliance Considerations for Exporters
While India’s export incentives provide significant financial and strategic benefits, strict compliance with legal and procedural requirements is essential to fully realise these advantages and avoid potential penalties.
- Eligibility Criteria
Exporters must meet prescribed conditions to claim benefits under schemes such as RoDTEP, duty-free cotton imports, or duty drawback for jewellery. This typically includes registration with the Directorate General of Foreign Trade (DGFT), adherence to sector-specific regulations, and compliance with prescribed export obligations.
- Documentation and Audit Requirements
Accurate and timely documentation is critical. Exporters are required to maintain detailed records of invoices, shipping bills, purchase receipts, and certification of origin. These documents are subject to DGFT and customs audits, which verify the authenticity of claims and the proper utilisation of duty credits.
- Interaction with GST and Customs Procedures
Export incentives operate in conjunction with GST refunds, customs duty exemptions, and export declarations. Coordinated reporting ensures that benefits are not duplicated and that transactions remain compliant under multiple regulatory frameworks.
- Importance of Compliance
Non-compliance can result in post-benefit recovery, financial penalties, or legal proceedings, which may offset the intended advantage of the incentives. Exporters are therefore advised to implement robust compliance systems, periodically review regulatory updates, and engage legal counsel when navigating complex claims.
By understanding and adhering to these requirements, exporters can maximise the value of India’s incentive schemes while mitigating legal and operational risk.
The UAE Connection: From Incentives to Expansion
India’s export incentives do more than reduce costs—they provide a strategic foundation for international expansion, particularly into high-opportunity hubs such as the UAE. Savings generated through measures like RoDTEP, duty-free cotton imports, and enhanced jewellery duty drawbacks can be reinvested to establish subsidiaries, joint ventures, or distribution networks in the UAE, leveraging the country’s favourable tax and trade environment.
Several sectors exemplify this potential:
- Textiles: Reduced input costs in India allow manufacturers to set up re-export or processing operations in UAE free zones, benefiting from logistics efficiency and preferential access to African, European, and Middle Eastern markets.
- Jewellery: Liquidity gains from increased duty drawback rates enable exporters to maintain inventory and participate in Dubai’s global gold market, creating synergies between Indian production and UAE-based trade hubs.
- Food Processing & Agro-products: Incentives help meet global compliance and certification requirements, while UAE operations provide proximity to regional distribution channels and re-export opportunities.
The synergy between India’s export support mechanisms and the UAE’s free-zone ecosystem enables Indian businesses to optimise both cost and market reach. By combining domestic policy advantages with UAE-based trade facilitation, exporters can enhance global competitiveness, strengthen supply chain integration, and expand their footprint in key international markets.
India–UAE Alignment Is Shaping the Future of Trade
India’s recent export incentives collectively reinforce the competitiveness of domestic producers while equipping them for broader international expansion. By lowering input costs, improving liquidity, and strengthening compliance capacity, government support helps exporters navigate global trade pressures with greater stability and confidence.
When combined with the UAE’s logistical strengths, regulatory clarity, and free-zone advantages, these fiscal measures create a durable foundation for long-term resilience. Indian businesses are increasingly positioned to integrate domestic efficiencies with UAE-based operational and market benefits, enhancing their global reach.
The growing alignment between India’s policy framework and the UAE’s trade ecosystem signals a new phase of collaborative economic engagement, shaping a future in which bilateral cooperation drives sustained export growth and stronger regional integration.
