The Remission of Duties and Taxes on Exported Products Scheme is a government policy that refunds embedded taxes and duties incurred during the manufacturing and distribution process which are not otherwise reimbursed.
The policy was aimed to neutralizing such costs and enhance exporters’ competitiveness in global markets.
Under the revised structure, incentive rates have reportedly been cut from 0.3%–4.3% of export value to 0.15%–2.15%. The reduction is expected to lower the quantum of rebates available to exporters, potentially impacting margins of companies with significant overseas revenue exposure, as per media reports.
Export-oriented textile companies, particularly garment and home textile manufacturers, are likely to face higher cost pressures. Stocks such as Gokaldas Exports (down 4.98%), Pearl Global Industries (down 2.37%), Arvind Fashions (down 1.23%), and Trident (down 2.63%) were under pressure following the announcement.
Other export-driven textile players include Welspun Living (down 4.97%), Indo Count Industries (down 4.48%), KPR Mill (down 1.65%), and Vardhman Textiles (down 1.27%), all of which derive a meaningful portion of revenue from overseas markets.
Domestic-focused textile manufacturers with limited export exposure are largely unaffected by the revision.
According to media reports, the rationalisation of incentives could influence India’s competitiveness in global textile trade, particularly against exporters from Bangladesh and Vietnam, where cost structures remain relatively competitive.