Most of what we write on this blog speaks to families moving abroad and NRIs returning home. This one is for the SME exporter — the founder or finance head running a commercial cargo line out of India, dealing with RoDTEP claims, drawback files and the GST LUT, and wondering whether the freight forwarder on the other end of the email is actually adding value or just adding markup. Our commercial cargo desk in Mumbai handles seventy to ninety SME consignments a month, and the three acronyms in this title are the ones that come up most often.
RoDTEP, in one paragraph
The Remission of Duties and Taxes on Exported Products scheme refunds an exporter for the embedded central, state and local taxes paid on inputs that have gone into an exported product — taxes that are not otherwise rebated through GST or drawback. The scheme runs through a per-HS-code rate notified by the Directorate General of Foreign Trade, the rebate accumulates as a transferable e-scrip in the exporter’s ICEGATE account, and the scrip can be used to pay customs duties on imports or sold to another importer at a small discount. For most exporters, RoDTEP is real money — one to three percent of FOB value depending on the product line.
The 2026 notification of refreshed rates touched several categories meaningful to our SME client base: engineering goods, processed food, certain textile components, and pharmaceuticals. If your shipping bill template still references rates from the 2024 notification, you are either over-claiming (which gets clawed back at audit) or under-claiming (which is your money sitting unallocated). We do not file your shipping bills, but we coordinate with the CHA who does, and we flag this routinely.
Drawback, and when to choose it over RoDTEP
The duty drawback scheme is older than RoDTEP and refunds customs duty paid on imported inputs that have gone into an exported product. The two schemes are not stackable for the same value — an exporter chooses drawback or RoDTEP for a given shipment, declared on the shipping bill. The choice depends on the input mix: a product with high imported-input content typically benefits more from drawback, while a product with high domestic-input content typically benefits more from RoDTEP.
Drawback rates are published in two columns: an “all-industry rate” which is the simpler default, and a “brand rate” which can be applied for when the all-industry rate substantially under-compensates an exporter’s actual duty incidence. Brand rate filings are paperwork-intensive and worth pursuing only when the gap is meaningful, but for some pharmaceuticals and specialty chemicals we have seen brand rates deliver multiples of the all-industry refund.
The GST LUT — the bond you should not be without
A Letter of Undertaking under GST is the document that lets an exporter ship goods or services without paying IGST upfront on the export invoice. Without an LUT, the exporter pays IGST on the export, claims it back as a refund — a process that takes 30 to 90 days — and lives with that working capital drag throughout the year. With an LUT in place, the export goes out at zero IGST and the working capital stays in the business.
Filing the LUT is a simple online process on the GST portal, valid for one financial year, renewed annually. The most common failure we see is exporters who filed an LUT in their first year of exports, forgot to renew, and discovered the lapse only when a shipping bill bounced. The renewal window opens in early April; we have a standing reminder to flag this for clients who give us calendar visibility.
ICEGATE 2.0 and the e-Sanchit document framework
ICEGATE 2.0, the upgraded customs portal, has matured through 2025 and 2026 and now offers genuinely faster shipping bill acknowledgement, cleaner Bill of Lading reconciliation, and the e-Sanchit document repository for supporting paperwork (commercial invoices, packing lists, certificates of origin, fumigation certificates, inspection certificates). Uploading documents to e-Sanchit ahead of the shipping bill filing speeds up the let-export order considerably.
The AD code linkage — the registration of an exporter’s authorised dealer bank with the port from which they are shipping — remains the prerequisite for any export from any port. An AD code is registered once per port; an exporter shipping from Nhava Sheva and Mundra in parallel needs the code linked at both. New exporters routinely miss this and watch their first shipment sit for a week while the linkage is processed.
HS code discipline — the unglamorous truth
Every benefit above — RoDTEP rate, drawback rate, LUT-backed zero-rated supply, ICEGATE processing speed — flows from the HS code declared on the shipping bill. An incorrect or imprecise HS code means an incorrect rate claim, which means either money left on the table or money clawed back at audit with interest. The customs department’s 2026 audit programme has been notably more attentive to HS classification than it was three years ago.
For SMEs running a stable product line, the right answer is to invest one week of compliance time, once, in pinning down the correct HS code for each product variant against the latest Indian customs tariff and the WCO 2022 nomenclature. We have seen six-figure clawbacks against exporters who relied on a CHA’s default classification rather than verifying it themselves. The CHA is competent at filing; the classification call is the exporter’s responsibility.
The forwarder’s role — honest version
A good freight forwarder for an SME exporter does three things. We book the right vessel at the right rate for the routing the cargo needs, with real visibility into the carriers’ equipment availability and roll history at Indian ports. We coordinate the documentation flow between the CHA, the bank, the consignee and the carrier so that nothing falls between desks. And we flag the issues we see — the RoDTEP rate change, the LUT renewal window, the new e-Sanchit requirement — before they cost the exporter money.
What we do not do is replace the CHA or the chartered accountant or the in-house compliance function. Those roles exist for good reasons and stack with ours. The exporters who get the most from working with us are the ones who run a tight compliance shop and want the freight side to match it.
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