Export

U.S. Tariff Action – India Assigned 26%

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In a landmark executive action, the U.S. President has signed an order adjusting import tariffs based on reciprocal trade imbalances and national interest objectives. India is one of the countries directly affected, with its reciprocal tariff rate adjusted to 26%, up from previous preferential or MFN levels.

This strategic trade move is aimed at rebalancing trade deficits and incentivizing fair market access for U.S. exporters. The revised tariff framework is backed by an extensive list of over 3,000 product lines under HTS codes across sectors like chemicals, minerals, fuels, and rare metals.

Top 10 Takeaways for Indian Exporters:

  1. India’s new tariff rate for exports to the U.S. is set at 26%

  2. The action is part of a reciprocal tariff realignment with 70+ countries (Annex-I), many of whom face similar hikes. No exemptions for developing countries – Vietnam, Sri Lanka, and Bangladesh are all included.

  3. ‘Reciprocal Tariff Adjustment’ is not uniform – countries like Lesotho face 50% while others like Nigeria see 14%.

  4. The implementation of the order will be on April 05, 2025 – 12:01am Eastern Daylight Time with an initial levy of 10% and the full rate as per the Order (India – 26%) from April 09, 2025 – 12:01am Eastern Daylight Time.  Goods already loaded onto a vessel at the port of loading and in transit on the final mode before the specified timing but land after the date shall not be subject to these new ad valorem rates of duties.

  5. Annex II lists product that are excluded from the ad valorem tariffs under this order. Excluded products include copper, aluminum, bauxite, fluorspar, graphite, APIs, and many chemicals.Exporters must validate their product’s HTSUS classification against Annex II to assess the exemption.

  6. These goods may face separate or alternative duty treatment, yet to be announced.

  7. The rates of duty established by this order are in addition to any other duties, fees, taxes, exactions or charges as applicable to such imported articles, except as provided in the exemptions of the order.

  8. In order to establish the duty rates described in the order, the HTSUS is also modified as set forth in the Annexes to this order. The modifications will take effect on the dates as mentioned in the order. Exporters can refer to https://hts.usitc.gov/ for further details.

  9. Accurate classification of export products under HTS codes is now more critical than ever.

  10. This change could significantly impact pricing, margins, and competitiveness in the U.S. market

This tariff realignment by the U.S. President marks a paradigm shift in trade policy, introducing stricter, country-specific import duties aimed at promoting reciprocal trade. Indian exporters must act now – assess your product lines, understand revised tariff rates, map HTS codes, track regulatory updates, and prepare contingency plans for what may come next.
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* The Annex I has been updated where rate against India has been edited to 26%
(https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-I.pdf) 

Disclaimer:
This summary reflects the Presidential Order and details as currently issued. Future U.S. trade actions or clarifications may alter its implementation. Exporters should refer official sources or trade advisors before making commercial decisions.

RoDTEP Extended and Closed for Advance Authorisation (AA) Holders, EOUs and SEZ Units

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The long-awaited clarification regarding the RoDTEP eligibility for Advance Authorisation (AA) Holders, EOUs, and SEZ Units has now been officially notified.

The DGFT, through Notification No. 66/2024-25 dated 20.03.2025, has confirmed that the RoDTEP benefit for exports of products manufactured by AA Holders, EOUs, and SEZ Units will be available only up to 05.02.2025.

This effectively extends the earlier cutoff from 31.12.2024 to 05.02.2025.

The notification also clearly states that no RoDTEP benefits will be applicable for such exports made on or after 06.02.2025 for exports from Advance Authorisation (AA) Holders, EOUs, and SEZ Units.

Other categories of exporters (i.e., DTA units) will continue to be eligible for RoDTEP benefits as per the earlier notification, i.e., up to 30.09.2025.

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Last date for Annual RoDTEP Return (ARR) Extended

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As per Para 4.94 of the Handbook of Procedures, the Annual RoDTEP Return (ARR) for FY 2023-24, originally due for online submission by March 31, 2025, has now been extended to June 30, 2025, as per Public Notice No. 51/2024-25 dated 19.03.2025.

Consequently, the applicable grace period has also been extended from
June 30, 2025, to September 30, 2025.

The ARR submission is mandatory for exporters who have received RoDTEP benefits of ₹1 crore or more in FY 2023-24.

Exporters are advised to ensure timely submission to remain compliant and avoid any penalties.

Budget 2025: Key Export-Related Announcements

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Driving Export Growth through Policy Reforms

The Union Budget 2025 presents a strategic vision for boosting exports, with a particular emphasis on MSMEs, infrastructure, digital trade facilitation, and sector-specific incentives. Recognizing that MSMEs contribute 45% of total exports, the government has introduced measures to ease credit access, streamline trade documentation, and enhance sectoral competitiveness. Below are the key highlights from the latest budget that will impact Indian exporters:

Key Highlights

  1. Strengthening MSME Exports
    • Investment and turnover limits for MSME classification have been enhanced to 2.5x and 2x, respectively.
    • Well-performing exporter MSMEs will have access to term loans up to ₹20 crore to boost their business expansion.
  2. Sector-Specific Export Incentives
    • Footwear & Leather Sectors: Expansion of the Focus Product Scheme to facilitate exports worth ₹1.1 lakh crore.
    • Handicrafts Sector: The export period is extended from 6 months to 1 year, with an additional 3-month extension if required. Also, 9 new items are added to the duty-free input list.
    • Crust Leather: 20% export duty exemption to support small-scale tanners and exporters.
  3. Export Promotion & Ease of Doing Business
    • Establishment of an Export Promotion Mission, jointly led by the Ministries of Commerce, MSME, and Finance, focusing on:
      • Easy access to export credit
      • Cross-border factoring support
      • Addressing non-tariff barriers in overseas markets
    • Launch of ‘BharatTradeNet’ (BTN), a unified digital platform for trade documentation and financing solutions.
    • Development of a national framework to encourage Global Capability Centres (GCCs) in Tier-2 cities to boost trade infrastructure.
  4. Infrastructure & Logistics Support
    • Enhancing air cargo infrastructure and warehousing to support the export of high-value perishable horticulture produce.
  5. Regulatory & Taxation Reforms
    • Introduction of a voluntary declaration system allowing importers/exporters to declare material facts and pay duties with interest but without penalty.
    • Amendment in Schedule III (w.e.f. 01.07.2017): Goods warehoused in Special Economic Zones (SEZs) or Free Trade Warehousing Zones (FTWZs), when supplied before clearance for exports or to the Domestic Tariff Area (DTA), will be treated neither as supply of goods nor as supply of services.
    • Removal of IGCR condition for customs duty exemption on import of seeds for rough lab-grown diamond manufacturing.

The Budget 2025 reaffirms the government’s commitment to strengthening exports by providing financial support to MSMEs, simplifying trade processes, and enhancing infrastructure. The establishment of BharatTradeNet (BTN) and the Export Promotion Mission are expected to streamline trade, while sector-specific benefits, will provide direct advantages to exporters. With these measures, India is set to bolster its position as a global trade leader, ensuring long-term export growth, resilience, and competitiveness.

Annual RoDTEP Return Filing Online Module Activated

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In continuation of DGFT Public Notice No. 27/2024-25, exporters with RoDTEP claims of ₹1 crore or more in FY 2023-24 must now file their Annual RoDTEP Return through the newly activated online module.

DGFT, via Trade Notice No. 27/2024-25 dated 29th January 2025, has released a detailed manual & FAQs to guide exporters through the filing process.

🚨 Key Compliance Points:
✅ Exporters must file separate returns for DTA(Appendix 4R) and AA/SEZ/EOU(Appendix 4RE) exports as per Policy.

✅ Seperate returns are required only for HS Codes with ₹50 lakh+ RoDTEP benefits or single return for the highest accrued 8 digit HS code must be filed.

✅ Pro-rata tax calculation is required and must be justifiable if scrutinized.

✅ Only non-refunded taxes/levies should be reported (GST/exempted taxes excluded).

✅ Exporters must submit HS Code, UQC, product description, export quantity, and FOB
value.

✅ Transport costs should include VAT & Excise duty for both inbound and outbound (road & rail).

✅ Additional costs like electricity duty, stamp duty, and captive fuel duty must be reported.

✅ Merchant exporters with ₹1 crore+ RoDTEP claims are also required to file the annual return with data support from their manufacturers. 

✅ Fuel tax claims can be approximated based on transporters’ data and should be maintained for verification.

✅ Filing is mandatory if RoDTEP claim value exceeds ₹1 crore, even if the actual claim received is lower.

📌 Deadline: Exporters must file their returns by 31st March 2025 to avoid penalties or late fees.

🔗 Visit the DGFT Portal to file your RoDTEP Annual Return and refer to the Manual & FAQs for guidance.

Amendments for Online Certificate of Origin (eCoO) System

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In alignment with the online issuance of Certificates of Origin (CoO) for both Preferential and Non-Preferential categories through the new platform https://trade.gov.in, DGFT has issued Public Notice No. 43/2024-25, dated 27th January 2025. The notice amends specific paragraphs of the Handbook of Procedures to ensure consistency with the implementation of the new eCoO system.

Key Changes Introduced

  1. Deletion of Para 2.91(d)
    • The provision allowing the Export Inspection Council (EIC) to print blank certificates and issue them under a specific procedure has been deleted.
  2. Amendment to Para 2.93(c)
    • For the issuance of Non-Preferential Certificates of Origin, only the Invoice and Packing List need to be uploaded online.
    • The fee for each CoO is fixed at ₹200, which includes the attestation of any additional documents.
  3. Addition to Para 2.93(d)
    • A provision has been added to allow the issuance of in-lieu Certificates of Origin (CoO) by the same issuing agency for corrections in previously issued eCoOs.
  4. New Para 2.93(f)
    • A provision has been added to permit the issuance of Back-to-Back Certificates of Origin (Non-Preferential) for goods not of Indian origin that are being re-exported, transshipped, or used for merchanting trade purposes.
    • These certificates will be issued based on documentary evidence confirming the original foreign country of origin.
    • The details of the supporting documents must be explicitly mentioned on the back-to-back CoO issued.

Effective Date

  • The Public Notice is applicable with immediate effect.

Action Required

Exporters are advised to refer to Public Notice No. 43/2024-25, dated 27th January 2025, available on the DGFT website, for detailed information and compliance guidelines

Customs Enables Online Voluntary Payment via ICEGATE

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In a move to enhance ease of doing business and further digitize its services, Customs has introduced a new functionality to replace the existing manual TR-6 Payment Challan process at various Customs stations.

New Voluntary Payment Facility on ICEGATE

  • The new Voluntary Payment facility is accessible post-login on the ICEGATE website (www.icegate.gov.in).
  • This feature enables payments for imports/exports cleared in the past and other issues, with a detailed purpose Annexure provided for clarity.
  • Proof of payment can be submitted to the respective field formations for necessary actions.

Payment Modes Supported

  • Nine Banks listed under the Internet Banking mode through the Authorized Bank, NEFT/RTGS, and Payment Aggregator Mode are accepted for this facility.
  • Electronic Cash Ledger can also be used for voluntary payments.

Key Transition Details

  • This online functionality aims to replace the existing manual TR-6 Challan process.
  • Starting 1st January 2025, the manual TR-6 Challan will no longer be accepted unless specifically approved by the concerned Principal Commissioner/Commissioner of Customs with valid reasons.

Additional Resources

This initiative reinforces Customs’ commitment to enhancing transparency, efficiency, and ease in payment processes.

DGFT Expands Exemption List for Quality Control Orders (QCOs) under Advance Authorization, EOU, and SEZ

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In line with recent updates to Quality Control Orders (QCOs) from various ministries and departments, the Directorate General of Foreign Trade (DGFT) has issued Public Notice No. 31/2024-25 dated 05th November 2024.

This notice amends Appendix-2Y, adding the Ministry of Heavy Industries to the list of ministries/departments exempted from mandatory QCO requirements for exports under Advance Authorization holders, EOUs, and SEZs.

With this addition, the Ministry of Heavy Industries is now included at Sr. No. 6 in the list, joining the Ministry of Steel, DPIIT, Ministry of Textiles, Ministry of Mines, and the Department of Chemicals & Petrochemicals (Sr. Nos. 1 to 5).

Exporters dealing with QCO requirements issued by the Ministry of Heavy Industries can now avail exemptions under this public notice by adhering to the existing guidelines.

For full details, please refer to the official public notice.

Filing of Annual RoDTEP Return (ARR) Introduced by DGFT

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On 23rd October 2024, the Directorate General of Foreign Trade (DGFT) issued Public Notice No. 27/2024-25 introducing the filing of the Annual RoDTEP Return (ARR) for RoDTEP claims.

To begin with, Exporters with a total RoDTEP claim exceeding ₹1 crore in a financial year must file the ARR by 31st March 2025 for FY 2023-24.

Non-reporting will result in suspension of benefits. A composition fee for late filing applies, with deadlines outlined.

A detailed format is provided in the Public Notice for the details required to be submitted in the Annual Return.

Exporters are requested to examine the Public Notice for further details.

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New DGFT Update: Electronic Submission of Appendix 4H Certificates for Advance Authorisation

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For quite some time, the Directorate General of Foreign Trade (DGFT) has been transitioning its procedures to online platforms and digital systems. As per Para 1.04(f) of the Handbook of Procedures (HBP), electronic systems must be introduced to facilitate the uploading of digitally signed documents by certifying authorities such as Chartered Accountants (CAs), Company Secretaries (CSs), and Cost Accountants.

Now, through DGFT Trade Notice No. 21/2024-25, dated October 17, 2024, the DGFT has announced a new facility for certifying authorities (i.e., CAs, CSs, and Cost Accountants) to digitally link Appendix 4H for Advance Authorisation applications and DFIA (Duty-Free Import Authorisation) schemes.

The Trade Notice outlines the workflow for both exporters and certifying authorities. Key highlights include:

  1. Online Submission: Exporters can now fill in Appendix 4H-related data online through the DGFT website.
  2. Forwarding to Certifying Authorities: Exporters can forward draft Appendix 4H data to their certifying authority online via the certifying authority’s registration number.
  3. Registration of Certifying Authorities: Certifying authorities (CAs, CSs, Cost Accountants, etc.) can register on the DGFT platform under the category “Certifying Authority.”
  4. Viewing and Approval: Once the exporter submits the data to the certifying authority through the DGFT website, the certifying authority can view and approve the Appendix 4H using their DGFT credentials.
  5. Digital Signature: The certifying authority can digitally sign and approve Appendix 4H.
  6. Exporter Access: The approved Appendix 4H will be available for viewing and downloading by the exporter and will be automatically linked to the redemption application for the Advance Authorisation and DFIA schemes.

This new digital feature for Appendix 4H is a significant enhancement for exporters, as it streamlines the process and reduces the time required for application and redemption under the Advance Authorisation & DFIA Schemes.

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