India to restore RoDTEP benefits for AA, EOU & SEZ exports from June 1
Government of India has reinstated Remission of Duties and Taxes on Exported Products (RoDTEP) scheme benefits for Advance Authorisation (AA) holders, Export-Oriented Units (EOUs), and Special Economic Zone (SEZ) units. Applicable from June 1, 2025, the move aims to strengthen India's export competitiveness and ensure parity across all exporter categories.
These benefits had earlier lapsed on February 5, 2025. Their restoration signals the government's ongoing commitment to boosting merchandise exports by offsetting unrefunded embedded duties and taxes. Since its launch on January 1, 2021, the WTO-compliant scheme has disbursed over ₹57,976.78 crore (~$6.8 billion), the Ministry of Commerce & Industry said in a press release.
Indian government has reinstated RoDTEP benefits for AA holders, EOUs and SEZ units from June 1. The move aims to enhance export competitiveness and ensure parity across exporter categories. Earlier withdrawn in February 2025, the scheme has disbursed over ₹57,976.78 crore (~$6.8 billion) since 2021. For FY26, ₹18,233 crore is allocated to support a wide range of HS lines via a digital platform.
For FY26, ₹18,233 crore has been earmarked to support exports under 10,780 HS lines for Domestic Tariff Area and 10,795 HS lines for AA/EOU/SEZ segments. The scheme is operated through a fully digital platform to ensure transparency and ease of access for exporters.
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This marked the first time since its signing in 1960 that India paused the urged India to reconsider the suspension of the pact, citing its critical role in supporting 80% of its agricultural water needs. Despite a ceasefire agreement on May 10 after a mini-war, India has kept the IWT in abeyance, with reports indicating that it will be fast-tracking projects on the western rivers to tap the suspension of the IWT came after India's patience was tested regularly by Pakistan and its gave Pakistan both water and money, but Pakistan returned the favour with this backdrop, it's worth revisiting the treaty's circumstances, how negotiations took shape, the rationale behind India's payment to Pakistan, how the payout of $174 million was arrived at through intense bargaining, and how Pakistan ultimately let India's then Prime Minister, Jawaharlal Nehru, down even after the IWT was signed. The Indus Waters Treaty was signed in 1960 by the Government of India, led by Prime Minister Jawaharlal Nehru (L), and Pakistan's President Ayub Khan. (Image: World Bank) WHY WAS INDUS WATERS TREATY NEEDED?The Partition of India in 1947 split the Indus River System, which had long irrigated vast farmlands, between India (the upper riparian) and Pakistan (the lower riparian). By 1948, India's use of the river waters triggered a panic in the newly-formed Islamic Republic. An interim agreement was signed, but Pakistan said it remained 1956, as PM Nehru prepared to dedicate the Bhakra Dam on the Sutlej River to the nation, tensions with Pakistan escalated sharply. The risk of a war loomed."Take up Arms" and "A Black Day" were the headlines in Lahore's Urdu newspapers, noted Niranjan Das Gulhati, the chief Indian negotiator and technical advisor during the formulation of the World Bank stepped in to mediate a long-term challenge was immense: to divide a single, integrated water system between two hostile neighbours. The solution took shape in the form of the IWT, in what would become one of the most complex international water-sharing agreements. The Indus River originates in Tibet near Lake Mansarovar, flows northwest into Ladakh, then enters Gilgit-Baltistan in Pakistan-occupied Jammu and Kashmir, then traverses the length of Pakistan from north to south, and drains into the Arabian Sea near Karachi. (India Today File) advertisementFORMAL PROPOSAL AND THE FIRST DEADLOCK OF INDUS WATERS TREATYNegotiations formally began in May 1952, facilitated by the World Bank. The process moved in 1952 to 1954, a working party of engineers from both countries, along with World Bank officials, developed technical proposals. In 1954, the Bank presented its formal proposal, suggesting a division: India would get exclusive use of the Eastern rivers, and Pakistan the Western rivers (Indus, Jhelum and Chenab).Pakistan accepted the principle but insisted on a massive replacement plan to offset the loss of Eastern river said it would not fund this entire plan, leading to a deadlock, noted Niranjan Das Gulhati in his 1973 book, Indus Waters Treaty: An Exercise in International 1955 and 1958, negotiations stalled India and Pakistan remained wasn't until 1959 that a breakthrough seemed year, officials of the World Bank (then called the International Bank for Reconstruction and Development), including its President Eugene Black and Vice President WAB Iliff, undertook intensive shuttle diplomacy between New Delhi, Karachi (Pakistan's capital until 1959), Washington DC and London. The Indus Waters Treaty negotiations spanned eight arduous years, from 1952 to 1960, involving intense mediation by the World Bank. WAB Iliff (R), as Vice-President of the World Bank, played a crucial role in mediating the treaty, and ultimately signed the agreement on behalf of his organisation. (Images: World Bank) INDIA RESISTED SHARING PAKISTAN'S FINANCIAL BURDENPakistan's demand for aid was rooted in the fact that it had lost access to the canals and their networks fed by the Eastern rivers, some of whose headworks were then laid in India. To survive agriculturally, it needed to build new infrastructure to tap the Western rivers: link canals, dams, and barrages. The estimated cost exceeded $1 World Bank began seeking contributions from major powers. The United States, United Kingdom, Canada, Australia, New Zealand, and Germany pledged funds. But the treaty couldn't move forward unless India, gaining exclusive rights over the Eastern rivers, also agreed to initially the World Bank argued that India was benefiting by securing exclusive rights and therefore should bear part of the replacement cost. The Bank also made it clear that without India's contribution, the treaty would collapse. Camels on a dry riverbed of the Indus River in central Sindh. Pakistan depends on the Indus Basin for nearly 80% of its agricultural water needs, making it the lifeline of the country's farming and food security. (Image: Reuters) WHY PAKISTAN WANTED MONEY AFTER INDUS WATERS TREATY?In May 1959, Iliff told Gulhati, India's chief negotiator, that Eugene Black had put his credibility on the line, saying, "A stage has been reached. If the negotiations are to break down, I should know immediately; otherwise my reputation with these governments would be at stake".The World Bank secured commitments from friendly nations based on India's assumed participation. If India refused to pay, the deal would fall apart."Before I left Washington in the third week of April, Iliff told me that, in New Delhi, Black would propose to the Prime Minister [Nehru] that India should pay $250 million as her contribution towards the cost of works to be built in Pakistan. I said that this was much too high a figure," Niranjan Das Gulhati wrote."However, the horse-trading in New Delhi was to be limited to the range of $158 million, which sum we considered fair, and $250 million, which Iliff regarded as a fair deal. Pakistan was hardly concerned as the Bank was undertaking to underwrite the entire cost of her works from assistance by friendly countries," he closed doors, Iliff and Indian officials, including then Finance Secretary, BK Nehru, debated the numbers. After much back and forth, they settled on $174.8 million (62.06 million pound).India would pay 10 equal annual instalments into the Indus Basin Development Fund, managed by the World Bank, until 1970. The fund financed Pakistan's massive infrastructure projects like the Mangla Dam and various link contribution was earmarked specifically for Pakistan's "replacement works" under the Indus Basin Development Contributions to Indus Basin Development Fund (1960)ContributorFinal Contribution (Approx.)United States$315 millionWorld Bank (IDA & Loan)$250 millionUnited Kingdom$90 millionCanada$70 millionAustralia$20 millionGermany (West Germany)$12 millionNew Zealand$6 millionIndia83 crore (approx $62 million)Pakistan (self-financed)$100 million (approx)Total Estimated CostOver $1 billionPAKISTAN REMAINS HOSTILITIE DESPITE INDUS WATERS TREATYWith the finances sorted, the treaty was finally signed on September 19, Nehru and Pakistan's President General Ayub Khan formalised the agreement in Karachi. World Bank Vice-President WAB Iliff signed it on behalf of his idealist in Nehru hoped that this IWT would usher in a new chapter in India-Pakistan relations. He believed that resolving this vital issue could pave the way for cooperation on other issues, including just months later, Gulhati, in his book, recalled Nehru telling him: "I had hoped that this agreement would open the way to settlement of other problems, but we are where we were".Four years after signing the IWT, in 1964, Pakistan's replacement works exceeded initial estimates. A supplementary agreement was signed to raise additional funds from donor countries. India did not pay again, as its financial obligation had already been fulfilled under the terms of the original treaty in the massive diplomatic and financial effort India put into the IWT, Pakistan continued to challenge and bleed India on several fronts. The Pahalgam attack was the latest of Pakistan's five years after the IWT was signed, Pakistan dragged India into a war after it infiltrated Kashmir and parts of spirit of goodwill that Nehru hoped the treaty would foster quickly retrospect, while the Indus Waters Treaty is still hailed globally as a successful case of water diplomacy, it came at a high cost for India, not just in terms of water allocation, but also in hard just with money, India paid with goodwill and trust too, only for Pakistan to repeatedly betray it. This very pattern of Pakistan's behaviour is what the Narendra Modi-led government, by suspending the Indus Waters Treaty, has now attempted to InMust Watch
