Repeated short-term extensions of export support schemes undermine the predictability that exporters need. Discuss with reference to the textiles sector.

The Rebate of State and Central Taxes and Levies (RoSCTL) has been run by the Ministry of Textiles since 7 March 2019. It refunds State and Central taxes embedded in apparel and made-up exports, on the principle of zero-rating of exports [1]. Since March 2026 it has survived only on six- and three-month extensions. This protects continuity but reduces predictability.

How short extensions undermine predictability

• Long order cycles: Textile orders are priced months before delivery. The Cabinet cited this when it granted a two-year run to March 2026 [3]. Validity now ends on 31 December 2026 [1], so orders booked today may ship after the scheme expires.
• Last-minute renewal: The earlier extension lapsed on 30 September 2026 [2], and its renewal was announced that same day [1]. Exporters had to quote October shipments without knowing whether the rebate would still exist.
• MSME margin squeeze: Beneficiaries are more than 15,400 exporters in more than 444 districts, mostly MSMEs [1]. Contract prices are fixed, so a lapsed rebate comes straight out of thin margins.
• Rate uncertainty: RoDTEP rates were capped at 50% in February 2026 and restored from 23 March 2026 [4]. RoSCTL rates remain frozen [1] even though the data window for the rate review closed in April 2025 [5].
• Fragmented value chain: Yarn and fabric fall under RoDTEP and garments under RoSCTL, each with its own timelines [2]. Integrated firms have to track two regimes.

The other side: why short extensions occur

• Bridge to the 16th Finance Commission cycle: Each extension runs "until approval for the 16th FC cycle, whichever is earlier" [2]. This keeps the benefit from lapsing while the scheme is appraised.
• Continuity maintained: Rates and guidelines stay unchanged, so exporters lose no benefit in the interim [1].
• Fiscal and policy flexibility: Short windows let the government recalibrate rates using industry data [5]. This keeps remission tied to actual embedded taxes and preserves its WTO-compatible character. They also allow quick responses to shocks such as the West Asia disruption [4].

Short extensions keep export support alive, but they shift planning risk onto the exporters least able to absorb it. The way forward is to:

• approve RoSCTL for the full 16th FC cycle;
• publish the revised rates well before they apply;
• align RoSCTL and RoDTEP timelines;
• notify any change at least one order cycle in advance.

This would deliver the "stable policy regime" the Cabinet itself endorsed [3] and advance SDG 8 on decent work and economic growth.