MEIS to RoDTEP: a decade of scheme transitions and what to learn

The major export incentive schemes have been re-engineered three times in the last decade. MEIS replaced FPS, FMS, VKGUY in 2015. RoDTEP replaced MEIS in 2021. RoSCTL was carved out of MEIS in 2019 and has been extended three times since. SEIS for services exports was wound down in 2022 without replacement.

The pattern that emerges from a decade of these transitions matters more than any individual scheme. Three lessons.

Lesson one: WTO-compatibility drives every change

MEIS was challenged by the United States at the WTO in 2019 as a prohibited export subsidy under the Agreement on Subsidies and Countervailing Measures. The dispute panel ruled against India in October 2019. RoDTEP was designed specifically to be WTO-compliant: it reimburses embedded taxes (electricity duty, fuel cess, mandi tax) rather than offering a direct export incentive, which qualifies under the WTO carve-out for indirect tax refund.

The practical implication: future scheme changes will continue to migrate from "incentive" framing to "tax refund" framing. Watch for this in any new scheme announcement. The language tells you what the scheme can and cannot survive.

Lesson two: rate volatility is the new normal

Under MEIS, rates were relatively stable. Under RoDTEP, rates have been notified, paused, halved, and partially restored on a near-quarterly cadence. The May 2025 halving was preceded by an October 2024 partial restoration which was preceded by a March 2023 cut.

The exporter who plans P&L on an assumed RoDTEP rate is taking volatility risk that did not exist a decade ago. Conservative planning at the trough of the cycle (current rates minus 30 percent) is more defensible than planning at the published rate.

Lesson three: scheme stacking has become the alpha

In the MEIS era, scheme stacking was uncommon. MEIS gave you 2 to 7 percent depending on product and destination, and that was usually the dominant scheme on the bill.

Under FTP 2023, the picture is different. RoDTEP gives you 0.5 to 4 percent. Drawback adds 0.2 to 1.5 percent on top. RoSCTL stacks for apparel. NIRYAT PROTSAHAN adds 2 percent on financing. EPCG and Advance Authorisation operate independently. The exporter who claims only one scheme of the available stack is leaving the majority of the recovery on the table.

The historical pattern suggests: scheme rates may continue to compress (we expect another rate review in FY 2026-27), but scheme stacking opportunities are likely to expand. The differentiation between exporters who manage their scheme stack actively versus passively will continue to grow.

What disappeared and what should have

SEIS for services exports was wound down in 2022 with no replacement. This is the gap most discussed but least felt: services exporters were already a relatively small share of the scheme outlay, and the WTO sensitivity around services subsidies made continuation politically expensive.

VKGUY (Vishesh Krishi Gram Udyog Yojana) was folded into MEIS and never explicitly replaced. The TMA scheme partially fills the gap for agri freight, but the broader VKGUY model of region-specific premium rates has not returned.

If you operate in services exports or in agri exports outside the TMA-eligible product list, your scheme universe has narrowed materially. This is not a market correction; it is structural. Plan for it.