Anshul Sharma

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RoDTEP is a Directorate General of Foreign Trade (DGFT) scheme that provides remission of eligible duties, taxes and levies to exporters. RoDTEP rates are currently at their applicable notified levels, following a rate cut and reversal earlier in 2026.

Exporters who shipped between 23 February and 22 March 2026, when the 50% restriction applied, should verify their RoDTEP credit for those shipping bills against the rate applicable during that period.

Additionally, check the<a href="https://www.dgft.gov.in/CP/?opt=RoDTEP"> DGFT RoDTEP page</a> before filing a shipping bill, since the applicable schedules can be revised through subsequent notifications.

RoDTEP, or Remission of Duties and Taxes on Exported Products, provides exporters with percentage-based remission against eligible Central, State and local duties, taxes and levies that are not otherwise refunded or credited. These rates typically range from 0.3% to 4.3% of a product's FOB (Free on Board) value. Although, a small number of specific categories such as gems and jewellery, carry lower notified rates going down to 0.01%.

Exporters do not receive this remission as cash. DGFT issues it as an electronic duty credit scrip, or e-scrip, through the Indian Customs Electronic Gateway (ICEGATE) portal, which can be used to pay basic customs duty on imports or transferred to another Import Export Code (IEC) holder. Every rate maps to a specific 8-digit HS code, listed under Appendix 4R for standard Domestic Tariff Area (DTA) exports and Appendix 4RE for exports under Advance Authorisation (AA), Export Oriented Unit (EOU), or Special Economic Zone (SEZ) schemes.

Some HS codes also carry a fixed per-unit cap such as a maximum amount per kilogram or per piece, which can limit the benefit even where the percentage-based calculation is higher. Rates are notified against individual 8-digit HS codes. Hence, exporters should confirm their specific product's rate in Appendix 4R or 4RE rather than relying on a broad sector estimate.

RoDTEP replaced the earlier Merchandise Exports from India Scheme (MEIS) when it launched on 1 January 2021, thereby moving exporters to a <a href="https://www.skydo.com/blog/rodtep-scheme-rates-notifications-and-benefits?utm_source">scheme based on remission </a>of eligible unrefunded duties, taxes and levies and a digital e-scrip process. In practice, RoDTEP is intended to offset eligible costs embedded in exported goods rather than provide a profit-based incentive.

<a></a>What Are Some Common RoDTEP Rates of Products?

RoDTEP rates vary by product and can range across different sectors, with textiles, leather, agriculture, chemicals, and engineering goods carrying different notified rates. The table below provides indicative rate ranges across common export sectors.

Note: These indicative ranges are only a starting point. The actual rate depends on the product's specific 8-digit HSN code. Products within the same sector can have different RoDTEP rates based on their 8-digit HSN classification. The applicable rate is listed in Appendix 4R or 4RE, along with any relevant per-unit value cap.

For example, an exporter dealing in textiles should not apply the 1% to 4% range directly to a shipment. The exporter must identify the correct 8-digit HSN code and check the corresponding rate and cap in the latest DGFT schedule.

DGFT updates the RoDTEP schedules periodically, so exporters should verify the applicable rate against the <a href="https://www.dgft.gov.in/CP/?opt=RoDTEP">latest DGFT</a> notification before calculating their expected benefit.

<a></a>How to Check RoDTEP Rates Online by HSN Code?

You can check the RoDTEP rate for your product by searching its 8-digit HSN code in the latest DGFT Appendix 4R or 4RE. The relevant appendix depends on the type of exporter and the scheme under which the goods are exported.

A RoDTEP benefit is calculated in two steps: the eligible value is determined first, then the notified rate is applied to it. The eligible value is the FOB value declared in the shipping bill or 1.5 times the market price of the goods, whichever is lower. The applicable RoDTEP rate is then applied to that eligible value, subject to any per-unit value cap. This calculation framework is set out in <a href="https://taxguru.in/custom-duty/cbic-notifies-manner-issue-duty-credit-rodtep-scheme.html">CBIC Notification No. 76/2021-Customs (N.T.). </a>

Where DGFT has notified a per-unit value cap for a specific HS code, the calculated figure gets capped at that notified amount, even where the percentage-based formula would produce a higher number.

Note that each HS code carries its own notified rate and cap. This further implies that two products exported by the same business can attract very distinct RoDTEP percentages based purely on their 8-digit classification.

What Factors Are Considered Before Determining a RoDTEP Rate?

RoDTEP rates are determined by assessing the duties, taxes and levies that remain embedded in exported goods and cannot be recovered through other mechanisms. The rate-setting process also considers the production and distribution costs associated with these unrefunded levies, WTO requirements, the scheme's budget and the sectors prioritised for support.

How Does Skydo Help Once You Have Your RoDTEP Rates?

Knowing the applicable RoDTEP rate covers only one part of an export transaction. The next requirement is ensuring the foreign payment reaches the exporter's account without being reduced by unnecessary charges. Banks and payment platforms can apply foreign-exchange margins and other fees to international receipts. On a ₹10 lakh receipt, a 5% to 8% reduction could mean ₹50,000 to ₹80,000 less received, potentially outweighing the RoDTEP benefit on the same shipment. Understanding<a href="https://www.skydo.com/blog/why-do-banks-differ-from-live-fx-rates-in-currency-exchange"> why banks differ from live FX rates</a> makes clear how much this can reduce the amount an exporter actually receives.

<a href="https://www.skydo.com/">Skydo</a> supports exporters at this stage of the process in several ways including:

Additionally, for exporters receiving payments from overseas buyers in different currencies, Skydo setup takes about 5 minutes, offering virtual accounts in multiple currencies including USD, EUR, GBP, SGD, AUD, and CAD. With zero monthly subscription fees, Skydo charges only apply only when a transaction is made.

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Top International payment method 2025

What Does It Mean to Streamline International Payments?

Streamlining international payments means reducing the time, cost, and manual work involved from sending an invoice to receiving and reconciling the payment. That includes the payment itself as well as the compliance and record-keeping that follow.

For an Indian exporter, this usually involves three parts:

Speed is only one part of the equation. Predictability matters too. Knowing the fee before a payment arrives, having the required documentation generated without repeated follow-ups, and being able to reconcile the payment easily can make the entire process simpler, even when the settlement time itself does not change.

<a></a>A 5-Step Workflow to Streamline International Payment Collection

A streamlined process connects payment collection with the documentation and reconciliation that follow it.

If chasing SWIFT copies and calculating the net amount after bank deductions is still part of your routine, <a href="https://www.skydo.com/">Skydo</a> brings payment collection and remittance documentation into one workflow. With virtual accounts, flat-fee pricing, zero hidden charges and automatic FIRA generation, the process requires minimal manual follow-up.

Why Do International Payments Feel Complicated for Indian Businesses?

International payments feel complicated for Indian businesses because they involve more than simply receiving money. Fees can vary, settlement can take time, compliance can require additional documentation, and the payment may pass through multiple banks and reporting systems before it is fully reconciled. Apart from this,

<a></a>Traditional Bank Wire vs. Modern Payment Aggregator

Consider a $5,000 payment from a US client to an Indian IT services agency. Here is how the difference can occur:

Tool Required to Streamline International Payments in 2026

Indian exporters need three types of tools to make international payments simpler in 2026; namely, virtual accounts for receiving money, transparent payment pricing, and automated compliance support. Together, they can reduce payment friction, make costs easier to predict and cut down on manual paperwork.

Additionally, FIRA should also be available automatically with the transaction where applicable, rather than requiring the exporter to contact the bank separately after every payment. This is where choosing an ideal <a href="https://www.skydo.com/blog/payment-gateway-for-international-payments-india">payment gateway for international payments in India</a> becomes a necessity.

What Are the Hidden Costs Eating Into Your International Settlements?

International settlements can cost more than the fee shown upfront. Foreign exchange (FX) spread markups, intermediary bank deductions, and receiving-bank charges can all reduce the amount an Indian exporter ultimately receives.

The receiving bank can add another charge. In addition to fees on the sender's side, Indian banks may apply charges for receiving an international wire. Due to the <a href="https://www.skydo.com/blog/international-bank-transfer-fees-freelancers-india">international bank transfer fees</a>, both these types reduce the amount that ultimately reaches the exporter.

The impact becomes significant as payment volume grows. On a $5,000 invoice, a 3% combined cost from FX spread and intermediary deductions means $150 lost on a single transaction. At 10 such payments a month, that adds up to $1,500 in potential costs. This is why exporters and freelancers need to ensure <a href="https://www.skydo.com/blog/avoid-hidden-international-transaction-charges">how to avoid hidden international transaction charges</a>.

How Does Compliance Fit Into the International Payment Workflow?

Compliance is part of the international payment workflow and not something to handle after the money arrives. For Indian exporters, keeping remittance records, export documentation, GST records, and payment details aligned can help prevent delays, open EDPMS entries and reconciliation problems.

For export payments, the Authorised Dealer (AD) bank plays a key role in reporting and documentation. The exact compliance requirements vary by the type of export and transaction, but the payment and its supporting records need to remain traceable.

How Does Skydo Help Streamline International Payments in 2026?

Skydo brings payment collection, transparent pricing, remittance documentation, and export compliance support into one platform for Indian freelancers, exporters, and agencies. Instead of managing each part of the international payment process separately, users can handle receiving payments and the related documentation in one place.

With <a href="https://www.skydo.com/">Skydo</a>, you know the cost upfront. It uses flat-fee pricing of:

There is no FX spread or intermediary deduction on Skydo's side, so the transaction cost is clear before the payment arrives. Additionally,

Skydo also has an India-based support team available through WhatsApp, calls, and text, so users can get help without visiting a bank branch. Moreover, there is no monthly fee or platform subscription charges. You pay when you receive a payment.

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Trade credit is a commercial arrangement whereby a seller allows a buyer to pay for goods or services after supplying the goods to them. With trade credit, the buyer is not under ‌pressure to make immediate payment, and therefore, can manage their cash flow better. While the seller uses it as a strategy to increase sales volume.

The seller provides ‌trade credit based on common payment terms. Some of these common payment terms include Net 30, Net 60, and Net 90. This means the buyer must pay the full invoice amount within 30, 60, or 90 days of the invoice date, respectively.

For example, an Indian exporter supplies goods worth $10,000 to a US customer on Net-60 terms. Until the exporter receives payment within the next 60 days, that $10,000 stays on the exporter’s books as a trade receivable. For the customer, it is a trade payable.

You might confuse trade credit with a bank loan; they are different. In trade credit, the seller gives the buyer time to pay for specific goods already delivered. In a bank loan, a bank provides cash that the buyer can use for any business purpose. They can use it for both domestic and international transactions, covering physical goods and professional services.

Trade credit begins when the buyer and seller agree on a specific credit period and payment terms. After they sign the agreement, the seller supplies the goods or delivers the services and issues an invoice that mentions the payment date.

The buyer receives the delivery without making any payment, but is contractually obligated to pay the total amount by the due date. The seller records the payment as a trade receivable in their books. If the buyer delays payment, the seller follows up and uses contractual remedies such as charging late-payment interest or suspending future orders.

Because the seller agrees to take on the buyer's default risk, they perform a credit evaluation before agreeing to these terms. They validate a buyer’s credibility using trade references, bank references, or third-party data from agencies like Dun &amp; Bradstreet to assess past payment behavior.

Once the credit limit and terms are approved, the seller fulfills the order. But if the buyer’s risk profile exceeds the seller’s threshold, the seller holds the order.

The invoice includes ‌payment terms like payment timeline and discount percentage for early payment.

If you’re an Indian exporter, you must also know the following conditions:

Practical example of trade credit in action:

A Bangalore-based SaaS agency signs a Net-60 contract with a UK client for £8,000 of product development work. The agency delivers the project on January 1 and issues the invoice the same day. Payment is contractually due on March 1.

During those 60 days, the agency is using its own money to pay employees and cover server costs. When the client pays, the funds arrive in the agency’s Indian bank account in GBP, then the bank converts GBP to INR. By the time the agency can use the money in hand, the total duration extends well beyond the 60-day contractual period.

Note: The RBI rolled back the 15-month repatriation window to 9-month in June 2026. This means, under the FEMA obligations, you must realize the export proceeds within months from the shipment date.

Open-account terms, net payment terms, instalment payments, bills of exchange, promissory notes, and deferred-payment letters of credit are the types of trade credit. Choosing the right type depends on the trust level between the seller and the buyer and the regulatory requirements of the countries involved.

In India, the RBI has specific rules for trade credit for imports into India. Under the RBI framework, trade credit is financing for imports through two sub-types:

These are regulated categories under RBI guidelines and are distinct from the general commercial meaning of trade credit used by exporters.

Recording trade credit depends on choosing between two primary accounting methods: cash accounting and accrual accounting. Based on the choice, the profitability and cash availability figures also shift.

Cash accounting records transactions only when actual payment occurs. So you get a simple view of actual cash movements, which makes it easier to track what is in the bank. However, it does not reflect the true financial position because credit transactions remain invisible. On paper, your business looks less profitable than it actually is during periods of high sales on credit.

Accrual accounting records transactions when they are incurred, i.e. at the time goods or services are delivered. For trade credit, this means the seller records the invoice as a trade receivable the moment he raises it. This method accurately represents a business's financial position and complies with Generally Accepted Accounting Principles (GAAP). You need more precise record-keeping, but you know the actual gap between revenue earned and cash received.

Larger businesses adopt accrual accounting because it provides a more complete financial picture and is required for regulatory and audit compliance.

For Indian exporters, accrual accounting is relevant. Revenue from a Net-60 international contract is recognized on the invoice date, but the cash does not arrive for at least 60 days. This creates a gap that the business has to manage to pay its own bills in the meantime.

Here’s a table to help you understand how a transaction and payment is recorded based on accrual accounting, assuming a trade credit of Net-60:

What Is the Difference Between Trade Credit, Export Credit and Trade Credit Insurance?

The differences between trade credit, export credit, and trade credit insurance are based on their applicability. Once you know the differences, you will know how each of these tools is effective in both protecting and growing your business.

Trade credit: It is the additional time the seller gives to the buyer to make the payment. The buyer receives the goods or services now and pays later, as per the agreed terms. The seller records the outstanding amount as a trade receivable.

Export credit: This refers to financing provided to an exporter to support the transaction. This includes <a href="https://www.skydo.com/blog/pre-shipment-credit">pre-shipment finance</a> or post-shipment finance. In pre-shipment finance, a bank provides a working capital loan to help the seller take care of procurement and packaging. In post-shipment finance, the seller presents their shipping bill and invoice to the bank, and the bank advances 80% to 90% of the amount instantly.

Trade credit insurance: This is an insurance policy that protects the seller from the risk of non-payment by a buyer. It takes care of credit risk by covering losses from buyer insolvency or protracted default.

Trade finance: Trade finance is a broader category that includes all these instruments, plus letters of credit, bank guarantees, and invoice discounting used to facilitate trade.

Let’s understand how these work together for an Indian exporter:

What Are the Advantages and Disadvantages of Trade Credit?

Trade credit offers advantages and disadvantages for both the buyer receiving it and the seller offering it.

Advantages for buyers (the foreign client in an export context):

• They don’t have to make the payment immediately, which frees up their working capital

• After receiving the goods, the buyer can use or resell the goods before paying.

• They can use their own money for procurement. No dependence on banks.

• Gives buyers greater purchasing flexibility with established suppliers.

• If they pay early, the seller might give them a discount.

Advantages for sellers (the Indian exporter):

• Exporters can be more competitive; foreign clients prefer suppliers who offer deferred terms.

• They can attract new customers and retain existing ones

• Support larger orders and repeat business.

• Strengthens long-term customer relationships through trust

Disadvantages and risks for sellers (Indian exporters):

• The buyer may delay payment or default entirely.

• The exporter has already incurred the cost, but has to bear the cash flow pressure until the buyer pays.

• Recovering overdue payments from foreign buyers is costly, time-consuming, and complex across jurisdictions.

• A USD or GBP receivable can change in INR value before payment is received. The exporter may receive less than expected.

• The exporter might face late fees or contractual consequences if they’re also a buyer on the other side of a supply chain.

• The average late fee for delayed payments is 1.5% per month. If the buyer doesn’t pay on time, trade credit becomes expensive quickly.

• Inability to pay on time damages the buyer's credit score or rating and hurts supplier relationships.

• The short-term nature of trade credit means it is not a substitute for long-term financing needs

After raising an invoice, how fast the payment reaches your Indian bank account is a separate problem. If you are already waiting 60 days for a foreign client to pay, you cannot afford slow settlement or surprise deductions on top of that. Skydo gives you real-time visibility, a free FIRC for every inward payment, and a flat fee.

<a href="https://www.skydo.com/">Visit Skydo</a>

What Is Trade Credit Insurance and Do Indian Exporters Need It?

Trade credit insurance protects a seller against financial losses caused if the buyer fails to pay for goods or services delivered on credit. It is more relevant for exporters using open-account or deferred-payment terms because the exporter carries the buyer’s credit risk for the entire duration of the credit period.

Trade insurance covers commercial risks like buyer insolvency or default. Some policies also cover political risks, such as war, revolution, or new government restrictions that prevent the buyer from transferring funds.

Trade insurance allows exporters to offer credit terms with greater confidence and protects their working capital during long cycles. It also helps exporters manage exposure to overseas buyers whose financial health is difficult to assess from India.

Indian exporters do not automatically need trade credit insurance just because they offer payment terms. Whether it makes sense for your business depends on:

ECGC (Export Credit Guarantee Corporation of India) is the primary provider of export credit insurance in India. They offer products designed to cover export receivables risks.

How Does Skydo Help Indian Exporters Manage Trade Credit Payments?

Skydo simplifies receiving international payments once the trade credit period ends. While Skydo does not provide the credit itself or insure the receivables, it operates on the payment-receipt side. It ensures that once a client pays; the funds reach the exporter quickly and at a predictable cost.

<a href="https://www.skydo.com/">Manage your international payments with Skydo</a>