India’s Exports Rise in Q1 FY26 What Taxpayers and Businesses Must Know
India’s exports rise by 5.94% in Q1 of FY 2025–26, signalling recovery in global demand and strong domestic performance in key sectors like electronics, pharmaceuticals, and marine products. This growth is not just a trade headline—it’s a sign for exporters, consultants, and small businesses to align with tax incentives and stay compliant.
Here’s a simplified breakdown of the data, tax provisions, and expert actionables that matter for you.
Export Performance Snapshot (April–June 2025)
As per Ministry of Commerce data:
| Sector | Growth (%) YoY |
|---|---|
| Electronic goods | +22.9 |
| Pharmaceuticals | +10.2 |
| Marine products | +6.3 |
| Overall merchandise | +5.94 |
Source: Press Release by Ministry of Commerce (July 15, 2025) – commerce.gov.in
This growth comes even as global uncertainties continue, showing India’s rising competitiveness.
Tax Incentives for Exporters in 2025–26
1. GST Refund on Exports (Zero-Rated Supply)
Under Section 16 of the IGST Act:
- Exports are zero-rated – no GST charged on final invoice.
- Exporters can:
- Claim IGST refund on exports with payment of tax, or
- Export under LUT without tax and claim input tax credit (ITC) refund.
Tip: Filing accurate GSTR-1 and GSTR-3B is essential to avoid refund delays.
2. RoDTEP and Duty Drawback Schemes
Exporters of eligible goods can claim:
- RoDTEP (Remission of Duties and Taxes on Exported Products): Refunds embedded taxes not covered under GST.
- Duty Drawback: Refund of customs and excise duties on inputs used.
Both are processed via ICEGATE (Customs Portal).
🧾 Expert View: Align your HSN code mapping and shipping bills with DGFT and ICEGATE systems to avoid claim rejection.
3. Income Tax Deduction – Section 10AA
Applicable to SEZ units:
- 100% deduction of export profits under Section 10AA for first 5 years.
- Partial deduction up to 15 years depending on reinvestment.
Important: SEZ units must file Form 56F and audit reports on time to claim benefits.
Legal Compliance: Key Updates You Should Track
A. Shipping Bill and GST Data Mismatch
CBIC has tightened scrutiny of:
- GSTR-1 vs. ICEGATE data
- FOB value mismatch
- Delay in AD code validation
Action: Regularly reconcile export data between GST portal, DGFT, and Customs.
B. Recent Circular – CBIC Clarification (June 2025)
CBIC’s Circular No. 126/2025 clarified:
- Export refund claims under LUT require realisation of export proceeds within FEMA timeline.
- Delays beyond 9 months need RBI condonation.
🔗 Read circular on cbic.gov.in
Why This Export Growth Matters for You
- Electronics sector is benefiting from PLI schemes—MSMEs in components and PCB assembly can plug into global supply chains.
- Pharma is leveraging India’s low-cost R&D and demand for generics.
- Marine exports are rising due to relaxed EU norms and India’s aquaculture push.
If your business is remotely linked to these sectors—via logistics, raw materials, or packaging—this is the time to claim input credits, duty benefits, and upgrade compliance.
Quick Checklist for Exporters – FY26
- Register with DGFT and obtain IEC
- File LUT (if exporting without IGST)
- Maintain GST-compliant invoices and E-Way Bills
- File GSTR-1, GSTR-3B on time
- Claim RoDTEP/drawback via ICEGATE
- Reconcile shipping bills with GST returns
- Track foreign remittance deadlines under FEMA
FAQ: India’s Export Tax Compliance – FY26
Q1. Do all exporters need to pay GST?
No. Export of goods/services is zero-rated. You either pay IGST and claim refund or export under LUT without payment.
Q2. What is RoDTEP and how do I claim it?
RoDTEP is a refund of embedded taxes. File shipping bill with correct declaration and track via ICEGATE.
Q3. What’s the deadline to realise export proceeds?
As per FEMA, usually 9 months from the date of export. Delays need RBI approval.
Q4. Can I claim both GST refund and RoDTEP?
Yes. They operate under different frameworks and don’t overlap.
Final Word
India’s exports rise in Q1 FY26 is more than just a number—it’s a call to action. Small businesses, consultants, and exporters must seize tax incentives and fix compliance gaps. Whether you deal in electronics, pharma, or simply supply to those who do, Efiletax can help you stay ahead.
👉 Need help with GST refunds, LUT filing, or export compliance? Talk to Efiletax today
Summary
India’s exports rose by 5.94% in Q1 FY26, led by electronics, pharma, and marine sectors. Exporters can benefit from GST refunds, RoDTEP, and Section 10AA deductions—if compliant. Here’s your simplified guide to tax incentives, compliance tips, and refund eligibility.