In a move aimed at supporting exporters navigating global trade disruptions, the Government of India has extended export obligation deadlines under key duty-free import schemes. Export commitments under the Export Promotion Capital Goods (EPCG) and Advance Authorisation (AA) schemes that were due to expire between March and May 2026 have now been automatically extended to August 31, 2026. The relaxation, notified by the Directorate General of Foreign Trade, provides operational flexibility to exporters affected by geopolitical tensions, supply chain disruptions, and rising freight costs.
In light of recent geopolitical developments affecting global trade and logistics, the government has announced an extension for exporters to fulfill their obligations under duty-free import schemes. The relaxation applies to the Export Promotion Capital Goods (EPCG) Scheme and the Advanced Authorisation (AA) Scheme, with export obligations (EOs) originally expiring between March 1 and May 31 now automatically extended to August 31. Exporters do not need to submit any application or pay a fee to avail of this extension, according to a notice issued by the Directorate General of Foreign Trade (DGFT). This relaxation is over and above the existing facility provided under the Foreign Trade Policy, which is available on payment of composition fees, the notice stated.
Under the EPCG scheme, exporters can import machinery at zero customs duty, provided they commit to exporting goods or services worth six times the duty saved on the imported machinery. At least 50% of the specific export obligation must be met within the first four years, with the remaining 50% to be fulfilled over the next two years.
The AA scheme permits duty-free imports of inputs such as raw materials, components, or fuel that are physically incorporated into the final export product. To qualify, the exported products must achieve a minimum of 15% value addition, and the export obligations are typically required to be completed within 18 months from the date of authorisation.
As per the Public Notice No. 51/2025-2026 issued on March 6, 2026. the relaxation covers Advance Authorisations, including those for annual requirements and special cases, as well as EPCG authorisations, the notice said. It added that DGFT’s regional authorities will verify compliance with export obligation requirements when issuing the Export Obligation Discharge Certificate (EODC), or during the closure or regularisation of the authorisation, as applicable.
Operational support for exporters
To further support exporters amid the West Asia crisis, the Ministry of Shipping, Ports and Waterways has proposed that ports may consider requests for reduction, waiver, or remission of charges, including change-of-vessel fees. The ministry has also issued a standard operating procedure (SoP) to help ports address challenges arising from ongoing disruptions in the West Asia region, aiming to ensure smoother export operations and reduce logistical bottlenecks for affected businesses.
Exporters had sought such relief amid challenges from high US tariffs and the West Asia crisis triggered by the joint US-Israel attack on Iran, which has disrupted maritime traffic, pushed up sea and air freight rates, and increased insurance costs, potentially affecting the price competitiveness of Indian goods.
The Commerce Ministry has announced automatic extensions under duty-free import schemes, including EPCG and Advance Authorisations. Exporters do not need to file separate applications or pay any composition fees to avail the benefit. The measure is intended to provide operational flexibility for exporters impacted by geopolitical disruptions affecting global trade and logistics. Customs authorities have also been instructed to allow exports in line with the revised export obligation timelines.
The government said the extension reflects its continued commitment to supporting exporters and ensuring that temporary global disruptions do not adversely impact India’s export performance or compliance under export promotion schemes, enabling businesses to meet obligations without penalty.
India’s export growth holds steady in a volatile global market
India’s export performance continues to show strength despite global uncertainties. Cumulative merchandise and services exports during April–January 2025-26 are estimated at US$ 720.76 billion, up from US$ 679.02 billion in the same period last year, marking an estimated 6.15% growth. This resilience is driven by high-value commodities, expanding international partnerships, and policy reforms that foster a balanced, globally integrated trade trajectory.
During January 2026, year-on-year exports recorded positive growth across several key categories. The highest growth was seen in Other Cereals (+88.49%), Coffee (+36.03%), Iron Ore (+31.54%), Meat, Dairy & Poultry (+17.92%), Marine Products (+13.29%), and Engineering Goods (+10.37%).
A strong growth was observed in Petroleum Products (+8.55%) and in Mica, Coal, Other Ores & Minerals, including Processed Minerals (+6.35%).
Meanwhile, steady growth was noted in Man-Made Yarn, Fabrics & Made-Ups (+1.01%), Drugs & Pharmaceuticals (+0.96%), Electronic Goods (+0.32%), Cereal Preparations & Miscellaneous Processed Items (+1.12%), and Fruits & Vegetables (+1.77%).
This diversified performance reflects both robust demand in high-value commodities and stability across essential goods, underscoring the resilience of India’s export sector amid global uncertainties. With policy reforms and expanding international partnerships, India is well-positioned to sustain its export momentum and maintain competitiveness in global markets.
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FAQ
What is the export obligation (EO) relaxation announced by the government?
Export obligations under the EPCG and Advance Authorisation (AA) schemes, originally expiring between March 1 and May 31, have been automatically extended to August 31, 2026.
Do exporters need to apply or pay fees to avail the extension?
No, the extension is automatic and does not require any application or composition fee.
Which authorisations are covered under this relaxation?
The relaxation applies to all Advance Authorisations, including annual and special requirements, as well as EPCG authorisations.
How will compliance with export obligations be verified?
DGFT’s regional authorities will verify compliance when issuing the Export Obligation Discharge Certificate (EODC) or during the closure or regularisation of the authorisation.
Is this relaxation in addition to existing facilities under the Foreign Trade Policy?
Yes, this measure is over and above existing provisions under the Foreign Trade Policy, which allow extensions on payment of composition fees.
