In a move aimed at supporting exporters grappling with rising US tariffs, the Government of India has extended the time limit for fulfilling export obligations under the Advance Authorization Scheme.
The Directorate General of Foreign Trade (DGFT) has amended the Foreign Trade Policy (FTP) 2023, extending the Export Obligation (EO) period for Advance Authorization holders, Export Oriented Units (EOUs), and Special Economic Zones (SEZs) from 6 months to 18 months. The relaxation specifically applies to imports of raw materials subjected to mandatory Quality Control Orders (QCOs), including chemicals and petrochemicals. Previously, exporters had 180 days from the clearance of such imports to complete their exports. Under the new policy, all authorization holders will now have 18 months to meet their obligations, in line with Para 4.40 of the Handbook of Procedures.
The Advance Authorization Scheme allows importers to bring in duty-free raw materials for export production without adhering to QCOs for those inputs, ensuring a steady flow of export operations. A significant share of these authorizations serves the chemical sector, highlighting the importance of the policy change.
“The Government of India remains committed to strengthening the chemicals and petrochemicals landscape through targeted strategies, acknowledging its pivotal role in economic growth. In 2024-25, the sector’s export contributions reached USD 46.4 billion — 10.6% of the country’s total exports — reinforcing its critical status,” the statement said.
The initiative is expected to ease financial pressures from rising input costs, ensure raw material availability, and enhance the competitiveness of Indian chemical products globally. The Department of Chemicals and Petrochemicals and DGFT’s steps reflect a forward-looking strategic vision to support exporters.
The extension is particularly significant for exporters in chemicals, petrochemicals, and pharmaceuticals, who are already facing challenges from higher US tariffs. The additional time will allow them to plan production and exports more efficiently, providing a buffer against global trade shocks.
