Govt Extends Export Obligation for QCO-Covered Chemicals from 6 to 18 Months under Advance Authorization; What changes for exporters
The change, notified via DGFT Notification No. 28 dated May 28, 2025, follows industry requests routed through DCPC.
New Delhi, September 3: In a major relief to chemical exporters, the Directorate General of Foreign Trade (DGFT) has extended the export obligation (EO) period from 6 months to 18 months for products covered by mandatory Quality Control Orders (QCOs) issued by the Department of Chemicals & Petrochemicals (DCPC). The change, notified via DGFT Notification No. 28 dated May 28, 2025, follows industry requests routed through DCPC.
An official statement on Tuesday said the move aligns chemicals with similar EO relaxations granted earlier for QCOs of other ministries (such as Textiles), and is expected to ease working-capital pressures, smoothen sourcing, and improve delivery commitments for export orders.
Under the Advance Authorization Scheme, importers can bring in duty-free inputs for export production; QCO compliance is not required for those inputs, ensuring continuity of export manufacturing. A large share of these authorizations serve the chemicals and petrochemicals sector.
The government noted that chemicals and petrochemicals are a key export engine: USD 46.4 billion in 2024–25, or 10.6% of India’s overall exports. Extending the EO period, it added, should bolster competitiveness by giving exporters a wider window to fulfill orders and manage quality and logistics in QCO-governed product lines.
What changes for exporters
- Who: Exporters of products under DCPC-notified QCOs using Advance Authorization.
- What: Export Obligation period extended to 18 months (from 6 months).
- Why it matters: More time to execute orders, manage input procurement, lab testing/certification, and shipments under stricter QCO regimes.
- Parity: Mirrors earlier 18-month EO extension provided for QCOs from other ministries.
The DCPC and DGFT said the decision reflects a continued push to strengthen India’s chemicals value chain with pragmatic, trade-facilitating measures.
