Government Lengthens Export Obligation to 18 Months for QCO Products under Advance Authorization

New Delhi, Sep 2, 2025 – In a move that is huge relief to the chemicals industry, the Ministry of Chemicals and Fertilizers has issued a notification, increasing the duration of export obligation to 18 months from six months for products that come under mandatory Quality Control Orders (QCOs). The change, done by the Directorate General of Foreign Trade (DGFT), is applicable to Advance Authorization scheme exporters.

Assistance to Exporters from the Chemical Industry

The Advance Authorization regime allows for duty-free import of inputs to manufacture export goods without the requirement of fulfilling QCOs for the inputs. Extension of the compliance period to 18 months has provided exporters with greater operating freedom, reduced timing risk, and higher predictability of production ranges. As a large majority of Advance Authorizations go to the chemicals and petrochemical sectors, the relaxation is bound to bring benefit to these sectors in the near term.

Alignment with Broader Trade Policy

The policy realignment also aligns with earlier relaxations permitted for QCOs by other ministries, including Textiles, thus aligning longer windows across industries. The move is an indication of the government’s resolve to simplifying export processes while helping local producers maintain competitiveness in overseas markets.

Implications for India’s Export Economy

India’s chemical and petrochemical industry is the pivot of India’s merchandise export. In FY2024–25, the sector contributed USD 46.4 billion with a share of 10.6 percent of India’s total export value. The longer export obligation period will reduce cost pressures on exporters, ensure steady access to raw material, and boost India’s position in international value chains.

Policy Outlook and Industry Impact

The step, according to the Department of Chemicals and Petrochemicals, is a forward-looking move that pushes the dynamic between industry needs and quality control. In collaboration with DGFT, the ministry explained that the extension serves to ensure continuity of supply while enabling Indian exporters to better meet global demand in a more efficient and flexible manner.

REF: https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2162989

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations