In a significant move to support the chemical industry, the Directorate General of Foreign Trade (DGFT) has announced an extension of the Export Obligation period under the Advance Authorization scheme for products that fall under mandatory Quality Control Orders (QCOs) notified by the Department of Chemicals and Petrochemicals (DCPC). This decision, outlined in Notification No. 28 dated May 28, 2025, extends the Export Obligation timeframe from the existing six months to an impressive eighteen months, providing much-needed relief to chemical exporters across India.
This extension is particularly timely, as it follows a similar adjustment made for QCOs notified by other ministries, including Textiles, which also saw its Export Obligation period extended to eighteen months. Such measures are crucial in offering essential support and flexibility to exporters in the chemicals and petrochemicals sectors, simplifying trade processes, and enhancing the global competitiveness of Indian goods.
The Advance Authorization Scheme allows importers to bring in duty-free raw materials for export production without being bound by QCOs for those inputs. This ensures a steady flow of export operations, which is vital for maintaining the momentum of the chemical sector. A significant portion of these authorizations is directed towards the chemical industry, underscoring the importance of this policy shift in facilitating smoother trade.
The Indian chemical industry plays a pivotal role in the country’s economic landscape, contributing significantly to exports. In the fiscal year 2024-25, the sector’s export contributions reached an impressive USD 46.4 billion, accounting for 10.6% of the total export value of the country. This statistic highlights the critical status of the chemical sector in driving economic growth and underscores the government’s commitment to strengthening this vital industry.
The extension of the Export Obligation period is expected to ease financial pressures stemming from input costs, ensuring the availability of raw materials and fortifying the competitive position of Indian chemical products in the global market. By providing this additional buffer, the government aims to alleviate the challenges faced by exporters, allowing them to focus on enhancing production and meeting international demand.
The Department of Chemicals and Petrochemicals, along with the DGFT, has demonstrated a forward-thinking and strategic vision in implementing this initiative. It reflects a broader commitment to fostering a conducive environment for the chemical industry, which is essential for sustaining growth and innovation.
As India celebrates “Azadi Ka Amrit Mahotsav,” this initiative stands as a testament to the government’s dedication to empowering the chemical sector and promoting its global presence. By extending the Export Obligation period, the government is not only supporting existing exporters but also encouraging new players to enter the market, thereby driving further growth and development in the industry.
In conclusion, the extension of the Export Obligation period for QCO products under the Advance Authorization scheme is a welcome relief for chemical exporters. It simplifies trade processes, enhances competitiveness, and reinforces the government’s commitment to strengthening the chemicals and petrochemicals landscape in India. As the industry continues to evolve, such proactive measures will play a crucial role in ensuring its sustained success on the global stage.