DGFT Notification
Effective Immediately — 2 June 2026

QCO/BIS Exemption Expanded for SEZ Units and Developers — DGFT Amends FTP 2023

DGFT Notification No. 20/2026-27 (S.O. 2827(E)), dated 2 June 2026, amends Para 2.03(A)(iii) of the Foreign Trade Policy, 2023 to extend QCO/BIS import exemptions to all permissible goods for authorised SEZ operations — with full compliance required upon DTA clearance.

Notification Details

Issued by: Ministry of Commerce & Industry (Department of Commerce) — Directorate General of Foreign Trade (DGFT)
Notification No.: 20/2026-27 | S.O.: 2827(E)
Date: 2 June 2026 | Gazette ID: CG-DL-E-06062026-273230
Signed by: Lav Agarwal, Director General of Foreign Trade & Ex-officio Addl. Secy.

What Changed

Amendment to Para 2.03(A)(iii) of FTP 2023 — Before & After

Previous Provision

Exemption from mandatory QCOs limited to import of inputs required for export production only
No DTA clearance of such inputs or goods manufactured therefrom allowed
Exemption available for physical exports only
Subject to para 2.03(c) of FTP
Undertaking to be submitted to Development Commissioner of SEZ at import

Revised Provision

Exemption extended to all permissible goods — raw materials, components, consumables, spares, and capital goods — for authorised SEZ operations
Applies to both SEZ Units and SEZ Developers
Aligned with SEZ Act, 2005 and Rule 27 of SEZ Rules, 2006
DTA clearance still subject to full QCO/BIS compliance at time of clearance
Undertaking to be submitted by SEZ Unit or SEZ Developer at import

Who is Covered

Entities Benefiting from the Amended Exemption

SEZ Units
Manufacturing, trading, or service units operating within a notified Special Economic Zone

SEZ Developers
Entities developing and maintaining SEZ infrastructure under the SEZ Act, 2005

Authorised Operations
Imports must be for operations authorised under the SEZ Act, 2005 and SEZ Rules, 2006

Goods Covered

All Permissible Goods for SEZ Authorised Operations

Raw Materials

Components

Consumables

Spares

Capital Goods

Any other permissible goods under Rule 27, SEZ Rules 2006

Critical Condition

DTA Clearance Still Requires Full QCO/BIS Compliance

The exemption applies only for use of imported goods within the SEZ for authorised operations. It is not a blanket waiver of QCO/BIS requirements.

Any removal, transfer, or clearance of such goods — or of goods manufactured or processed from such imported goods — from the SEZ into the Domestic Tariff Area (DTA) shall be subject to full compliance with:

Condition 01

Applicable QCOs

All Quality Control Orders issued under the BIS Act, 2016 that apply to the product at the time of DTA clearance must be complied with.

Condition 02

BIS Requirements

Bureau of Indian Standards requirements applicable to the product — including mandatory ISI marking — must be met before the goods enter the DTA.

Condition 03

Other Applicable Laws

Any other applicable laws, rules, or regulations in force at the time of DTA clearance must also be complied with.

Condition 04

Undertaking at Import

An undertaking to the above effect must be submitted by the SEZ Unit or SEZ Developer to the concerned Development Commissioner at the time of importation.

Effect of This Notification

Why DGFT Issued This Amendment

Aligns FTP 2023 exemption provisions with the SEZ Act, 2005 and SEZ Rules, 2006 (Rule 27)

Extends exemption beyond export-production inputs to all permissible goods for authorised operations

Brings clarity on QCO applicability for SEZ imports vs. DTA clearance

Covers SEZ Developers explicitly — a gap in the earlier provision

Impact

Regulatory

FTP 2023 now aligned with the SEZ Act, 2005 and Rule 27 of SEZ Rules, 2006. No more ambiguity on which QCOs apply inside SEZ vs. at DTA entry.

Commercial

SEZ Units and Developers can import capital goods, spares, and consumables without QCO compliance overhead — reducing cost and lead time for authorised operations.

Compliance

Businesses planning DTA sales of SEZ-processed goods must plan QCO/BIS compliance in advance. The exemption does not extend to goods entering the domestic market.

The amended provision closes a long-standing gap — SEZ Developers were not explicitly covered under the earlier text. The revised Para 2.03(A)(iii) now clearly extends the QCO exemption to both SEZ Units and SEZ Developers, covering the full range of goods required for authorised SEZ operations, not just export-production inputs.

How Omega QMS Can Help

Navigating QCO Compliance for SEZ Operations

Assessment of QCO applicability for your specific goods and SEZ operations

Guidance on undertaking requirements for Development Commissioner submissions

Pre-clearance compliance planning for goods moving from SEZ to DTA

BIS/ISI certification support for products entering the domestic market

Review of existing import documentation for alignment with amended FTP provisions

Ongoing compliance advisory for SEZ Units and Developers under QCO framework

Questions About QCO Compliance in Your SEZ?

Omega QMS advises SEZ Units and Developers on BIS certification and Quality Control Order compliance — including pre-clearance planning for goods moving into the DTA. Contact us to understand how the amended FTP Para 2.03(A)(iii) affects your operations.

Reach us at info@globalomega.com or globalomega.com/contact