Published: 9 Jun 2026
QCO/BIS Exemption Expanded for SEZ Units and Developers: DGFT Amends FTP 2023
Omega QMS Compliance Insights
Omega QMS
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.
Amendment to Para 2.03(A)(iii) of FTP 2023: Before and After
- Exemption from mandatory QCOs limited to import of inputs required for export production only
- No DTA clearance of such inputs or goods manufactured from them allowed
- Exemption available for physical exports only
- Subject to para 2.03(c) of the FTP
- Undertaking to be submitted to the Development Commissioner of the SEZ at import
- 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 the SEZ Act, 2005 and Rule 27 of the SEZ Rules, 2006
- DTA clearance still subject to full QCO/BIS compliance at the time of clearance
- Undertaking to be submitted by the SEZ Unit or SEZ Developer at import
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 the SEZ Rules, 2006.
All Permissible Goods for SEZ Authorised Operations
- Raw materials
- Components
- Consumables
- Spares
- Capital goods
- Any other permissible goods under Rule 27, SEZ Rules 2006
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 them, from the SEZ into the Domestic Tariff Area (DTA) is subject to full compliance with the conditions below.
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.
BIS Requirements
BIS requirements applicable to the product, including mandatory ISI marking, must be met before the goods enter the DTA.
Other Applicable Laws
Any other applicable laws, rules or regulations in force at the time of DTA clearance must also be complied with.
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.
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 versus DTA clearance
- Covers SEZ Developers explicitly, a gap in the earlier provision
Impact
Regulatory
FTP 2023 is now aligned with the SEZ Act, 2005 and Rule 27 of the SEZ Rules, 2006. No more ambiguity on which QCOs apply inside an SEZ versus 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.
Navigating QCO Compliance for SEZ Operations
How Omega QMS can help:
- 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 the amended FTP provisions
- Ongoing compliance advisory for SEZ Units and Developers under the QCO framework
Questions About QCO Compliance in Your SEZ?
We advise SEZ Units and Developers on BIS certification and QCO compliance, including pre-clearance planning for goods moving into the DTA.
Reference: DGFT Notification No. 20/2026-27 (S.O. 2827(E)), dated 2 June 2026, issued by the Ministry of Commerce & Industry (Department of Commerce), Directorate General of Foreign Trade. Gazette ID: CG-DL-E-06062026-273230. Amends Para 2.03(A)(iii) of the Foreign Trade Policy, 2023.
