Published: 30 Jul 2026
DGFT Updates ITC (HS) Export Policy Schedule to Align with Finance Act 2026: What Exporters Need to Know
REGULATORY INTELLIGENCE
Published: 28 July 2026
Notification: DGFT Notification No. 26/2026-27
Effective Date: 27 July 2026
The Directorate General of Foreign Trade (DGFT) has issued Notification No. 26/2026-27 dated 27 July 2026, updating Schedule-II (Export Policy) of the ITC (HS) 2022 to align with the tariff amendments introduced under the Finance Act, 2026.
While the notification is primarily a technical harmonization exercise, it affects numerous tariff classifications across agricultural products, chemicals, minerals, pharmaceuticals, and food products. The objective is to ensure that India’s export policy classifications remain fully synchronized with the Customs Tariff, enabling exporters to use consistent and up-to-date HS codes across export documentation and customs procedures.
For exporters, customs brokers, logistics providers, and compliance teams, reviewing these changes is essential to avoid classification mismatches, documentation errors, and delays in customs clearance.
Key Takeaways
- Schedule-II (Export Policy) has been aligned with the Finance Act, 2026 tariff amendments.
- New and revised ITC (HS) classifications have been introduced across multiple product categories.
- Several broad tariff entries have been split into more specific product codes.
- Export duty and policy entries have been updated in the Supplementary Notes for various chapters.
- Exporters should review and update product classifications, ERP systems, and shipping documentation.
- Effective immediately from 27 July 2026.
Why Has DGFT Issued This Notification?
India’s export policy is based on the Indian Trade Classification (Harmonized System) [ITC (HS)], which is closely linked to the Customs Tariff.
Whenever the Finance Act modifies tariff classifications by introducing new tariff lines, splitting existing codes, merging classifications, or revising duty structures, the DGFT updates Schedule-II (Export Policy) to ensure both systems remain aligned.
This harmonization prevents inconsistencies between customs tariff classifications and export policy codes, enabling exporters to accurately classify products and comply with current regulatory requirements.
What Has Changed?
1. New Tariff Items for Previously Broad Product Categories
Several products that were previously classified under generic or residual tariff entries have now been assigned dedicated 8-digit ITC (HS) codes.
Illustrative examples include:
- Krill (Chapter 3)
- Pecan nuts (Chapter 8)
- Cranberries (Chapter 8)
- Blueberries (Chapter 8)
- Shea nuts (Chapter 12)
Creating dedicated classifications improves trade data accuracy, product traceability, and customs reporting while providing exporters with greater classification clarity.
2. Expanded Classification of Botanical Extracts
Chapter 13 has undergone a significant restructuring.
Previously grouped plant and herbal extracts have now been divided into multiple individual tariff classifications covering specific botanicals, including:
- Turmeric
- Ginger
- Tulsi
- Indian Gooseberry (Amla)
- Other named botanical extracts
This provides greater precision for exporters dealing in herbal extracts, nutraceutical ingredients, and botanical products.
3. New Classifications for Specialty Chemicals and Pharmaceutical Intermediates
One of the most extensive updates appears in Chapter 29, where numerous new or revised tariff classifications have been introduced for specialty chemicals and pharmaceutical intermediates.
Examples include:
- Gibberellic Acid
- Artemisinin
- Piperidine compounds
- Various pharmaceutical intermediates
These revisions provide more granular product identification and strengthen regulatory monitoring of chemical products with industrial, pharmaceutical, or dual-use applications.
4. Revised Duty and Policy Entries
The notification also updates the Supplementary Notes accompanying various tariff items.
Across Chapters 25, 28, and several other chapters, multiple entries have been revised to reflect:
- Updated export duty percentages
- Revised policy conditions
- “Free” export status for numerous inorganic chemical tariff items
These revisions ensure consistency between the Export Policy Schedule and the Customs Tariff as amended through the Finance Act, 2026.
Why This Matters for Exporters
Although this notification does not introduce major policy restrictions, it has important compliance implications.
Schedule-II serves as the foundation for India’s export policy framework, determining product classifications used for export documentation, policy conditions, and incentive mapping.
Using outdated or superseded ITC (HS) codes could result in:
- Customs queries during export clearance
- Shipping bill validation issues
- Delays in customs processing
- Incorrect export duty assessment
- Errors in RoDTEP or Duty Drawback claims
- Additional compliance reviews
Businesses should therefore ensure that their export documentation reflects the updated classifications before their next shipment.
Industries Likely to be Impacted
The notification is particularly relevant for businesses involved in:
- Agricultural exports
- Dry fruits and nuts
- Food processing
- Herbal extracts and botanical products
- Specialty chemicals
- Pharmaceutical intermediates
- Mineral products
- Chemical manufacturing
- International trading companies
- Customs brokerage and freight forwarding
Recommended Actions for Exporters
Businesses should proactively review their export processes to ensure compliance with the revised Schedule-II.
Recommended actions include:
- Compare existing product classifications with the revised ITC (HS) Schedule.
- Update ERP systems, product databases, and customs documentation.
- Review shipping bill templates and internal classification records.
- Verify the applicability of revised export duty entries.
- Confirm RoDTEP and Duty Drawback classifications where product codes have changed.
- Train export documentation and compliance teams on the revised classifications.
Taking these steps now can help minimize operational disruptions and ensure smooth customs clearance.
Business Impact
Although many of the amendments are technical in nature, they require operational updates across export compliance processes.
Companies exporting products covered by the revised classifications should review whether:
- Existing HS codes remain valid.
- Internal ERP and documentation systems require updates.
- Product master databases reflect the latest classifications.
- Customs brokers and logistics partners are using the updated codes.
- Export incentive claims continue to reference the correct tariff classifications.
Early review and implementation can help reduce compliance risks and prevent avoidable shipment delays.
How Omega QMS Can Help
Keeping pace with evolving DGFT notifications and tariff amendments can be challenging, particularly for businesses managing large product portfolios or exporting across multiple jurisdictions.
Omega QMS provides comprehensive DGFT and trade compliance advisory services, including:
- ITC (HS) product classification reviews
- DGFT regulatory advisory
- Export policy interpretation
- Customs tariff mapping
- Export documentation compliance
- RoDTEP and Duty Drawback advisory
- Import and export licensing support
- End-to-end trade compliance consulting
Our experts work closely with manufacturers, exporters, importers, and multinational companies to help ensure regulatory compliance while minimizing operational disruptions.
Conclusion
DGFT Notification No. 26/2026-27 is primarily a harmonization measure, aligning Schedule-II (Export Policy) of the ITC (HS) 2022 with the tariff amendments introduced under the Finance Act, 2026.
Although the notification does not substantially alter India’s export policy, it introduces important classification updates across agricultural products, chemicals, botanical extracts, minerals, and pharmaceutical intermediates. Businesses should review these changes promptly to ensure their export documentation, customs declarations, and internal systems reflect the latest ITC (HS) classifications.
Timely compliance will help exporters avoid unnecessary customs queries, shipment delays, and documentation errors while ensuring seamless international trade operations.
Frequently Asked Questions (FAQs)
Does this notification change India’s export policy?
No. The notification primarily aligns Schedule-II (Export Policy) with the tariff amendments introduced through the Finance Act, 2026.
When does the notification become effective?
The revised Schedule-II came into force with immediate effect from 27 July 2026.
Which businesses are most likely to be affected?
Exporters dealing in agricultural products, food products, botanical extracts, chemicals, pharmaceutical intermediates, minerals, and related commodities should review the revised classifications.
Should exporters update their HS codes?
Yes. Businesses should verify whether their products fall under newly created, revised, or split tariff classifications and update export documentation where required.
Why is this harmonization important?
Synchronizing the Export Policy Schedule with the Customs Tariff helps eliminate classification inconsistencies, supports accurate customs declarations, and reduces the risk of compliance issues during exports.
Source
Directorate General of Foreign Trade (DGFT), Ministry of Commerce & Industry
Notification No. 26/2026-27, dated 27 July 2026
Subject: Harmonisation of Schedule-II (Export Policy), ITC (HS) 2022 with amendments introduced through the Finance Act, 2026.
Disclaimer: This article is intended for general informational purposes only and should not be construed as legal or regulatory advice. Businesses should consult qualified professionals for guidance specific to their products and export operations.