DGFT Export Import Policy Updates 2026 – New Trade Regulations

The Directorate General of Foreign Trade (DGFT) dropped a significant update to India’s export-import policy on May 5, 2026—and if you’re involved in cross-border trade, this directly impacts your compliance obligations, duty liabilities, and eligibility for incentives. Whether you’re an exporter of textiles, importer of machinery, or running a small-scale agri-export unit, these changes aren’t just bureaucratic noise—they’re operational game-changers.

Also Read-DGFT Reforms to Speed Up Advance Authorisation: Old vs New System – 2026 Update

As a tax and customs practitioner who’s been navigating DGFT circulars for over a decade, I can tell you this: missing even one detail in such notifications can lead to shipment delays, customs holds, or worse—loss of export benefits. The May 2026 update introduces tighter documentation norms, revised export obligation periods under advance authorisation schemes, new sector-specific restrictions, and expanded digital integration with ICEGATE and GSTN. Let’s break down what changed, why it matters, and how you should respond—before your next consignment gets stuck at the port.

Quick Summary

What the Notification States

As per Notification No. 12/2026 dated May 5, 2026, issued by the DGFT under the Foreign Trade (Development & Regulation) Act, 1992, several key amendments have been introduced to streamline trade facilitation while tightening compliance. The notification emphasizes “ease of doing business with accountability”—a phrase we’ve heard before, but this time, it comes with real enforcement teeth.

One of the most consequential changes is the reduction in the export obligation period under Advance Authorisation and EPCG (Export Promotion Capital Goods) schemes. Previously, exporters had 18 months to meet their export commitments after importing duty-free inputs or capital goods. Now, that window has been compressed to 12 months for all sectors except those dealing exclusively with capital goods (which retain the 18-month window). This shift aims to accelerate foreign exchange inflows and reduce idle inventory of duty-free imports.

Another critical update is the mandatory linkage between DGFT records and GST data. From July 1, 2026, the RoDTEP (Remission of Duties and Taxes on Exported Products) reimbursement system will cross-verify shipping bills, invoice values, and tax payments directly against your GSTR-1 and GSTR-3B filings. If there’s a mismatch—say, you claimed ₹10 lakh in RoDTEP but your GSTR-1 shows only ₹8 lakh in exports—the claim will be auto-rejected unless reconciled within 15 days. This closes a long-standing loophole where exporters inflated export values to claim higher incentives.

the notification introduces a new category of “restricted imports” for certain high-risk items. Steel products (HS codes 7206–7326), aluminium alloys (7601–7616), and select consumer electronics (8517, 8525) now require a Pre-Shipment Inspection Certificate (PSIC) from DGFT-empanelled agencies like SGS, Bureau Veritas, or TÜV SÜD. Without this certificate, customs will not allow clearance—even if you have an import licence.

Key Changes: Old vs New

Why This Matters for Your Business

If you’re an exporter relying on Advance Authorisation to import raw materials duty-free, the shortened 12-month window means you need to fast-track your production and logistics planning. In our practice, we’ve seen clients lose entire shipments because they assumed the old 18-month timeline still applied—only to face demurrage charges and customs penalties when the obligation wasn’t met.

Similarly, the GST-DGFT integration is a double-edged sword. On one hand, it reduces manual paperwork and speeds up RoDTEP claims. On the other, it exposes discrepancies that were previously overlooked. We recently handled a case where a textile exporter claimed ₹2.3 crore in RoDTEP but had underreported export turnover in GSTR-1 by ₹47 lakh. The claim was frozen, and the client faced a 90-day delay in cash flow—plus interest on working capital.

For importers, the new PSIC requirement adds cost and time. A PSIC from an empanelled agency costs between ₹15,000–₹25,000 per shipment and takes 3–5 days to process. If your supplier is in China or Vietnam, factor this into your lead time. Customs won’t release goods without it—even if your Bill of Entry is perfect.

What Changes on the Ground

From June 1, 2026, the DGFT portal will no longer accept physical applications or emails for scheme renewals. Everything—from EPCG closure requests to DEPB (Duty Entitlement Pass Book) revalidation—must be filed digitally. The portal now requires Aadhaar-based OTP authentication for all users, including company representatives. This means your authorised signatory must have a registered mobile number linked to their Aadhaar.

Customs houses at major ports like Nhava Sheva, Chennai, and Mundra have already begun rejecting shipments lacking PSICs for restricted items. In the first week of May, over 40 containers of galvanised steel coils were held at JNPT due to missing inspection certificates. Importers had to pay demurrage of ₹2.1 lakh per day while scrambling for compliance.

On the export side, the RoDTEP auto-verification system is being tested in a phased rollout. As of May 20, 2026, 12 product categories (including pharmaceuticals, auto components, and processed foods) are under live validation. By July, it will cover all eligible exports. The system flags mismatches in real time and sends alerts via email and SMS to the exporter and their chartered accountant.

Common Pitfalls to Avoid

Based on recent client cases and DGFT grievance data, here are the three biggest traps exporters and importers are falling into—and how to dodge them:

• • The “Silent Deadline” Trap – Many exporters assume the export obligation period starts from the date of licence issuance. It doesn’t. It starts from the date of first import under the authorisation. We’ve seen clients lose ₹80 lakh in duty savings because they imported in January but didn’t ship until February of the following year—missing the 12-month window by 14 days. Always mark the import date, not the licence date, on your calendar.
• • The “GSTR-1 vs Shipping Bill” Mismatch – Exporters often report different values in GSTR-1 (based on invoice value) and shipping bills (based on FOB value). While minor differences are tolerated, gaps over 5% trigger auto-rejection. For example, if your invoice is ₹1 crore but your shipping bill shows ₹92 lakh (due to freight deductions), the system flags it. Reconcile these values before filing GSTR-1. Use the ICEGATE shipping bill data as your source of truth.
• • The “PSIC Rush” Delays – Importers often wait until the vessel arrives to apply for PSICs. But DGFT-empanelled agencies require 72 hours for inspection and certification. If your shipment arrives on Monday and you apply on Tuesday, it sits at the port until Friday. Build PSIC timing into your procurement schedule—apply as soon as the purchase order is confirmed.

Looking Ahead

The DGFT has hinted at further automation, including AI-driven risk assessment for licence approvals and real-time duty remission tracking. There’s also talk of integrating the new policy with the upcoming “National Trade Facilitation Portal” (expected Q4 2026), which will unify DGFT, Customs, GST, and ICEGATE data in one dashboard.

For now, focus on three actions: (1) update your internal compliance calendar to reflect the new 12-month export obligation, (2) assign a dedicated team member to monitor GSTR-1 and shipping bill alignment, and (3) register your import suppliers with DGFT-approved inspection agencies to avoid last-minute scrambles.

As practitioners, we’re advising clients to treat this notification not as a one-time update but as a shift toward “compliance-by-design” in cross-border trade. The era of manual reconciliations and post-facto corrections is ending. If you’re still relying on spreadsheets to track export obligations or duty benefits, it’s time to invest in integrated ERP or customs compliance software.

Frequently Asked Questions (DGFT 2026)