Amendment in Para 2.03A i g of the Foreign Trade Policy 2023 laying down enabling provisions for import of inputs that are subjected to mandatory Quality Control Orders QCOsby Advance Authorisation holders EOU and SEZ

## Policy Analysis Report: Amendment to Foreign Trade Policy 2023 Regarding Advance Authorisation and Quality Control Orders **1. Executive Summary:** This report analyzes a notification amending the Foreign Trade Policy (FTP) 2023, specifically addressing Para 2.03A (i) (g) related to Advance Authorisation. The core purpose of this amendment is to restrict the Export Obligation (EO) period to 180 days from the date of clearance of import consignments for textile and chemical products benefiting from Quality Control Order (QCO) exemptions. The key finding is that this amendment shortens the EO period for specific sectors under certain import conditions, potentially impacting export timelines and working capital requirements for affected businesses. **2. Introduction:** This report aims to provide a comprehensive overview of the amendment to the Foreign Trade Policy (FTP) 2023, as detailed in the provided notification. The analysis focuses on understanding the changes introduced, the rationale behind them, and the potential implications for relevant stakeholders, based solely on the information available within the provided policy text. **3. Policy Overview:** * This report analyses an **amendment** to the Foreign Trade Policy (FTP) 2023, specifically focusing on the existing provisions related to Advance Authorisation. * **Core Objective(s):** Based on the text, the objective of the original policy (FTP 2023) and this amendment appears to be regulating and facilitating foreign trade, specifically concerning the import of inputs under Advance Authorisation, while ensuring quality control standards are met. The amendment seems focused on managing the export obligations associated with duty-free imports. **4. Background and Rationale:** * This notification amends Para 2.03A (i) (g) of the Foreign Trade Policy, 2023. The likely reason for this specific amendment is to address potential issues or gaps related to the Export Obligation (EO) period for textile and chemical products benefiting from Quality Control Order (QCO) exemptions. The amendment suggests a concern about the time taken to fulfill export obligations for these products when QCO exemptions are involved, possibly to prevent misuse of the exemption or align with specific industry needs. It is restricting the time duration companies have to fulfill export obligations. **5. Key Provisions / Changes:** This is an **amendment**, therefore, this section details the specific changes introduced: * **Specific Part of Original Policy Changed:** Para 2.03A (i) (g) of the Foreign Trade Policy, 2023. * **New Rule/Provision:** The Export Obligation (EO) period for authorizations related to import consignments benefiting from QCO exemption is restricted to 180 days from the date of clearance of import consignments. This restriction applies to textile and chemical products, notified by the Department of Textiles and Department of Chemicals and Petrochemicals (DCPC) respectively. * **Difference/Effect of the Change:** Previously, the EO period was governed by Para 4.40 of the Handbook of Procedures. This amendment creates an exception, shortening the EO period to a maximum of 180 days for the specified textile and chemical products under QCO exemptions. This means affected businesses now have a significantly shorter timeframe to fulfill their export obligations related to these imports. **6. Target Audience and Stakeholders:** Based on the text, the primary target audience and stakeholders are: * Businesses involved in the import of textile and chemical products under the Advance Authorisation scheme. * Businesses benefiting from Quality Control Order (QCO) exemptions on these imported products. * The Department of Textiles and the Department of Chemicals and Petrochemicals (DCPC), as they are responsible for notifying the relevant products. * Export Oriented Units (EOU) and units in Special Economic Zones (SEZ). **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, Department of Textiles, Department of Chemicals and Petrochemicals (DCPC). * **Timelines:** The amendment is effective "with immediate effect" from June 23, 2025. The key timeline introduced is the 180-day Export Obligation period. * **Procedures:** The procedure for Advance Authorisation remains as per the FTP 2023 and the Handbook of Procedures, except for the EO period for specified textile and chemical products, which is now capped at 180 days. Businesses will need to adjust their export planning to comply with this shortened timeframe. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is to: * Ensure quicker fulfillment of export obligations related to imports under Advance Authorisation that benefit from QCO exemptions. * Reduce the potential for misuse of QCO exemptions by limiting the EO period. * Potentially increase the efficiency of trade processes related to textile and chemical product exports. The potential impact of these changes includes: * Businesses may need to streamline their export processes to meet the shorter EO timeframe. * Working capital management may become more critical for affected businesses. * The Departments of Textiles and Chemicals and Petrochemicals will need to ensure timely notification of products covered under this amendment. **9. Conclusion:** The amendment to the Foreign Trade Policy 2023, specifically addressing Para 2.03A (i) (g) through this notification, introduces a significant change by restricting the Export Obligation period to 180 days for specific textile and chemical products imported under Advance Authorisation and benefiting from QCO exemptions. This amendment has immediate effect and requires businesses to adapt their export strategies to comply with the new timeframe. The notification underscores the government's focus on regulating foreign trade, promoting quality control, and streamlining export processes.

Key Entities Referenced