New Delhi: The Directorate General of Foreign Trade (DGFT) has amended the Foreign Trade Policy (FTP) 2023 to relax the export performance requirement for businesses seeking One Star Export House status.
Through Notification No. 026-27, the Government has amended Para 1.25(d) of the Foreign Trade Policy, 2023, with immediate effect. The amendment has been issued under the provisions of the Foreign Trade (Development & Regulation) Act, 1992 and the Foreign Trade Policy, 2023.
Export performance in any two of three years now sufficient
Under the earlier provision, export performance was required in all three preceding financial years for grant of Export House status. For the Gems & Jewellery sector, export performance was required in all two preceding financial years.
The revised provision introduces a relaxation specifically for One Star Export House status. Exporters, other than those in the Gems & Jewellery sector, can now qualify for One Star Export House status if they demonstrate the required export performance in any two out of the three preceding financial years, subject to the other conditions prescribed under Para 1.25 of the FTP 2023.
What has changed?
| Particular | Earlier requirement | Revised requirement |
|---|---|---|
| One Star Export House | Export performance in all 3 preceding financial years | Export performance in any 2 of the preceding 3 financial years |
| Gems & Jewellery sector | Export performance in all 2 preceding financial years | No change specified by this amendment |
Relief for exporters with an inconsistent export record
The amendment is expected to provide greater flexibility to exporters whose export performance may have fluctuated during the preceding three financial years.
An exporter who meets the prescribed export performance criteria in two of the three preceding financial years can now seek One Star Export House status, even if the required performance was not achieved in the remaining year.
However, the relaxation is subject to the other provisions of Para 1.25 of the Foreign Trade Policy, 2023.
Amendment effective immediately
The DGFT notification states that the amendment to Para 1.25(d) will come into effect immediately.
The notification has been issued with the approval of the Minister of Commerce & Industry by the Directorate General of Foreign Trade.
Key Takeaway for Exporters
The latest DGFT amendment makes the eligibility requirement for One Star Export House status more flexible by replacing the requirement of export performance in all three preceding financial years with performance in any two of those three years.
Exporters seeking recognition under the Status Holder Scheme should therefore review their export performance for the preceding three financial years and assess their eligibility under the amended provision.