DGFT Amends Validity Rules for LOP/LOI

The Government of India has taken another step toward enhancing ease of doing business and supporting export-oriented industries with a recent amendment to the Handbook of Procedure (HBP) 2023. Through Public Notice No. 34/2025-26, issued by the Ministry of Commerce and Industry on December 2025, significant changes have been introduced to Para 6.34 of Chapter 6 of the HBP. These changes aim to provide greater clarity and streamline the administrative processes related to the extension of Letter of Permission (LoP) and Letter of Intent (LoI) for Export Oriented Units (EOUs), Biotechnology Parks (BTPs), Electronic Hardware Technology Parks (EHTPs), and Software Technology Parks (STPs).

Understanding the Amendment

The amendment specifically revises the provisions under Para 6.34 (h) of Chapter 6 of the HBP. Here’s a detailed breakdown of the changes:

Extension After Production Commencement:
- Once a unit commences production, the validity period of the LoP/LoI can now be extended for up to 5 years at a time. This extension will be governed by Para 6.01(c) of the HBP.
- This change provides businesses with a longer operational window, reducing the need for frequent renewals and allowing them to focus on their core activities.
Initial Validity Period Extension:
- The initial validity period of 2 years for LoP/LoI can now be extended by one additional year for valid reasons. However, these reasons must be recorded in writing to ensure transparency and accountability.
- It is important to note that this provision does not apply to projects with restrictions on the initial approval period, such as oil refinery projects.

Effect of the Amendment 

The primary goal of this amendment is to simplify and streamline the process for extending the validity of LoP/LoI. By introducing clear guidelines, the government aims to reduce administrative hurdles and provide businesses with greater flexibility in managing their operations. This is particularly beneficial for EOUs, BTPs, EHTPs, and STPs, which play a crucial role in driving India’s export-oriented growth.

The amendment also reflects the government’s commitment to creating a business-friendly environment. By allowing longer extensions and providing clarity on the process, businesses can better plan their operations and focus on innovation and production without unnecessary delays.

Why This Amendment is Important

Export-oriented units and technology parks are vital contributors to India’s economy, fostering innovation, creating jobs, and boosting exports. However, these industries often face challenges related to regulatory compliance and administrative processes. The amendment to Para 6.34 of the HBP 2023 addresses these challenges by:

Reducing Bureaucratic Delays: The extended validity periods minimize the frequency of renewal applications, saving time and resources for businesses.
Enhancing Transparency: The requirement to record valid reasons for extensions ensures accountability and reduces ambiguity in decision-making.
Supporting Business Continuity: By providing a clear framework for extensions, the amendment helps businesses maintain uninterrupted operations.

Who Will Benefit?

This amendment is particularly relevant for businesses operating under the following schemes:

Export Oriented Units (EOUs): Units focused on manufacturing goods for export.
Biotechnology Parks (BTPs): Facilities dedicated to research and development in biotechnology.
Electronic Hardware Technology Parks (EHTPs): Parks specializing in the production of electronic hardware.
Software Technology Parks (STPs): Centers for software development and IT services.

These entities can now enjoy a more streamlined process for extending their operational permissions, enabling them to focus on their growth and contribution to India’s export sector.

How to Apply for Extensions

Businesses seeking to extend their LoP/LoI validity under the new provisions should refer to Para 6.01(c) of the HBP for detailed guidelines. It is essential to ensure that all required documentation is submitted and valid reasons for extension are clearly recorded in writing.

Conclusion

The amendment to Para 6.34 of Chapter 6 of the Handbook of Procedure 2023 is a progressive step by the Government of India to support export-oriented industries and technology parks. By simplifying the process for extending LoP/LoI validity, the government is fostering a more business-friendly environment and encouraging growth in key sectors. This move aligns with India’s broader vision of becoming a global leader in trade and commerce.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: DGFT

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