Amendments to Quality Control Orders (QCOs) and BIS Requirements for SEZ Imports

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Dated: 02.06.2026

Amendments to Quality Control Orders (QCOs) and BIS Requirements for SEZ Imports

The Government of India has recently issued a significant amendment regarding the applicability of Quality Control Orders (QCOs) and Bureau of Indian Standards (BIS) requirements on imports by Special Economic Zone (SEZ) units and developers. This change, notified by the Directorate General of Foreign Trade (DGFT), directly impacts how SEZs import goods for their operations and clarifies the regulatory landscape for stakeholders involved in export-oriented activities.

Background: SEZs and Regulatory Exemptions

Special Economic Zones (SEZs) are designated areas in India that offer special regulatory and tax incentives to promote exports and attract investment. Traditionally, SEZ units and developers have enjoyed certain exemptions from domestic regulations, including QCOs and BIS requirements, to facilitate smoother import of inputs required for export production.

Key Amendment: Revised Para 2.03A(iii) of FTP 2023

The latest notification amends Para 2.03A(iii) of the Foreign Trade Policy (FTP) 2023. Here’s a breakdown of the changes:

1. Scope of Exemption Expanded

Previous Provision: Exemption from QCOs was limited to inputs required for export production, with no Domestic Tariff Area (DTA) clearance allowed for such goods or their derivatives.
New Provision: The exemption now covers all permissible goods—including raw materials, components, consumables, spares, and capital goods—imported by SEZ units or developers for authorized operations within SEZs, as per the SEZ Act, 2005 and Rule 27 of the SEZ Rules, 2006.

2. Conditions for Exemption

The exemption applies only to goods used within the SEZ for authorized operations.
If these goods, or products manufactured or processed from them, are removed, transferred, or cleared into the Domestic Tariff Area (DTA), they must comply with all applicable QCOs, BIS requirements, and other relevant laws at the time of clearance.

3. Undertaking Requirement

SEZ units or developers must submit an undertaking to the concerned Development Commissioner at the time of importation, confirming adherence to these conditions.

Practical Implications for SEZ Stakeholders

Ease of Import for SEZ Operations
- SEZ units and developers can now import a broader range of goods without being subject to QCOs/BIS requirements, provided these are used exclusively for authorized SEZ operations.
Strict Compliance for DTA Clearance
- Any movement of such goods into the DTA triggers full compliance with QCOs, BIS, and other applicable regulations, ensuring product quality and safety standards are maintained in the domestic market.
Documentation and Compliance
- The requirement to submit an undertaking at the time of importation adds a layer of accountability and ensures regulatory oversight.

Example Scenario

Import for SEZ Use: An SEZ unit imports specialized machinery (a capital good) for its manufacturing process. The machinery is exempt from QCOs/BIS requirements as long as it remains within the SEZ and is used for authorized operations.
Transfer to DTA: If the unit decides to sell or transfer the machinery or products made using it into the DTA, all relevant QCOs and BIS standards must be met before clearance.

Conclusion

This amendment streamlines import procedures for SEZs, supporting their role as export hubs while maintaining regulatory safeguards for goods entering the domestic market. SEZ units and developers should update their compliance protocols and ensure all undertakings and documentation are in place to benefit from these revised provisions.

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Source: DGFT

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