Export Obligation Period: 2026 Rules, Extensions, and Fees Explained

The Export Obligation Period (EO) is the fixed time within which you must complete exports after importing inputs under schemes such as Advance Authorisation. Many exporters confuse this with import validity, but the two are different. Import validity only sets the deadline to bring raw materials into India. The export obligation period determines how long you have to ship the finished goods out.

For most products, the export obligation period remains 18 months. However, DGFT allows different timelines for specific items, including those listed under Appendix 4J, and has updated certain rules through recent policy changes. This makes it important to track your applicable deadline carefully, because any shortfall or delay in meeting the export obligation can lead to customs duty becoming payable, along with interest.

What Is the Export Obligation Period?

Under export promotion schemes, Export Obligation refers to the value or quantity of goods you must export to offset the customs duty saved on imported inputs. Simply put, if you import raw materials duty-free, you must earn foreign exchange by exporting finished goods of a specified value.

The Export Obligation Period is the fixed time given by DGFT to complete these exports. You must finish exporting within this window. If you miss it, you may have to pay back the saved duty with interest.

Many exporters mix this up with Import Validity, but they serve different purposes.

Import Validity vs Export Obligation

Standard Export Obligation Periods by License Type

The export obligation period is not the same for every exporter. It changes based on the type of licence, the nature of goods, and whether the item falls under the tighter government control. Understanding which category you fall into helps you plan imports, production, and exports without compliance risk.

General Advance Authorisation

For most exporters, this is the default category.

• The standard export obligation period is 18 months from the date of issue of the Advance Authorisation.
• It applies to goods not listed under special appendices such as Appendix 4J.
• The same timeline applies to:
  • Physical exports
  • Deemed exports
  • Intermediate supplies

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Appendix 4J Items (Pre-import Condition)

Appendix 4J applies to sensitive items where exports are allowed only after imports, with stricter tracking.

• Precious Metals (Gold, Platinum, Silver): 120 days from import clearance.
• Drugs from Unregistered Sources: 12 months from import clearance.
• Tea: 6 months from import clearance.
• Spices (Pepper, Cardamom, Chillies): 120 days for value addition.

For these items, the export obligation period starts from the date of clearance of imports, not the licence issue date.

Restricted and Prohibited Items

Restricted items follow short, non-flexible export obligation periods due to tighter government control. For instance, wheat flour (atta) must be exported within 180 days. These timelines are strictly enforced, and extensions are rarely granted for restricted or prohibited goods. Careful planning is essential to avoid compliance issues and duty recovery.

Recent DGFT Updates to EO Periods (2026)

DGFT has tightened and relaxed export timelines across sectors through Notification No. 28/2025-26. These changes directly affect how you plan production and shipments, especially if you deal in chemicals or jewellery. Missing such updates can lead to avoidable duty costs.

Extension for QCO-Exempt Chemical Imports

DGFT has eased timelines for certain chemical exporters under the QCO exemption.

• Old Rule: If you imported chemicals that were exempt from Quality Control Orders (QCO), you had only 180 days to complete exports.
• New Rule: The export obligation period is 18 months, the same as normal Advance Authorisations.
• Why this Helps: You get more time to process the chemicals, complete manufacturing, and ship exports without rushing.

Stricter Norms for Gold and Jewellery

DGFT has tightened timelines for jewellery exporters dealing in precious metals.

• The export obligation period for findings/mountings of gold, silver, and platinum is now 180 days.
• The option for gold replenishment after export is no longer allowed.
• DGFT has clearly stated that no extension will be granted beyond this period.

In practice: Jewellery exporters must plan imports and exports with precision. Delays now carry real financial risk.

How to Extend the Export Obligation Period?

If you cannot complete exports within the original export obligation period, DGFT allows limited relief. The EO extension process follows a clear escalation path—first through your local office, and only then at the policy level. Extensions are not automatic, so timing and documentation matter.

Extensions via Regional Authority (RA)

Any request to extend the export obligation period must first be made to the Regional Authority.

• First Extension: Up to 6 months, granted on payment of a composition fee.
• Second Extension: Another 6 months, with a higher composition fee.
• Key Condition: You must usually apply before the EO period expires. Late applications often get rejected.

Extensions via Policy Relaxation Committee (PRC)

Once RA extensions are exhausted, options narrow.

• After 12 additional months through the RA route, any further extension requires approval from the Policy Relaxation Committee in New Delhi.
• Approvals are given only for genuine hardship, not as a routine extension.
• The process takes longer, as PRC meetings are periodic and scrutiny is strict.

Composition Fees for EO Extension

Extending your export obligation period comes at a cost. DGFT charges a composition fee for each extension request. Earlier, this fee was linked to a percentage of export shortfall. To improve ease of doing business, DGFT has now moved to flat, slab-based extension charges, based on the Cost, Insurance, and Freight (CIF) value of imports.

This makes the cost predictable and easier to plan for.

Fee Structure for First Extension (6 Months)

The composition fee DGFT charges for the first extension is:

• CIF value up to ₹2 crore: ₹5,000
• CIF value between ₹2 crore and ₹10 crore: ₹10,000
• CIF value above ₹10 crore: ₹15,000

This fee applies regardless of how much export obligation remains pending.

Fee Structure for Second Extension (6 Months)

If you need another extension, the extension charges increase:

• CIF value up to ₹2 crore: ₹10,000
• CIF value between ₹2 crore and ₹10 crore: ₹20,000
• CIF value above ₹10 crore: ₹30,000

Documents Required for EO Extension

To get an export obligation period extension approved, DGFT expects clear paperwork. Incomplete or unclear submissions are a common reason for rejection. 

Application Forms and Letters

• ANF-4D Form: The main application form used to request an EO extension.
• Covering Letter: A short note summarising your request and the period of extension sought.
• Justification Letter: A clear explanation for the delay, such as order cancellation, supply chain issues, or production setbacks.

Supporting Evidence

• Import–Export Statement: A certified statement showing how imported inputs were used.
• Physical Export Proof: Copies of shipping bills or Bills of Export.
• Deemed Export Proof: Invoices or project authority certificates, where relevant.
• Valid Registration Cum Membership Certificate (RCMC): It is issued by the appropriate export promotion council.

Role of Payment Realisation in EO Discharge

Completing exports alone does not close your export obligation. DGFT treats the EO as fulfilled only when export proceeds are realised in India. In simple terms, goods must leave the country and the money must come in.

This is where the e-BRC (Electronic Bank Realisation Certificate) becomes critical. Your bank issues the e-BRC after it confirms receipt of foreign currency against the export invoice. DGFT systems are digitally linked with bank servers and automatically verify this data before allowing EO closure.

If payment is delayed, or if documents such as FIRC/FIRA or e-BRC are not issued on time, the issuance of the Export Obligation Discharge Certificate (EODC) gets delayed, even if the exports are already completed.

How Razorpay International Payments Accelerates EO Discharge

When you’re aiming to speed up export obligation discharge, getting export proceeds realised quickly is crucial. Razorpay’s International Payments stack helps simplify and accelerate this part of the export lifecycle — from collecting funds to reconciling them for EODC purposes.

Here’s how Razorpay makes a difference:

• Receive Payments from Buyers Across 180+ Countries in 135+ Currencies, including key markets like the US, UK, UAE and EU — all on one platform. This breadth improves your chances of getting timely foreign exchange inflows crucial for EO discharge.
• Multiple Payment Methods: You can accept global cards, local wallets and international bank transfers seamlessly, reducing friction that often slows down payment realisation.
• Low-Cost Bank Transfers: Razorpay’s international bank transfer option charges no forex markup and no hidden fees, helping you preserve more of your export value and reducing delays caused by intermediary processes.
• Automatic e-FIRC Issuance: For eligible export transactions, Razorpay provides automatic e-FIRC certificates, helping you complete bank documentation faster and avoid delays in EO discharge due to pending realisation proof.
• Predictable Pricing and Support: Transparent fees and India-based support mean you spend less time chasing payments and more time focusing on exports. 

Conclusion

For most exporters, the 18-month export obligation period remains the baseline, but keeping track of Appendix 4J exceptions is critical. The 2025 DGFT updates have eased timelines for QCO-exempt chemical exporters, while taking a much stricter approach on gold and jewellery inputs, where delays now leave little room for correction. 

Staying on top of deadlines and applying for extensions in time can help you avoid duty payments, interest, and risks to your IEC. The simplest safeguard is to keep all shipping bills, e-BRCs, and authorisation records digitally organised—this small habit goes a long way in ensuring smooth EO closure.

FAQs

1. What is the standard Export Obligation period for Advance Authorisation?

The standard export obligation period is 18 months, counted from the date of issue of the Advance Authorisation.

2. Can I get an extension on my Export Obligation period?

Yes. You can usually take two extensions of 6 months each from the Regional Authority (DGFT) by paying the applicable composition fee.

3. What is the new EO period for QCO-exempt chemical imports?

Under the 2025 DGFT update, the timeline has been relaxed from 180 days to 18 months.

4. Is the composition fee for EO extension still percentage-based?

No. DGFT now uses flat composition fees linked to the CIF value of the authorisation to make extensions simpler and more predictable.

5. What is the EO period for gold and precious metals under Appendix 4J?

For gold, silver, and platinum, the EO period is generally 120 days from the import clearance date of each consignment.