Government Eases Export Obligation Amidst West Asia Crisis

The government has granted extensions for exporters to fulfill their export obligations due to disruptions caused by the West Asia crisis. Expiring between March and May 2026, obligations are now extended to August 2026 without composition fees. Exporters face increased tariffs, disrupted shipping, and rising costs due to the conflict.

The government has introduced relaxations for exporters facing difficulties due to the West Asia crisis, according to a recent notification. The ongoing geopolitical developments are affecting international shipping routes and global supply chains.

As a result, the Directorate General of Foreign Trade (DGFT) declared an automatic extension of the export obligation period for specific advance authorisations and EPCG authorisations, initially expiring between March 1 and May 31, 2026, now extended to August 31, 2026, without a composition fee. This decision aims to support exporters amidst rising US tariffs and challenges from the recent conflict in West Asia.

The disruptions following the US and Israel's joint attack on Iran have complicated the movement of goods, increasing sea and air freight rates and insurance premiums. Consequently, the price competitiveness of Indian exports may be at stake if conditions persist. In January, exports rose by 0.61% to USD 36.56 billion, yet the trade deficit hit a three-month high of USD 34.68 billion.

(With inputs from agencies.)