SEZ Imports Freed from Quality Control Orders, Standards Apply on Domestic Sales [Read Notification]

TheMinistry of Commerce & Industry has amended the Foreign Trade Policy (FTP) 2023 to clarify the applicability of Quality Control Orders (QCOs) and BIS requirements on imports by Special Economic Zone (SEZ) Units and Developers.

Earlier, SEZs were exempted from Quality Control Orders (QCOs) only for importing inputs required for export production. These inputs could not be cleared into the Domestic Tariff Area (DTA), nor could goods manufactured from them be sold domestically.

The exemption was strictly limited to physical exports, and SEZ Units had to submit an undertaking to the Development Commissioner upon importation. This exemption was also subject to compliance with Para 2.03(c) of FTP, 2023.

In the revised para 2.03A(iii), the exemption from QCOs has been broadened to cover all permissible goods imported by SEZ Units or Developers, including raw materials, components, consumables, spares, and capital goods required for authorized operations. These goods can be freely used within SEZs under the SEZ Act, 2005, and Rule 27 of the SEZ Rules, 2006.

So if such goods or products manufactured or processed from them are removed or transferred into the DTA, they must comply with applicable QCOs, BIS standards, and other laws. SEZ Units/Developers must still submit an undertaking to the Development Commissioner at the time of importation, confirming adherence to these conditions

Simply, under the old rule, the exemption applies only to export inputs; no domestic clearance is allowed. On the other hand, in the new rule, Exemption for all authorized SEZ imports, but domestic clearance requires full compliance with QCOs and BIS standards.

SEZs can now import more freely for internal operations, but domestic sales remain subject to India’s quality and safety regime, a balance between trade facilitation and consumer protection.

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