DGFT Revises TRACE Guidelines under Export Promotion
DGFT Revises TRACE Guidelines under Export Promotion Mission (EPM) – Niryat Disha
The Directorate General of Foreign Trade (DGFT) has introduced amendments to the Trade Regulations, Accreditation and Compliance Enablement (TRACE) Guidelines under the Export Promotion Mission (EPM) – Niryat Disha.
These revisions build upon Trade Notice No. 26/2025-26 dated 20 February 2026 and are intended to provide greater operational clarity, streamline reimbursement procedures, and strengthen support for exporters, particularly Micro, Small and Medium Enterprises (MSMEs).
Key Changes Introduced
1. Replacement of Positive Lists with a Unified Eligible List
The earlier framework classified certifications into separate Positive List and Priority Positive List categories.
Under the revised guidelines, these have been replaced by a single List of Eligible Testing, Inspections and Certifications, provided in Annexure-I of the Trade Notice.
This list will continue to remain dynamic and may be revised periodically after considering:
- Stakeholder feedback
- Developments in international standards
- Trade facilitation requirements
- Regulatory changes
2. Higher Financial Assistance for MSMEs
The reimbursement structure has been significantly revised.
Instead of providing a uniform reimbursement to all MSMEs, assistance will now depend on the enterprise category.
Micro and Small Enterprises
Eligible for reimbursement of up to 95% of the actual eligible expenditure (excluding applicable taxes, duties and cess), subject to the prescribed ceiling.
Medium Enterprises
Eligible for reimbursement of up to 80% of the eligible expenditure (excluding taxes, duties and cess), subject to the notified ceiling.
Increased Annual Reimbursement Limit
The overall reimbursement limit has been increased from ₹25 lakh to ₹50 lakh per Import Export Code (IEC) in a financial year.
Applications seeking assistance beyond ₹50 lakh may still be considered individually after examination by the designated Sub-Committee.
3. Reimbursement to be Released in Two Instalments
The revised guidelines introduce a milestone-based payment mechanism.
First Instalment
Fifty percent of the approved reimbursement will be released after:
- Successful completion of testing, inspection or certification; and
- Submission of the relevant certification documents.
Second Instalment
The remaining fifty percent will be released only after the exporter demonstrates exports linked to the approved certification.
This change directly links financial assistance with actual export performance.
4. Two-Stage Reimbursement Claim Process
The reimbursement application process has also been modified.
Stage I – RC-1
After obtaining the required certification, applicants must submit:
- Copy of the certificate, inspection report or test report
- Invoice and proof of payment
- Evidence showing that the certification was mandatory or commercially required
Stage II – RC-2
Once exports have been completed using the certified product, applicants must submit:
- Documentary evidence of exports linked to the certification
- Proof of export proceeds realization
Only after completion of this second stage will the balance reimbursement be released.
5. Disbursement Process Updated
Payments will continue to be credited directly to the bank account linked with the IEC.
However, reimbursements will now follow the newly prescribed two-instalment structure:
- First payment after certification
- Final payment after proof of export
6. New Compliance Requirement for Export Completion
The revised guidelines retain the existing provision that reimbursement claims must be filed within two years from the filing of the Intent-to-Claim.
Additionally, a new compliance condition has been introduced.
If an applicant receives the first reimbursement instalment but fails to submit proof of exports within two years, then:
- The second instalment will automatically lapse; and
- The first instalment may be recovered by the authorities.
This ensures that financial assistance is ultimately linked with successful export activity.
7. Changes in the Role of the TRACE Sub-Committee
The responsibilities of the TRACE Sub-Committee have also been updated.
The Committee will now recommend:
- Financial assistance limits and reimbursement ceilings
- Addition, modification or deletion of eligible testing, inspection and certification entries
- Eligible tariff lines for Merchant Exporters under TRACE
The earlier references to separate Positive and Priority Positive Lists have been removed.
8. Significant Expansion of Eligible Certifications
One of the most notable updates is the expansion of the eligible certification database.
Instead of maintaining separate certification lists, the revised framework introduces a consolidated list containing 462 eligible testing, inspection and certification activities, included in Annexure-I.
This broader coverage is expected to benefit exporters operating across a wider range of industries and international markets.
Existing Provisions Continue
Except for the amendments introduced through this Trade Notice, all other provisions of Trade Notice No. 26/2025-26 dated 20 February 2026 remain unchanged.
Conclusion
The latest amendments make the TRACE scheme more structured and performance-oriented. Higher reimbursement percentages for Micro and Small Enterprises, an increased annual assistance cap, expanded coverage of eligible certifications, and a two-stage reimbursement mechanism are expected to strengthen compliance support for Indian exporters.
By linking part of the reimbursement to actual export performance, the revised framework also ensures that government assistance is closely aligned with the objective of promoting international trade under the Export Promotion Mission (EPM) – Niryat Disha.
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