Deemed Export Benefits for Indian Suppliers Under FTP 2023: Complete 2026 Guide

Key Takeaways

• Deemed exports under FTP 2023 cover specified domestic supplies where goods do not leave India.
• Eligible supplies must meet the conditions prescribed under Chapter 7 of FTP 2023.
• Indian manufacturers may qualify for Advance Authorisation/DFIA, deemed export drawback and other applicable benefits.
• EPCG-related capital-goods supplies can qualify as deemed exports subject to applicable conditions.
• GST deemed exports and FTP deemed exports are separate concepts and should not be confused.
• Proper documentation, direct supply conditions and timely filing are critical for claiming benefits.
• Chapter 7 of the HBP and ANF-7A should be checked before filing a claim.

Introduction

Indian manufacturers and suppliers can sometimes receive export-related benefits even when the supplied goods do not physically leave India. These transactions are commonly known as deemed exports under the Foreign Trade Policy.

For businesses supplying goods to Advance Authorisation holders, EOUs, EPCG projects and certain government or internationally funded projects, understanding deemed export provisions can help improve cost efficiency and access applicable trade-policy benefits.

FTP 2023 defines deemed exports as specified transactions where goods supplied do not leave India and payment is received in Indian rupees or freely convertible foreign exchange. The goods must also be manufactured in India.

This 2026 guide explains the major deemed export benefits available to eligible Indian suppliers, important conditions, documentation and practical compliance considerations.

What Are Deemed Exports Under FTP 2023?

Under Chapter 7 of FTP 2023, deemed exports are specified domestic supplies that are treated as deemed exports for FTP purposes even though the goods remain within India.

The policy objective is to provide a level playing field to domestic manufacturers and promote manufacturing in India in specified cases.

Featured Snippet Answer

Deemed exports under FTP 2023 are specified supplies of Indian-manufactured goods that do not physically leave India but qualify for prescribed foreign-trade benefits. Eligible supplies may include goods supplied against Advance Authorisation, to EOUs, capital goods supplied against EPCG Authorisation and certain notified projects or agencies, subject to Chapter 7 conditions.

Which Supplies Can Qualify as Deemed Exports?

Chapter 7 identifies several categories.

1. Supplies Against Advance Authorisation or DFIA

Manufacturers can supply eligible goods against Advance Authorisation, Advance Authorisation for annual requirements or DFIA, subject to the applicable procedure.

Intermediate supplies against an invalidation letter and supplies against an ARO have specific procedural requirements.

2. Supplies to EOU, STP, EHTP and BTP Units

Supplies of eligible goods to Export Oriented Units and specified technology or biotechnology park units can qualify under the deemed export framework, subject to applicable conditions.

3. Capital Goods Against EPCG Authorisation

Supply of capital goods against an EPCG Authorisation is specifically included as a deemed export category when the prescribed requirements are met.

4. Supplies to Specified Projects and Agencies

Certain supplies to projects financed by notified multilateral or bilateral agencies can qualify.

There are also provisions covering specified projects eligible for zero-basic-customs-duty treatment, certain mega power projects, supplies to specified UN or international organisations, and qualifying nuclear power projects. These categories have specific conditions such as tendering and project eligibility requirements.

Major Deemed Export Benefits for Indian Suppliers

Eligible deemed exports can receive one or more benefits under Paragraph 7.03 of FTP 2023.

Advance Authorisation / DFIA

Eligible suppliers may receive benefits involving Advance Authorisation, Advance Authorisation for annual requirements or DFIA, depending on the category and applicable conditions.

Deemed Export Drawback

Eligible supplies can qualify for deemed export drawback under the prescribed rules. The FTP provides for drawback on inputs used in manufacture, subject to applicable conditions and the relevant drawback schedule.

Terminal Excise Duty Refund

FTP 2023 also provides for refund of terminal excise duty for eligible excisable goods where the relevant conditions are satisfied and no exemption applies. Businesses should verify the current applicability of this provision before making a claim.

Important Conditions for Claiming Benefits

Receiving a deemed export benefit is not automatic merely because a domestic supply falls within a broad category.

Businesses should verify:

• Goods are manufactured in India.
• The recipient/project falls within an eligible category.
• Supply is made directly to the designated entity wherever required.
• Applicable authorisation, invalidation letter or ARO requirements are fulfilled.
• Invoices and supply documents are properly maintained.
• Payment and banking evidence is available.
• Required declarations and certificates are complete.
• The claim is filed with the appropriate authority.

FTP 2023 specifically states that third-party supplies are generally not eligible for deemed export benefits and prescribes direct-supply requirements, with certain provisions for subcontractors.

Documents Generally Required

Depending on the category, suppliers may need documents such as:

• Commercial invoice
• Tax invoice
• Purchase order or contract
• IEC and GST details
• Advance Authorisation / DFIA / EPCG Authorisation
• Invalidation Letter or ARO, where applicable
• Proof of supply
• Payment evidence
• End-user or project-related documents
• Certificates and declarations prescribed by the applicable procedure
• ANF-7A and supporting documents

The exact document set depends on the category of deemed export and benefit being claimed.

How to Claim Deemed Export Benefits in 2026

The practical process generally involves:

Step 1: Identify whether the transaction falls under Paragraph 7.02 of FTP 2023.

Step 2: Verify the recipient, project and authorisation requirements.

Step 3: Confirm that the goods and supply structure satisfy the applicable conditions.

Step 4: Prepare invoices, authorisations, proof of supply and supporting documents.

Step 5: File the applicable claim in ANF-7A with the jurisdictional Regional Authority, following the current HBP procedure.

The DGFT amended Chapter 7 of HBP 2023 and ANF-7A through Public Notice No. 35/2025-26 dated 10 December 2025. The updated procedure specifies jurisdictional Regional Authority requirements and provides a separate procedure for certain EOU claims.

FTP Deemed Exports vs GST Deemed Exports

One important compliance point is that FTP deemed exports and GST deemed exports are not identical.

Under FTP 2023, deemed exports are defined for specified foreign-trade benefits. Under GST, deemed exports refer to supplies notified under Section 147 of the CGST Act.

GST refund treatment also has separate procedures. CBIC’s refund rules provide specific documentation requirements for refund claims relating to deemed export supplies.

Businesses should therefore evaluate the transaction separately under DGFT/FTP and GST provisions instead of assuming that one automatically creates benefits under the other.

Common Mistakes Suppliers Should Avoid

• Treating every domestic supply as a deemed export.
• Failing to verify the recipient’s eligibility.
• Using incorrect authorisation details.
• Missing invalidation letter or ARO requirements.
• Making supplies through an ineligible third party.
• Maintaining incomplete payment evidence.
• Filing an incomplete ANF-7A application.
• Confusing FTP deemed exports with GST deemed exports.
• Ignoring amendments to the HBP or ANF-7A.

Practical Compliance Checklist for 2026

Before claiming a benefit, Indian suppliers should confirm:

Eligible product and recipient
Correct FTP 2023 category
Valid authorisation/project documentation
Direct supply requirements
Correct invoice and tax documentation
Payment evidence
ANF-7A requirements
Applicable Regional Authority
No duplicate or conflicting benefit claim
Complete recordkeeping for audit purposes

DGFT also operates a risk-management and internal-audit mechanism for Chapter 7 claims. Erroneous or ineligible benefits may be reassessed and recovered with applicable interest, while misrepresentation can result in penal action.

Frequently Asked Questions

1. What is deemed export under FTP 2023?

It refers to specified supplies of Indian-manufactured goods that do not leave India but qualify for prescribed FTP benefits when all conditions are satisfied.

2. Can EPCG-related supplies qualify as deemed exports?

Yes. Supply of capital goods against EPCG Authorisation is included in the deemed export categories under FTP 2023, subject to applicable conditions.

3. What benefits are available for deemed exports?

Depending on the category, benefits can include Advance Authorisation/DFIA, deemed export drawback and applicable terminal excise duty refund.

4. Is every domestic supply to an exporter a deemed export?

No. Only supplies falling within the specified categories and satisfying the conditions under FTP 2023 qualify.

5. Which form is used for deemed export benefit claims?

ANF-7A is used for claiming deemed export benefits, along with the documents prescribed under the applicable HBP procedure.

6. Are GST deemed exports and FTP deemed exports the same?

No. They operate under different legal frameworks and have different eligibility and benefit provisions.

Conclusion

Deemed export provisions under FTP 2023 can provide significant benefits to eligible Indian manufacturers and suppliers involved in specified domestic supply transactions.

However, eligibility depends on the exact nature of the supply, recipient, authorisation, project and supporting documentation. Businesses should carefully verify Chapter 7 of FTP 2023 and the latest HBP requirements before submitting a claim.

For 2026, suppliers should also pay particular attention to the updated ANF-7A and Chapter 7 procedures introduced through the December 2025 DGFT amendment.

Need Professional Help with Deemed Export Compliance?

A V International has over 35 years of experience in import-export licensing, DGFT compliance and regulatory consulting.

Our experts assist businesses with:

• Deemed Export Benefit Claims
• Advance Authorisation
• EPCG Compliance
• DFIA Services
• DGFT Documentation
• Export-Import Regulatory Consulting
• End-to-End Compliance Support

Professional assistance can help Indian manufacturers and suppliers identify applicable benefits, prepare documentation correctly and reduce the risk of delays or compliance issues.

Written By

Akash Bhangare

Having more than 10 years of experience in EPR Compliance, Legal Metrology, DGFT Regulations, Import Export Consulting, and Environmental Compliance in India.

Associated with A V International, a company with over 35 years of expertise in Environmental Compliance, EPR Registrations, Licensing, and Regulatory Approvals.