If your company has been exporting consistently but had one weaker financial year, you may previously have been unable to obtain One Star Export House status even if your export performance was otherwise strong.

That has now changed.

The Directorate General of Foreign Trade (DGFT) has introduced an important relaxation in the eligibility condition for One Star Export House status. Under the revised rule, exporters outside the Gems & Jewellery sector can qualify for One Star status if they have the required export performance in any two out of the three preceding financial years.

This is a meaningful change for exporters whose business has experienced a temporary dip in one financial year but otherwise meets the prescribed export-performance threshold.

The change has been made through DGFT Notification No. 33/2026-27 dated 21 August 2026, amending Para 1.25(d) of the Foreign Trade Policy (FTP), 2023, with immediate effect. The uploaded notification is a one-page amendment to Para 1.25(d); its page image has been reviewed directly because the PDF does not contain machine-readable text.

The important point is that this is a relaxation specifically for One Star Export House status. It does not mean that every Status Holder category can now be obtained on the basis of only two years of export performance.

Let’s understand exactly what has changed and, more importantly, what it means for exporters.

Quick Take: What Exporters Need to Know

• DGFT Notification No. 33/2026-27 was issued on 21 August 2026.
• The amendment modifies Para 1.25(d) of FTP 2023.
• It has immediate effect.
• For One Star Export House status, exporters other than those in the Gems & Jewellery sector can now qualify based on export performance in any two of the three preceding financial years.
• Earlier, export performance was required in all three preceding financial years.
• The One Star export-performance threshold remains USD 3 million; the notification does not reduce the threshold itself.
• The Gems & Jewellery sector is not covered by this relaxation. Its existing requirement of export performance in the preceding two financial years continues.
• Two Star, Three Star, Four Star and Five Star Export House categories are not relaxed by this notification.
• All other applicable conditions under Para 1.25 of FTP 2023 continue to apply.
• The amendment does not directly change the eligibility or Export Obligation requirements of Advance Authorisation or EPCG.
• However, obtaining Status Holder recognition can be commercially useful because Status Holders receive various facilitation benefits under FTP 2023, including certain bank-guarantee and customs/self-declaration facilities, subject to the applicable rules.

What Does the New DGFT Notification Actually Say?

DGFT has amended Para 1.25(d) of the Foreign Trade Policy, 2023.

The earlier provision stated that, for granting Status Holder recognition, export performance was necessary in:

• all three preceding financial years for most sectors; and
• all two preceding financial years for the Gems & Jewellery sector.

The new provision retains the general rule but adds a specific relaxation:

For grant of One Star Export House status, other than for the Gems & Jewellery sector, export performance in any two out of the three preceding financial years shall be sufficient.

The notification has been issued under the powers of the Central Government under the Foreign Trade (Development & Regulation) Act, 1992, read with FTP 2023, and is effective immediately.

In simple terms

Previously:

You needed to meet the required export-performance criteria in all three preceding financial years.

Now, for One Star status:

You need to meet the required export-performance criteria in any two of those three preceding financial years.

That one change can make a significant difference to exporters with an uneven export history.

What Has Changed?

The easiest way to understand the amendment is through a before-and-after comparison.

The underlying FTP framework continues to prescribe USD 3 million for One Star Export House, USD 15 million for Two Star, USD 50 million for Three Star, USD 200 million for Four Star and USD 800 million for Five Star.

Why Is This Important for Exporters?

This may look like a small procedural amendment, but it solves a genuine problem for exporters.

Consider an exporter who has built a strong international business but experienced a temporary decline in exports in one year because of:

• a major customer loss,
• commodity-price fluctuations,
• supply-chain disruptions,
• a temporary production shutdown,
• geopolitical conditions,
• a weak international market, or
• a strategic change in export markets.

Under the earlier rule, one weak year could prevent the exporter from obtaining One Star status even if the other two years demonstrated sufficient performance.

The new rule provides more flexibility.

What this means for you

If your company has crossed the applicable One Star threshold in two of the three preceding financial years, you may now have an opportunity to apply for One Star Export House status even if the third year was below the threshold.

This makes it particularly important for exporters who previously assumed that they were not eligible to reassess their export performance.

Who Will Benefit From the New Rule?

Exporters Who May Benefit

The relaxation can be particularly useful for exporters who:

• have strong export performance in two of the last three financial years;
• had one comparatively weak export year;
• previously failed the three-year continuity requirement;
• are close to or above the One Star threshold through eligible export performance;
• qualify for applicable double-weightage provisions; or
• have recently become aware that their historical export performance may now qualify them.

The key is that the exporter must satisfy all other applicable requirements.

Exporters Who May Not Benefit

The amendment does not mean that every exporter automatically qualifies.

For example:

• An exporter with only one qualifying year cannot use this relaxation.
• An exporter below the applicable One Star threshold in two of the three years cannot qualify merely because the three-year continuity requirement has been relaxed.
• Gems & Jewellery exporters cannot use this particular two-out-of-three relaxation.
• Exporters applying for Two Star or higher status do not get a new two-year eligibility rule from this notification.

What Is the One Star Export House Threshold?

Under Para 1.26 of FTP 2023, the export-performance threshold for:

One Star Export House = USD 3 million

The higher categories are:

The new notification does not reduce these monetary thresholds. It changes the number of preceding financial years in which the One Star performance requirement must be demonstrated.

An important distinction

This is therefore a relaxation of the performance-period requirement, not a reduction of the One Star export threshold.

That distinction is important when assessing eligibility.

What Does “Any Two Out of Three Financial Years” Mean?

Suppose an exporter is applying during FY 2026-27.

The three preceding financial years would generally be:

• FY 2025-26
• FY 2024-25
• FY 2023-24

Under the amended rule, the exporter can qualify for One Star status if the required export performance is achieved in any two of these three years.

So, for example:

The exporter is no longer disqualified merely because the third preceding financial year was below the threshold.

Practical Example: Exporter With One Weak Year

Example 1 — Previously Ineligible, Potentially Eligible Now

ABC Engineering Ltd. has the following export performance:

• FY 2025-26: USD 4 million
• FY 2024-25: USD 3.4 million
• FY 2023-24: USD 2.2 million

Earlier, ABC could not satisfy the requirement of export performance in all three preceding years.

Under the amended rule, however, the company has the required performance in two of the three preceding financial years.

Therefore, subject to the other provisions of Para 1.25 and applicable documentation, ABC can now consider applying for One Star Export House status.

Practical impact

A company that previously had to wait for another year of export performance may now have an immediate opportunity to seek recognition.

Practical Example: One Qualifying Year Is Not Enough

Example 2 — Still Not Eligible

XYZ Industries has:

• FY 2025-26: USD 3.5 million
• FY 2024-25: USD 2.4 million
• FY 2023-24: USD 2.1 million

Only one year meets the USD 3 million threshold.

The new rule does not allow XYZ to qualify merely because one year crossed the threshold.

The relaxation is:

any two out of three — not one out of three.

Practical Example: Double Weightage Can Still Matter

FTP 2023 separately provides double weightage for One Star Export House status for specified categories, including eligible Micro and Small Enterprises, certain manufacturing units with ISO/BIS certification, specified units in the North Eastern States/Sikkim and certain Union Territories, and exports of fruits and vegetables under Chapters 7 and 8 of ITC(HS).

This provision has not been changed by Notification No. 33/2026-27.

For example, an eligible shipment of USD 1.6 million that qualifies for double weightage can be counted as USD 3.2 million for the applicable status calculation, subject to the detailed rules.

Therefore, when reviewing eligibility, exporters should not look only at the gross export turnover. They should also check whether any legitimate double-weightage provision applies.

What Export Performance Is Counted?

FTP 2023 provides that export performance for Status Holder recognition is counted based on FOB export earnings in freely convertible foreign currencies or in Indian Rupees as permitted under Para 2.53 of FTP. Deemed exports have a separate conversion mechanism based on the CBIC-notified exchange rate applicable on 1 April of the financial year.

The application documentation also requires the export-performance calculation to be properly supported.

DGFT’s ANF-1B documentation provides for reporting:

• exports of goods;
• exports of services;
• exports eligible for double weightage;
• deemed exports;
• eligible receipts in INR under Para 2.53;
• eligible exports from SEZs/EOUs/EHTPs/STPs/BTPs where clubbing is sought; and
• total export performance in USD.

Important Conditions That Still Apply

The notification relaxes one specific condition. It does not remove the other Status Holder requirements.

For example, FTP 2023 continues to state that:

• export performance of one IEC holder cannot simply be transferred to another IEC holder;
• disclaimer-based export performance cannot be used for recognition;
• re-exports are not counted for recognition; and
• exports of items under Authorisation, including SCOMET items, can be included in export performance, subject to the applicable provisions.

Exporter Tip

Do not interpret the new notification as a general relaxation of all Status Holder eligibility conditions.

It changes one specific requirement for One Star Export House status. The remaining provisions of Para 1.25 and related provisions continue to apply.

Important Dates

There is no separate transition period or application deadline specified in the notification.

The important point is that exporters should not wait unnecessarily if they now appear eligible.

How Does This Affect the Status Holder Certificate Application?

The underlying application procedure remains relevant.

Under the current HBP, exporters apply online for Status Holder recognition using ANF-1B, with the application filed with the jurisdictional Regional Authority determined according to the location of the registered/head office.

The application is electronic and paperless. DGFT’s ANF-1B documentation states that no physical copy or scanned copy of the ANF itself is required to be submitted to a DGFT office.

Documentation and data that deserve attention

The ANF-1B framework requires detailed export-performance information and supporting certification.

It includes, among other things:

• IEC details;
• category of Status Holder being applied for;
• export performance for relevant financial years;
• details of double-weightage exports, where applicable;
• deemed exports;
• INR receipts covered under Para 2.53;
• relevant SEZ/EOU/EHTP/STP/BTP exports where clubbing is sought;
• product/service information;
• business information for publication in the DGFT Status Holder list; and
• applicable declarations.

The application documentation also provides for a CA/Cost Accountant/Company Secretary certificate, including verification of relevant export records and realization of export proceeds.

Exporter Tip

Before filing, reconcile your export turnover with your shipping bills, invoices, bank realization/e-BRC data and accounting records.

A mismatch in export-performance figures can create unnecessary queries during the application process.

What Are the Benefits of One Star Export House Status?

One Star Export House status is not a direct cash incentive or export subsidy.

It is a Status Holder recognition under FTP 2023, accompanied by various facilitation measures.

FTP 2023 provides Status Holders with privileges including:

• self-declaration-based authorisation and Customs clearances, subject to applicable conditions;
• priority consideration for Input-Output Norm fixation;
• exemption from furnishing Bank Guarantee for schemes under FTP unless otherwise specified;
• exemption from compulsory negotiation of documents through banks, while remittances/receipts continue through banking channels; and
• preferential treatment and priority in handling of consignments by concerned agencies.

Some facilities are category-specific. For example, Export Warehouses are available to Two Star and above Export Houses, while certain self-certification facilities are specifically provided for higher-category manufacturer Status Holders.

Therefore, obtaining One Star status does not mean that an exporter automatically receives every privilege available to higher Status Holder categories.

How Does This Affect Advance Authorisation?

No Direct Change to Advance Authorisation Eligibility

Notification No. 33/2026-27 specifically amends Para 1.25(d) relating to Status Holder certification.

It does not amend the core Advance Authorisation provisions.

Therefore, this notification does not by itself:

• change Advance Authorisation eligibility;
• change input norms;
• change Export Obligation;
• change redemption/EODC requirements;
• change the validity of an Advance Authorisation; or
• create a new duty exemption.

However, there can be an indirect operational benefit.

FTP 2023 provides Status Holders with exemption from furnishing Bank Guarantee for schemes under FTP unless specifically provided otherwise in FTP/HBP.

Therefore, an exporter obtaining One Star status may need to examine whether the relevant Status Holder privilege can be used in a particular Advance Authorisation transaction.

This should be checked against the specific Authorisation, applicable Customs requirements and the prevailing FTP/HBP provisions rather than assumed automatically.

How Does This Affect EPCG?

Again, there is no direct amendment to EPCG eligibility or Export Obligation under this notification.

The notification does not change:

• EPCG duty benefit;
• capital-goods eligibility;
• specific Export Obligation;
• average Export Obligation;
• EO period; or
• EPCG redemption requirements.

However, because Status Holder privileges can include exemption from Bank Guarantee requirements for FTP schemes unless otherwise specified, an exporter that newly obtains One Star status should examine whether the relevant EPCG transaction can benefit from the Status Holder provision.

This is a consequential consideration, not a new EPCG benefit created by Notification No. 33/2026-27.

What About RoDTEP, RoSCTL, DFIA and Other DGFT Schemes?

The notification does not directly amend:

• RoDTEP;
• RoSCTL;
• DFIA;
• SCOMET licensing;
• REX registration;
• Restricted Import Licences; or
• other individual DGFT export-promotion schemes.

The change is specifically focused on Status Holder certification under Para 1.25(d).

That said, Status Holder recognition can have broader operational significance because the privileges in Para 1.29 apply to Status Holders subject to their respective conditions.

For example, export performance under Authorisations, including SCOMET items, can be included for Status Holder recognition under FTP 2023.

Does This Change Apply to Existing Status Holders?

The notification is primarily an eligibility relaxation for grant of One Star status.

It does not state that existing Status Holder certificates are being retrospectively modified or upgraded.

Therefore:

• An existing One Star Export House does not need to reapply merely because of this notification.
• A Two Star or higher Status Holder is not automatically affected.
• An exporter whose earlier application was rejected because of the three-year performance condition should examine whether a fresh application or other procedural route is appropriate under the prevailing DGFT system.
• Pending applications should be reviewed based on their exact status and the procedural position at the time of processing.

Exporter Tip

If you previously concluded that your company was ineligible only because one of the three preceding financial years fell below the required performance level, recalculate your eligibility now.

Do not assume that an old assessment remains valid after this amendment.

How Long Is the Status Holder Certificate Valid?

The current HBP provides that a Status Certificate issued under FTP 2023 is valid for five years from the date on which the application for recognition was filed. It also permits a firm to upgrade its status category after achieving the higher threshold, subject to surrender of the previous certificate and a fresh application under the prescribed procedure.

This validity provision has not been changed by Notification No. 33/2026-27.

What Should Exporters Do Now?

If your business has substantial exports, this is a good time to conduct a Status Holder eligibility review.

Action Checklist

• 
  

  Check your export performance for the last three completed financial years.

• 
  

  Identify whether the USD 3 million One Star threshold was achieved in any two years.

• 
  

  Check whether you are outside the Gems & Jewellery sector.

• 
  

  Recalculate export performance after considering any legitimately applicable double-weightage provisions.

• 
  

  Verify that export proceeds have been properly realised and reflected in the relevant records.

• 
  

  Reconcile shipping bills, invoices, bank records and e-BRC data.

• 
  

  Check whether any SEZ/EOU/EHTP/STP/BTP exports are proposed to be clubbed.

• 
  

  Check whether any disclaimer or re-export transactions have inadvertently been included.

• 
  

  Review your eligibility under the other provisions of Para 1.25.

• 
  

  Check the applicable ANF-1B requirements.

• 
  

  Determine the correct jurisdictional Regional Authority.

• 
  

  Assess whether obtaining Status Holder recognition could improve your Customs/DGFT compliance and working-capital position.

• 
  

  If you previously failed only because of the three-year continuity requirement, reassess your eligibility under the amended provision.

Common Mistakes Exporters Should Avoid

1. Assuming the USD 3 million threshold has been reduced

It has not.

The threshold remains USD 3 million. The relaxation concerns the number of preceding years in which the required performance must be demonstrated.

2. Assuming one qualifying year is enough

It isn’t.

The new provision requires qualifying performance in any two of the three preceding financial years.

3. Applying the relaxation to Gems & Jewellery

The notification specifically excludes the Gems & Jewellery sector from the new two-out-of-three rule.

4. Assuming Two Star and higher categories are also relaxed

They are not.

The specific relaxation introduced by this notification is for One Star Export House status.

5. Counting ineligible export turnover

Re-export performance and disclaimer-based transfer of export performance cannot simply be included for Status Holder recognition.

6. Assuming Status Holder means automatic exemption from every Bank Guarantee

The FTP provides a Bank Guarantee exemption for Status Holders, but it is expressly subject to situations where FTP/HBP specifies otherwise.

7. Ignoring export-realisation records

The Status Holder application requires proper verification of export performance and realisation. DGFT’s ANF-1B framework specifically requires supporting certification and records.

8. Treating this notification as an Advance Authorisation or EPCG amendment

It is not.

The notification amends Para 1.25(d) relating to Status Holder certification.

Frequently Asked Questions

1. What is the latest DGFT update on One Star Export House status?

DGFT Notification No. 33/2026-27 dated 21 August 2026 relaxes the export-performance requirement for One Star Export House status. Exporters other than those in the Gems & Jewellery sector can now qualify based on performance in any two of the three preceding financial years, subject to the other applicable conditions.

2. What is the new One Star Export House eligibility under FTP 2023?

For exporters other than Gems & Jewellery, export performance in any two out of the three preceding financial years is now sufficient for One Star status, subject to the remaining provisions of Para 1.25.

3. Has the One Star Export House threshold been reduced?

No. The One Star threshold remains USD 3 million. The amendment relaxes the requirement regarding how many preceding financial years must demonstrate the required performance.

4. Can an exporter qualify for One Star status if one of the last three years was below USD 3 million?

Yes, potentially. If the exporter meets the applicable threshold in the other two of the three preceding financial years, the new provision can permit One Star recognition, subject to all other requirements.

5. Does the new rule apply to Gems & Jewellery exporters?

No. The notification specifically excludes the Gems & Jewellery sector from the relaxation. The existing requirement for that sector remains performance in the two preceding financial years.

6. Does the new rule apply to Two Star Export House status?

No. The notification specifically provides the relaxation for One Star Export House status. It does not introduce a similar two-out-of-three rule for Two Star and higher categories.

7. Does this DGFT notification change Advance Authorisation?

No. Notification No. 33/2026-27 does not directly amend Advance Authorisation provisions. Any impact on an Advance Authorisation would be consequential to the exporter obtaining Status Holder recognition and must be assessed under the applicable scheme conditions.

8. Does this notification change EPCG eligibility?

No. It does not amend the EPCG scheme’s core eligibility, duty benefit or Export Obligation provisions. Any indirect benefit should be examined under the Status Holder provisions and the specific EPCG requirements.

9. How do I apply for a Status Holder Certificate?

The application is filed online in ANF-1B with the jurisdictional Regional Authority. DGFT’s current HBP provides the procedure for Status Holder applications, and the ANF-1B process is electronic and paperless.

10. What documents are required for Status Holder recognition?

The application requires export-performance information and supporting documentation, including the prescribed CA/Cost Accountant/Company Secretary certification and relevant export records. The precise documents and declarations should be checked against the current ANF-1B and DGFT portal requirements at the time of filing.

11. Is One Star Export House status a direct financial incentive?

No. It is a Status Holder recognition under FTP 2023. The associated value comes from the facilitation and procedural privileges available to Status Holders rather than from a direct cash incentive.

12. Should exporters who previously failed the three-year requirement check their eligibility again?

Absolutely. If the only reason for ineligibility was that one of the three preceding financial years did not meet the required export-performance condition, the exporter should reassess eligibility under the amended rule

Final Takeaway: A Small Amendment With Potentially Significant Practical Impact

The most important message from DGFT Notification No. 33/2026-27 is simple:

For One Star Export House status, exporters outside the Gems & Jewellery sector no longer need qualifying export performance in all three preceding financial years. Performance in any two of those three years can now be sufficient, subject to the other applicable provisions.

The change does not reduce the USD 3 million One Star threshold.

It does not change Advance Authorisation or EPCG Export Obligation rules.

It does not extend the relaxation to Gems & Jewellery or automatically to Two Star and higher categories.

What it does is remove one important hurdle for exporters whose export performance has been strong but uneven.

For an exporter who crossed the required threshold in two of the last three years, this could be the difference between “not eligible” and “worth applying now.”

Need Help Assessing Your One Star Export House Eligibility?

DGFT Status Holder applications can appear straightforward, but the eligibility calculation often requires careful review of financial-year-wise exports, FOB/FOR values, export realisation, double weightage, deemed exports, INR realisations, SEZ/EOU exports and exclusions.

If your company has previously been unable to obtain One Star Export House status because of a weak export year, the latest amendment makes it worthwhile to reassess your position.

A V International can assist exporters with:

• Status Holder / Export House Certification
• DGFT licensing and compliance
• Export-performance assessment
• Advance Authorisation
• EPCG
• Norms Fixation
• Redemption / EODC
• RoDTEP and other DGFT export benefits
• Other DGFT regulatory matters

With 35+ years of experience assisting Indian exporters, A V International can help you assess the applicability of the amended rule to your specific export history and guide you through the documentation and DGFT application process.

A V International

Important: This article explains the regulatory amendment based on the notification and the applicable FTP/HBP provisions reviewed for this article. Eligibility should be verified against the exporter’s actual records and the DGFT provisions applicable on the date of filing. Where the facts of a particular case are complex, case-specific verification with DGFT/Customs or professional advice is recommended.