DGFT Automates FSC Issuance: What Exporters Need to Know

The Directorate General of Foreign Trade (DGFT) has enabled automated issuance of Free Sale and Commerce Certificates (FSCs), on the DGFT portal, marking a shift from routine manual verification towards a rule-based, system-driven workflow. The measure is intended to facilitate seamless, paperless processing, expedite turnaround times and further promote ease of doing business for trade and industry.

FSCs are issued by DGFT under Paragraph 2.34 of the Handbook of Procedures (HBP) for items not covered under the Drugs & Cosmetics Act, 1940. The present Trade Notice introduces an automated mechanism for issuance of eligible FSC applications through the DGFT portal.

What Has Changed?

Under Trade Notice No. 24/2026-2027, dated August 31, 2026, DGFT has enabled automated issuance of FSCs in accordance with the prevailing framework. The mechanism is aligned with Paragraph 1.04(d) of HBP 2023, which envisages the phased implementation of rule-based, system-driven workflows with a risk-based management approach.

Previously, applications submitted online were routed to the concerned DGFT Regional Authority (RA) for manual analysis, verification and approval. DGFT has stated that this process involved substantial processing time. The new mechanism seeks to replace routine manual processing with a, system-driven workflow adopting a risk-based management approach.

How the Automated Process Will Work

• Automatic issuance for eligible applications: Applications meeting the applicable automated processing parameters will be considered for automatic issuance through the DGFT system.
• Manual processing where verification is required: Applications requiring verification, or those not meeting the automated processing parameters, may continue to be referred to the concerned RA for manual processing.
• Risk-based post-issuance review: Certain applications issued automatically may subsequently be flagged for review by the concerned RA under the system’s risk-management parameters.

The reform, therefore, does not eliminate manual scrutiny. Instead, it provides for automatic issuance for applications meeting the applicable processing parameters, while retaining manual processing and risk-based review where required.

Legal and Regulatory Context

The Trade Notice has been issued in accordance with Paragraph 2.34 of the HBP and refers to the approach envisaged under Paragraph 1.04(d) of HBP 2023, concerning phased implementation of a rule-based, system-driven workflow with a risk-based management approach.

The FSC initiative is consistent with DGFT’s wider efforts towards digitisation and automation of trade-related processes. In November 2023, for instance, DGFT issued Trade Notice No. 33/2024, introducing an upgraded electronic Bank Realisation Certificate (eBRC) system, enabling exporters to self-certify eBRCs based on electronic Inward Remittance Messages transmitted by banks to the DGFT system.

DGFT has also previously introduced system-generated electronic Status Holder Certificates (e-SHCs). Under Public Notice No. 32/2023 dated October 9, 2023, DGFT provided for automatic system-based issuance of e-SHCs based on merchandise export data available with DGCI&S, without requiring exporters to file an application in most cases. The measure expressly referred to the e-governance initiative envisaged under Paragraph 1.04(d) of HBP 2023.

What Does This Mean for Exporters?

Faster and more predictable processing

For applications eligible for automatic issuance, removal of routine manual intervention is expected to reduce processing time and administrative burden. 

For exporters, faster issuance could make the FSC process more predictable, particularly where the certificate is required as part of documentation for overseas markets or other export-related requirements.

Automation does not mean the end of scrutiny 

The continued possibility of manual processing and subsequent risk-based review is an important feature of the new mechanism. Applications requiring verification may continue to be referred to the concerned RA, while certain automatically issued FSCs may subsequently be flagged for review.

Accordingly, automatic issuance should not be treated as removing the possibility of subsequent regulatory verification. Businesses should continue to maintain appropriate records and supporting documentation relating to FSC applications.

Data quality assumes greater importance

The shift towards system-driven processing also places greater emphasis on the accuracy and consistency of information submitted through the DGFT portal. Businesses should ensure that application particulars are complete and consistent with their underlying records, particularly given the possibility of subsequent review.

While DGFT has indicated that a significant category of FSC applications will benefit from automated processing, the Trade Notice does not set out the automated processing parameters that will determine which applications qualify for automatic issuance. The practical scope of the mechanism will therefore become clearer as the system is implemented and further operational guidance is issued.