Deemed Exports
Supporting Domestic Manufacturers with Export Benefits for Goods Supplied Within India
Learn About Deemed ExportsWhat are Deemed Exports?
🎯 Objective
To provide a level-playing field to domestic manufacturers in certain specified cases, as may be decided by the Government from time to time.
Definition: "Deemed Exports" for the purpose of Foreign Trade Policy refer to those transactions in which goods supplied do not leave the country, and payment for such supplies is received either in Indian rupees or in free foreign exchange.
Condition: Supply of goods shall be regarded as "Deemed Exports" provided goods are manufactured in India.
Important Note on GST: "Deemed Exports" for the purpose of GST would include only the supplies notified under Section 147 of the CGST/SGST Act, on the recommendations of the GST Council. The benefits of GST and conditions applicable for such benefits would be as specified by the GST Council and as per relevant rules and notifications.
Key Characteristics
Domestic Supply
Goods are supplied within India and do not physically leave the country
Payment in INR/Foreign Exchange
Payment received in Indian Rupees or free foreign exchange
Made in India
Goods must be manufactured in India to qualify
Export Benefits
Eligible for various export incentives despite domestic supply
Categories of Supply
Supply of goods under the following categories shall be regarded as "Deemed Exports":
Category A-D Supply by Manufacturer
The following supplies by a manufacturer qualify as deemed exports:
- Supply against Advance Authorisation / DFIA: Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA
- Supply to Special Economic Zones: Supply of goods to EOU / STP / EHTP / BTP
- Supply against EPCG: Supply of capital goods against EPCG Authorisation
- [Deleted]
Category E-H Supply by Main / Sub-Contractor(s)
The following supplies by main/sub-contractors qualify as deemed exports:
- Multilateral/Bilateral Agency Projects: Supply of goods to projects financed by multilateral or bilateral Agencies/Funds as notified by Department of Economic Affairs (DEA), MoF, where legal agreements provide for tender evaluation without including customs duty.
Note: Supplies covered in this paragraph shall be under International Competitive Bidding (ICB) in accordance with procedures of those Agencies/Funds. A list of agencies is given in Appendix 7A.
- Turnkey Contracts (DDP Basis): Supply and installation of goods and equipment (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral Agencies/Funds as notified by Department of Economic Affairs (DEA), MoF, for which bids have been invited and evaluated on the basis of Delivered Duty Paid (DDP) prices for goods manufactured in India.
- Zero Customs Duty Projects: Supply of goods to any project or for any purpose in respect of which the Ministry of Finance, by erstwhile Notification No. 12/2012-Customs dated 17.3.2012, as amended from time to time, had permitted import of such goods at zero customs duty (with exemption of both BCD and CVD) subject to conditions specified therein and which are continued under the Customs Notification No. 50/2017-Customs dated 30.6.2017 with exemption of zero basic customs duty and subject to conditions mentioned in the said new notification.
Condition: Benefits of deemed exports shall be available only if the supply is made under procedure of ICB.
- Mega Power Projects: Supply of goods required for setting up of any mega power project, as specified in the list 31 at Sl. No. 598 of Department of Revenue Notification No. 50/2017-Customs dated 30.6.2017, as amended from time to time and subject to conditions mentioned therein, shall be eligible for deemed export benefits provided such mega power project conforms to the threshold generation capacity specified in the above said notification.
Special Provision: For mega power projects, ICB condition would not be mandatory if the requisite quantum of power has been tied up through tariff based competitive bidding or if the project has been awarded through tariff based competitive bidding.
- UN and International Organizations: Supply of goods to United Nations or International organization for their official use or supplied to the projects financed by the said United Nations or an International organization approved by Government of India in pursuance of section 3 of United Nations (Privileges and Immunities Act), 1947.
Reference: List of such organizations and conditions applicable to such supplies is given in the Customs notification no. 84/97-Customs dated 11.11.1997, as amended from time to time. A list of Agencies is given in Appendix-7B.
Key Benefits & Advantages
Level Playing Field
Domestic manufacturers receive export benefits even when supplying within India
Export Incentives
Access to various export promotion schemes and benefits
Competitive Advantage
Better pricing competitiveness against imported goods
Refund/Rebate
Eligible for duty drawback, refund of terminal excise duty, and other benefits
Project Support
Special benefits for mega projects and infrastructure development
International Standards
Compliance with international competitive bidding procedures
📋 Important References
- Foreign Trade Policy: Guidelines and procedures for deemed exports
- Handbook of Procedures: Detailed operational instructions
- Appendix 7A: List of multilateral/bilateral agencies for deemed export benefits
- Appendix 7B: List of UN and international organizations
- Customs Notification 50/2017: Zero customs duty projects
- Customs Notification 84/97: UN and international organization supplies
Compliance & Key Points
✅ Eligibility Check
Verify your supply category matches deemed export criteria
📄 Documentation
Maintain proper records of manufacture and supply in India
🔍 ICB Requirements
Ensure compliance with International Competitive Bidding where applicable
💰 Payment Terms
Confirm payment in INR or free foreign exchange
🏭 Manufacturing Proof
Goods must be manufactured in India with supporting evidence
📋 GST Compliance
Follow GST Council notifications for applicable benefits
Need Expert Assistance with Government Schemes?
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