The one-time relief window introduced by the Ministry of Finance from April 1, 2026 to March 31, 2027 addresses a critical operational bottleneck: underutilized production capacity caused by volatile global demand and West Asia’s geopolitical disruptions, says the Apparel Export Promotion Council (AEPC). This regulatory update allows Special Economic Zone (SEZ) manufacturing units to clear goods into the Domestic Tariff Area (DTA) at concessional customs duty rates, ranging from 5 per cent to 12.5 per cent, the Council adds. . The measure permits units to sell up to 30 per cent of their highest annual export turnover domestically, providing a stabilization mechanism for factories that have seen a 10 per cent to 15 per cent drop in international order books over the last six months, the Council adds.
Safeguarding value addition and domestic parity
To ensure a level playing field for non-SEZ manufacturers, the policy mandates a minimum value addition of 20 per cent on all goods cleared under this window. This requirement prevents SEZs from functioning as mere trading hubs for cheap imports, reinforcing the focus on substantive textile manufacturing. This calibrated flexibility is essential for maintaining employment continuity during a period of global trade stress, stated an AEPC representative.
Industry data for FY26 indicates, while ready-made garment (RMG) exports reached $10.08 billion between April and November, the sector remains sensitive to rising input costs. The relief window is expected to improve liquidity for approximately 1,200 manufacturing units currently navigating high inventory levels and increased logistics expenses.
Strategic alignment with national export targets
This intervention is viewed as a transitional support tool as the industry moves toward the $100 billion export target by 2030. The implementation through a faceless assessment mechanism ensures transparency while allowing firms to pivot - without losing their export-oriented status—toward India’s growing $225 billion domestic market. As manufacturing indices show a modest 1.2 per cent growth, the ability to utilize SEZ infrastructure for local supply chains provides a necessary buffer against external shocks. Analysts suggest this move will consolidate India’s position as a resilient textile hub, balancing domestic consumption with aggressive global expansion plans.
An official body representing Indian apparel exporters, facilitating global trade and policy advocacy, AEPC manages a network of over 8,000 members across major textile hubs. The council is currently driving a $100 billion export roadmap by 2030, focusing on ESG compliance and enhancing the market share of man-made fiber (MMF) garments in the US and EU.
