DGFT Automates Free Sale and Commerce Certificate Issuance

The Directorate General of Foreign Trade (DGFT) has introduced automated issuance of Free Sale and Commerce Certificates (FSC) through its online portal. The change was announced through Trade Notice No. 24/2026-2027 dated 31 August 2026 and is aimed at reducing the manual processing involved in eligible FSC applications.

Exporters were already applying for an FSC online. The major change is what happens after an application is submitted. Earlier, the file was routed to the concerned DGFT Regional Authority (RA) for manual analysis, verification, and approval. Under the new arrangement, eligible applications can be considered for automatic issuance through a rule-based and system-driven workflow.

Automation, however, does not mean every FSC application will be approved automatically. Applications requiring verification or failing to meet automated-processing parameters can still be sent to the concerned Regional Authority. Even some auto-approved applications may later be selected for review under DGFT's risk-management parameters. 

Notification at a Glance

The notice is therefore mainly a processing reform. It does not replace the FSC framework itself. It changes the way qualifying applications may be examined and issued. 

What Is a Free Sale and Commerce Certificate (FSC)?

A Free Sale and Commerce Certificate is an export-related certificate that confirms the specified product is freely sold in the country from which it is being exported. DGFT's official FAQ also explains that an FSC does not, by itself, mean that the product has been evaluated for safety or efficacy. 

Under Paragraph 2.34 of the Handbook of Procedures, DGFT Regional Authorities may issue FSCs for specified categories of products. The provision covers certain products not falling under the Drugs & Cosmetics Act, 1940, as well as other items that are not restricted or prohibited for export. The HBP also provides that the certificate is normally valid for two years from the date of issue unless otherwise specified. 

An FSC should therefore not be treated as a universal export certificate. Whether it is relevant depends on the product, its regulatory status and the requirements applicable to the proposed export.

The Regulatory Framework for Free Sale and Commerce Certificates

The automation introduced in August 2026 takes place within an existing DGFT process and not through the creation of a new certificate.

DGFT Functions

DGFT functions under the ambit of the Department of Commerce, Ministry of Commerce and Industry. It deals with processes related to India's foreign trade policy. For FSCs, the relevant procedural provision is Paragraph 2.34 of the Handbook of Procedures 2023.

Paragraph 2.34 of the Handbook of Procedures- Paragraph 2.34 provides for FSC issuance by Regional Authorities.

It covers:

• Certain items not covered under the Drugs & Cosmetics Act, 1940 that have medical or surgical use in hospitals, nursing homes, and clinics and are not prohibited for export. 
• Other items that are not restricted or prohibited for export. 
• Application through the prescribed ANF 2H framework. 
• Issuance of the certificate in the prescribed format. 
• A normal certificate validity of two years unless otherwise specified. 

For items falling under the Drugs & Cosmetics Act, the HBP refers applicants to the Central Drugs Standard Control Organisation (CDSCO) for the relevant FSC route. 

Paragraph 1.04(d) of HBP 2023

The automation is also linked to Paragraph 1.04(d), titled Automated Processing in Online Environment.

That provision establishes the wider DGFT policy of progressively introducing rule-based and system-driven processing with a risk-based management approach. 

The FSC change is therefore part of a wider shift from officer-led processing of every routine case towards automated processing where system conditions allow it.

What Has DGFT Changed in the FSC Issuance Process?

The change is in processing after online submission, not in moving the application from offline to online.

Before this Trade Notice, an exporter submitted the FSC application online. The file was then sent to the concerned Regional Authority, where officers carried out manual analysis, verification, and approval. Under the automated system, eligible applications can now move through a system-driven route.

The practical change can be understood as:

Earlier:

Online application → Regional Authority → manual analysis → verification → approval

New system for eligible cases:

Online application → system-based assessment → automatic issuance where applicable

For cases requiring closer examination:

Online application → system assessment → Regional Authority → manual processing

This distinction matters. The reform is about reducing unnecessary manual examination in suitable cases, not removing regulatory oversight. 

Who Is Eligible for Automated FSC Issuance?

The Trade Notice says that eligible applications will be considered for automatic issuance in accordance with the prevailing framework.

It does not, however, publish a complete list of the internal parameters that determine whether a particular application will pass through the automated route.

There are therefore two separate questions:

• Eligibility for an FSC

This comes from the existing DGFT framework, including Paragraph 2.34 of the HBP and applicable application requirements.

• Eligibility for Automatic Issuance

This depends on whether an application satisfies the parameters built into DGFT's automated system.

The Trade Notice does not disclose every system parameter or risk condition used to make that decision.

Exporters should therefore avoid assuming that being eligible to apply for an FSC automatically means the certificate will be issued through the automated route.

Which Products Are Covered Under the DGFT FSC Mechanism?

Paragraph 2.34 provides clearer product coverage than the short Trade Notice itself.

The HBP permits Regional Authorities to issue FSCs for:

Products outside the Drugs & Cosmetics Act, 1940 that are used in hospitals, nursing homes, or clinics for medical and surgical purposes and are not prohibited for export. 

Other products that are not restricted or prohibited for export. 

The prescribed ANF 2H certificate format also refers to specified products being freely permitted for sale in India and freely exportable, subject to the declaration underlying the certificate. 

Product classification should therefore be checked before filing. A business should not choose the DGFT FSC route merely because a foreign buyer asks for a "free sale certificate."

Which Products Are Outside the Scope of This DGFT Trade Notice?

One important boundary concerns product covered under the Drugs & Cosmetics Act, 1940.

Paragraph 2.34 specifically provides that applications relating to products falling under that Act may be made to the Central Drugs Standard Control Organisation (CDSCO) for the relevant Free Sale and Commerce Certificate. 

This distinction can be important for businesses dealing with pharmaceutical, drug, cosmetic or other products regulated under that legislation.

The correct regulator should therefore be identified before starting an application. Filing through the wrong route can create avoidable delays even if the underlying product is otherwise exportable.

How Will Automated FSC Issuance Work on the DGFT Portal?

The Trade Notice does not publish a detailed technical workflow, but its provisions can be understood through the following practical sequence.

Step 1: Submission of the FSC Application in an Online Format

The exporter continues with the DGFT online system. Automation does not eliminate online filing but affects how the submitted application can be handled.

Step 2: Evaluation of the FSC Application

The FSC application is evaluated according to the current framework and criteria for automation.

Step 3: Issuance of the Application Automatically

When the requirements are fulfilled, the FSC can be issued automatically.

Step 4: Some Cases Continue to the Regional Authority

Applications requiring verification or those that do not meet the automated parameters can still be routed to the concerned RA.

Step 5: Certain Auto-Approved Cases May Be Reviewed

Even after automatic approval, a case can subsequently be flagged to the relevant Regional Authority under DGFT's risk-management parameters.

This is an explanatory reading of the Trade Notice. DGFT has not presented these points as a separately numbered five-stage statutory procedure. 

When Will an FSC Application Still Go for Manual Verification?

Manual processing has not been abolished.

The Trade Notice identifies two broad situations in which an application may continue to the concerned Regional Authority:

• The application requires verification. 
• The application does not meet the automated-processing parameters. 
• In those situations, the RA can continue with manual processing.

A manual referral should not automatically be read as a rejection. It simply means that the application has not completed the automatic route and needs officer-level processing or verification.

This is one of the most important practical points for exporters because the new system creates an automated route alongside the existing regulatory review mechanism rather than replacing it completely. 

Can an Automatically Approved FSC Be Reviewed Later?

Yes.

Trade Notice No. 24/2026-2027 specifically states that certain auto-approved applications may later be flagged to the concerned Regional Authority for review under the system's risk-management parameters. 

This means receiving an FSC through the automated route should not be understood as immunity from later regulatory scrutiny.

For exporters, the practical lesson is straightforward: information submitted in the application should be accurate and capable of being supported if a review is later initiated.

Supporting records should also be organised rather than treated as unnecessary simply because the initial decision was automated.

The Trade Notice does not state how many cases will be reviewed or reveal the internal criteria used to select them.

How Does DGFT's Risk-Based FSC Processing System Work?

Risk-based processing allows a digital system to distinguish between applications that can proceed through automated processing and cases where further regulatory attention may be needed.

For FSCs, DGFT has confirmed three broad outcomes:

• Eligible applications can be automatically issued. 
• Applications requiring verification or failing automated parameters can be sent for manual processing. 
• Certain auto-approved cases can later be flagged for review. 

The Trade Notice does not disclose the risk-scoring system behind these decisions.

It does not identify:

• A numerical risk scores 
• Specific red flags 
• Selection percentages 
• Review frequency 
• Internal algorithms 
• Product-wise risk categories 
• These details should not be guessed.

The broader HBP framework itself provides for phased use of rule-based, system-driven workflows combined with risk-based management. 

Manual vs Automated FSC Issuance: What Has Changed for Exporters?

The most important difference is therefore not the application form. It is the way DGFT handles the file after it enters the system.

What Is the Role of DGFT Regional Authorities After Automation?

Regional Authorities continue to have a meaningful role.

Under the new arrangement, their involvement may become more targeted rather than routine for every application.

RAs may still deal with:

• Applications requiring verification 
• Cases that do not meet automated-processing parameters 
• Manual processing of referred applications 
• Certain auto-approved applications later flagged under risk-management parameters 
• The system should therefore not be described as replacing Regional Authorities.

A better description is that automation may reduce the number of straightforward applications requiring routine manual processing while preserving RA scrutiny where the system determines that further examination is appropriate.

Does Automated FSC Issuance Mean Automatic Approval for Every Application?

No.

"Automated issuance" and "automatic approval of every application" are not the same thing.

The Trade Notice uses the word eligible applications. That qualification is important.

An applicant may face one of several outcomes:

• The application satisfies the automated route and is issued through the system. 
• The application needs verification and moves to the Regional Authority. 
• The application does not satisfy automated parameters and moves to manual processing. 
• An automatically issued application is later selected for review. 

The notice therefore introduces differentiated processing rather than unrestricted automatic approval.

What Happens If an FSC Application Does Not Meet Automated Processing Parameters?

The Trade Notice allows such an application to continue to the concerned Regional Authority for manual processing.

It does not say that failure to qualify for automated processing automatically causes rejection.

This matter because an exporter may see a manually routed application and incorrectly assume something is wrong with the underlying FSC eligibility.

The two issues are different.

• A file can fail to complete the automated route but remain capable of being processed manually under the prevailing framework.
• Exporters should therefore follow the status and any communication issued through the official DGFT system rather than concluding only from the fact that the application has moved to an RA.

Why Has DGFT Introduced Automated FSC Issuance?

DGFT gives a clear administrative reason for the change: reduce manual work and move suitable applications through a faster, paperless system.

• Reduce Manual Processing

The notice records that the earlier workflow involved manual analysis, verification, and approval, which could involve substantial processing time.

• Support Paperless Trade Procedures

Automation allows more of the decision-making process to take place within the digital environment rather than requiring routine manual handling.

• Improve Processing Efficiency

A rule-based system can process qualifying applications without waiting for the same level of individual officer intervention in every case.

• Apply Risk-Based Regulatory Oversight

The system retains the ability to direct selected cases towards manual review.

• Reduce Compliance Burden

DGFT expressly links the change with its broader efforts to digitise processes, reduce compliance burden and facilitate trade. 

The intended direction is faster processing, but the Trade Notice does not guarantee a particular turnaround period for individual applications.

What Does the New FSC System Mean for Indian Exporters?

For exporters, the change can affect both processing speed and the way applications should be prepared.

• Faster Processing Potential

Applications that successfully satisfy the automated route may avoid routine manual verification. That creates the potential for quicker issuance.

• Reduced Routine Manual Intervention

Straightforward applications may no longer need to move through the same officer-led analysis that formed part of the earlier process.

• Greater Importance of Accurate Digital Applications

When a system takes a larger role in processing, inconsistencies in submitted information can become more important. Exporters should therefore treat data quality as part of their regulatory preparation.

• Continued Regulatory Scrutiny

Manual verification remains available, and even auto-approved applications may be reviewed later.

• Better Process Predictability

A rule-based process can potentially make routine cases more predictable, although the notice does not guarantee identical processing for every applicant.

Benefits of Automated FSC Issuance for Exporters

The main benefit is the possibility of reducing routine administrative time for applications capable of being processed automatically.

The likely benefits include:

• Less routine manual handling: Qualifying applications can move without every file passing through the same manual examination. 
• Paperless processing: The change builds on DGFT's existing online system and extends automation deeper into the processing stage. 
• Potentially faster issuance: DGFT expressly intends the system to support expedited turnaround. 
• Better use of Regional Authority resources: Manual attention can be directed towards applications that actually require verification. 
• System-driven processing: Routine cases can be dealt with using predefined processing parameters. 
• Continued regulatory control: Risk-based checks remain available instead of being removed for the sake of speed. 
• Improved export-document workflow: Faster handling of qualifying applications may help exporters organise downstream documentation more efficiently. 

These are procedural benefits. The Trade Notice does not guarantee approval, a fixed time saving, a particular cost reduction, or any increase in export revenue.

Challenges and Practical Concerns for Exporters

Automation reduces some manual work, but it does not remove every practical issue.

• Not Every Application Will Qualify for Automation
• An exporter should not plan on automatic issuance merely because an FSC application has been submitted.
• Automated Parameters Are Not Fully Explained
• The Trade Notice does not disclose every parameter used by the automated system.
• That can make it difficult for applicants to predict with certainty whether a case will complete the automatic route.
• Manual Verification Can Still Apply
• Businesses must remain prepared to deal with RA review where required.
• Auto-Issued Cases Can Still Be Reviewed
• An automatically issued certificate does not necessarily close the regulatory file permanently.
• Application Accuracy Matters
• The move towards system-driven processing makes clean, consistent, and correct data even more valuable.
• Product Applicability Still Needs Attention
• Automation does not change the need to determine whether DGFT is the correct route for the product in question.

Is Automated FSC Issuance a Right Decision or an Additional Burden?

The measure is better understood as a change in how regulatory scrutiny is allocated rather than a removal of scrutiny.

On balance, the change appears favourable for exporters whose applications can be processed automatically. It removes part of the routine manual layer without removing the regulator's ability to verify cases that require attention.

The burden is therefore more likely to come from application quality and regulatory preparedness than from a new compliance obligation created by this Trade Notice.

For businesses already maintaining correct records and filing complete applications, the automated route may make the process easier. Businesses with unclear product applicability or inconsistent information may still encounter manual examination.

What Exporters Should Check Before Filing an FSC Application

The following are practical preparation points. They should not be confused with a new list of statutory duties created by Trade Notice No. 24/2026-2027.

Exporters should check:

• Applicability of product: Verify if the product falls within the category of DGFT FSC route.
• Applicability of regulation: Verify whether Drugs & Cosmetics Act or any other product-specific regulations apply to the product.
• Export eligibility: Verify whether the product is free, restricted, or prohibited for export in accordance with the relevant policy.
• Accuracy of application information: Maintain correct business/product/exporter data.
• Applicable ANF: ANF 2H application can be made in accordance with 2.34 of Paragraphs.
• Documentation: Maintain documentation for the claims mentioned in the application.
• Business details on DGFT system: Maintain relevant business details up-to-date on the DGFT portal where required.
• Communication with DGFT portal: Follow up on application for any query/manual referral.

DGFT's official FAQ has historically identified an IEC-linked user profile, registered digital signature, and valid RCMC details among the prerequisites for the FSC online service. Businesses should check the current portal requirements at the time of filing because operational requirements can be updated. 

What Should Exporters Do If Their FSC Application Goes for Manual Processing?

A manual referral should first be treated as a processing status, not as an adverse decision.

The exporter should:

• Check the application status on the DGFT portal. 
• Review any communication issued by the concerned Regional Authority. 
• Identify whether verification or additional information has been requested. 
• Keep product and supporting records available. 
• Respond through the method and within any timeline specified by DGFT. 
• Check that the information supplied is consistent with the original application. 

Seek regulatory assistance where the issue relates to product coverage, export policy, or interpretation of the FSC framework. 

The Trade Notice itself does not create a separate appeal mechanism or special procedure simply because a case enters manual processing.

Does the Trade Notice Change FSC Eligibility or Mainly the Processing Method?

The central change is the processing method.

Paragraph 2.34 already provides the regulatory basis for FSC issuance. The 31 August 2026 Trade Notice does not replace that framework with a new certificate.

Instead, DGFT has enabled an automated route for eligible applications under the prevailing framework.

This distinction prevents a common misunderstanding: exporters do not receive a new type of FSC because of this notice. What changes is how qualifying applications may move from submission to issuance.

Existing provisions on product scope and FSC eligibility remain relevant unless separately amended.

How Will Risk-Based Review Affect Exporters After FSC Approval?

The possibility of post-approval review means businesses should not discard their regulatory records simply because the system has issued an FSC automatically.

Practical preparation should include:

• Keeping the underlying product information available. 
• Maintaining consistency between the application and supporting records. 
• Retaining relevant certificates or regulatory records used for filing. 
• Monitoring DGFT communication after issuance. 
• Responding properly if an RA seeks review or clarification. 

This should not be overstated. The Trade Notice does not say that every automatically issued certificate will be reviewed.

It only provides that certain auto-approved applications may subsequently be flagged under risk-management parameters.

DGFT FSC Automation: Key Points Exporters Should Not Misunderstand

These are the main distinctions businesses should keep in mind:

• FSC filing was already online before this notice.
• The new development is automated processing and issuance for qualifying applications.
• Not every FSC application will automatically be approved.
• Manual processing continues where verification is required.
• Applications failing automated parameters can still move to the RA.
• Manual referral does not automatically mean rejection.
• DGFT Regional Authorities remain part of the FSC process.
• Certain auto-approved applications can later be reviewed.
• DGFT has not disclosed all internal automated-processing or risk parameters.
• No fixed turnaround time is promised in the Trade Notice.
• The correct FSC route depends on the product and applicable regulatory framework.

How Can Exporters Prepare for DGFT's Shift Towards Automated Approvals?

Businesses do not need to create an entirely new compliance structure because of this Trade Notice. They do, however, have a reason to improve the quality of information used in digital filings.

Useful practices include:

• Maintain correct and updated exporter master data. 
• Keep IEC-linked information consistent with relevant business records. 
• Verify product descriptions before filing. 
• Check applicable export-policy conditions. 
• Avoid conflicting details across supporting documents. 
• Keep documents organised even if the application appears likely to qualify for automated processing. 
• Monitor portal messages after submission and issuance. 
• Assign responsibility internally for replying to any RA query. 
• Review future DGFT notices because automated-processing conditions can evolve. 

These are practical controls rather than additional statutory requirements created by the Trade Notice.

Impact on Businesses

The effect will differ depending on how frequently a business uses the FSC process and how well organised its export-compliance records are.

Exporters

Regular exporters may gain the most operational benefit where applications meet automated parameters, and no additional verification is needed.

MSME Exporters

Smaller exporters may benefit from reduced routine processing, particularly where they have limited internal resources. At the same time, automation does not remove the need to identify the correct certificate route.

Export Compliance Teams

Internal teams may need to place greater emphasis on getting the information right before submission rather than relying on later manual interaction to resolve inconsistencies.

Export Consultants and Regulatory Teams

Professional support may become more focused on product applicability, documentation quality, complex cases, and applications that move into manual review.

What Businesses Should Do Next

Exporters dealing with Free Sale and Commerce Certificates should take a few practical steps.

• Check Product Applicability- Determine whether DGFT is the correct authority for the product.
• Review Paragraph 2.34 Requirements- Check the current Handbook of Procedures rather than relying only on the two-page Trade Notice.
• Verify Application Information- Review business, exporter, and product details carefully before filing.
• Keep Supporting Records Ready- An automated decision does not rule out later review.
• Prepare for Manual Verification- A file can still be sent to the relevant RA where system conditions require it.
• Monitor the Application After Submission- Check official portal communication rather than assuming the application will proceed automatically.
• Retain Records After Issuance- Certain auto-approved applications can later be flagged for review.
• Follow Future DGFT Updates- The HBP expressly envisages phased implementation of automated processing, so exporters should keep track of subsequent operational changes. 

How Corpseed Can Help with DGFT and Export Compliance

The move towards automated FSC processing can make routine applications faster, but it also increases the value of getting the application right before submission. Corpseed's DGFT compliance services can support exporters who need help with applicability, documentation, and regulatory interpretation.

Here are the areas where support may be useful:

• FSC Applicability Assessment

Corpseed can help review the product and determine whether the DGFT Free Sale and Commerce Certificate framework is relevant.

• DGFT Regulatory Interpretation

Businesses can receive assistance in understanding Paragraph 2.34, applicable DGFT procedures, and product-specific regulatory issues.

• FSC Application Support

Corpseed can assist with preparation and filing of the Free Sale and Commerce Certificate application where the DGFT route applies.

• Export Documentation Review

Application information and supporting records can be reviewed for completeness and consistency before submission.

• Manual Verification Support

Where an application moves to the Regional Authority, Corpseed can assist businesses in understanding the communication and preparing the required response based on the official query.

• DGFT Query and Clarification Support

Exporters facing a portal query or regulatory clarification can obtain help in understanding what has been requested and organising the response.

• Export Compliance Advisory

Businesses can also seek support for related DGFT, IEC and foreign trade compliance matters where they affect an export transaction.

• Ongoing DGFT Compliance Support

Exporters dealing with recurring regulatory requirements can use ongoing support to monitor relevant DGFT changes and maintain better filing controls.

Exporters requiring assistance with FSC applications or related foreign trade requirements can use Corpseed's DGFT compliance services for product-applicability review, documentation support, filing assistance, and regulatory guidance. Professional support cannot guarantee automatic issuance or approval, but it can help reduce avoidable filing and documentation errors.

Key Takeaways

DGFT issued Trade Notice No. 24/2026-2027 on 31 August 2026 concerning automated FSC issuance. The change affects the processing of Free Sale and Commerce Certificate applications, not merely online filing. 

Eligible applications may now be considered for automatic issuance.  Applications requiring verification or failing automated parameters can continue to the concerned Regional Authority. 

Manual referral does not automatically mean rejection. Certain auto-approved applications may later be selected for risk-based review. The DGFT automated Free Sale and Commerce Certificate system is intended to support paperless processing and faster turnaround while retaining regulatory checks where needed.