Overview: India’s merchandise exports reached a record $49.47 billion in October 2026, rising 45.06% year-on-year. The growth creates opportunities for manufacturers, startups and MSMEs. However, overseas orders require businesses to fund production, freight and other costs before buyers make payment. Exporters need proper GST arrangements, registrations and foreign-payment records to manage this gap.
India’s record export figures point to growing opportunities for businesses across manufacturing, engineering, electronics and other sectors. But securing an overseas order is only one part of the process. Exporters must also arrange production funds, meet GST requirements, maintain the right registrations and ensure that payments are received within the timelines prescribed under FEMA. These requirements can affect cash flow as much as the order itself.
India’s merchandise exports set a monthly record
Merchandise exports increased from $34.11 billion in October 2025 to $49.47 billion in October 2026. Petroleum products recorded the highest growth at 140.21%, followed by electronic goods (62.70%), gems and jewellery (40.06%), organic and inorganic chemicals (36.20%) and engineering goods (36.01%).
Combined merchandise and services exports were estimated at $89.99 billion in October, up 29.90% year-on-year. The services figure is an estimate because the latest available RBI data was for September 2026. Combined exports during April-October reached an estimated $568.84 billion, an increase of 16.66%.
Merchandise imports stood at $89.35 billion, taking the merchandise trade deficit to $39.88 billion. These figures show the scale of export activity, but individual businesses must still manage their own production costs, tax records and payment cycles.
Plan GST payments and refunds
Exports are zero-rated under Goods and Service Tax. Eligible registered exporters can use either of the following routes, subject to the applicable conditions:
- Export under LUT: An exporter can furnish an annual Letter of Undertaking (LUT) in Form GST RFD-11 and export without paying IGST under Rule 96A of the CGST Rules. The exporter can separately claim a refund of eligible unutilised input tax credit (ITC) through Form GST RFD-01, subject to the prescribed conditions.
- Export on payment of IGST: An exporter pays IGST and claims a refund of the tax paid. This route is restricted to the classes of persons or goods and services notified by the Government under Section 16(4) of the IGST Act.
An LUT avoids upfront IGST, but does not remove the cost of inputs or the amount of ITC awaiting refund. Exporters should reconcile invoices, GST returns, shipping bills, bank receipts and refund applications to identify mismatches.
For the online filing process, businesses can refer to our GST LUT filing guide.
Merchant-exporter concession: Eligible registered merchant exporters can procure specified goods from registered suppliers at concessional GST rates of 0.05% Central GST plus 0.05% State GST for intra-State supplies, or 0.1% IGST for inter-State supplies. The facility is subject to conditions under Notifications 40/2017-Central Tax (Rate) and 41/2017-Integrated Tax (Rate).
The merchant exporter must place a purchase order with the supplier and provide a copy to the supplier’s jurisdictional tax officer. The exporter must also hold registration with a recognised Export Promotion Council or Commodity Board.
Goods must move directly to the export port or through a registered warehouse, and must be exported within 90 days of the supplier’s invoice. The supplier’s GSTIN and invoice number must appear in the shipping bill. Proof of export must also be provided to the supplier and the jurisdictional tax officer. Exports under this facility are made under LUT or bond, not through the IGST-paid refund route.
Complete the basic export formalities
An exporter may operate as a proprietorship, partnership, LLP or company. Incorporation as a company is not compulsory solely for undertaking exports. The business must have PAN, address proof and a bank account.
Goods exporters generally require an Importer Exporter Code (IEC) from DGFT unless specifically exempt. Service and technology exporters need an IEC to claim benefits under the Foreign Trade Policy or where otherwise required. IEC holders must confirm or update their details online every year during April–June, even if no changes are required.
Goods exporters must also complete applicable ICEGATE and bank registrations. ICEGATE maintains separate bank account categories for foreign remittances through an Authorised Dealer (AD) Code and for refunds or export incentives. Exporters should register the relevant details for their transactions.
Maintain invoices, packing lists, shipping bills, transport documents and required certificates for goods exports. Service exporters should retain contracts, invoices and payment records.
Track export payments under FEMA
The Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026 are in force since 1st October, 2026. Under Regulation 5, export proceeds must generally be realised and repatriated within nine months from the shipment date for goods or the invoice date for services.
Where exports are invoiced and/or settled in Indian rupees, the period is 12 months. An authorised dealer bank may also extend the period if the exporter provides satisfactory reasons for the delay.
For goods exported through an Electronic Data Interchange (EDI) port, the shipping bill is treated as submission of the Export Declaration Form (EDF). Service exporters generally have to submit the EDF within 30 days from the end of the month in which the invoice is raised.
The RBI’s second amendment dated 2nd November, 2026, provides deemed EDF submission when a resident individual gives the required payment information to the authorised dealer bank. For other service exporters, this facility applies where the inward remittance for the particular service does not exceed ₹10 lakh. Non-software service exporters may also submit the EDF on or before receipt of payment, subject to the regulations.
Exporters should monitor their entries in the Export Data Processing and Monitoring System (EDPMS) and reconcile bank receipts with electronic Bank Realisation Certificate (e-BRC) records, wherever applicable.
Check sector-specific approvals
Additional registrations and product approvals depend on the nature of goods or services and the destination market.
| No. | Sector | Requirements, where applicable |
|---|---|---|
| 1 | Agriculture and food | APEDA registration for scheduled products, FSSAI licensing and phytosanitary requirements |
| 2 | Marine products | MPEDA exporter registration and applicable EIA approvals |
| 3 | Textiles and garments | Relevant EPC/RCMC, product testing and labelling standards |
| 4 | Gems and jewellery | GJEPC registration where required |
| 5 | Engineering and electronics | ITC-HS classification, applicable BIS requirements and destination standards |
| 6 | Chemicals and pharmaceuticals | Chemical safety requirements, drug licences and product approvals |
| 7 | Software and IT services | GST export conditions, invoicing and FEMA records |
Businesses exporting goods or technology should also check whether the proposed items fall under the SCOMET list and require an export licence or authorisation.
Setindiabiz Support
Setindiabiz handles the corporate, registration and tax-compliance work required to establish and maintain an export business. Its relevant services include:
- Private Limited Company Registration and LLP Registration for businesses choosing an appropriate legal structure.
- IEC Registration, applicable modifications and annual updates.
- GST LUT Filing, GST returns and Merchant Exporter GST support.
- APEDA Registration and FSSAI Licensing, where applicable.
- Assistance with applicable FEMA documentation and continuing corporate and tax compliance.
Government authorities issue statutory registrations and licences, while banks and customs authorities handle their respective approvals and processes. Setindiabiz supports businesses with the related applications, documentation and ongoing compliance.
FAQs
Goods exporters generally require an IEC unless specifically exempt. Service and technology exporters need it to claim Foreign Trade Policy benefits or where otherwise required.
Yes. Eligible exporters can claim a refund of unutilised ITC after exporting under LUT or bond, subject to GST rules. The LUT itself does not provide the refund.
Generally, nine months from shipment for goods and from the invoice date for services. The period is 12 months where exports are invoiced and/or settled in Indian rupees, subject to the applicable conditions and extensions.
