In late May 2026, the Directorate General of Foreign Trade (DGFT) issued clarification on concessional import duty treatment for capital equipment procured by infrastructure Special Purpose Vehicles (SPVs) under project-financing structures. The clarification tightens documentation requirements and introduces a 15 July 2026 deadline for advance notification filings.
Infrastructure developers and contractors who plan to import machinery, plant and equipment for roads, ports, power and renewable projects must now file detailed Advance Authorisation (AA) applications with fresh technical specifications and project-linked bank undertakings — a departure from the relaxed self-certification regime that prevailed until March 2026.
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The May 2026 clarification requires SPVs to furnish project-executed contracts, independent valuation reports, and monthly utilisation schedules alongside AA applications. Self-certification is no longer accepted; third-party verification is now mandatory for all equipment imports above ₹2 crore.
Lenders must now issue explicit undertakings confirming equipment is financed under the project facility and will not be diverted or sold domestically within five years. This ties import concessions directly to project execution tracking and increases lender compliance burden.
All notifications under the May 2026 regime must be lodged before 15 July 2026. Filings after this date will fall under the stricter, post-July rules—with longer processing timelines and higher scrutiny. Early filing is essential to lock in the current concession window.
Under India's Foreign Trade Policy (FTP) and DGFT notifications, infrastructure SPVs typically qualify for concessional import duty on capital goods via Advance Authorisation (AA). The May 2026 clarification reinforces anti-evasion controls by mandating independent technical valuations, project-execution contracts, and lender undertakings—all verifiable by DGFT's Post Clearance Audit (PCA) teams. Non-compliance (false declarations, diversion, or missed deadlines) risks AA revocation, duty recovery, and directorate referral to the Directorate of Revenue Intelligence (DRI). Vinayakam Consultants helps infrastructure SPVs structure import applications, coordinate third-party valuations, prepare bank undertakings, and file within the July 2026 window to protect concessional treatment and avoid costly delays or penalty exposure.
Your action checklist
- Audit existing equipment import pipelines: identify all pending procurements above ₹2 crore and prioritise those for advance filing before 15 July 2026.
- Engage an independent valuer (NISM-certified preferred) to prepare technical specifications and cost justifications for all equipment; attach copies to AA applications.
- Secure project-execution contracts (supplier agreements, EPC agreements) and lender undertakings confirming equipment financing and five-year lock-in; file along with DGFT applications.
- File Advance Authorisation notices with DGFT's regional office on or before 15 July 2026; maintain evidence of submission (acknowledgement receipts) and track approval status fortnightly.
Frequently asked questions
The DGFT import duty exemption window closes on 15 July 2026. All Advance Authorisation applications for capital equipment imports must be filed before this date to secure concessional duty treatment.
SPVs must submit project-executed contracts, independent valuation reports, monthly utilisation schedules, and project-linked bank undertakings. Self-certification is no longer accepted; third-party verification is mandatory for equipment imports above ₹2 crore.
Yes, lenders must now issue explicit undertakings confirming equipment is financed under the project facility and will not be diverted or sold domestically within five years.