TRACE Scheme under Niryat Disha: Get Up to 95% of Your Export Certification Costs Back

For most Indian MSME exporters, the single biggest non-tariff hurdle is not finding a buyer — it is proving to the buyer's regulator that the product is safe, compliant and traceable. A CE file for Europe, FCC and UL for the United States, KC for Korea, SASO/SABER for Saudi Arabia, PSE for Japan, or a BRCGS or GLOBALG.A.P. audit for a food retailer can easily run into several lakh rupees before a single container ships. TRACE — Trade Regulations, Accreditation & Compliance Enablement — is the Government of India's answer to that cost. Notified by the Directorate General of Foreign Trade (DGFT) under the Export Promotion Mission (EPM) – Niryat Disha, it reimburses a large share of what MSMEs spend on testing, inspection and certification for overseas markets.

This guide explains where TRACE sits in the Export Promotion Mission, who can claim, how much you can recover after the July 2026 amendment, which certifications qualify, the exact two-stage claim process on the Trade Connect platform, and the procedural mistakes that cost exporters their reimbursement.

🧭 Export Promotion Mission, Niryat Disha and Where TRACE Fits

The Export Promotion Mission, announced in the Union Budget 2025-26 and approved by the Union Cabinet in November 2025, carries an outlay of Rs 25,060 crore for FY 2025-26 to FY 2030-31. It consolidates India's export support into two sub-schemes:

On 20 February 2026 the Ministry of Commerce and Industry launched seven further EPM interventions. Four of them sit under Niryat Disha: TRACE (compliance and certification), FLOW (Facilitating Logistics, Overseas Warehousing & Fulfilment), LIFT (Logistics Interventions for Freight & Transport) and INSIGHT (Integrated Support for Trade Intelligence & Facilitation). TRACE is the one aimed squarely at technical barriers to trade — the testing, certification and conformity requirements that importing countries impose.

🎯 What TRACE Reimburses

TRACE provides partial reimbursement of eligible expenditure incurred to meet the quality, safety and technical requirements of the importing country. Support is not linked to export performance at the claim stage, and covers both one-time and recurring compliance costs:

• Testing and inspection — product testing against the destination standard (e.g. EN, IEC, UL, ASTM), pre-shipment and third-party inspection.
• Certification and audits — product certification, factory or facility assessments, market-specific licences and system audits.
• Traceability systems — systems required to show origin and chain-of-custody compliance.
• Recurring compliance — ongoing quality certifications, specific health or safety certificates and buyer-mandated voluntary certifications.
• Other conformity-assessment requirements — where mandated for market access or needed to demonstrate compliance with internationally recognised standards.

Only expenditure incurred on or after 20 February 2026 qualifies, and the eligible amount is the actual cost net of taxes, duties and cess — GST on the testing invoice is not reimbursed.

✅ Who Is Eligible

• MSME status — a valid Udyam Registration Number (micro, small or medium).
• Active IEC — the Importer-Exporter Code must be active and the firm must not be on DGFT's Denied Entity List.
• Part of an international value chain — manufacturer-exporters are the core beneficiaries.
• Merchant exporters — eligible only for the six-digit tariff lines notified in Annexure-VII, where exports mainly move through aggregator models.
• Clean compliance record — declarations that there is no investigation, prosecution, debarment or outstanding dues under the foreign-trade, customs, excise, FEMA or COFEPOSA laws.
• Graduating MSMEs — a unit that grows out of MSME status stays eligible for three years from re-classification, in line with MSME Notification S.O. 4926(E) of 18 October 2022.

💰 How Much You Can Recover — Original vs Amended Rates

The July 2026 amendment transformed TRACE from a modest pilot into one of the most generous compliance-support schemes available to Indian exporters:

Worked example: a micro-enterprise electrical-goods exporter spends Rs 6,00,000 (excluding GST) on EN 60335 safety, EMC and RoHS testing and a CE technical file for the EU. At 95%, the eligible reimbursement is up to Rs 5,70,000 (subject to any notified ceiling for that entry). Rs 2,85,000 is released after the CE certification and RC-1 are approved; the balance Rs 2,85,000 follows once exports to the EU under that certification are shown and realised.

📜 Which Certifications Qualify — the 462-Entry List

Annexure-I to Trade Notice 09/2026-27 replaced the two earlier lists with a single, periodically reviewed list of eligible testing, inspection and certifications. It spans product safety, radio and EMC, energy, food safety, agriculture, sustainability and social compliance. Representative entries include:

The list is dynamic — DGFT has said it will be updated with new certifications, standards and country-specific measures, and the Federation of Indian Export Organisations (FIEO) has invited exporters to flag missing certifications for inclusion. Always check the exact entry, scope and country against the current Annexure-I before you budget the claim.

🛠️ Step-by-Step: How to Claim TRACE Reimbursement

1. Confirm eligibility and the certificationCheck Udyam, active IEC, merchant-exporter tariff lines if relevant, and that the certification appears in the 462-entry Annexure-I for your product and destination.
2. File the Intent-to-Claim (IC) — before certificationOn DGFT's Trade Connect ePlatform, declare the claim year, sector, the certification, certifying agency, purpose, export country and the intended amount (with and without taxes). The IC must be filed before the certificate or test report is obtained.
3. Complete testing and certificationCarry out the testing, audit and certification with the chosen lab or body. Reports routed or validated through Quality Setu / Bharat Aayat Niryat Lab may be prioritised for faster processing.
4. File Reimbursement Claim 1 (RC-1)Tag RC-1 to the IC and upload the certificate or test report, invoice and proof of payment, and evidence that the requirement is mandatory or market-driven, with the no-double-benefit declaration.
5. Receive the first 50% instalmentDGFT examines and approves the claim; payment goes to the bank account linked to the IEC. Valid claims are consolidated quarterly.
6. Export under the certificationShip to the market the certification was obtained for, and keep shipping bills and bank realisation records mapped to the certified product.
7. File Reimbursement Claim 2 (RC-2)Within two years of the first instalment, submit export evidence and proof of realisation to release the balance 50%.
8. Stay audit-readyAll claims are subject to post-disbursement verification; incorrect or misleading information can lead to recovery and penal action.

🗂️ Documents to Keep Ready

• Udyam Registration certificate and active IEC details (auto-populated on the portal).
• Quotation or proforma from the lab / certification body (for the Intent-to-Claim amount).
• Final certificate, test report or inspection report, with issuing authority and dates.
• Tax invoice and proof of payment (bank debit / remittance), showing taxes separately.
• Evidence that the certification is a mandatory market requirement or buyer-driven (regulation reference, buyer PO or specification, tender clause).
• Self-declaration of no other government or third-party benefit for the same expenditure, and compliance-status declarations.
• For RC-2: shipping bills, invoices and bank realisation (e-BRC) linked to the certified product and destination.

⏱️ Timelines and Deadlines That Matter

An Intent-to-Claim stays valid for two years for filing the reimbursement claim. If no claim is filed in that window, the IC lapses and the applicant becomes ineligible for claims in the next financial year — so do not file speculative ICs for certifications you are not sure to pursue. After the first instalment, export evidence must follow within two years; otherwise the second instalment lapses and the first may be recovered.

⚠️ Common Mistakes That Forfeit TRACE Money

• Getting certified first, applying later — the Intent-to-Claim must precede the certificate. This is the most expensive error.
• Claiming GST — reimbursement is on the cost net of taxes, duties and cess.
• Certification not on Annexure-I, or listed for a different country or product scope than the one you tested.
• Double-dipping — the same expense already supported by a State scheme, export promotion council or buyer.
• Unlinked exports — shipments that cannot be mapped to the certified product and destination will not release the second instalment.
• Letting an IC lapse — triggers next-year ineligibility.
• Invoices in the wrong name — the payer on the invoice should be the IEC-holding MSME claiming the reimbursement.

🔗 TRACE Alongside Your Other Export Approvals

TRACE pays for compliance; it does not replace it. Plan the destination approvals and the Indian export paperwork together:

• CE marking for Indian exporters — the most common TRACE-eligible spend for electricals, machinery and toys.
• FCC certification and UL certification for the US market.
• SASO / SABER for Saudi Arabia and KC mark for Korea.
• UKCA marking for Great Britain.
• DGFT IEC and licence services and Udyam / MSME registration — the two eligibility gates for TRACE.

❓ Frequently Asked Questions

🏆 Why Choose Global Approbation for TRACE-Funded Certifications

• One desk for both sides — we run the overseas certification (CE, FCC, UL, KC, SASO, UKCA, PSE and more) and the DGFT claim paperwork together.
• Annexure-I mapping — we confirm your certification, scope and country match an eligible entry before any money is spent.
• Intent-to-Claim first — we sequence the IC ahead of testing so the reimbursement is never lost on timing.
• Claim-ready file — invoices, payment proof, requirement evidence and declarations assembled for RC-1, and export-linkage tracking for RC-2.
• Regulatory consultants since 1997 — with ongoing work across Indian (BIS, WPC, BEE, CDSCO) and global market-access approvals.