Putting postal exports on par: India’s quiet but powerful trade reform

For decades, India’s export incentive framework has been designed around ports, airports and courier terminals, inadvertently overlooking millions of small exporters who rely on the vast postal network to access global markets.

Artisans, home-based units, MSMEs and first-time exporters, especially from rural and semi-urban India, have long operated at a structural disadvantage, despite being integral to the country’s export ecosystem.

In a decisive policy intervention that corrects this imbalance, the Central Board of Indirect Taxes and Customs (CBIC) has extended key export incentives—Duty Drawback, Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) to exports made through the postal mode in electronic form, effective 15 January 2026.

This reform not only provides a level-playing field for rural and small-time entrepreneurs but also signals India’s intent to align its customs framework with the realities of digital trade and cross-border e-commerce.

This policy marks a significant shift in India’s export architecture by placing postal exports at par with courier and port-based exports, thereby removing a long-standing structural disadvantage faced by MSMEs, artisans, home-based units and cross-border e-commerce sellers who depend heavily on postal channels.

The change is expected to have a transformational impact on MSMEs, handicraft and handloom exporters, startups and first-time exporters who typically ship low- to medium-value consignments through post.

Until now, exporters using the postal route—despite complying with customs formalities—were largely excluded from mainstream export incentive schemes. This anomaly disproportionately affected small exporters in non-metro regions, where access to ports, air cargo complexes or courier terminals is limited.

By extending incentive eligibility to postal exports, CBIC has addressed a critical policy gap and aligned customs law with contemporary digital trade practices, particularly in the fast-growing domain of cross-border e-commerce.

The reform has been implemented through amendments to the Postal Export (Electronic Declaration and Processing) Regulations, 2022, supported by Notification No. 07/2026–Customs (N.T.) and Circular No. 01/2026–Customs, both issued on 15 January 2026.

A key feature of the new framework is the formal recognition of electronic export declarations filed under Section 84 of the Customs Act, 1962 as valid export documents for claiming export incentives. This legal clarity removes ambiguity and provides certainty to exporters and tax administrators alike.

The reform is firmly anchored in CBIC’s broader push towards paperless, automated and risk-based customs processing. Two new electronic forms have been introduced: Form PBE-III for e-commerce exports and Form PBE-IV for other postal exports.

These enable exporters to submit comprehensive electronic declarations covering valuation, invoices, applicable duties, GST/IGST particulars, FEMA compliance and incentive claims through a single digital workflow. Significantly, the system now generates Let Export Orders (LEO) electronically, eliminating the need for physical signatures or manual approvals.

Export incentives will be processed exclusively through the Customs EDI system, enhancing transparency, auditability and speed while reducing the scope for discretionary intervention.

India’s postal export infrastructure has seen steady strengthening in recent years, and the present reform builds on that foundation. Currently, 28 Foreign Post Offices (FPOs) are notified under Section 7 of the Customs Act 1962, to handle international mail and export parcels. In addition, more than 1,000 Dak Niryat Kendras (DNKs) are operational across the country under a Hub-and-Spoke model.

These centres facilitate booking, aggregation, documentation and customs clearance for export parcels, particularly benefiting exporters from rural and semi-urban areas. Further, automation of IGST refunds for postal exports, implemented since September 2024, has already improved liquidity for small exporters. The extension of Drawback, RoDTEP and RoSCTL now completes the incentive framework for postal exports.

By lowering compliance costs, simplifying procedures and ensuring access to export incentives, the reform enhances the competitiveness of Indian products in global markets. It also promotes geographically diversified export growth, enabling participation from regions previously underrepresented in India’s export landscape.

As global e-commerce increasingly shifts towards small consignments and direct-to-consumer models, postal channels remain a vital logistics backbone. Bringing postal exports within the incentive regime strengthens India’s position in the global digital and e-commerce trade ecosystem and supports initiatives such as Districts as Export Hubs and Vocal for Local to Global.

By harmonising customs law with modern trade realities and empowering exporters at the grassroots level, this reform stands out as a major milestone in India’s ongoing Ease of Doing Business journey and its ambition to become a global export powerhouse.

The significance of this reform lies not merely in the extension of incentives, but in the philosophy it embodies.

By recognising postal exports as equal participants in the formal trade ecosystem, India has acknowledged that global commerce no longer flows only through large ports and warehouses, but also through village post offices, home workshops and small digital storefronts.

In doing so, this reform transforms export growth from an urban-centric ambition into a nationwide movement where even the smallest exporter can compete on equal terms, and where India’s journey towards becoming a global export leader is powered as much by its grassroots as by its gateways.

(The author is the Former Principal Chief Commissioner CGST Mumbai)