Trade Regulations, Accreditation and Compliance Enablement (TRACE)
The Trade Regulations, Accreditation and Compliance Enablement (TRACE) initiative is a pivotal scheme launched by the Directorate General of Foreign Trade (DGFT) in February 2026. It operates under the broader Export Promotion Mission (EPM)—specifically under the Niryat Disha sub-scheme—to help Indian MSMEs overcome non-tariff barriers in global trade.
Below is a detailed note on the TRACE initiative for industry stakeholders.
1. Core Objective
The primary goal of TRACE is to reduce the financial burden of international compliance on Micro, Small, and Medium Enterprises (MSMEs).
Competitiveness: To shift the focus from “price-only” competition to “quality-certified” competition in the global value chain.
Quality & Standards: To help Indian products meet the stringent quality, safety, and technical standards of importing countries.
Market Access: To enable MSMEs to enter regulated markets (like the EU, USA, and Japan) where certifications are mandatory.
The Trade Regulations, Accreditation and Compliance Enablement (TRACE) initiative is a pivotal scheme launched by the Directorate General of Foreign Trade (DGFT) in February 2026. It operates under the broader Export Promotion Mission (EPM)—specifically under the Niryat Disha sub-scheme—to help Indian MSMEs overcome non-tariff barriers in global trade.
Below is a detailed note on the TRACE initiative for industry stakeholders.
1. Core Objective
The primary goal of TRACE is to reduce the financial burden of international compliance on Micro, Small, and Medium Enterprises (MSMEs).
- Quality & Standards: To help Indian products meet the stringent quality, safety, and technical standards of importing countries.
- Market Access: To enable MSMEs to enter regulated markets (like the EU, USA, and Japan) where certifications are mandatory.
- Competitiveness: To shift the focus from “price-only” competition to “quality-certified” competition in the global value chain.
2. Nature of Financial Assistance
TRACE provides support in the form of partial reimbursement of actual costs incurred for testing and certification. The scheme categorizes certifications into two lists:
| Category | Reimbursement Rate | Annual Cap |
| Positive List (Standard Certifications) | Up to 60% of actual cost | ₹25 Lakh per IEC |
| Priority Positive List (Critical/High-impact) | Up to 75% of actual cost | ₹25 Lakh per IEC |
Note: Reimbursement is calculated on the cost net of taxes
3. Eligibility Criteria
To avail of benefits under TRACE, an industry unit must meet the following:
- MSME Status: Must have a valid Udyam Registration Number.
- Export License: Must hold an active Importer-Exporter Code (IEC).
- Compliance History: The entity must not be on the “Denied Entity List” of the Foreign Trade Policy.
- Value Chain Participation: The scheme is for MSMEs involved in international value chains (both manufacturing and merchant MSMEs, though merchant MSMEs are limited to specific notified tariff lines).
- Graduation Clause: MSMEs that outgrow their size category (e.g., from Medium to Large) remain eligible for support for 3 years post-reclassification to ensure a smooth transition
4. Scope of Coverage (What can be reimbursed?)
The scheme covers a wide array of conformity assessment activities, including:
- Testing & Lab Fees: Charges for product testing in accredited laboratories.
- Certification Costs: Costs for obtaining international marks like CE (Europe), FCC (USA), REACH (Chemicals), and ISO standards.
- Audits & Inspections: One-time costs for factory audits, facility assessments, and market-specific licensing.
- Traceability Systems: Implementation of systems required by overseas regulators to track the origin and journey of products.
- Consultancy & Data: Fees for data generation (e.g., for EU REACH) and consultancy required to achieve compliance
5. The Two-Stage Application Process
The scheme is fully digital and follows a structured workflow to ensure transparency:
- Stage 1: Intent-to-Claim (IC)
- Exporters must file an “Intent-to-Claim” on the DGFT portal before starting the certification or testing process.
- This registers the project with the government and secures the “intent” for future reimbursement.
- Stage 2: Reimbursement Claim (RC)
- Once the certificate/test report is obtained, the exporter submits the final claim.
- Required Documents: Copy of the certificate/report, original invoices, proof of payment, and evidence that the certification is a market-access requirement.
- The IC remains valid for 2 years to allow for long-duration certification processes.
6. Key Exclusions
Industry members should note that TRACE does not cover:
- Deemed Exports: Sales within India that are treated as exports for other benefits.
- SEZ Sales: Supplies to Special Economic Zones.
- Export Performance: Unlike some other schemes, TRACE is not linked to export turnover; it is a “readiness” support tool
Strategic Importance for Industry
For the Indian industry, TRACE is a game-changer because it addresses “Standard-related Trade Barriers.” By subsidizing up to 75% of the cost of complex certifications like EU REACH or US FDA approvals, the government is effectively lowering the entry barrier for small players to join the global supply chain, ensuring that “Made in India” is synonymous with “World Class Quality.”
This scheme covers Partial reimbursement of eligible expenditure incurred by MSMEs involved in international value chains towards testing, inspection, certification, audits, traceability systems, and other conformity-assessment requirements that are mandated vide regulations required for market access, or necessary to demonstrate compliance with internationally recognized standards.
For detailed information, procedure to apply, download the following documents :
TRACE Scheme Guidelines
Guidelines for Trade Regulations, Accreditation and Compliance Enablement (TRACE) under Export Promotion Mission (EPM)
https://content.trade.gov.in/EPM-Scheme-Guidelines/Guidelines%20for%20Trade%20Regulations,%20Accreditation%20and%20Compliance%20Enablement%20(TRACE)%20under%20Export%20Promotion%20Mission%20(EPM).pdf
Apply for TRACE Intent :
https://www.trade.gov.in/pages/login
User Manual for TRACE INTENT :
https://nprd-content.trade.gov.in/Manual/USER_MANUAL_FOR_TRACE_INTENT_updated.pdf
Source : https://www.dgft.gov.in/CP/index.jsp?opt=scheme-guidelines