Advance Authorisation Scheme India: Duty-Free Import of Raw Materials for Exporters

What is Advance Authorisation?

Advance Authorisation (AA) is an export promotion scheme under India's Foreign Trade Policy that allows duty-free import of raw materials, components, and intermediates needed for manufacturing export products. It was previously known as "Advance License" and is governed by Chapter 4 of the Foreign Trade Policy 2023.

Key Benefits

• Zero Basic Customs Duty (BCD) — No BCD on imported inputs
• Exemption from IGST — No Integrated GST on imports under AA
• No Compensation Cess — Exemption from all additional duties
• Reduced input costs — Significant cost savings making your exports more competitive

Eligibility Criteria

• Valid IEC — Must have an active Import Export Code
• Export history or order — Either past export performance or a confirmed export order/LC
• Inputs for export production — Imported materials must be used for manufacturing export goods
• SION or self-declaration — Inputs must be specified in Standard Input Output Norms (SION) or declared with ad-hoc norms

Standard Input Output Norms (SION)

SION are pre-defined norms published by DGFT that specify the quantity and type of raw materials allowed for producing a specific export product. For example:

• 1 kg of cotton yarn may require 1.15 kg of raw cotton (including wastage)
• 1 MT of chemicals may allow specific quantities of chemical inputs

If no SION exists for your product, you can apply for ad-hoc norms where you self-declare the input-output ratio, subject to verification by the Norms Committee.

Application Process

1. Login to DGFT portal — Navigate to dgft.gov.in → Services → Advance Authorisation
2. Fill ANF-4A — Application cum Authorization form with export product details, input requirements, SION reference
3. Attach documents — Export order/LC copy, IEC, RCMC, self-declaration of inputs
4. Pay application fee — Based on CIF value of imports
5. Regional Authority approval — DGFT Regional Authority processes and issues the authorisation
6. Import duty-free — Use the AA to import inputs at zero duty
7. Fulfill export obligation — Export the specified products within the prescribed time (typically 18 months)

Export Obligation

After importing duty-free inputs, you must fulfill an Export Obligation (EO):

• Value Addition — Minimum 15% value addition over the CIF value of imports
• Time limit — 18 months from date of issue (extendable by 6 months with fee)
• EO discharge — Submit EODC (Export Obligation Discharge Certificate) application with proof of exports

How Eximly Tracks Advance Authorisation

Eximly tracks your Advance Authorisation status, export obligation deadlines, import utilization, and alerts you before EO expiry. Our compliance dashboard ensures you never miss a deadline and can file for EODC on time. Try Eximly free for 30 days.