DGFT License Types in India: All Authorizations Explained (2026)

What is DGFT?

The Directorate General of Foreign Trade (DGFT) is the apex authority under the Ministry of Commerce and Industry that regulates India's foreign trade policy. DGFT issues the Foreign Trade Policy (FTP) and grants various licenses, authorizations, and permissions to exporters and importers.

Understanding DGFT license types is crucial because the right authorization can save you significant customs duty and give your business a competitive edge.

1. Advance Authorization (AA)

The most widely used DGFT license for exporters who import raw materials:

• Purpose: Import inputs duty-free (zero BCD, zero IGST) for manufacturing export products
• Eligibility: Any manufacturer-exporter or merchant-exporter tied to a supporting manufacturer
• How it works: DGFT specifies the Standard Input-Output Norms (SION) — the quantity of inputs allowed per unit of export output
• Export obligation: Must export finished goods within 18 months of issue (extendable)
• Value addition: Minimum 15% value addition required

Types of Advance Authorization

• Standard AA — Based on SION norms published by DGFT
• AA for Annual Requirement — For established exporters, covers 12 months of input needs
• Advance Authorization for Deemed Exports — For supply to EOU/SEZ/government projects

2. EPCG (Export Promotion Capital Goods) Authorization

For importing capital goods (machinery, equipment) at zero or concessional duty:

• Purpose: Import capital goods at zero customs duty for use in export production
• Eligibility: Manufacturer-exporters and service providers
• Export obligation: Export goods/services worth 6 times the duty saved within 6 years
• Specific export obligation: 50% of the obligation must be met by export of goods made with the imported capital goods
• Benefit: Can save 15-30% on capital equipment costs, significantly reducing CapEx for expanding export capacity

3. DFIA (Duty Free Import Authorization)

A post-export authorization similar to Advance Authorization but with more flexibility:

• Purpose: Import inputs duty-free after exports have been completed
• Key advantage: DFIA is transferable — you can sell the unused authorization to another importer
• How it works: Export first, then apply for DFIA based on actual inputs consumed. DGFT issues the authorization based on SION norms
• Eligibility: Only for products with notified SION norms
• Transferability: After meeting export obligation, the license can be transferred, creating monetary value even if you don't import yourself

4. License for Restricted Items (Import)

Some goods are classified as "Restricted" in the ITC(HS) classification, meaning they cannot be freely imported or exported without a DGFT license:

• Restricted imports: Certain chemicals, electronics, defense-related items, second-hand machinery, certain food products
• Application: Filed online on the DGFT portal with supporting documents (end-use certificate, NOC from relevant ministry, etc.)
• Processing time: Typically 15-30 working days, depending on the item and clearances required
• Validity: Usually 12-24 months from the date of issue

5. SCOMET License

For export of Special Chemicals, Organisms, Materials, Equipment, and Technologies:

• Purpose: Control export of dual-use items that could be used for weapons of mass destruction (WMD) or military applications
• Items covered: Listed in Appendix 3 of Schedule 2 of ITC(HS) — includes specific chemicals, biological agents, nuclear materials, missile technology, and advanced electronics
• Application: Filed with DGFT with detailed end-use and end-user certification
• Inter-ministerial review: Applications are reviewed by an inter-ministerial working group including MEA, DAE, DRDO, and other agencies
• Processing time: Can take 4-12 weeks due to security review
• Penalty for violation: Severe — imprisonment up to life and heavy fines under WMD Act 2005

6. Star Export House Recognition

Not technically a license, but an important DGFT recognition that provides significant benefits:

• One Star Export House: FOB exports of Rs 25 crore in 3 years
• Two Star: Rs 100 crore
• Three Star: Rs 500 crore
• Four Star: Rs 2,000 crore
• Five Star: Rs 5,000 crore

Benefits include faster customs clearance, self-certification of origin, priority DGFT processing, and exemption from bank guarantees for certain authorizations.

7. Other DGFT Authorizations

• Served from India Scheme (SFIS) / Service Exports from India Scheme (SEIS) — Duty credit scrips for service exporters (currently under review in FTP 2023-26)
• Vishesh Krishi and Gram Udyog Yojana (VKGUY) — For agricultural and rural industry exports
• TRQ (Tariff Rate Quota) License — For importing specific goods under FTA quota at concessional duty rates
• State Trading License — For items canalized through state trading enterprises (e.g., MMTC for certain commodities)

How to Apply for DGFT Licenses

1. Register on DGFT portal — dgft.gov.in with your IEC and DSC
2. Select the application type — AA, EPCG, Restricted License, etc.
3. Fill the online application — Product details, HS codes, quantity, value, export plan
4. Upload documents — RCMC, IEC, export invoices (for post-export), SION worksheet, manufacturer certificate
5. Pay application fee — Varies by authorization type (Rs 500 to Rs 2,000)
6. Track status — Monitor on the DGFT portal. Typical processing: 5-15 working days for AA/EPCG, longer for restricted items

How Eximly Helps with DGFT Compliance

Eximly's DGFT module tracks all your active authorizations — Advance Authorization, EPCG, and DFIA — with real-time export obligation status. Our dashboard shows how much obligation is fulfilled, what's pending, and when deadlines are approaching. Automatic alerts ensure you never miss an EODC (Export Obligation Discharge Certificate) deadline. We also maintain a complete audit trail of all imports and exports against each license. Start your free trial today.