Advance Authorisation Scheme – Duty-Free Imports for Exporters

The Advance Authorisation (AA) Scheme, administered by the Ministry of Commerce and Industry through the Directorate General of Foreign Trade (DGFT), is a key incentive for Indian exporters. It allows duty-free import of inputs—including fuel, oil, and catalysts—that are physically incorporated into or consumed during the manufacture of export products. By exempting these inputs from customs duties and other taxes, the scheme reduces production costs, helping Indian goods compete globally and encouraging value addition within the country.

The scheme is particularly useful for manufacturers who depend on imported raw materials, intermediates, or components to produce exports. It operates on the principle that export products should not carry the burden of domestic taxes and duties, ensuring a level playing field in international markets. The quantity of inputs allowed is determined by Standard Input-Output Norms (SION) set by DGFT, or through alternative methods such as self-declaration, prior fixation by the Norms Committee, or the Self Ratification Scheme, providing flexibility to exporters.

• Duty-free import of inputs, fuel, oil, and catalysts for export products
• Exempt from Basic Customs Duty, IGST, Compensation Cess, and more
• Minimum 15% value addition required
• Open to manufacturer and merchant exporters (with supporting manufacturers)
• Export obligation within 18 months
• Application online via DGFT portal

The Advance Authorisation Scheme is open to manufacturer exporters and merchant exporters who are tied to supporting manufacturer(s). For pharmaceutical products manufactured through a Non-Infringing (NI) process, only manufacturer exporters are eligible.

The scheme covers physical exports (including to SEZs), intermediate supplies, specific supplies under FTP paragraph 7.02, and supply of 'stores' to foreign-going vessels/aircraft. Applicants must meet a minimum value addition of 15% and fulfill the export obligation within 18 months from the date of issue, or as notified by DGFT.

Before applying, exporters need a valid PAN-based Import Export Code (IEC), a Digital Signature Certificate (DSC) registered on the DGFT portal, and a Registration Cum Membership Certificate (RCMC) from the relevant Export Promotion Council or Commodity Board.

Advance Authorisation Scheme – Duty-Free Imports for Exporters is open to startups at any stage. It is open to startups registered anywhere in India.

Advance Authorisation Scheme – Duty-Free Imports for Exporters accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.

The primary benefit is the exemption from a range of duties and taxes on imported inputs, including Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Safeguard Duty, and Transition Product Specific Safeguard Duty. Additionally, the scheme provides exemption from Integrated Goods and Services Tax (IGST) and Compensation Cess, wherever applicable.

These exemptions significantly lower production costs, allowing exporters to source inputs at global prices without domestic tariff burdens. The quantity of inputs allowed is based on SION or other approved norms, ensuring the benefit is proportionate to export output. This directly enhances profitability and price competitiveness of Indian exports, fostering growth and foreign exchange earnings.

Advance Authorisation Scheme – Duty-Free Imports for Exporters is offered by Ministry of Commerce and Industry, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

The selection process is administrative and technical, focusing on compliance with foreign trade policy. DGFT verifies that the applicant is an eligible manufacturer or merchant exporter and assesses the justification for duty-free imports against Standard Input-Output Norms (SION) or ad-hoc norms fixed by the Norms Committee, self-declaration, or self-ratification. The quantity of inputs is linked to the export product and its wastage allowances.

DGFT officials scrutinize the application to ensure adherence to the minimum value addition of 15% and the commitment to fulfill the export obligation within 18 months. Any inconsistencies or non-compliance may lead to rejection or modification of the application. There is no competitive selection based on innovation; rather, the process ensures that applicants meet predefined norms and policy directives.

Before you apply to Advance Authorisation Scheme – Duty-Free Imports for Exporters, keep the following documents ready:

• A pitch deck or short business plan describing the problem, product and traction
• Company registration documents and PAN
• Founder identification (PAN / Aadhaar) and brief profiles
• Recent financial statements or projections
• Product details — a demo, prototype or working link if available

Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.