In a move to enhance the competitiveness of Indian exporters, the Government of India is set to ease the procedural norms under the Advance Authorisation (AA) scheme. This scheme, which allows duty-free import of inputs used in the manufacture of export products, will now be more accessible and exporter-friendly.
Key Change in Eligibility Norms
The most significant relaxation pertains to the timing of export shipments and the issuance of the AA license. Exporters will now be eligible for duty exemption benefits even if goods are shipped before the Advance Authorisation license is granted, as long as the Bill of Entry is filed after the license is issued. This is a departure from the earlier rule, where customs authorities strictly denied exemptions if the goods left the port before the license date.
This change is expected to resolve long-standing issues related to procedural delays and documentation mismatches that previously led to disputes and increased compliance costs.
Objective of the Policy Change
The primary aim of this relaxation is to reduce input costs for exporters, thereby making Indian exports more competitive in global markets. By easing the operational framework, the government is attempting to align policy implementation with ground realities of international trade logistics.
However, the new rule will not apply to restricted goods or items that require import through designated government agencies. In such cases, special approval from the Directorate General of Foreign Trade (DGFT) will be mandatory.
While official responses from DGFT and the Central Board of Indirect Taxes and Customs (CBIC) are still awaited, the policy direction reflects the government’s responsiveness to industry feedback and trade facilitation goals.
Key Points Summary
| # | Key Aspect | Description |
|---|---|---|
| 1 | Eligibility Flexibility | Exports before AA license issuance now eligible if Bill of Entry is post-license. |
| 2 | Purpose of Scheme | Allows duty-free import of inputs for export production. |
| 3 | Cost Reduction Goal | Aims to lower input costs, boosting export competitiveness. |
| 4 | Operational Change | Focus shifts from shipment date to Bill of Entry date for exemption eligibility. |
| 5 | Restrictions | Does not apply to restricted or agency-imported goods unless DGFT permits. |
| 6 | Industry Concerns Addressed | Responds to issues around delays and disputes raised by trade bodies. |
| 7 | Lack of Official Clarity | DGFT and CBIC have not issued formal comments as of now. |
Benefits of the Advance Authorisation Scheme
| Benefit | Description |
|---|---|
| Duty-Free Imports | Raw materials can be imported without customs duty, reducing input costs. |
| Boosts Export Competitiveness | Enables competitive pricing in international markets. |
| Increases Profit Margins | Lower costs translate to better margins for exporters. |
| Encourages Export Growth | Supports export-led economic growth. |
| Flexible Licensing | Relaxations offer greater flexibility in handling export timelines. |
| Streamlined Process | Fewer disputes due to the Bill of Entry-based criterion. |
| Supports Domestic Industry | Helps manufacturers by easing input procurement. |
| Job Creation | Export growth can increase employment opportunities. |
| Encourages Value Addition | Incentivizes processing and upgrading of raw materials before export. |
| Regulatory Compliance | Helps businesses stay compliant with export laws while benefiting from exemptions. |
Conclusion:
This reform in the Advance Authorisation scheme signals a positive shift towards practical trade facilitation, responding directly to industry needs. It is a timely move that can help boost exports, strengthen manufacturing, and drive India’s ambitions as a global trade powerhouse.
Glottis Limited 
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