According to DGFT, the Advance Authorisation scheme allows duty-free import of inputs that are physically incorporated in an export product. It covers manufacturer exporters, and merchant exporters tied to supporting manufacturer(s). In return, the holder takes on an export obligation, which under the Foreign Trade Policy includes achieving a minimum value addition on the exports.
What can be imported duty free under Advance Authorisation?
- Fuel, oil and catalyst: where these are consumed or utilised in the process of producing the export product, they may also be allowed.
- Mandatory spares: spares that are required to be exported or supplied with the resultant product are permitted duty free to the extent of 10% of the CIF value of the Authorisation.
The Foreign Trade Policy says an Advance Authorisation holder can procure inputs from an indigenous supplier, State Trading Enterprise, EOU, EHTP, BTP or STP in lieu of direct import.
Which duties are exempt on imports under Advance Authorisation?
- Basic Customs Duty
- Additional Customs Duty
- Education Cess
- Anti-dumping Duty
- Countervailing Duty
- Safeguard Duty
- Transition Product Specific Safeguard Duty
- The whole of the Integrated Tax and Compensation Cess, for imports under Advance Authorisation for physical as well as deemed exports
How is the quantity of duty-free inputs decided?
DGFT says the quantity of inputs allowed for a given export product is based on specific norms defined for that product, and those norms take into account the wastage generated in the manufacturing process.
- Standard Input-Output Norms (SION): DGFT provides a sector-wise list of SION under which exporters may choose to apply.
- Ad-hoc norms: where the SION does not suit the exporter, the exporter may apply for its own ad-hoc norms.
- Self declaration: the Foreign Trade Policy also provides for Advance Authorisation to be issued on the basis of self declaration as per paragraph 4.07 of the Handbook of Procedures.
Who can apply for Advance Authorisation, and how?
- Hold an Importer Exporter Code (IEC), which DGFT says is required to apply for an Advance Authorisation. See how to get an IEC code in India.
- Check the other pre-requisites mentioned in Chapter 4 of the Foreign Trade Policy and the Handbook of Procedures.
- Apply on form ANF-4A through the DGFT portal. If you are new to the portal, see how to register on the DGFT portal.
Under the Foreign Trade Policy, the purposes for which Advance Authorisation is issued include physical export (including export to SEZ) and intermediate supply.
What is Advance Authorisation for Annual Requirement?
The Foreign Trade Policy says exporters having past export performance in at least the preceding two financial years are entitled to Advance Authorisation for Annual Requirement. The entitlement, in terms of CIF value of imports, is up to 300% of the FOB value of physical exports and/or FOR value of deemed exports in the preceding financial year, or Rs 1 crore, whichever is higher. For working out FOB values, see how to calculate FOB price for export.
What is the export obligation under Advance Authorisation?
Under the Foreign Trade Policy, the minimum value addition required to be achieved under Advance Authorisation is 15%. Export products where value addition could be less than 15% are given in Appendix 4D.
The Foreign Trade Policy leaves the timelines to the Handbook of Procedures: the period for fulfilment of the export obligation, and its extension, are as prescribed there, and so is the validity period for imports under the Advance Authorisation.
Match your descriptions. The Foreign Trade Policy says the name or description of the input used (or to be used) in the Authorisation must match exactly with the name or description endorsed in the shipping bill.
What can you do with the inputs, finished goods and scrap?
- Actual User condition: the Advance Authorisation is subject to the ‘Actual User’ condition and is not transferable, even after completion of the export obligation.
- Finished products: once the export obligation is completed, the authorisation holder has the option to dispose of products manufactured out of duty-free inputs.
- Waste and scrap: waste or scrap arising out of the manufacturing process, as allowed, can be disposed of on payment of applicable duty, even before the export obligation is fulfilled.
When to get specialist help
- The exact export obligation period, extensions and import validity for your authorisation.
- Applying for ad-hoc norms, or working out whether a SION fits your product.
- Deemed export and intermediate supply arrangements in detail.
- How value addition is worked out for your specific product.
- Redemption of the authorisation and what to do if shipping bill descriptions do not match.
Related reading
Sources
Checked against the official sources above on 23 October 2026. Rules and forms change, so confirm the current version on the official page before you act.