A scheme under Chapter 4 of the Foreign Trade Policy 2023. It allows duty-free import of inputs that are physically incorporated in the export product, taking normal wastage into account. Fuel, oil and catalysts consumed in production can also be allowed.

A manufacturer exporter, or a merchant exporter tied to a supporting manufacturer. Pharmaceutical products made by a non-infringing process are limited to manufacturer exporters. Physical exports, including exports to an SEZ, count, and so do certain other supplies where norms exist.

Usually by the Standard Input Output Norms (SION) for the product, or by self-declaration as the Handbook of Procedures allows. For products without a norm, the Norms Committee fixes one for the applicant.

Para 4.14 lists the duties that are exempt. They include basic customs duty and, for goods used in physical and deemed exports, integrated tax and compensation cess. Some supplies stay liable for anti-dumping, countervailing and safeguard duties. Read Para 4.14 on dgft.gov.in for your case.

The Policy gives a formula: (A minus B) divided by B, times 100. A is the FOB value realised or the FOR value of supply, and B is the CIF value of the inputs plus any other input on which drawback is claimed. The minimum is 15 per cent in general (Para 4.09). Spices and tea have higher minimums, and Appendix 4D lists exceptions.

Para 4.10 allows mandatory spares up to 10 per cent of the CIF value to be imported duty-free.

• Spices (Para 4.04): duty-free import of Chapter 9 spices is allowed only for crushing, grinding, sterilisation, or making oil or oleoresin. Cleaning, grading and repacking are not covered.
• Apparel (Para 4.04A): a special provision for fabric imports for Chapter 61 and 62 exports. Fabric only, and it cannot be transferred except for job work under GST provisions.

• Actual user: the imported material cannot be transferred, even after the obligation is met (Para 4.16).
• Accounting: inputs must be accounted for and endorsed in the shipping bill (Para 4.12).
• Prohibited items: cannot be imported or exported under it. Restricted items may be allowed unless disallowed (Para 4.18).
• Drawback: available on duty-paid inputs, subject to endorsement (Para 4.15).

The export obligation period and its extensions, and the import validity period and extensions, are as prescribed in the Handbook of Procedures. Read the current Handbook on dgft.gov.in before you commit to dates.

Para 4.07 provides an Advance Authorisation for Annual Requirement for SION-notified items, for exporters with two preceding financial years of export performance. The entitlement is linked to previous export performance. Read the paragraph for the limit that applies.

Yes. Tell us what you make, the inputs, and your export plan. We will tell you whether the scheme fits and what to prepare. We are just a call and a message away.