📦 Export Advance Authorisation Scheme – Complete Guide 2026

India 🇮🇳 has put in place many schemes to boost exports and make Indian products competitive across the world. One such important export promotion scheme is the Advance Authorisation Scheme or Export Advance Authorisation Scheme. ✨ This scheme allows duty-free import of inputs/raw materials required to make export products, helping exporters save money and grow business. Let’s dive deep into everything you need to know! 🤓📘

🏁 What is Advance Authorisation Scheme? 🤔

The Advance Authorisation Scheme (also called Advance Authorisation or Advance License Scheme) is a duty exemption scheme under India’s Foreign Trade Policy. Under this, an exporter can import inputs like raw materials, components, fuel, packaging materials, etc., without paying customs duty if these inputs are used in the manufacture of goods that will be exported later. 🌍✈️

In simpler terms – import first duty-free ➜ manufacture goods ➜ export later. 🇮🇳👉📦👉🌎

👉 This makes Indian exports cheaper and more competitive internationally because duties that would normally be paid on imported inputs are waived. ✔️

🧩 Why Was It Introduced? (Purpose of Scheme) 🎯

The main objectives of the Export Advance Authorisation Scheme are:

✅ To promote exports by reducing the cost of raw materials.
✅ To make Indian products competitive globally.
✅ To help exporters maintain better cash flow (because they don’t pay duty upfront).
✅ To support the “Make in India” initiative by encouraging manufacturing.
✅ To ensure value addition happens in India before products are exported.

So basically, this scheme helps Indian exporters to import cheaper ➜ produce efficiently ➜ export more 🚀.

📜 Legal Basis & Who Runs It? 🏛️

The Export Advance Authorisation Scheme is governed by:
📌 The Foreign Trade (Development & Regulation) Act, 1992
📌 The Foreign Trade Policy (updated from time to time)
📌 Guidelines issued by the Directorate General of Foreign Trade (DGFT) 🏢

The DGFT is the government authority that issues licences and monitors compliance. 📌

📥 What Inputs Can Be Imported Duty-Free? 🛃

Under this scheme, the following are allowed to be imported without paying customs duty or IGST/other charges (subject to conditions):

✔ Raw materials physically incorporated in the export product
✔ Fuel/oil/catalysts used in production
✔ Packaging inputs
✔ Consumables used in manufacturing process
✔ Mandatory spares (in specific cases up to a certain % of value)

This means not only raw materials but also essential things that go into making the final product are covered. 😄

🧠 Advance Authorisation Scheme Under GST 🇮🇳

After GST came into force, this scheme was updated to clarify duties.
Under Advance Authorisation Scheme under GST, import under licence can be exempted from:
✔ Basic Customs Duty
✔ Integrated GST (IGST)
✔ Compensation Cess
✔ Other applicable charges under customs (if conditions are satisfied)

This means exporters do not have to pay GST/compensation on imported inputs if they are being brought in under the Advance Authorisation and will be exported in finished goods later. 🎉

✔ Important: These exemptions depend on notifications and conditions set by DGFT and customs. Always check the latest policy notifications before applying.

📅 Validity & Time Limits ⏳

The scheme works with two important timelines:

1. ✅ Validity for Import: Once licence is issued, imported goods must be brought into India within 12 months from date of issuance.
2. ✅ Export Obligation Period: Exporter must fulfill the export obligation within 18 months from date of licence issue (can be extended in special cases).

💡 This means you have 12 months to import raw materials, make goods, and then fulfill the export obligation within 18 months overall.

📦 What Is Export Obligation Under Advance Authorisation? 📈

The heart of the scheme is the Export Obligation (EO). 💼

When you import duty-free inputs under Advance Authorisation, you must export finished goods equivalent to those inputs within the given time. This responsibility is called Export Obligation under Advance Authorisation Scheme.

There are two common ways export obligation is determined:

1. 📍 Quantity-Based Export Obligation: Export a specified quantity of finished goods linked to the imported inputs.
2. 📍 Value-Based Export Obligation: Export finished goods whose value must be a certain percentage (often 15% or more) above the value of imported inputs.

👉 This ensures that India actually exports the final product, not just import raw materials for domestic sale. ⚖️

📊 Value Addition – Why It Matters? 📌

Value Addition is a measure of how much value was added in India by manufacturing/processing the imported inputs into export goods.

Example: If you import raw materials worth ₹10 lakh and export finished goods worth ₹12 lakh, then value addition is 20%.

Minimum value addition often required is 15%, though it can vary by product. This encourages manufacturers to add economic value rather than just re-export imported goods.

📋 Standard Input-Output Norms (SION) 🧾

To implement the scheme fairly, the DGFT uses Standard Input-Output Norms (SION) which defines how much input is needed to make one unit of the product.

📌 SION helps determine whether the imported input quantity matches the production requirement.

If SION is not available for a product, exporters can apply for Adhoc norms or self-declaration based norms based on detailed calculations.

🧰 Types of Advance Authorisation Licences 🧾

There are different categories of licences under this scheme:

🔹 Standard Advance Authorisation: For regular export manufacturing.
🔹 Advance Authorisation for Annual Requirement: For experienced exporters to meet all annual needs with one licence.
🔹 Special Advance Authorisation: For specific industries like garments where only a certain input (like fabrics) is covered.
🔹 Advance Authorisation for Intermediate Supply: For manufacturers supplying parts for export products.

These options make the scheme flexible and suitable for various types of exporters.

 📝 How to Apply – Form ANF 4A & EN SB I00 📋

To get an Advance Authorisation, exporters must apply online via DGFT using:

👉 Form ANF 4A – Application form for Advance Authorisation.

Exporters must provide:
✔ IEC (Import Export Code)
✔ RCMC (Registration Cum Membership Certificate)
✔ Details of inputs and export products
✔ SION or ad hoc norms
✔ Bank guarantee or bond (LUT) as per rules

👉 Form EN SB I00 – This is a shipping bill code used when filing export documentation.
When export is done for Advance Authorization, shipping bills are filed under EN SB I00 series (used for export benefitting schemes). This helps track export fulfilment for export obligation. 📦✔

💼 Benefits of Advance Authorisation Scheme 😊

Here are some major advantages:

🌟 Duty Savings: Huge savings on customs duty and GST.
🌟 Competitiveness: Helps export products at competitive prices.
🌟 Better Cash Flow: No need to pay duties upfront.
🌟 Encourages Value Addition: Ensures goods are made/processed in India.
🌟 Supports MSMEs: Smaller exporters also benefit.

⚠️ Conditions & Compliance 📏

Even though this scheme is great, exporters must follow strict compliance:

❗ Imported inputs must be used only for export goods.
❗ Export obligation must be met within time.
❗ If export is not done, duties + interest must be paid.
❗ Proper documentation (EODC) must be filed for discharge of export obligation.

If these conditions are not met, customs may penalise or withdraw duty exemptions.

Read More - 🌟 DCK Management: Everything You Need to Know in 2026 🌟

📨 Monitoring & Export Obligation Discharge 📜

Once you complete exporting goods under the licence, you must file for:

📌 Export Obligation Discharge Certificate (EODC) – This proves you met the export obligation.
The DGFT issues EODC after verifying documents and shipment evidence. This officially closes the licence. ✔️

📌 Advance Authorisation Scheme – UPSC (Exam Perspective) 📘

For UPSC aspirants, remember that:
👉 The scheme is part of India’s Foreign Trade Policy.
👉 It promotes exports by duty-free imports of inputs.
👉 Linked with value addition and export obligations.
👉 Administered by DGFT under Ministry of Commerce.
This is often asked under topics like International Trade, Export Incentives, Foreign Trade Policy, Economic Development, and Government Initiatives.

🔚 Conclusion 🌟

The Export Advance Authorisation Scheme is one of India’s most effective export promotion tools. It helps exporters import inputs duty-free, save money, add value, and compete globally. 📦🌍

💡 Whether you’re a business owner, student preparing for UPSC, a commerce student, or simply someone interested in trade policy, understanding this scheme gives you a big advantage in grasping how India supports exports. 📈🇮🇳

❓ 3 Most Asked FAQs (With Answers) ❓

❓ 1. What is the Export Obligation under Advance Authorisation?

📌 Export Obligation means the exporter must export a specified amount of goods within a set time after using duty-free imported inputs. Typically, this includes achieving a minimum value addition (often 15%) and exporting within 18 months. If not met, duty + interest must be paid.

❓ 2. How does the Advance Authorisation Scheme work under GST?

📌 Under GST, imported inputs under Advance Authorisation are exempt from Basic Customs Duty, IGST, and compensation cess, subject to conditions. This means exporters don’t pay GST on imports and then claim refunds later — the duties are exempt in the first place.

❓ 3. What is Form EN SB I00?

📌 EN SB I00 is a shipping bill series code used when filing export documents under the Advance Authorisation Scheme. It helps customs and DGFT track exports related to duty-free inputs and monitor export obligations. ✔️