Advance Authorisation (AA)

What is Advance Authorisation?

Advance Authorisation (AA) is a duty-exemption scheme administered by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry. According to the DGFT portal, Advance Authorisation permits the duty-free import of inputs that are "physically incorporated in an export product," together with packaging material, fuel, oil and catalysts consumed in the course of producing the export goods.

The scheme rests on a simple principle: inputs that go into exports should not carry the burden of import duties, because the finished goods are sold abroad and earn foreign exchange. By exempting these inputs from Basic Customs Duty and certain other levies at the point of import, Advance Authorisation lowers the working-capital cost of manufacturing for export and keeps Indian exporters price-competitive.

Advance Authorisation is governed by Chapter 4 of the Foreign Trade Policy (FTP) and the corresponding Handbook of Procedures. It is a trade-facilitation instrument for businesses, not an individual welfare benefit.

Who is eligible for Advance Authorisation?

You can apply if:

• You are a manufacturer exporter who makes the export product yourself, or
• You are a merchant exporter tied to a supporting manufacturer named in the application, and
• You hold a valid Importer-Exporter Code (IEC) issued by DGFT, and
• You hold a Registration cum Membership Certificate (RCMC) from the relevant Export Promotion Council or commodity board.

Advance Authorisation is also available for specified categories such as supplies to projects, deemed exports and, in some cases, the annual requirement of status holders and regular exporters, subject to the conditions in the FTP.

You cannot apply if:

• You are an individual seeking duty-free imports for personal use, the scheme carries an actual-user condition tied to exports.
• You do not have an IEC, or the intended import is not an input physically incorporated in an export product.
• You cannot meet the minimum value-addition requirement or the export obligation attached to the authorisation.

The imported inputs carry an actual-user condition: they cannot be sold or transferred in the domestic market until the export obligation is discharged and the authorisation is redeemed.

How much benefit does Advance Authorisation provide?

There is no fixed rupee ceiling. The benefit equals the customs duty saved on the inputs you are allowed to import duty-free, which depends on the value and duty rate of those inputs. The allowed quantity of each input is governed by the Standard Input-Output Norms (SION) for the export product, which build in an allowance for manufacturing wastage. Where no SION is notified, the exporter can approach the Norms Committee for fixation of ad-hoc norms.

Against this exemption, the exporter takes on two core obligations:

• A minimum value addition of 15% for most products (higher for a few notified items), and
• An export obligation: exporting the resulting goods, typically to be completed within 18 months from the date the authorisation is issued.

What documents are required for Advance Authorisation?

How to apply for Advance Authorisation

1. Ensure you hold a valid IEC and an RCMC, and register a Class 3 Digital Signature Certificate on the DGFT portal at dgft.gov.in.
2. Log in and open the Advance Authorisation service under the "Services" menu, then start a new authorisation application.
3. Enter the export product, the inputs required, and the applicable SION; if no SION exists, file for norms fixation with the Norms Committee.
4. Declare the value addition and export obligation you undertake, and upload the supporting documents.
5. Pay the application fee, digitally sign and submit; the system generates the authorisation once approved.
6. After exports are completed, file for redemption / closure (EODC — Export Obligation Discharge Certificate) with proof of exports and consumption within the prescribed period.

The portal also handles amendments, revalidation, invalidation, and closure, and lets you track the status of your authorisation with customs.

Where to get help

• DGFT Toll Free Helpdesk: 1800-111-550
• DGFT portal: dgft.gov.in; raise an e-ticket through the online helpdesk
• Your Export Promotion Council can advise on RCMC and product-specific norms

Advance Authorisation is a specialised trade scheme. Exporters commonly work with a customs broker or trade consultant to prepare SION references, value-addition calculations and the export-obligation documentation, but the application itself is filed on the DGFT portal under the exporter's own IEC.