Advance Authorisation (AA) Scheme

The Advance Authorisation (AA) scheme, managed by the Ministry of Commerce and Industry (Central) through the Directorate General of Foreign Trade (DGFT), is a crucial incentive for Indian exporters. It aims to boost the competitiveness of Indian goods in international markets by allowing duty-free import of essential inputs required for manufacturing export products. This scheme recognizes that duties on raw materials and components can inflate production costs, thereby making Indian exports less attractive. By exempting these duties, the government facilitates a level playing field for exporters, encouraging value addition and technological upgrade within the country. The AA scheme is particularly beneficial for manufacturers who rely on imported raw materials, intermediates, or components to produce finished goods for export. It also covers fuel, oil, and catalysts that are consumed or utilized during the production process. The core principle is to prevent the incidence of domestic taxes and duties on export products, making them competitive globally.

The quantity of inputs allowed for a given product is based on specific norms defined for that export product, which considers the wastage generated in the manufacturing process. DGFT provides a sector-wise list of Standard Input-Output Norms (SION) under which exporters may choose to apply. Alternatively, exporters may apply for their own ad-hoc norms in cases where the SION does not suit their specific production process. The scheme offers flexibility in determining input quantities based on various methods including SION, self-declaration, applicant-specific prior fixation of norms by the Norms Committee, or through the Self Ratification Scheme.