Duty Exemption and Remission Scheme: Duty-Free Imports for Exporters
Guidance by StartupFlora · Last updated: September 16, 2026 Import duty on raw materials can quietly eat into an exporter's margin before a single unit ships out. A garment exporter paying full customs duty on imported fabric, or an electronics manufacturer paying duty on components, is competing against exporters in other countries who don't carry that cost. The Duty Exemption and Remission Scheme exists to remove that disadvantage for Indian exporters. Administered under Chapter 4 of the Foreign Trade Policy by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, the scheme allows duty-free import of inputs that go into making a product for export. Note the correct administering authority here: this scheme sits with DGFT and the Commerce Ministry, not MeitY, since it applies to exporters across sectors, not just electronics or IT. If you take one thing from this article: the exemption only lasts as long as you complete your export obligation on time. Get the paperwork right upfront, because Advance Authorisation is a conditional benefit, not a free pass.
Benefits of the Scheme
Duty-Free Import of Raw Materials
Under Advance Authorisation, inputs physically incorporated into the export product can be imported without paying Basic Customs Duty, Integrated GST, and Compensation Cess, which can cut raw material import costs meaningfully depending on the product category.
Replenishment or Remission, Whichever Fits
The scheme covers two routes: importing inputs before export (Advance Authorisation) or getting duty remission on inputs already used through instruments like Duty Free Import Authorisation, giving exporters flexibility in how they structure imports.
Standard Input-Output Norms Simplify Approval
DGFT publishes Standard Input-Output Norms (SION) for thousands of product categories, spelling out exactly how much input quantity is allowed per unit of export output, which removes ambiguity from the approval process.
Second-Hand Capital Goods and Oil/Catalyst Also Covered
Duty Free Import Authorisation additionally allows import of oil and catalyst consumed in the production process, and permits certain second-hand capital goods where applicable.
Transferability for Gems and Jewellery
Replenishment Authorisation for gems is available against exports, including supply by a Nominated Agency, and Authorisation for gems can be freely transferable under the scheme's specific provisions for that sector.
Self-Declaration Route for Products Without SION
If a product doesn't have a published SION, exporters can apply under self-declaration norms or request the DGFT's Norms Committee to fix ad-hoc norms, so the absence of a standard norm doesn't block the application.
Scheme Snapshot
How to Apply for Advance Authorisation
Confirm your product has a SION, or plan for self-declaration
Check whether your export product has a published Standard Input-Output Norm. If not, you can apply on a self-declaration basis or request the Norms Committee to fix norms for your case.
Calculate your input requirement against export quantity
Use the applicable SION, or your own documented consumption data, to determine how much input quantity you need per unit of export output.
File your application online through DGFT's EDI system
Applications for Advance Authorisation and DFIA are filed online, with complete details as prescribed under the relevant appendix formats of the Handbook of Procedures.
Submit supporting technical certification where required
Certain applications require supporting documentation, such as a Chartered Engineer's certificate, depending on the category and value of the authorisation sought.
Import your inputs under the issued Authorisation
Once the Authorisation is issued, import the specified inputs duty-free, ensuring imports and exports are routed through the EDI-enabled ports as required.
Fulfil your export obligation within the timeline
Complete the export obligation, generally within 18 months of the Authorisation's issue date, maintaining the minimum value addition prescribed under the FTP.
Maintain accounting records and close out the Authorisation
Keep records of imports and corresponding exports in line with the scheme's accounting conditions, and complete the necessary closure formalities with your Regional Authority once the export obligation is met.
Confirm your product has a SION, or plan for self-declaration
Check whether your export product has a published Standard Input-Output Norm. If not, you can apply on a self-declaration basis or request the Norms Committee to fix norms for your case.
Calculate your input requirement against export quantity
Use the applicable SION, or your own documented consumption data, to determine how much input quantity you need per unit of export output.
File your application online through DGFT's EDI system
Applications for Advance Authorisation and DFIA are filed online, with complete details as prescribed under the relevant appendix formats of the Handbook of Procedures.
Submit supporting technical certification where required
Certain applications require supporting documentation, such as a Chartered Engineer's certificate, depending on the category and value of the authorisation sought.
Import your inputs under the issued Authorisation
Once the Authorisation is issued, import the specified inputs duty-free, ensuring imports and exports are routed through the EDI-enabled ports as required.
Fulfil your export obligation within the timeline
Complete the export obligation, generally within 18 months of the Authorisation's issue date, maintaining the minimum value addition prescribed under the FTP.
Maintain accounting records and close out the Authorisation
Keep records of imports and corresponding exports in line with the scheme's accounting conditions, and complete the necessary closure formalities with your Regional Authority once the export obligation is met.
Eligibility for the Duty Exemption and Remission Scheme
Manufacturer exporters and merchant exporters
tied to a supporting manufacturer, depending on the specific instrument applied for.
A valid Import Export Code (IEC),
since all applications are processed against a registered IEC holder
Willingness to meet the minimum value addition
prescribed under Para 4.09 of the FTP for the relevant product category
Ability to fulfil the export obligation
within the stipulated timeframe, since duty exemption is conditional on completing the export commitment
Compliance with pre-import conditions,
where applicable, for products under notified SION or where prior fixation of norms is required.
FAQs
Related Schemes
STP Scheme — a sector-specific duty-free import route for software exporters.
ESDP Scheme — for first-time exporters who need foundational business training before scaling into export production
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