Why DGFT Norms Fixation is Essential for Advance Authorisation Holders

 

For exporters in India, maximizing profitability while maintaining compliance with trade regulations is essential for long-term success. The Advance Authorisation Scheme and DGFT Norms Fixation are two critical components under the Foreign Trade Policy that enable exporters to optimize resources, reduce costs, and enhance global competitiveness.

While the Advance Authorisation Scheme allows duty-free import of raw materials for export production, DGFT Norms Fixation ensures that material consumption standards are fair, transparent, and aligned with industry benchmarks. Together, these mechanisms streamline export operations, promote ease of doing business, and encourage global trade participation.

Understanding the Advance Authorisation Scheme

The Advance Authorisation Scheme, introduced by the Directorate General of Foreign Trade (DGFT), permits exporters to import raw materials, components, and inputs without paying customs duty, provided that the imported goods are used to manufacture export products. This duty exemption enhances liquidity and cost-efficiency, allowing exporters to remain competitive in international markets.

Key Features of the Advance Authorisation Scheme:

• Duty-Free Imports: Raw materials required for export production can be imported without paying basic customs duty, anti-dumping duty, or safeguard duty.

• Export Obligation: Exporters must fulfill a specific export obligation (EO) within a stipulated period, usually 18 months from the date of issue.

• Eligibility: Both manufacturer-exporters and merchant-exporters tied to supporting manufacturers can apply for authorisation.

• Transferability: The Advance Authorisation is non-transferable but can be used by supporting manufacturers associated with the license holder.

Example:
A pharmaceutical exporter importing active ingredients under the Advance Authorisation Scheme can produce the final medicine and export it without paying import duties. This significantly lowers production costs and enhances export competitiveness.

What is DGFT Norms Fixation?

DGFT Norms Fixation refers to the process of determining the quantity of input materials required to produce one unit of export product. These input-output norms are essential for monitoring and validating the use of duty-free imported materials under the Advance Authorisation Scheme.

DGFT maintains a database of Standard Input Output Norms (SION) for various export products. However, if no standard norms exist for a particular product, exporters can apply for Ad Hoc Norms Fixation to determine consumption ratios.

Key Aspects of DGFT Norms Fixation:

• SION (Standard Input Output Norms): Predefined consumption standards for commonly exported goods.

• Ad Hoc Norms: Temporary norms fixed for unique export products without existing SION data.

• Norms Committee: DGFT’s Norms Committee reviews applications and fixes norms based on technical data, production records, and industry standards.

Example:
An exporter manufacturing specialized machinery may not find standard norms under SION. In this case, the exporter must apply for DGFT Norms Fixation by providing technical details and input consumption data. Once approved, the fixed norms will define the permissible import quantity for duty-free procurement.

How the Advance Authorisation Scheme and DGFT Norms Fixation Work Together

The Advance Authorisation Scheme and DGFT Norms Fixation are closely interlinked. The latter provides the foundation for determining the permissible quantity of imported inputs, ensuring fair usage and preventing misuse of duty exemptions.

Here’s how the process works:

1. Exporters apply for Advance Authorisation based on SION or Ad Hoc norms.

2. DGFT verifies input-output ratios through established norms.

3. Exporters fulfill the export obligation using imported inputs.

4. DGFT monitors compliance during license redemption and EODC issuance.

Example:
A textile exporter applying under the Advance Authorisation Scheme for fabric production will rely on DGFT Norms Fixation to determine how much yarn can be imported duty-free for every meter of fabric exported.

Benefits of the Advance Authorisation Scheme and DGFT Norms Fixation

• Cost Efficiency: Eliminates import duty, reducing production costs.

• Global Competitiveness: Helps exporters offer competitive pricing in international markets.

• Regulatory Clarity: DGFT Norms Fixation ensures transparency in input utilization.

• Encourages Manufacturing: Supports the government’s Make in India initiative by promoting domestic production for export.

• Streamlined Compliance: Simplifies monitoring and documentation through standardized norms.

Best Practices for Exporters

To fully benefit from the Advance Authorisation Scheme and DGFT Norms Fixation, exporters should:

• Maintain detailed production and consumption records.

• Regularly update themselves on DGFT circulars and notifications.

• Seek expert guidance for SION or Ad Hoc Norms applications.

• Ensure timely redemption of licenses and submission of EODC (Export Obligation Discharge Certificate).

• Implement internal compliance audits for accurate documentation.

Conclusion

The Advance Authorisation Scheme and DGFT Norms Fixation are indispensable tools for Indian exporters aiming to grow globally while maintaining compliance and efficiency. These frameworks reduce costs, promote responsible trade practices, and strengthen India’s position in global exports.

By understanding and effectively implementing these schemes, businesses can streamline their export operations, achieve higher profitability, and ensure regulatory confidence.

Why Timely Advance License EODC Is Critical for Export Business Success

 

India’s foreign trade ecosystem offers numerous schemes that empower exporters to grow globally while maintaining cost efficiency. Among these, the Advance Authorisation Scheme stands out as a crucial export promotion policy that allows duty-free import of raw materials used in manufacturing export products.

However, compliance doesn’t end with obtaining the authorisation — completing the Advance License EODC (Export Obligation Discharge Certificate) is equally important. Both elements work together to ensure businesses not only enjoy the benefits of duty exemption but also meet their export commitments responsibly.

This article explains how the Advance Authorisation Scheme works, the importance of Advance License EODC, and best practices for maintaining compliance.

Understanding the Advance Authorisation Scheme

The Advance Authorisation Scheme, governed by the Directorate General of Foreign Trade (DGFT), enables exporters to import inputs without paying customs duty, provided that these inputs are used in products meant for export.

Key Features of the Advance Authorisation Scheme:

• Duty-free import of raw materials and components for export production.

• Applicable for manufacturer-exporters and merchant-exporters tied with supporting manufacturers.

• Export obligation must be fulfilled within a specified timeframe.

• Issued based on Standard Input Output Norms (SION) or through self-declaration in special cases.

Example:
An automobile parts manufacturer can import specialized steel components without paying import duties under the Advance Authorisation Scheme. In return, the company must export finished products equivalent to the duty-free benefit received, within the export obligation period set by DGFT.

This scheme enhances competitiveness, reduces production costs, and boosts India’s export potential globally.

Fixation of Norms and Export Obligation

Each Advance Authorisation specifies the quantity of imported materials allowed, based on Standard Input Output Norms (SION) determined by DGFT. These norms define how much raw material is required to produce a specific quantity of finished export goods.

Businesses that cannot find an applicable SION can apply for ad-hoc norms fixation, ensuring flexibility across diverse industries.

To comply fully, exporters must meet their export obligation (EO) within the prescribed time, usually 18 months. Failure to fulfill the EO can result in penalties or blocking of future authorisations.

Understanding Advance License EODC (Export Obligation Discharge Certificate)

Once the exporter fulfills the required export obligation, they must obtain an Advance License EODC from the DGFT. The EODC serves as an official closure of the authorisation, confirming that the exporter has completed the necessary exports against the duty-free imports.

Steps to Obtain Advance License EODC:

1. Fulfilling the Export Obligation: Export products as per the authorisation terms.

2. Compiling Export Documents: Maintain all shipping bills, invoices, and bank realisation certificates (BRCs).

3. Filing EODC Application: Submit the online EODC application on the DGFT portal.

4. DGFT Verification: The DGFT office verifies exports and documentation.

5. Issuance of EODC: Once verified, DGFT issues the Export Obligation Discharge Certificate, officially closing the license.

Example:
A pharmaceutical exporter imported chemicals duty-free worth ₹1 crore under Advance Authorisation. After exporting the finished medicines worth ₹3 crore within 18 months, the company submitted the required documents and obtained the Advance License EODC. This completion not only ensured compliance but also allowed them to apply for future authorisations seamlessly.

Why Advance License EODC is Important

Obtaining the EODC is more than a formality — it’s a legal necessity. It certifies that the exporter has met all obligations under the Advance Authorisation and prevents any future demand for customs duty or penalties.

Without the EODC, the duty benefits availed under the scheme are considered unpaid, and the company may face recovery actions from customs or DGFT.

In short, EODC compliance ensures peace of mind, protects financial benefits, and strengthens your credibility as an exporter.

Best Practices for Managing Advance Authorisation and EODC Compliance

• Maintain meticulous records of all imports, exports, and corresponding documentation.

• Monitor export obligation deadlines to avoid delays.

• Use digital tools or professional consultants for filing and compliance tracking.

• Apply for ad-hoc norms fixation if your product category isn’t covered under SION.

• Always apply for EODC immediately after completing exports to avoid compliance gaps.

These proactive steps help exporters avoid penalties, improve operational efficiency, and maintain a strong relationship with DGFT and customs authorities.

Conclusion

The Advance Authorisation Scheme and Advance License EODC together form the foundation of a smooth, compliant export operation. While the scheme reduces production costs by allowing duty-free imports, obtaining the EODC ensures legal closure and continued eligibility for future trade benefits.

For exporters aiming to scale globally, timely EODC compliance is not just a regulatory step — it’s a strategic move toward sustainable business growth.

EPR Registration Explained: Simplifying Extended Producer Responsibility for Businesses

 

EPR Registration, short for Extended Producer Responsibility Registration, is a mandatory authorization issued by the Central Pollution Control Board (CPCB) in India. It ensures that manufacturers, importers, and brand owners take responsibility for managing the waste generated from the products they introduce into the market.

The concept of EPR Compliance is rooted in sustainability — it shifts the burden of waste management from consumers and governments to producers. Businesses engaged in manufacturing or importing products that generate plastic, e-waste, battery waste, or packaging materials must obtain valid EPR Registration before selling in the Indian market.

The Objective Behind EPR Compliance

The purpose of EPR Compliance is to promote sustainable production and consumption by ensuring proper recycling, reuse, and disposal of waste materials. The main objectives include:

• Encouraging waste segregation and recycling
  
  

• Reducing landfill pressure
  
  

• Promoting circular economy practices
  
  

• Ensuring producer accountability
  
  

• Reducing environmental impact through proper waste management
  
  

By adhering to EPR Registration norms, companies demonstrate their commitment to environmental protection and legal responsibility.

Who Needs EPR Registration?

EPR Registration applies to all entities involved in producing or handling products that generate waste post-consumption. The following categories of businesses require EPR Registration:

1. Manufacturers – Companies producing plastic, electrical, or electronic goods.
   
   

2. Importers – Businesses importing packaged products or raw materials that generate waste.
   
   

3. Brand Owners – Companies selling products under their own brand name, regardless of who manufactures them.
   
   

4. Producers of Batteries and Electronics – Entities producing electrical appliances, mobile phones, batteries, or related components.
   
   

Any company operating in these segments must ensure EPR Compliance by registering with the CPCB and submitting annual returns.

The Legal Framework for EPR Registration

The foundation of EPR Registration lies in various environmental regulations enforced by the Government of India, such as:

• Plastic Waste Management Rules, 2016 (amended 2022)
  
  

• E-Waste (Management) Rules, 2022
  
  

• Battery Waste Management Rules, 2022
  
  

• Solid Waste Management Rules, 2016
  
  

These rules collectively ensure that producers are accountable for post-consumer waste. Failure to obtain or renew EPR Registration can lead to penalties, suspension of operations, or legal action by the CPCB.

Step-by-Step Process of EPR Registration

Obtaining EPR Registration requires careful documentation and compliance with CPCB guidelines. Here’s a simplified breakdown of the process:

Step 1: Identify Applicable Category

Determine whether your business falls under e-waste, plastic waste, or battery waste management rules.

Step 2: Create an Online Account on CPCB Portal

Register on the CPCB EPR portal using your company’s credentials.

Step 3: Submit Required Documents

Upload the following documents:

• GST certificate
  
  

• PAN card
  
  

• Manufacturing or import license
  
  

• Product details and recycling plan
  
  

• Details of authorized recyclers or collection partners
  
  

Step 4: Review and Verification

The CPCB reviews the documents and verifies compliance details. Any discrepancies must be rectified before approval.

Step 5: Issuance of EPR Certificate

Once approved, the business receives an EPR Registration Certificate, valid for a specific period.

Step 6: Annual Reporting and Renewal

Businesses must file annual EPR returns and renew their registration before expiry to maintain continuous compliance.

Key Benefits of EPR Registration for Businesses

Apart from legal compliance, EPR Registration provides multiple advantages for responsible companies:

1. Enhanced Brand Reputation

Customers increasingly prefer eco-friendly brands. EPR-certified companies gain trust and recognition for sustainability.

2. Regulatory Security

Proper EPR Compliance ensures you avoid fines, bans, or legal disputes with regulatory authorities.

3. Operational Efficiency

By integrating recycling partners and waste management systems, companies streamline their operations.

4. Market Access

Many government tenders and private collaborations require valid EPR Registration as part of their eligibility criteria.

5. Environmental Responsibility

EPR frameworks help businesses actively contribute to a greener planet by reducing pollution and supporting recycling efforts.

Common Challenges in Achieving EPR Compliance

While the benefits are numerous, many organizations face challenges during EPR Registration and implementation, such as:

• Complex documentation requirements
  
  

• Lack of awareness of CPCB procedures
  
  

• Difficulty in finding authorized recyclers
  
  

• Monitoring and reporting waste collection data
  
  

To overcome these hurdles, businesses often collaborate with professional EPR consultants or compliance agencies that manage registration, documentation, and reporting.

Importance of Maintaining Ongoing EPR Compliance

Securing an EPR Registration Certificate is just the beginning. Ongoing EPR Compliance involves maintaining proper records, ensuring collection targets are met, and filing accurate returns each year.

Companies must:

• Maintain agreements with authorized recyclers
  
  

• Keep updated records of waste generation and recycling
  
  

• File timely EPR Annual Returns on the CPCB portal
  
  

• Renew EPR Registration before its expiry
  
  

Neglecting these responsibilities can lead to penalties or cancellation of authorization. Continuous compliance strengthens brand credibility and ensures smooth business operations.

How to Ensure Smooth EPR Registration

To make EPR Registration easier and error-free, follow these best practices:

1. Conduct a Waste Audit – Analyze your product’s lifecycle and waste output.
   
   

2. Partner with Authorized Recyclers – Collaborate only with government-approved recyclers.
   
   

3. Prepare Documentation Early – Keep all licenses, certificates, and recycling plans ready.
   
   

4. Stay Updated with CPCB Guidelines – Regularly monitor rule amendments and notifications.
   
   

5. Seek Expert Assistance – Work with EPR consultants to simplify the application and reporting process.
   
   

Conclusion

EPR Registration is not merely a legal obligation it’s a strategic step toward sustainability and responsible business growth. It ensures that producers and importers take accountability for waste generated through their products, contributing to environmental conservation and regulatory compliance.

By adopting effective EPR Compliance practices, companies can build stronger brand credibility, meet legal standards, and support the circular economy movement. For businesses looking to thrive sustainably, obtaining and maintaining EPR Registration is both a responsibility and an opportunity.