How to Apply for Norm Fixation and Use EPCG License Effectively

 

📌 Introduction: Empowering Exporters Through Trade Incentives

To boost exports and reduce production costs, the Indian government provides several duty exemption schemes. Two of the most important are the Advance Authorisation and EPCG License. While both aim to support exporters, understanding the Fixation of Norms for Advance Authorisation and the operational requirements of an EPCG License is essential for maximizing benefits—and staying compliant.

Let’s break down how these two schemes work and how you can use them strategically.

📦 What Is Advance Authorisation?

Advance Authorisation allows manufacturers to import raw materials duty-free, provided the finished goods are exported. This helps reduce input costs and make Indian products more competitive globally.

But not all products have pre-defined input-output norms listed in DGFT’s SION (Standard Input Output Norms). That’s where Fixation of Norms for Advance Authorisation comes into play.

✅ Example: If you manufacture a unique alloy or customized machinery, you may need to apply for ad-hoc fixation by submitting your bill of materials, process details, and product specifications.

Once approved, DGFT grants duty-free import rights based on the approved inputs and export obligations.

🏭 What Is an EPCG License?

The Export Promotion Capital Goods (EPCG) License allows you to import capital machinery at zero or reduced customs duty, provided you fulfill a pre-set export obligation within a defined period.

🔧 Example: A textile exporter can import a computerized embroidery machine duty-free under EPCG and commit to exporting 6x the duty saved over 6 years.

Unlike Advance Authorisation, EPCG focuses on long-term productivity enhancement through advanced machinery.

🔄 How Fixation of Norms & EPCG Can Work Together

Many businesses benefit from using both schemes in parallel. For instance:

• Use Advance Authorisation with norms fixation to import raw materials duty-free.

• Simultaneously, use an EPCG License to modernize your production line with capital equipment.

However, both schemes require strict documentation, time-bound export obligations, and careful tracking of inputs vs. outputs.

🧠 Tips for Smooth Processing

• Hire an experienced DGFT consultant to avoid application rejection.

• Submit technical data sheets, BOMs, and export projections in detail.

• Keep real-time records of production, imports, and exports.

• Understand amendment & extension rules for EPCG if deadlines cannot be met.

• Always cross-check with the latest DGFT notifications and FTP guidelines.

📣 Conclusion: Compliance + Strategy = Export Success

The Fixation of Norms for Advance Authorisation and benefits of the EPCG License are powerful tools for Indian exporters. But they demand proactive compliance, technical clarity, and strategic use.