Government simplifies import norms for export boost

The government has come up with the advance authorization scheme which allows exporters to import necessary input materials without any cost. The objective behind this decision is to address the sluggish demand in both the Western markets and China.

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In response to the ongoing decline in merchandise goods exports for the fifth consecutive month in June, the government has taken steps to simplify the process for exporters to access benefits through an advance authorization scheme. This scheme permits the import of input materials free of charge. The move aims to address the demand slowdown in the western markets and China.

India’s goods exports in June witnessed a sharp decline of over 22% YoY, hitting an eight-month low at US$32.97 billion. It was due to the significant drop in the value of petroleum product exports, which nearly halved compared to the previous year. The decrease in petroleum exports can be attributed to the normalization of commodity prices after the peak observed during the Russia-Ukraine conflict in the corresponding period last year.

Under the newly introduced Foreign Trade Policy, the Directorate General of Foreign Trade (DGFT) is responsible for implementing the advance authorization scheme. This scheme operates with the participation of sector-specific norms committees, which play a crucial role in determining the eligibility of inputs based on input-output norms. It is important to highlight that these committees assess and establish the specific norms applicable to different sectors.

To enhance the efficiency of the norms fixation process, the DGFT has announced the development of a user-friendly and searchable database containing ad-hoc norms established in previous years. This database allows exporters to access and utilize these norms without the need to approach the norms committee. The aim is to streamline the process and provide exporters with a convenient resource for determining applicable norms.

The database is hosted on the DGFT website and allows users to search using export or import item descriptions, technical characteristics, or Indian tariff classification codes.