Duty Free Import Authorization - DFIA

Duty Free Import Authorization (DFIA)

1. Introduction

The Duty Free Import Authorization (DFIA) scheme is a vital export promotion initiative under the Foreign Trade Policy of India. It allows businesses to import inputs used in the manufacture of export products without paying customs duties. This helps reduce production costs and boosts export competitiveness.

2. Key Features:

  • Duty Exemptions: DFIA holders can import raw materials and inputs duty-free, including customs and safeguard duties.
  • Value Addition: Exporters must ensure a minimum of 20% value addition in the final exported product.
  • Transferable License: Once export obligations are fulfilled, DFIA can be transferred or sold.
  • Wide Applicability: Covers various industries, including textiles, chemicals, electronics, and engineering goods, allowing exporters across multiple sectors to benefit.

3. DFIA Process:

  • Pre-Export Application: Exporters must apply for DFIA before shipping goods, specifying the inputs needed for production.
  • Fulfilling Export Obligations: Exporters are required to meet export commitments within 18 months from the date of authorization.
  • Post-Export Transferability: After fulfilling export obligations, DFIA can be transferred to another entity or used to import additional inputs.

4. Advantages of DFIA :

  • Cost Savings: DFIA reduces the overall cost of manufacturing by exempting various duties on essential inputs.
  • Flexibility: The transferability of DFIA offers flexibility and liquidity options, allowing exporters to trade the license.
  • Competitive Edge: Lower input costs enhance the competitiveness of Indian exporters in global markets.

5. Conclusion

At Best EXIM and Industrial Consultants Company, we specialize in guiding businesses through the DFIA process. Our experienced consultants provide comprehensive assistance, from eligibility assessment to documentation and regulatory compliance, helping you optimize your export operations and benefit from duty-free imports.

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