Government benefits for importers in India are primarily focused on reducing costs (duty exemption) and enhancing efficiency (trade facilitation). Most schemes are linked to a commitment to export, but some are standalone benefits for compliance and modernization.
Here are the major government benefits available to importers:
1.Advance Authorisation (for Importing Inputs Duty-Free)
What it offers: Import raw materials duty-free if the final product is exported.
Example: A chemical company imports raw materials duty-free because the finished product will be exported.
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EPCG Scheme (Duty-Free Import of Machinery)
What it offers: Import machinery at 0% customs duty for manufacturing, with export obligation.
Example: A textile unit imports a weaving machine at zero duty if it agrees to export finished fabric.
3. Duty-Free Import Allowed in EOUs/SEZs (for Manufacturers)
What it offers:
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Duty-free import of raw materials
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Duty-free import of capital goods
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Simplified clearance
Example: A leather goods unit in an SEZ imports leather, chemicals, and machinery without duties.
4. Project Import Scheme (for Manufacturers)
What it offers: Concessional customs duty for large industrial projects.
Example: Power plants or fertilizer units importing equipment get lower duty on plant & machinery.
5. FTAs – Reduced Import Duties
What it offers: Lower customs duty on imports from FTA partner countries.
Example: Importing gold jewelry from UAE under CEPA comes with reduced import duty (subject to quota).
6. Import of Second-Hand Machinery (Allowed with Conditions)
What it offers: Many categories of used machinery can be imported without prior approval.
Example: A small manufacturer imports refurbished CNC machines at lower cost.
7. Duty Free Import Authorization (DFIA / DFAI)
(Big benefit for manufacturer-exporters)
What it offers:
DFIA allows duty-free import of inputs that are used in the manufacture of export products.
It is transferable after export obligation is completed, making it highly valuable.
Key Features:
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Zero customs duty on specified inputs
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Transferable once the export obligation is fulfilled
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Useful for standardized inputs like chemicals, packing materials, fabric, etc.
Example:
A biscuit manufacturer exports biscuits and uses a DFIA license to import sugar, preservatives, and packaging material without paying customs duty.
Once exports are completed, the license can be sold to another importer.
The Government of India offers a wide range of incentives and schemes for importers, including Duty-Free Import Authorizations (DFIA), Advance Authorization, EPCG, SEZ/EOU benefits, project import concessions, and bonded warehousing facilities. These measures help reduce the cost of raw materials, capital goods, and inputs, promote export competitiveness, and support manufacturing and industrial growth. By strategically leveraging these benefits, importers can optimize their operations, improve cash flow, and strengthen India’s position in global trade.