For Indian exporters, especially MSMEs, one of the biggest challenges is not just finding buyers, but staying competitive on cost, upgrading capabilities, and managing cash flow.
To support this, the Directorate General of Foreign Trade (DGFT) offers a range of export promotion schemes under the Foreign Trade Policy (FTP) 2023.
But for many businesses, these schemes feel complex and underutilized.
This guide breaks them down in simple, practical terms so you can understand what they do, who they are for, and how they can benefit your business.
1. Advance Authorisation (AA): Reduce Input Costs
The Advance Authorisation Scheme allows exporters to import raw materials duty-free, provided they are used in export production.
Key Benefits:
- Duty-free import of raw materials, fuel, oil, and catalysts
- Lower production cost → better export pricing
- Valid for 18 months (import + export obligation)
Best For:
Manufacturers in sectors like chemicals, engineering, and processing industries. Why it matters: Reduces upfront costs and improves margins on export orders.
2. EPCG Scheme: Upgrade Your Machinery
The Export Promotion Capital Goods (EPCG) Scheme helps exporters import capital goods at zero customs duty.
Key Benefits:
- Import machinery, tools, and software at zero duty
- Export obligation = 6x duty saved (over 6 years)
- Reduced obligation (75%) for green technology sectors
Best For:
Manufacturers are looking to upgrade technology and scale production. Why it matters: Enables modernization without heavy upfront investment.
3. DFIA Scheme: Post-Export Benefits + Flexibility
The Duty Free Import Authorisation (DFIA) works differently; it is issued after export.
Key Benefits:
- Duty-free import after fulfilling the export obligation
- Transferable license → improves liquidity
- Minimum 20% value addition required
Best For:
Exporters who want flexibility and post-export financial benefits. Why it matters: Adds liquidity and reduces long-term cost burden.
4. Status Holder Scheme: Faster Processes, More Power
Exporters are recognized based on performance (1-star to 5-star).
Key Benefits:
- Faster approvals and reduced compliance
- Self-ratification of input-output norms (for 2-star and above)
Best For:
Growing exporters scaling internationally. Why it matters: Saves time and improves operational efficiency.
5. Towns of Export Excellence (TEE): Cluster Advantage
Certain regions are designated as export hubs to promote specialization.
Benefits:
- Priority access to Market Access Initiative (MAI) funds
- Support for infrastructure and services
- Key Locations:
Faridabad, Moradabad, Varanasi, Mirzapur, etc. Why it matters: Strengthens local export ecosystems.
6. Amnesty Scheme: Clean Up Old Liabilities
This one-time scheme helps exporters regularize past defaults under AA/EPCG.
Key Benefits:
- Close pending cases
- Pay duty without heavy penalties
- Interest is capped at 100% of the duty
- Why it matters: Clears compliance issues and restores eligibility.
7. Export Authorization (Restricted Items)
Certain products require licenses for export, which include:
- SCOMET items (dual-use goods, sensitive technologies)
- Why it matters: Ensures compliance while enabling high-value exports.
Important Update: Service Export Incentives
The earlier SEIS scheme (3–5% rewards) has been discontinued.
👉 Exporters must now focus more on:
- Goods exports
- Cost optimization
- Market diversification
Final Takeaway: Which Scheme Should You Focus On?
Here’s a simple way to decide:
| Your Goal | Scheme to Focus |
|---|---|
| Reduce raw material cost | AA |
| Upgrade machinery | EPCG |
| Improve liquidity | DFIA |
| Faster approvals | Status Holder |
| Fix old compliance issues | Amnesty |
What Exporters Should Do Next
If you’re exporting (or planning to):
1️⃣ Identify which scheme fits your business model
2️⃣ Align your production and sourcing accordingly
3️⃣ Ensure compliance (documentation, norms, timelines)
4️⃣ Use schemes strategically, not just occasionally
India’s export schemes are not just incentives; they are strategic tools.
The exporters who benefit the most are not the ones who apply randomly,
But the ones who align their entire business model around them. Not sure which scheme is right for your business?
At V Global, we help exporters choose, apply, and optimize the right schemes based on their products and markets.
Get in touch with us to build a smarter, more profitable export strategy.