What are Norms in Advance Authorisation?
Advance Authorisation norms decide the exact input-output relationship your licence will follow: what you can import duty-free, in what quantity, and with how much wastage, for a specific export product. Everything in Advance Authorisation—issue of licence, imports, export obligation, and EODC—is checked against these norms.
Norms are technical ratios that say: to export 1 unit (or 1 kg/1 piece) of a product, you are allowed to import X units of each input, with Y% wastage, and you must achieve at least a minimum value addition. For example, a SION entry might allow 1.1 kg of a raw material to produce 1 kg of finished export goods, implying 10% wastage. These norms ensure the scheme is used only for genuine input needs and not for excess duty free imports.
Standard Input Output Norms (SION)
- SION are pre-approved norms notified by DGFT in a large table, product-wise (chemicals, textiles, engineering, etc.).
- When an exporter applies for Advance Authorisation and an appropriate SION exists, DGFT issues the licence directly by mapping the export product to that SION; separate norms approval is needed.
SION Specifications
- Export product description and HS code.
- List of permitted inputs (domestic/imported).
- The quantity of each input allowed per unit of export.
- Any by-products/co-products.
- Any special technical conditions.
Because SION is standard and published, it is easy to use and widely relied upon in sectors like textiles, engineering, chemicals, leather, and food processing.
Ad Hoc Norms and Norms Committee
If no suitable SION exists for your export product, you can seek ad hoc norms fixation from DGFT's Norms Committee (para 4.06 HBP).
- The exporter files an application with detailed input-output data, production process, wastage, and past consumption records or test reports.
- The Norms Committee examines the data, may ask for clarifications or plant visits, and then fixes norms (input quantities, wastage limits, value addition).
- Once fixed, those ad hoc norms govern your existing Advance Authorisation(s); sometimes norms are later generalised and published as SION for all exporters.
Ad hoc norms are common in highly customised or technology-driven industries (speciality chemicals, advanced engineering components, custom machinery).
Self-Declaration Norms
To avoid delays, DGFT allows Advance Authorisation on self-declaration when no SION or ad hoc norm exists (para 4.07 HBP).
- You declare in your application the inputs, quantities, and wastage you need per unit of export, based on your own technical calculation.
- DGFT issues Advance Authorisation quickly based on this self-declaration, but reserves the right to get the norms ratified later by the Norms Committee.
- If, during ratification, the Committee approves lower input quantities or wastage than you claimed, any excess duty-free imports you took above the approved norms may become dutiable with interest.
Important: Self-declaration is useful when you need a quick licence issue, but it must be used carefully with realistic consumption figures to avoid later disputes.
Self-Ratification Scheme (SRS)
For eligible status holder exporters in notified sectors, the Self-Ratification Scheme allows them to fix norms themselves without prior Norms Committee approval.
- Large, compliant exporters with recognised status and a strong track record can self-ratify input-output norms, subject to conditions (no sensitive items, adherence to minimum value addition, internal records).
- DGFT issues Advance Authorisation based on these self-ratified norms, and the Norms Committee intervenes only in exceptional cases.
This greatly speeds up licensing for high-volume exporters but also places responsibility on them to maintain robust production and consumption records.
How Norms Impact Imports, EO, and EODC
Norms influence every stage of the scheme:
Licence Issue
The CIF value and quantity of inputs permitted in your Advance Authorisation are directly derived from norms multiplied by your planned export quantity.
Actual Imports
Customs allows duty-free imports only up to the quantities and descriptions specified in the licence, which in turn reflect the norms. Excess or wrong inputs fall outside the scheme.
Export Obligation
The minimum FOB value and product description you must export are again tied to the norms and minimum value addition requirements in FTP.
Redemption/EODC
At closure, DGFT and sometimes customs compare your total imports and exports against the applicable norms. If you imported more than norms allow, they can demand duty plus interest on the excess.
Why "Getting Norms Right" is Critical
Over-generous self-declared norms can bring short-term extra duty-free imports but usually result in heavy duty + interest and possible penalties when norms are ratified or audited later.
Too conservative norms may under state your genuine input need, forcing you either to buy domestically at a higher cost or to apply repeatedly for amendments.
For long term exporters, investing in accurate technical data, lab reports, and internal consumption analysis helps secure realistic norms that minimise both compliance risk and cost.
In short, Advance Authorisation norms are the backbone of the scheme: they legally define your entitlement to duty free imports and the benchmark against which your export performance is judged.