Advance and EPCG Authorisation Scheme

Introduction

The Advance Authorization Scheme (AAS) or Advance License Scheme, introduced by the Government of India under the Foreign Trade Policy 2015-2020, has recently gained attention in the news. This scheme aims to promote the competitiveness of Indian products in the global market by providing duty exemptions on imported raw materials required for the manufacture of export products. By eliminating import duties on these materials, the cost of the final export products is reduced, making them more competitive in terms of pricing.

Ministry, Launch Year, and Implementing Body

The Advance Authorization Scheme is implemented by the Directorate General of Foreign Trade (DGFT), which operates under the Ministry of Commerce and Industry in the Government of India. The scheme was launched in the year 2015 under the Foreign Trade Policy for the period 2015-2020.

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Objectives

The primary objective of the Advance Authorization Scheme is to enhance the competitiveness of Indian products in the global market by providing duty exemptions on imported raw materials. By exempting import duties, the scheme aims to lower the production costs of export products, making them more affordable and attractive to international buyers.

Goal

The goal of the Advance Authorization Scheme is to promote exports and boost the Indian economy. By incentivizing the production of export-oriented goods through duty exemptions, the scheme encourages businesses to expand their manufacturing capabilities and increase their export volumes.

Vision

The vision behind the Advance Authorization Scheme is to position India as a major player in the global market by ensuring the competitiveness of its products. By facilitating duty-free imports of raw materials, the scheme enables Indian manufacturers to produce high-quality goods at a lower cost, thus increasing their market share internationally.

Benefits and Impact

The Advance Authorization Scheme provides several benefits to exporters and the Indian economy as a whole. Some of the key benefits and impacts include:

1. Cost Reduction: By exempting import duties on raw materials, the scheme significantly reduces the production costs for exporters. This cost advantage makes Indian products more competitive in the international market.
2. Boosting Exports: The scheme encourages exporters to expand their production capacities and increase their export volumes. This, in turn, leads to higher export earnings for the country and contributes to overall economic growth.
3. Promoting Manufacturing: The Advance Authorization Scheme promotes domestic manufacturing by providing an incentive for businesses to produce goods for export. This contributes to the development of a robust manufacturing sector in India.
4. Foreign Exchange Earnings: Increased exports resulting from the scheme help generate foreign exchange earnings for the country. This strengthens India’s foreign currency reserves and supports economic stability.
5. Employment Generation: The growth of the manufacturing sector and increased exports create job opportunities, leading to the generation of employment for the Indian workforce.

Funding Objectives

To support the implementation of the Advance Authorization Scheme, the government allocates funding for various aspects of the scheme.

The objectives of funding include:

1. Infrastructure Development: Funding is allocated for the development of necessary infrastructure to facilitate the smooth implementation of the scheme. This includes the establishment of export-oriented manufacturing units and the enhancement of logistics and transportation facilities.
2. Capacity Building: The government provides funds for training programs and skill development initiatives to enhance the capabilities of exporters and promote the manufacturing of high-quality export products.
3. Research and Development: Funding is allocated for research and development activities to foster innovation, improve product quality, and explore new markets for Indian exporters.

Funding Allocation

The specific details of funding allocation for the Advance Authorization Scheme may vary based on the annual budgets and priorities set by the government. The allocation is determined to ensure effective implementation of the scheme and to support the growth of the export sector.

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