Duty-Free Import Scheme Faces Misuse Allegations

The Duty-Free Import Authorization (DFIA) scheme, intended to reduce costs for exporters, is reportedly being exploited by companies as a 'licence to loot' due to vague policies, weak enforcement, and judicial interpretations. The Global Trade Research Initiative urges government intervention to restore trust in India's export incentive system.

The Duty-Free Import Authorization (DFIA) scheme, a cornerstone of India's export promotion strategy, is coming under fire for alleged misuse, according to a report by the Global Trade Research Initiative (GTRI). The think tank claims the scheme is being exploited for unlawful gains, transforming it into a 'licence to loot.'

GTRI's report highlights that companies are importing high-value goods like whey protein and lithium-ion batteries under the guise of inputs needed for exports, such as biscuits and tractors, without these items ever being used in production. This manipulation allegedly leads to significant revenue losses for the government.

The organization calls for immediate government action, suggesting a forensic audit and stricter enforcement of norms to prevent further exploitation. Key recommendations include restricting imports to low-duty items and revising the Standard Input and Output Norms (SION) to deter misuse.

(With inputs from agencies.)