DFIA Scheme: Correlation of Input Specs with Export Product Clarified

The Central Board of Indirect Taxes and Customs (CBIC) has issued a vital clarification regarding the correlation requirements under the Duty-Free Import Authorisation (DFIA) Scheme, as per Foreign Trade Policy (FTP), 2023.

This clarification comes as a relief to exporters facing procedural challenges at Customs related to the mandatory correlation of technical characteristics, quality, and specification of imported inputs with the exported product.

Background

Customs authorities were reportedly insisting on establishing a strict one-to-one correlation between imported inputs and the export product — for all cases under the DFIA scheme. This led to delays and confusion, especially where the Standard Input Output Norms (SION) allowed generic or alternative inputs.

Policy Provisions at a Glance

1. Para 4.12 and 4.28(iv) of FTP, 2023:
   • When SION allows generic or alternative inputs, exporters must declare the specific input and quantity used in the export product in the shipping bill.
2. Para 4.29 of FTP, 2023:
   • For 22 specified items, exporters are required to declare technical characteristics, quality, and specification of inputs used in the exported product.
3. Condition (iii) of Notification No. 25/2023-Customs dated 01.04.2023:
   • Reiterates the above policy for DFIA imports, aligning customs requirements with FTP provisions.

CBIC Clarification

After examining the matter, CBIC has clarified the following:

(a) For Inputs under Para 4.29 of FTP, 2023:

• Correlation of technical characteristics, quality, and specification is mandatory when importing under the DFIA Scheme.
• Exporters must declare these specifications in the shipping bill or bill of export.

(b) For Inputs under Para 4.12 and 4.28(iv):

• Only the specific name and quantity of the input used in the manufacture of the exported product must be declared in the shipping bill.
• No requirement to declare or correlate technical characteristics, quality, or specification.

📌 Why This Matters

This clarification resolves a major compliance bottleneck for DFIA holders and ensures that Customs adheres strictly to the actual intent of FTP provisions:

• Prevents unnecessary delays at ports.
• Reduces compliance cost and procedural ambiguity.
• Eases export operations where inputs are generic or alternative in nature

What Should Exporters Do?

• Continue declaring input name and quantity as per SION norms in the shipping bill for non-Para 4.29 items.
• Ensure full technical declarations only for Para 4.29-listed inputs.
• Seek guidance from your consultants or customs broker for accurate documentation.

Notification Reference: Customs
Circular No. 20 /2025-Cus.
24 /07/2025