ANNOUNCEMENT 11 Aug 2016

India has announced a special scheme to support the exports of apparel and clothing accessories.

NUMBER OF INTERVENTIONS

2

  • 1 harmful
  • 0 neutral
  • 1 liberalising
Inception date: 11 Aug 2016 | Removal date: 31 Mar 2021

Tax-based export incentive

On 11 August 2016, the Indian Ministry of Commerce and Industry through Notification No. 21/2015-2020 announced a new scheme called the "Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing Accessories" under the Foreign Trade Policy. The scheme aims to support the export of exports of apparel and clothing items under HS chapters 61 and 62 by allowing duty-free import of fabric to be used as inputs and duty drawback on non-fabric inputs.

The duty-free import is limited to relevant fabrics including interlining to be used as input only. No other input material including packing material, fuel, oil, and catalyst would be allowed as a duty-free import under this scheme. The quantity of duty-free inputs allowed will be as fixated by the Standard Input Output Norms (SION). 

The duty drawback on non-fabric inputs is provided as a percentage of the FOB value of exports. The rates of the drawback for the export of products under HS chapters 61 and 62 under this scheme were announced on 13 August 2016 through Notification No. - 110/ 2016 - CUSTOMS (N.T.).

The duty-free inputs are subject to the Actual User condition i.e. the importer has to be the actual user of the imported goods and they cannot be transferred.

On 31 March 2020, the Ministry of Commerce and Industry announced that the existing Foreign Trade Policy 2015-2020, which was to expire on 31 March 2020, will be extended till 31 March 2021.

AFFECTED SECTORS

 
Inception date: 11 Aug 2016 | Removal date: 31 Mar 2021

Import tariff

On 11 August 2016, the Indian Ministry of Commerce and Industry through Notification No. 21/2015-2020 announced a new scheme called the "Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing Accessories" under the Foreign Trade Policy 2015-2020.

The scheme allows duty-free import of fabric inputs (including interlining) and a duty drawback on non-fabric inputs to manufacture apparel and clothing items under HS chapters 61 and 62 for exports.

The duty-free import on fabrics, including interlining, can be used as an input only and cannot be used to be sold further. The scheme provides an incentive to increase imports by export manufacturers of apparel and clothing accessories.

On 31 March 2020, the Ministry of Commerce and Industry announced that the existing Foreign Trade Policy 2015-2020, which was to expire on 31 March 2020, will be extended till 31 March 2021.

 
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