According to Gtri, the flagship export promotional schedule has been hijacked and changed to one of India’s most brutal import scams.
The Duty Free Import Authorization (DFIA) schedule, aimed at lowering the input costs for exporters, is abused by some companies and has become a “license to plunder” because of a mix of vague policy definitions, lax enforcement and judicial interpretations, said Economic think tank Gtri on Sunday.
The Global Trade Research Initiative (GTRI) said that the government should intervene immediately, because if it is not checked, DFIA Misuse will destroy the belief in the India export regime and do fair exporters bankrupt.
A forensic audit of licenses issued in the past five years is urgently needed, in addition to recovery of tasks from fraudulent entry, it said.
When asked about the issue, the Ministry of Trade said that in the Directorate -General of Foreign Trade (DGFT) there is a permanent mechanism of standards committees in different sectors for investigating complaints of abuse of Sion (standard entry output standards) and the wrong allocation of inputs used.
“It is also proposed that the import items for which DFIAs have been used in the past five years are screened to determine whether the schedule results in an unintended benefit or whether sensitive items, items with high value import tasks should be kept outside the scope of the scheme,” the ministry said.
According to Gtri, the flagship export promotional schedule has been hijacked and changed to one of India’s most brutal import scams.
“The DFIA scheme -intended to reduce the input costs for exporters -has changed into a ‘license to plunder’, allowing traders to import high -quality goods such as whey protein, saffron, walnuts and lithium ion batteries with zero -douane,” said it.
It added that these products are claimed on paper as “inputs” for export as normal as cookies, pickles and tractors. In reality they were never used in production.
“Een mix van vage beleidsdefinities, lakse handhaving en gerechtelijke interpretaties gescheiden van de realiteit heeft een kartel van handelaren in staat gesteld om de schatkist te bloeden terwijl toezichthouders wegkijken. Wat een reddingslijn voor exporteurs zou moeten zijn, is nu een gelegaliseerd smokkelkanaal,” zei Gtri -oprichter Ajay Srivastava.
Srivastava explains the problem, said that the schedule, managed by the DGFT, enables exporters to import raw material -free imports, provided that these inputs are really used in export production.
Licenses are issued at pre -approved standard entry output standards (Sion), which determine what can be imported for each export item. In principle, the scheme reduces costs and improves competitiveness. But once the export is completed, the licenses are transferable.
“In combination with vague definitions such as” milk and milk products “or” protein derivatives “, this function has opened the locks for abuse,” said Srivastava.
With reference to examples, the report also said that the wide categories in Zion are stretched further than logic.
“Biscuits that normally require milk Powder Were linked to duty-free imports of whey protein concentrate. DRAWING SYNTHETIC FLAVORS BECAME AN Excuse To Bring in Saffron. Snack Foods That Typically Oil Were Used Used Used Used Used Used Used Us. Said, Adding Pharmaceutical Capsules Requiring Gelatin Were Replaced with Collagen Peptides, Used Mainly in Cosmetics.
The think tank suggested to deepen the import of high-service articles such as whey proteins and walnut-under Dfia.
The vague SIAL standards must be rewritten with precise product-specific terms, it said, the most important thing is that DFIA must be limited to inputs with low service that by 10 percent or less attracting traders cannot exploit the scheme for luxury goods.
“The schedule began as a real lifeline for small exporters. Today it is turned in a parallel tax -free bazaar for a handful of traders.
Helped by weak definitions, accomplice supervisors and tolerant courts, this cartel has changed from an export facility tool to a racket, “said Srivastava.
Published on August 17, 2025
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