Paragraphs 1 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Paragraphs 1.21 to 1.24 close Part B of Chapter 1. Paragraph 1.21 lists trade facilitation measures taken by Customs; 1.22 describes the Authorised Economic Operator (AEO) programme; 1.23 provides for Towns of Export Excellence (TEE); and 1.24 gives marine products and sports goods and toys import entitlements, limited to basic customs duty. The chapter has no Handbook paragraph for these four.
This article is based on the chapter-wise text of the Foreign Trade Policy, 2023 published on the DGFT website, as consulted on 2 October 2026; the copy carries no "updated up to" date. Later Notifications, Public Notices and Trade Notices should be checked before you act. Customs initiatives and notifications named in these paragraphs are described only as the Policy names them.
Paragraph 1.21 lists thirteen heads of Customs facilitation, from round-the-clock clearance to Direct Port Delivery. Paragraph 1.22 describes the AEO programme and its benefits, and says MSMEs are covered. Paragraph 1.23 lets towns producing goods of Rs. 750 Crore or more (Rs.150 Crore for handloom, handicraft, agriculture and fisheries) be notified as Towns of Export Excellence. Paragraph 1.24 allows duty-exempt imports of up to 1% of FOB value of seafood exports (marine sector) and up to 3% of sports goods exports, on basic customs duty only.
What the Policy says
Paragraph 1.21: trade facilitation at Customs
Paragraph 1.21 says CBIC has undertaken a number of initiatives. The Policy lists them as items (i) to (xiii):
| Item | Initiative as listed |
|---|---|
| (i) | Customs clearance round the clock in 20 sea ports and 17 airports, and extended clearance in ICDs as the trade needs |
| (ii) | Single Window in Customs |
| (iii) | e-Sanchit, enabling a paperless clearance environment |
| (iv) | Pan-India faceless e-assessment in imports |
| (v) | TURANT Customs |
| (vi) | Electronic messages from document clearance to cargo movement |
| (vii) | Paperless Customs initiatives such as e-LEO SB, e-Gatepass and e-OOC |
| (viii) | Contactless customs initiatives such as Turant Suvidha Kendras |
| (ix) | ICE-DASH, the Indian Customs EoDB Monitoring Dashboard |
| (x) | Direct Port Delivery on imports and Direct Port Entry on exports |
| (xi) | Compliance Information Portal |
| (xii) | End-to-end automated and simplified procedure for import of certain specified goods at concessional rate of duty or for specified end use |
| (xiii) | Detailed guidelines are on the CBIC and ICEGATE websites |
The last entry is only a pointer to two websites. The paragraph describes the measures by name and does not give procedures; those are Customs matters. For the filing portal, see our guide to ICEGATE e-filing on the customs portal, and if you need to be set up on it, an ICEGATE registration is the usual starting point.
Paragraph 1.22: the Authorised Economic Operator programme
Based on the World Customs Organization's SAFE Framework of Standards, the AEO programme was developed by Indian Customs to enable businesses in international trade to obtain these benefits (clause (a)):
- (i) a secure supply chain from point of export to import;
- (ii) the ability to show compliance with security standards when contracting to supply overseas importers or exporters;
- (iii) enhanced border clearance privileges in Mutual Recognition Agreement (MRA) partner countries;
- (iv) minimal disruption to the flow of cargo after a security-related disruption;
- (v) reduction in dwell time and related costs; and
- (vi) Customs advice and assistance if trade faces unexpected issues with the Customs of countries with which India has an MRA.
Clause (b) says other Customs administrations also run AEO programmes, giving AEO holders preferential treatment such as reduced examination and quicker clearance, and that Indian Customs has signed MRAs with South Korea, Taiwan, Hong Kong and US Customs to recognise respective AEO programmes on a reciprocal basis. Clause (c) says Indian Customs has introduced a new or revamped AEO programme with extensive benefits, including greater facilitation and self-certification, for entities with strong internal control systems and compliance with CBIC. Clause (d) states that MSMEs are also covered. For the detailed guidelines the paragraph sends the reader to the AEO India and CBIC websites. For the tiers and the application, see our guides on AEO certification and its tiers and on the Authorised Economic Operator under Customs.
Paragraph 1.23: Towns of Export Excellence
Clause (a) states the objective: to develop and grow export production centres. A number of towns have emerged as dynamic industrial clusters contributing to exports, and the Policy wants to recognise them so that they can maximise their potential, move up the value chain and tap new markets.
Under clause (b), selected towns producing goods of Rs. 750 Crore or more may be notified as TEE on their potential for export growth. For TEE in the handloom, handicraft, agriculture and fisheries sectors the threshold is Rs.150 Crore. Two facilities follow:
- Recognised associations of units get financial assistance under the MAI scheme, "on priority basis", for export promotion projects for marketing, capacity building and technological services.
- Common Service Providers in these areas are entitled to an authorisation under the EPCG scheme.
Clause (c) says notified towns are listed in Appendix 1B, which is named here and not reproduced.
Paragraph 1.24: duty-exempt entitlements for select sectors
To expand employment, the Policy gives two sectors duty-exempt import entitlements, as per the relevant Customs Notifications, where only basic customs duty is exempted. The paragraph's own heading uses a different word for "duty-exempt"; this article uses duty-exempt throughout.
- Marine sector: import without payment of basic customs duty of specified specialised inputs, chemicals and flavouring oils, not exceeding 1% of FOB value of seafood exports in the preceding financial year (clause (a)).
- Sports goods and toys: import without payment of basic customs duty of specified inputs, not exceeding 3% of FOB value of sports goods exports in the preceding financial year (clause (b)).
The Policy sends the reader to the relevant Customs Notifications for details. Which inputs qualify, and any rate or condition, are in those notifications and are not stated here. The Customs power behind such exemptions is explained in our article on section 25 of the Customs Act, 1962.
A practical example
Kaveri Tiles, an invented company in a cluster, hears that its town has been notified as a Town of Export Excellence. Under paragraph 1.23(b) the facilities are financial assistance under the MAI scheme for the recognised association of units, and an EPCG authorisation entitlement for common service providers; they are not a rebate for each member firm. The company should read Appendix 1B on the DGFT website to confirm whether its town is notified, and check the MAI scheme terms separately. Meanwhile, a seafood exporter in the same town planning to import specified inputs under paragraph 1.24(a) can import up to 1% of the FOB value of the previous year's seafood exports, subject to the Customs Notification, and only basic customs duty is exempted.
Need help with Customs registration?
Facilitation measures such as e-Sanchit, faceless assessment and paperless documents all depend on being registered and filing correctly. If your business needs to be set up on the Customs portal, we can help with an ICEGATE registration and with matching your DGFT and Customs profiles.
Key takeaways
- Paragraph 1.21 lists Customs facilitation measures; the Policy gives no procedure for them.
- Paragraph 1.22 describes the AEO programme, its benefits, MRAs with four administrations, and coverage of MSMEs.
- Towns producing goods of Rs. 750 Crore or more (Rs.150 Crore for the sectors named) may be notified as TEE (paragraph 1.23(b)).
- The marine (1%) and sports goods and toys (3%) entitlements are limited to FOB value of the preceding year's exports and to basic customs duty (paragraph 1.24).
- Appendix 1B lists notified towns; the Customs Notifications carry the detail of the entitlements.
Read next
- Paragraph 1.17: e-BRC and EDPMS as the record of export proceeds
- Paragraphs 1.25 to 1.28: status holder eligibility, categories and double weightage
- Section 5 of the Foreign Trade (Development and Regulation) Act, 1992: the foreign trade policy
- Section 25 of the Customs Act, 1962: power to grant exemption from duty
Disclaimer: Based on the chapter-wise text of the Foreign Trade Policy, 2023 and the Handbook of Procedures, 2023 published on the DGFT website, and on the later Notifications named in this article, as consulted on 2 October 2026. The copies carry no "updated up to" date. Notifications, Public Notices, Trade Notices, the ITC(HS) schedules, Appendices and forms change often; the current text on the DGFT website should be checked before acting. This article is general information, not legal advice; check the official text before acting.