Paragraph 4 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.
Paragraph 4.07 of the Policy sets the conditions on which an exporter can take one Advance Authorisation to cover a whole year's requirement: items must have notified norms, no input may appear in Appendix 4J, the exporter must have exported in at least the preceding two financial years, and the entitlement is up to 300% of the previous year's export value or Rs 1 Crore, whichever is higher. Paragraph 4.44 of the Handbook adds the procedure.
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. The procedure is taken from Chapter 4 of the Handbook of Procedures, 2023 as published on the DGFT website (file of July 2026), consulted on 2 October 2026. Later Notifications and Public Notices should be checked. The authorisation needs an Importer-Exporter Code; see our IEC registration service.
An Advance Authorisation for Annual Requirement is issued only for items notified in SION and not where any input appears in Appendix 4J (paragraph 4.07(i) and (ii)). The exporter needs past export performance in at least the preceding two financial years (paragraph 4.07(iii)). The entitlement in CIF value of imports is up to 300% of the FOB value of physical export and/or FOR value of deemed export in the preceding financial year, or Rs 1 Crore, whichever is higher.
What paragraph 4.07 of the Policy says
The paragraph is headed "Advance Authorisation for Annual Requirement and Eligibility Condition". Its sub-paragraphs are numbered (i), (ii), (iii) and (v); no sub-paragraph (iv) is printed. The text is given as printed.
Paragraph 4.07(i): only for items with notified norms
The authorisation is issued only for items notified in Standard Input Output Norms (SION). It is not available in the case of ad hoc norms under paragraph 4.03(b)(ii) of the Policy. A product with no SION, or one that relies on self declaration, cannot be covered. For how the four bases of Advance Authorisation differ, see our article on Advance Authorisation, the four bases and the eligible applicant.
Paragraph 4.07(ii): the Appendix 4J bar
The authorisation is also not available in respect of a SION where any item of input appears in Appendix 4J. Appendix 4J is named only; this article describes nothing inside it, and the exporter must check whether any input of the SION is listed there.
Paragraph 4.07(iii): past export performance
Exporters having past export performance in at least the preceding two financial years are entitled to an Advance Authorisation for Annual Requirement. A new exporter, or one with only one year of export record, does not meet the test as printed.
Paragraph 4.07(v): the entitlement
The entitlement, in terms of CIF value of imports, is up to 300% of the FOB value of physical export and/or the FOR value of deemed export in the preceding financial year, or Rs 1 Crore, whichever is higher.
| If 300% of the preceding year's export value is | Then the entitlement ceiling is |
|---|---|
| Less than Rs 1 Crore | Rs 1 Crore |
| More than Rs 1 Crore | 300% of that value |
Only the 300% and the Rs 1 Crore come from the Policy; the table shows how the words "whichever is higher" work. The words "up to" mean the authorisation can be for less.
The Policy is made under section 5 of the Foreign Trade (Development and Regulation) Act, 1992, and the paragraph names no other section; see our article on section 5 of the FTDR Act.
What the Handbook requires: paragraph 4.44
Paragraph 4.44(a): filing and the differences
Exporters eligible for such authorisations file an online application in ANF 4A with the Regional Authority concerned. All provisions applicable to the Advance Authorisation apply except the following four.
- (i) Flexibility. The holder has the flexibility to export any product falling under the export product group using the duty-exempt material.
- (ii) Number of authorisations. Within the eligible entitlement, an exporter may apply for one or more authorisations in a licensing year, but against one port of registration not more than five authorisations can be issued for the same product group. One-time enhancement or reduction of the authorisation is available.
- (iii) Revival. On completion of the export obligation against one or more authorisations issued in the same licensing year, the exporter's entitlement for that licensing year is deemed revived by an amount equal to the export obligation completed.
- (iv) Norms on the date of issue. The authorisation is issued only where SIONs or valid ad hoc norms exist on the date of issue. However, none is issued where an input is listed in Appendix 4J.
Paragraph 4.07(i) of the Policy says the authorisation is not available in the case of ad hoc norms under paragraph 4.03(b)(ii), whereas paragraph 4.44(a)(iv) of the Handbook speaks of SIONs or valid ad hoc norms existing on the date of issue. The two texts are given as printed and are not reconciled here; the Appendix 4J bar appears in both.
Paragraph 4.44(b): endorsement of technical characteristics
At the time of clearance of the import consignment against the authorisation, the exporter mentions the technical characteristics, quality and specifications, which are endorsed in the Bill of Entry or invoice, duly attested by the Customs authority, for the following inputs: alloy steel including stainless steel, copper alloy, synthetic rubber, bearings, solvents, perfumes, essential oils and aromatic chemicals, surfactants, relevant fabrics and marble. The paragraph states no other detail.
The Handbook rests on the Director General's power described in our article on section 6 of the FTDR Act.
A worked example
Vishwa Components Private Limited, an invented manufacturer, exported in each of the preceding two financial years. Its product has a notified SION, and none of the inputs appears in Appendix 4J. Under paragraph 4.07(v) its ceiling is the higher of 300% of the preceding year's export value and Rs 1 Crore. It applies in ANF 4A and, as paragraph 4.44(a)(ii) allows, takes two authorisations within the year at one port of registration. When it completes the export obligation under one, paragraph 4.44(a)(iii) revives its entitlement by the same amount. At clearance, if one of its inputs is alloy steel, the technical characteristics are endorsed in the Bill of Entry under paragraph 4.44(b).
Need help with an annual requirement authorisation?
The test turns on two years of export record and on the contents of the norm. Our team can check eligibility and prepare the application; if you have no code yet, begin with our IEC registration service.
Key takeaways
- Only items notified in SION qualify, and none of the inputs may be in Appendix 4J (paragraph 4.07(i) and (ii)).
- Two preceding financial years of exports are needed (paragraph 4.07(iii)).
- Entitlement is up to 300% of preceding year's FOB or FOR value, or Rs 1 Crore, whichever is higher (paragraph 4.07(v)).
- Up to five authorisations per port of registration for the same product group, with revival on completion (Handbook 4.44(a)).
- Listed inputs need technical characteristics endorsed at clearance (Handbook 4.44(b)).
Read next
- Paragraph 4.06 of the Foreign Trade Policy, 2023: Self Ratification Scheme
- Paragraphs 4.08 to 4.10 and 4.19 of the Foreign Trade Policy, 2023: value addition, mandatory spares and buyer-supplied inputs
- Advance Authorisation inputs, SION and minimum value addition
- Advance Authorisation export obligation, clubbing and EODC
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.