**Executive Summary**
Circular No. 20/2025-Cus, dated July 24, 2025, issued by the Central Board of Indirect Taxes and Customs, clarifies the correlation requirements for technical characteristics, quality, and specification of inputs with export products under the Duty Free Import Authorisation (DFIA) Scheme, according to the Foreign Trade Policy, 2023. It addresses difficulties faced by the trade in clearing material under the DFIA Scheme. A public notice and standing order will be issued.
**Key Points / Main Content**
* **Shipping Bill Endorsement:**
* When Standard Input Output Norms (SION) permits the use of generic or alternative inputs, the specific input and quantity used in manufacturing the export product must be indicated in the shipping bill, as per paragraphs 4.12 and 4.28(iv) of the Foreign Trade Policy, 2023.
* **Declaration Requirements:**
* For 22 specified items, exporters must declare technical characteristics, quality, and specifications in the shipping bill, as per paragraph 4.29 of the Foreign Trade Policy, 2023.
* **Notification No. 25/2023-Cus Clarification:**
* For inputs mentioned in paragraph 4.12 [applicable for inputs of 4.28(iv)], the exporter must declare the specific name or description of the material used in the export of the resultant products in the shipping bill/bill of export.
* For resultant products requiring inputs specified in paragraph 4.29, the materials permitted in the DFIA shall be of the same quality, technical characteristics and specification as the materials used in the said resultant product and that in respect of the said resultant product, the exporter shall give declaration with regard to the quality, technical characteristics and specification of materials used in the Shipping Bill or bill of export.
* **Correlation Requirement:**
* Correlation of technical characteristics, quality, and specification of inputs with the export product is only required for inputs specified in paragraph 4.29 of the Foreign Trade Policy, 2023, under the DFIA Scheme. It is not required for other inputs.
* Only when importing inputs mentioned in paragraph 4.29 of the FTP, 2023, is the correlation of technical characteristics, quality and specification of the inputs with the export product required to be established.
* For inputs mentioned in paragraphs 4.12 and 4.28(iii) of the FTP, 2023, only the specific input's name and quantity must be declared in the shipping bill/bill of export. No declaration of technical characteristics, quality, and specification of the inputs used in the manufacture of the export product is required.
**Impact Analysis**
**All Principal Chief Commissioners/Chief Commissioners of Customs/Customs (Preventive), All Principal Chief Commissioners/Chief Commissioners of Customs & Central Tax, All Principal Commissioners/Commissioners of Customs/Customs (Preventive), All Principal Director Generals/Director Generals under CBIC and Trade and Staff**
* **Impact:** Affected by the clarified regulations regarding the correlation of technical characteristics, quality, and specification of inputs with export products under the DFIA scheme.
* **Action Required:** Issue a suitable Public Notice and Standing Order for the guidance of the trade and staff and implement the circular, bringing any difficulties faced to the notice of the Board at an early date.
Key Entities Referenced
Central Board of Indirect Taxes and Customs: The nodal national agency responsible for administering Customs, Central Excise, Goods & Service Tax (GST) and Service Tax in India.
Foreign Trade Policy, 2023: A policy document that contains provisions related to imports and exports of goods and services.
Duty Free Import Authorisation (DFIA) Scheme: A scheme that allows duty-free import of inputs that are used in the manufacture of export products.
Circular No. 20 /2025-Cus.
F.No. 140605/10/2025-DBK
Government of India
Ministry of Finance, Department of Revenue
Central Board of Indirect Taxes and Customs
Drawback Division
oR RR RK
New Delhi, dated 24" July, 2025.
To
All Principal Chief Commissioners/Chief Commissioners of Customs/Customs (Preventive),
All Principal Chief Commissioners/Chief Commissioners of Customs & Central Tax,
All Principal Commissioners/Commissioners of Customs/Customs (Preventive),
All Principal Director Generals/Director Generals under CBIC.
Subject: Correlation of Technical Characteristics, Quality and Specification of the
Inputs with the Export Product under the DFIA Scheme - reg.
Madam/Sir,
lam directed to invite your attention to the provisions of paragraph 4.12, 4.28(iv) and
4.29 of the Foreign Trade Policy, 2023 (i.e. FTP, 2023) and condition (iii) of Notification No.
25/2023-Cus dated 01.04.2023 regarding correlation of technical characteristics, quality and
specification of the inputs at the time of import with the exported product, under the DFIA
Scheme.
2. In this connection, representations have been received from trade stating that
difficulties are being faced in clearance of material under DFIA Scheme on account of
Customs insisting on establishing close nexus or correlation between the imported goods and
the inputs used in the manufacture of exported product - in all cases of imports under the said
scheme.
3. The matter has been examined by the Board. It is observed that:-
(i) In terms of paragraph 4.12 and 4.28(iv) of the Foreign Trade Policy, 2023, wherever
SION permits use of either a generic input or alternative input, the specific input
together with quantity, which has been used in manufacturing the export product,
should be indicated / endorsed in the relevant Shipping Bill.
(ii) Further, in terms of paragraph 4.29 of the said Policy, in respect of some 22 items
specified therein, the exporters are required to give a declaration with regard to
technical characteristics, quality and specification in the Shipping Bill.4, In line with the above stated policy provisions, the condition (iii) of notification
No.25/2023-Cus dated 01.04.2023 states that:-
(a) in respect of inputs mentioned in paragraph 4.12 [which is applicable for
inputs of 4.28(iv) also] the exporter shall declare the specific name or
description of the material used in the export of the resultant products in the
shipping bill/bill of export.
(b) in respect of the resultant product requiring inputs specified in paragraph 4.29,
the materials permitted in the DFIA shall be of the same quality, technical
characteristics and specification as the materials used in the said resultant
product and that in respect of the said resultant product, the exporter shall give
declaration with regard to the quality, technical characteristics and
specification of materials used in the Shipping Bill or bill of export.
5. The position is thus clear that only in respect of inputs specified in paragraph 4.29 of
the Foreign Trade Policy, 2023, a correlation of technical characteristics, quality and
specification of the inputs with the export product is required to be established under the
DFIA Scheme. Such correlation is not required to be established in case of other inputs.
6. It is, therefore, clarified that:-
(a) Only in case of import of inputs mentioned in paragraphs 4.29 of the FTP,
2023, correlation of technical characteristics, quality and specification of the
inputs with the export product is required to be established when imported
under the DFIA Scheme.
(b) In case of inputs mentioned in paragraphs 4.12 and 4.28(iii) of the FTP, 2023,
only name of the specific input along with the quantity is required to be
declared in the shipping bill/bill of export. Declaration of technical
characteristics, quality and specification of the inputs used in the manufacture
of the export product is not required.
7. A suitable Public Notice and Standing Order may be issued for the guidance of the
trade and staff. Difficulties faced, if any in implementation of the Circular may be brought to
the notice of the Board at an early date.
Hindi version follows.