DGFT - NORM COMMITTEE

[YAGAY andSUN]

The Norm Committee under the Directorate General of Foreign Trade (DGFT) plays a vital role in regulating and managing the Advance Authorization Scheme and other similar schemes, which allow exporters to import inputs duty-free for the production of export goods. The Norm Committee specifically works to determine the norms for the input-output ratios for various products that exporters can use under these schemes.

The Norm Committee helps establish the standard norms or input-output norms for export products and ensures that the inputs used in the production process align with the export obligations set by the government. These norms help determine the amount of raw materials or components required to manufacture a finished export product.

	DGFT - Norm Committee
Sl. No	Title	Title Code
1	Norms Committee (Engineering Products Gr B)	NC-I
2	Norms Committee (Engineering Products Gr A)	NC-II
3	Norms Committee (Pharmaceutical Products)	NC-III
4	Norms Committee (Chemical Products)	NC-IV
5	Norms Committee (Textiles & Leather)	NC-V
6	Norms Committee (Marine, Food, Sports & Misc. Products )	NC-VI
7	Norms Committee (Plastic and Rubber) \	NC-VII

Key Functions of the Norm Committee:

1. Determining Input-Output Norms:
   • One of the main functions of the Norm Committee is to establish input-output norms, which refer to the amount of raw material, components, and other inputs required to produce a certain quantity of finished export products.
   • These norms are crucial in schemes like Advance Authorization and Duty-Free Import Authorization (DFIA), where exporters are allowed to import materials duty-free based on these norms. The norms must be based on industry standards and technological requirements.
2. Fixing Duty-Free Imports under Advance Authorization:
   • For exporters using the Advance Authorization scheme, the Norm Committee ensures that the duty-free inputs imported are in line with the required input-output ratios. This ensures that the scheme supports efficient production for export without allowing excess imports.
3. Approval of Specific Norms:
   • In cases where a standard norm is not available, exporters can approach the Norm Committee to get specific norms approved for their products. The committee evaluates the requirements and approves the necessary input-output norms for that specific case.
   • The norms approval process may include a review of technical, industrial, and production details to ensure that the norms are fair, feasible, and aligned with industry practices.
4. Monitoring and Reviewing Existing Norms:
   • The Norm Committee regularly reviews and monitors the existing norms to ensure that they remain relevant and aligned with changing industry practices, technology, and export patterns.
   • As new products or technologies are introduced, the committee assesses whether new norms are required or if existing norms need to be revised.
5. Ensuring Compliance with Export Obligation:
   • The committee ensures that exporters who avail themselves of the Advance Authorization Scheme comply with the stipulated export obligations. The input-output norms are established in such a way that the exporters can meet their export targets within the specified timeframe.
6. Harmonizing Input-Output Ratios with International Standards:
   • The Norm Committee also takes into account international standards when determining the input-output norms. This ensures that Indian exporters remain competitive in the global market, using resources efficiently and sustainably.
7. Resolving Issues Related to Norms:
   • The committee acts as a body to resolve any disputes or issues related to the input-output norms that exporters may face. This could include disputes regarding the sufficiency of imported raw materials or discrepancies in the norm calculations.
8. Advising on Technical and Policy Matters:
   • The Norm Committee provides advice on technical and policy matters related to the use of the Advance Authorization scheme and other similar schemes. This may involve discussions on industry trends, technological advancements, and government priorities in the context of international trade and export promotion.

Composition of the Norm Committee:

The Norm Committee is usually composed of officials from DGFT and other relevant agencies, including:

1. DGFT Officials:
   • Senior officials from the Directorate General of Foreign Trade, responsible for formulating and implementing trade policies.
2. Customs Officials:
   • Customs Department officials who ensure that the input-output norms comply with the country's trade regulations and tariff systems.
3. Industry Experts:
   • Representatives from industry bodies and export promotion councils, who provide technical inputs regarding the feasibility and necessity of input-output norms in their respective sectors.
4. Other Technical Experts:
   • Depending on the specific industry, technical experts from relevant sectors (such as textiles, chemicals, electronics, etc.) may also be part of the committee.

When Should Exporters Approach the Norm Committee?

Exporters may approach the Norm Committee in the following situations:

1. Request for New Norms:
   • When there is no standard input-output norm for a specific product, the exporter can request the Norm Committee to establish a new norm based on their production process and requirements.
2. Amendment of Existing Norms:
   • If an exporter believes that the existing norms are outdated or do not reflect the current production techniques, they can apply to the Norm Committee for a revision of the norms.
3. Disputes Over Input-Output Ratios:
   • If there is a dispute over the input-output ratios determined by customs or other authorities, exporters can seek the intervention of the Norm Committee to resolve such issues.
4. Clarifications on Norms:
   • Exporters who have questions or doubts regarding the norms applicable to their products can approach the Norm Committee for clarification and guidance.
5. Request for Relaxation of Norms:
   • If an exporter is unable to meet the prescribed norms due to unforeseen circumstances (such as technology changes, material shortages, or production disruptions), they may request the Norm Committee for a relaxation of norms.

Process for Approaching the Norm Committee:

1. Application Submission:
   • Exporters must submit an online application in ANF-4B (NORMS) to the Norm Committee through the DGFT. The application should provide detailed information about the product, production process, and technical specifications.
2. Documentation:
   • The exporter should provide all necessary documents to support their request for new or revised norms. This may include production data, industry standards, technology used, and other relevant information.
3. Review and Evaluation:
   • The Norm Committee reviews the application and assesses the technical feasibility of the proposed norms. The committee may consult industry experts, analyse the production process, and compare the proposed norms with industry practices.
4. Decision and Notification:
   • After reviewing the application, the Norm Committee issues a decision regarding the approval of the norms. If the norms are approved, they will be notified to the applicant, and they can be used in the exporter’s future transactions under the relevant schemes.
5. Compliance and Monitoring:
   • After the norms are established, the exporter must ensure compliance with the prescribed input-output ratios. The DGFT and Customs monitor compliance and may take corrective action if the norms are not followed.

Conclusion

• The Norm Committee under DGFT plays an essential role in regulating the input-output norms for products exported under schemes like Advance Authorization and Duty-Free Import Authorization.
• By determining these norms, the committee ensures that exporters can import raw materials duty-free in alignment with their export obligations while maintaining efficient production processes.
• The Norm Committee helps streamline trade, resolve disputes, and continuously update the norms to align with industry advancements, thus contributing to India's trade facilitation efforts. Exporters who need specific norms, have disputes, or require amendments can approach the committee for support.