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87 Smuggling in India Report 2024-25

Case 8: Misuse of EPCG license

In May 2024, DRI found that an importer
obtained an EPCG license from DGFT by
false declaration. They imported capital
goods viz. Top Gas Recovery Turbine (TRT)
and used it to generate and supply electrici-
ty to their own unit which is not permitted
as per the specific conditions prescribed by
FTP. The estimated duty evasion is ₹21
crore.

ii. Misuse of Advance Authorization

Advance Authorisation allows duty-free import of inputs/raw materials used in
the manufacture of export products. By reducing input costs, the scheme enhanc-
es the global competitiveness of Indian goods. The scheme stipulates that export
obligations must be fulfilled within the prescribed timeframe through export of
finished goods. Unscrupulous importers often divert the goods imported under the
advance authorization into domestic market instead of utilizing such goods for
manufacturing export products.

Case 9: Violation of advance authorization conditions for
stainless steel seamless pipes

In November 2024, DRI found that an importer
was fraudulently bringing in stainless steel seamless
pipes from China under the Advance Authorization
scheme, which allows duty-free imports tied to
export obligations. Instead of utilizing the imported
pipes for export production, the firm diverted them
to the domestic market and used locally sourced
scrap to manufacture products for export, thereby
misrepresenting compliance. The total estimated
duty evasion is approximately ₹51.48 crore.

final fill 160 v28 with bleed.pdf 130 12/19/2025 3:28:01 PM