Steel Industry Guide: Import Steel Coils & Sheets Duty-Free under Advance License

India’s steel industry is massive. For manufacturers and exporters, the cost of raw materials, especially steel coils and sheets, can significantly impact competitiveness. One way to reduce these costs is by utilising the Advance License for steel industry.

This blog explains how importers can bring steel coils and sheets duty‑free under the Advance License, how the scheme works, and the benefits and risks associated with the industry.

With the Advance Authorisation Scheme, exporters can import raw materials at zero customs duty. However, the imports must be used in manufacturing goods meant for export.

• Duty exemption applies to Basic Customs Duty, Additional Customs Duty, Anti-dumping Duties, Safeguard Duties, and other applicable levies.
• Inputs can be raw materials, fuel, catalysts or other items consumed or incorporated in production.
• Export Obligation: Goods manufactured from duty‑free inputs must be exported or supplied under prescribed conditions (e.g., to SEZ / EOU) within a defined period.
• The scheme depends on defined norms. Either Standard Input Output Norms (SION) or Ad-hoc/self-declared norms approved by authorities.
• Once inputs are imported duty‑free, they must be used by the license holder (actual user condition). You can’t import under an Advance License and then sell those raw materials to someone else.

The Advance Authorisation Scheme provides a legitimate path for exporters. You can import steel coils, sheets, and other raw inputs duty-free. However, this benefit applies only when the imported steel is used to manufacture goods meant for export.

But before importing steel under the Advance License, you must understand the key practical and regulatory conditions:

• The imported steel must be physically incorporated into exported products. You cannot import under an Advance License merely to use the steel in the domestic market.
• For steel items subject to mandatory quality or standards regulation (e.g. under a QCO-Quality Control Order), the licence‑holder may need to declare the exemption when applying.
• Since the license is under the “actual user” condition, the steel must be used in the license-holder’s own factory. Resale of raw steel is not permitted under this scheme.

So, if your business manufactures items for export (e.g. steel articles, components, etc.), Advance License can indeed help you bring in steel coils/sheets duty‑free. But if your goal is to supply the domestic market or just procure steel for local use, this scheme’s benefit doesn’t apply.

In April 2025, the government imposed a 12% provisional safeguard duty on several categories of flat steel imports. These include:

• Hot-rolled coils, sheets and plates 
• Cold-rolled coils and sheets 
• Metallic-coated coils, and
• Colour-coated sheets

It is to protect domestic producers from a surge in cheap imports.

• Safeguard duty applies if CIF import price is below certain thresholds (e.g. USD 675 per MT for hot-rolled coils).
• Duty is provisional for 200 days (unless extended) as a temporary protective measure.
• Certain specialised steels are exempt from this duty (e.g. stainless steel, CRGO electrical steel).

Implication for importers/exporters: If you import steel coils/sheets through the normal import method, these safeguard duties significantly increase the cost. 

But if you have an Advance License, you can import duty‑free (customs duties as well as safeguard duty). This further makes the Advance License a more attractive, tax‑efficient option.

Before you consider using an Advance License for steel imports, make sure you meet these conditions:

• You must be an exporter: Either a manufacturer‑exporter or a merchant exporter tied to a supporting manufacturer.
• Export Obligation (EO): Goods manufactured using duty-free inputs must be exported (or supplied to SEZ/EOU) within a fixed timeframe (usually 18 months).
• Actual user condition: The imported inputs must be used by the license-holder themselves and cannot be sold in raw form within the domestic market.
• Pre-import condition: Raw materials must be imported first, then physically used in the product, and then exported. The sequence matters.
• SION or approved norms: Required input quantity must match the standards laid by SION or ad‑hoc/self‑declared norms approved.

If you meet all these, the Advance License can help you import steel coils & sheets at zero duty, giving you a cost advantage compared to standard importers, especially with recent safeguard duties.

Using an Advance License can offer significant cost savings: duty exemption means lower input cost, which can improve margins when exporting steel products or goods made with steel. With safeguard duties in place for normal imports, the cost advantage becomes even larger. But this comes with compliance obligations. License holders must maintain strict documentation. From the invoice, BOE (bill of entry), and production records to proof of export, you must have all of it. Failure to comply may lead to penalties, denial of duty exemption, or cancellation of the license. Moreover, as recently observed, regulators are tightening norms to avoid misuse. For instance, the exemption under Advance Authorisation for steel imports is under stricter scrutiny if the steel does not meet quality standards (such as under surveillance by standards authorities). Hence, while the scheme offers benefits, the associated compliance burden should be carefully assessed.

From what we see in policy and market trends, here’s when using an Advance License for steel coils/sheets is a smart move:

• If you are manufacturing steel‑based products (pipes, fabricated steel goods, coated sheets, etc.) for export, then duty‑free import of steel can substantially reduce costs.
• If your business model involves large volumes. Because the benefit from duty exemption scales with quantity, compliance overhead becomes more manageable in bulk operations.
• If the safeguard duty remains in place for regular imports. Advance License offers a legal, duty‑free alternative, giving you a competitive edge both in costs and pricing.
• But only if your internal compliance and export logistics processes are well-managed. Because non-compliance risks are real, especially with recent regulatory strictness.

Imported flat steel prices have hit multi-year lows. At the same time, domestic producers are seeking protection. In this situation, the Advance License can help exporters stay competitive. It allows duty-free imports without breaking trade or customs rules.

The Advance Authorisation Scheme allows exporters to import steel coils and sheets duty-free. However, it is not for all importers. Only manufacturers or exporters producing goods for export and following the scheme’s rules can benefit. 

With rising steel imports and provisional safeguard duties in India, this license helps reduce costs and improve profit margins. Careful planning, proper documentation, and timely export of manufactured goods are essential. Businesses should check if their production and export model fits the criteria. 

When used correctly, the Advance License is a beneficial way to save on raw steel costs and stay competitive in exports in the international market.