Minimum Import Price (MIP) and Advance Authorisation: Understanding the Exemption Under DGFT Rules

The government imposes a Minimum Import Price (MIP) on specific products when it wants to regulate imports through a minimum price condition. If you import a product covered by an MIP notification, you must meet the prescribed price requirement and any other conditions specified in that notification.

The government may use MIP to address concerns about low-priced imports, support domestic manufacturers facing import competition, or regulate imports in a particular sector. However, these restrictions do not apply to every product. You should check the relevant DGFT notification to confirm whether your imported product falls under an MIP condition and whether any exemption applies to your shipment.

Suppose a product has an MIP of ₹100 per kg. If the notified policy says imports below ₹100/kg are restricted, an import transaction at ₹80/kg could fall within the restriction.

The important point is that the MIP is determined by the relevant DGFT notification and ITC (HS) code. Importers should therefore never assume that an MIP applicable to one product automatically applies to another.

Many DGFT notifications specify the MIP with reference to the CIF value, Cost, Insurance and Freight.

For instance, DGFT’s April 2026 notification extended an MIP of ₹67,220 per MT on CIF value for specified Virgin Multi-layer Paper Board tariff lines.

This makes it important to check the exact wording of the notification rather than relying on a general understanding of MIP.

Advance Authorisation (AA) is a duty-exemption scheme under India’s Foreign Trade Policy.

Under Chapter 4 of FTP 2023, Advance Authorisation scheme allows eligible exporters to import specified inputs duty-free when those inputs are physically incorporated into the export product, subject to the applicable conditions. Certain fuel, oil and catalyst consumed in the production process may also be permitted.

The authorisation can be issued based on:

• Standard Input Output Norms (SION)
• Self-declaration under the applicable procedure
• Applicant-specific norms fixed by the Norms Committee
• Self-Ratification Scheme, where applicable

In simple terms, the scheme is designed to help exporters bring in eligible inputs without the normal customs-duty burden, provided those inputs are used according to the conditions of the authorisation.

This is where the exemption becomes important. Some DGFT notifications imposing an MIP specifically state that the MIP condition does not apply to imports made by Advance Authorisation holders, Export Oriented Units (EOUs), and units in Special Economic Zones (SEZs), subject to specified conditions.

A recent DGFT notification, for example, states that the MIP condition on specified products does not apply to Advance Authorisation holders, EOUs and SEZ units where the imported items are not sold into the Domestic Tariff Area (DTA).

So, the exemption isn’t simply:

“I have an Advance Authorisation, therefore MIP never applies.”

Instead, it is:

“The relevant DGFT notification provides an MIP exemption for Advance Authorisation imports, and I meet the conditions attached to that exemption.”

That distinction is critical.

The exemption depends on the specific DGFT notification governing the product. In notifications where the exemption is provided, the following conditions commonly matter:

The importer must be an eligible Advance Authorisation holder, and the import must fall within the scope of the authorisation. Simply possessing an unrelated Advance Authorisation does not automatically eliminate an MIP condition.

MIP is linked to specific tariff lines or products. Therefore, the importer should verify:

• ITC (HS) code
• Product description
• MIP notification
• Applicable exemption
• Validity of the authorisation

The exact exemption language matters. For example, DGFT notifications have expressly provided that the imported inputs should not be sold into the Domestic Tariff Area (DTA) for the exemption to apply.

Advance Authorisation is linked to export production. The imported inputs must therefore be used in accordance with the authorisation and applicable Foreign Trade Policy/Handbook of Procedures requirements.

MIP can look like a straightforward price restriction, but the real picture is more nuanced. DGFT often builds specific exemptions into MIP notifications, and Advance Authorisation holders can benefit where the applicable notification expressly provides for such treatment. Recent DGFT notifications demonstrate that these exemptions can be subject to important conditions, particularly restrictions on selling the imported inputs into the DTA.

The safest approach is therefore not to ask only, “Is there an MIP?” Ask the more useful question:

“Is there an MIP, and does the current DGFT notification provide an exemption for my Advance Authorisation import?”

That distinction can make a significant difference when planning an import for export production.

1. What is Minimum Import Price (MIP) under DGFT?

MIP is a minimum price condition imposed on specified imported products through DGFT notifications. Imports below the notified threshold may be subject to restrictions or specific policy conditions.

2. Are Advance Authorisation imports exempt from MIP?

They can be, but not automatically. The applicable DGFT notification must specifically provide the exemption and its conditions must be satisfied.

3. What is the DTA condition for MIP exemption?

Where specified by the notification, inputs imported under Advance Authorisation must not be sold into the Domestic Tariff Area (DTA) to qualify for the MIP exemption. 

4. Does MIP exemption mean customs duty is also exempt?

Not necessarily. MIP exemption and duty exemption are separate matters. Advance Authorisation may provide duty benefits subject to its own rules and conditions.

5. How can I check the current MIP applicable to my product?

Identify the correct ITC (HS) code and check the latest DGFT import-policy notification applicable to that product. MIP conditions can be amended or extended over time.

6. Where can businesses get help with DGFT MIP exemption compliance?

Businesses importing restricted or regulated goods can consult experienced DGFT Consultants at DGFT Guru to understand the applicable notification, verify Advance Authorisation eligibility, and review the documentation and export-obligation requirements for their transactions.