ocurements under the DFIA scheme. With these changes, the DFIA has become similar to the transferable advance licence scheme that gave way to DFRC scheme in the year 2000. In its present form, the DFIA is more cumbersome as it requires the DFIA application to be filed before any exports are made, submission of documents to establish fulfilment of export obligation, the usual customs verification and so on. At best, it gives the option of transferability, but at the cost of CVD payment on imports under DFIA. More important, the option of sourcing domestic inputs without excise duty payment under Notification No. 43/2001-CE dated June 26 2001 is denied under the DFIA scheme because the export obligation has to be fulfiled without availing the facility under the said notification issued under Rule 19(2) of Central Excise Rules, 2002. This makes it very difficult for exporters, whose raw material content is very high to manage their cash flow. In short, the DFIA scheme in its present form gives no great advantage compared to the DFRC scheme. It is not only more cumbersome but also deprives the exporters an important tool to improve their cash flow. The commerce ministry should not hesitate to admit its mistakes in abolishing the DFRC scheme. The DFIA scheme was a bad idea. It remains so even after the amendments this year. It should give way to the DFRC scheme with further improvements such as lower value addition requirement. The new Director General of Foreign Trade BS Meena should have no hesitation in advising the commerce minister to correct his mistake.
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