In an unexpected move towards regulatory refinement, the Directorate General of Foreign Trade (DGFT) announced the suspension of a significant chunk of Standard Input Output Norms (SIONs) on February 22, 2024. Public Notice No. 44/2023, issued by the DGFT, disclosed the suspension of approximately 5300 SIONs out of the existing approx. 7500. 

This move aims to streamline trade by eliminating inactive norms over the past five years. The suspensions predominantly affect the Engineering (2,513) and Chemicals (1,685) sectors. Compliance with SIONs allows exporters to import inputs duty-free based on rationalized input-output ratios.

The decision to suspend these SIONs comes as part of the DGFT’s broader effort to streamline trade practices and eliminate redundancies. The identified SIONs have been flagged as inactive for the past five years, prompting the need for their suspension.

Standard Input Output Norms (SIONs) serve as essential guidelines that rationalize the quantity of inputs required, along with the permissible wastage, to produce a specific output. For instance, a norm might stipulate that 2.25 meters of fabric, along with buttons and other materials, are required to manufacture one shirt, with 0.25 meters considered as acceptable wastage. Compliance with these norms allows exporters to import their inputs duty-free.

Over the years, these norms were meticulously developed through consultations with relevant ministries, trade bodies, and councils, designed to facilitate and support exporters in their trade activities.

Importers who are directly impacted by the suspension of these SIONs have been given an opportunity to seek reinstatement. The deadline for such requests is March 15, 2024. 

This represents a positive initiative; nevertheless, we recommend that the DGFT office concentrates its efforts primarily on norms awaiting approval from the Norms Committee. Several norms have been pending for over a year. It would be beneficial to organize an open house session facilitated by the norms committee.

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