Export controls

General controls

What general controls are imposed on exports?

The policy applicable on export of goods is provided under Schedule 2 (Export Policy) to the prevailing Foreign Trade Policy. The Export Policy divides products into three categories, based on the Indian Trade Classification (Harmonised System) (ITC (HS)) and depending on the sensitivity of the products:

  • free: export allowed without any restrictions;
  • restricted: export allowed, subject to procurement of relevant registration, licence or authorisation; and
  • prohibited: export not permitted.

Export of sensitive or special categories of products (eg, chemicals, aerospace, defence and other dual-use items) is restricted and subjected to additional conditions, such as end-user certification and restrictions on further development and supply of such goods.

Although most products are permitted to be exported without any export duties, certain agricultural products such as coffee, tea, spices, rice varieties, sugar, varieties of oil cake, animal feed and unmanufactured tobacco are subject to export duties.

Government authorities

Which authorities handle the controls?

Exports are cumulatively governed by the Directorate General of Foreign Trade (DGFT) and the Indian customs.

Special controls

Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

India is a signatory to major multilateral export control regimes, such as the Missile Technology Control Regime, the Wassenaar Arrangement and the Australia Group. It is also a signatory to international conventions on non-proliferation, namely, the Chemical Weapons Convention and the Biological and Toxic Weapons Convention. Accordingly, India regulates the export of sensitive or special materials (such as nuclear materials, munitions, dual-use products and technologies) under the Special Chemicals, Organisms, Materials, Equipment and Technologies List (the SCOMET List), issued via Foreign Trade Policy 2023 and the Handbook of Procedures 2023. The SCOMET List provides eight broad categories, which are further sub-divided based on the use, technical and functional features of the product. Export of goods covered under the SCOMET List requires a mandatory licence or authorisation for export, which is issued by the nodal ministry that regulates the specific category of product. For example, the Department of Atomic Energy and the Department of Defence Production regulate the export of nuclear and defence products, respectively. 

There are 10 types of export authorisations that are provided for SCOMET products:

  • direct export to ultimate end user;
  • export for repeat orders of same SCOMET items;
  • export for stock and sale purposes;
  • export of spare parts under SCOMET for stock and sale purposes;
  • export for or after repair or replacement of defective SCOMET items;
  • temporary export of SCOMET items;
  • export of imported items to the same foreign entity or to its original equipment manufacturer;
  • Global Authorization for Intra-Company Transfers of SCOMET items, including software and technology;
  • General Authorization for Export of Chemicals and related equipment except for software and technology; and
  • General Authorization for Export after Repair in India.

In addition, export of non-SCOMET items for dual use may be denied or permitted subject to a licence, if the exporter knows or has reason to believe that a non-SCOMET item has a potential risk of use in or diversion to WMD or in their missile system or military end use.

Supply chain security

Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

In compliance with WCO’s SAFE Framework of Standards, India has implemented the Authorised Economic Operator Programme (the AEO Programme) to ensure the security of global supply chains. The process was revamped in 2016 to provide additional facilities to members of the trade who have strong internal control systems and compliance levels. The multiple tiers of certification under the AEO Programme are:

  • AEO T1 – verified on the basis of document submission only;
  • AEO T2 – in addition to document verification, successful completion of onsite verification; and
  • AEO T3 – available to AEO T2 holders who have held the status of AEO T2 for two years.
Applicable countries

Where is information on countries subject to export controls listed?

The export control details can be accessed on the DGFT website.

Named persons and institutions

Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

India does not impose unilateral sanctions and only recognises sanctions imposed by the United Nations. Accordingly, the export of specified goods to countries, organisations and persons sanctioned by the United Nations is prohibited. The list includes:

  • Iran;
  • Iraq;
  • the Islamic State in Iraq and the Levant, also known as Daesh, Al Nusrah Front, and individuals, groups, undertakings and entities associated with Al Qaeda;
  • North Korea; and
  • Somalia.
Penalties

What are the possible penalties for violation of export controls?

Violation of export controls are cumulatively governed under the Foreign Trade (Development and Regulation) Act 1992, the Customs Act and the principle regulatory laws that govern the products in question. Accordingly, an exporter will be subjected to the following penalties in case of contravention and violation of export control norms:

  • cancellation or suspension of the Importer Exporter Code issued to the exporter;
  • refusal to grant or renew a licence, certificate, scrip or any other instrument bestowing financial or fiscal benefit;
  • cancellation or suspension of any licence, certificate, scrip or instrument bestowing financial or fiscal benefit;
  • imposition of a fine amounting to either 10,000 rupees or five times the value of the goods, whichever is greater;
  • proceedings for confiscation of goods if they have not crossed the customs frontier; and
  • criminal prosecution for imprisonment of the offender for a period up to seven years with or without a fine. 

Furthermore, for violation of export control norms punitive proceedings under foreign exchange laws may also be initiated.