Trade sanctions

General restrictions

What restrictions apply in relation to the trade of goods, technology and services?

Trade in all kinds of goods, technology, and services is free except when regulated under a prohibition or restriction. The details of these regulations are in the Indian Trade Classification (Harmonized System) (ITC (HS)) policy of exports and imports. 

Separately, India also has a policy for Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) items. These are dual-use items that are considered capable of civil as well as military application. The SCOMET list is included in Appendix 3 to Schedule 2 of the ITC(HS). The export of the items under the SCOMET list is restricted and subject to an authorisation or licence. 

General exemptions

Do any exemptions apply to the general trade restrictions?

As per the Handbook of Procedure (2015-20) (HOP) issued by the DGFT, prior authorisation from the DGFT is required to import or export items that are restricted. 

However, government-recognised research and development units are exempted. They are allowed to import all restricted items, except for living animals, required for research and development without any authorisation.

In the case of prohibited items, the ITC(HS) contains certain product-specific exemptions. If such exempting criteria are met, import and export of prohibited items can be allowed. 

Targeted restrictions

Have the authorities in your jurisdiction imposed any trade sanctions against dealing with any particular individuals or entities?

The GoI has prohibited trade with the Islamic State in Iraq and the Levant, Al Nusrah Front, and other individuals, groups, undertakings, and entities associated with Al Qaida to implement UNSC resolutions against such entities.

Exemption licensing – scope

In what circumstances may the competent sanctions authorities in your jurisdiction issue a licence to trade in goods, technology and products that are subject to restrictions?

As per the HOP, authorisation to import or export restricted items needs to be obtained from the DGFT or a regional authority designated by the DGFT (RA). While granting an import authorisation, the DGFT can seek assistance from an Export-Import Facilitation Committee that forms part of the DGFT. The HOP specifically exempts hotels, restaurants, travel agents, and tour operators and permits them to import restricted items, if required, subject to the DGFT’s authorisation and a recommendation by the GoI.

The DGFT’s Export-Import Facilitation Committee grants the export authorisation for restricted items (apart from SCOMET list items) after reviewing the merits of the request for such authorisation. 

For SCOMET list items, an Inter-Ministerial Working Group of the DGFT (IMWG) considers an application for export authorisation. The HOP stipulates factors considered by the IMWG while granting such an authorisation, which include credentials of the end user, credibility of end-use of the item or technology, and a risk assessment of whether the exported item could fall into the hands of terrorists or terrorist organisations. 

Exemption licensing – application process

What is the application process for a licence? What is the typical timeline for a licence to be granted?

The HOP prescribes the process of obtaining authorisation to import or export restricted items. To obtain such authorisation, an application along with the prescribed documents must be submitted to the DGFT. The application process is online and available on DGFT’s website. 

The timeline to obtain authorisation varies as per the nature of authorisation. For example, the export authorisation to deal in restricted items is typically granted within 30 to 45 days. Similarly, in the case of export authorisation for SCOMET items, the members of the IMWG are required to furnish their written comments, views or no objections to DGFT within 30 days from the date of receiving an application from the DGFT. 

Approaching the authorities

To what extent is it possible to engage with the competent sanctions authorities to discuss licence applications or queries on trade sanctions compliance?

It is possible to discuss concerns regarding licence applications or trade sanctions compliance with the officers of the DGFT. The DGFT website provides a detailed list of officials who can be contacted to discuss concerns raised by interested persons. The work allocation of each such officer is specified in the list. The DGFT has also prescribed the format of the application for seeking clarifications on the FTP.

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28 April 2021