Background
The Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) was enacted to provide the legal framework for the development and regulation of India’s foreign trade. It replaced the earlier Imports and Exports (Control) Act, 1947 to align India’s trade regime with global practices after the liberalisation policies of 1991. The Act empowers the Central Government to make provisions for the development and regulation of foreign trade, prohibit, restrict, or regulate imports and exports of goods, services, and technology, and to issue notifications, orders, and policies in the interest of national economy, security, and foreign relations.
Applicability
The act applies to:
Compliance requirement s under the Act in accordance with the Foreign Trade (Regulation)(Amendment) Rules, 2015
An Importer Exporter Code (IEC) is an identification number mandatory for export from India or Import to India. A person may make an application for the grant of a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits to import or export goods or services or technology in accordance with the provisions of the policy or an order made under sections 5 and 3 of the Act respectively.
IEC is filed online at www.dgft.gov.in as per ANF 2A. Once an IEC is allotted, businesses may import goods that are compliant with Section 11 of the Customs Act (1962), Foreign Trade (Development & Regulation) Act (1992), and the Foreign Trade Policy, 2015-20.
No person shall export any material, equipment or technology knowing that such material, equipment or technology is intended to be used in the design or manufacture of a biological weapon, chemical weapon, nuclear weapon or other nuclear explosive device, or in their missile delivery systems.
Dealing in specified goods or services or technology is prohibited as per the definition contained in Section 2(l) of the Foreign Trade (Development and Regulation) Act, 1992.
“Specified goods or services or technology” means the goods or services or technology, the export, import, transfer, re-transfer, transit and transshipment of which is prohibited or restricted because of imposition of conditions on the grounds of their being pertinent or relevant to India as a Nuclear Weapon State, or to the national security of India, or to the furtherance of its foreign policy or its international obligations under any bilateral, multilateral or international treaty, covenant, convention or arrangement relating to weapons of mass destruction or their means of delivery to which India is a party or its agreement with a foreign country under the foreign trade policy formulated and notified under section 5 of the Act.
In regard to controls on export of specified goods, services and technology referred to in Chapter IVA of the Act, the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 shall apply to exports, transfers, re-transfers, brought in transit, trans-shipment of, and brokering in specified goods, technology or services.
No goods, services or technology notified under Chapter IVA of the Act shall be exported, transferred, re-transferred, brought in transit or transhipped except in accordance with the provisions of the Act, the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 or any other relevant Act.
On the importation into, or exportation out of, any customs ports of any goods or goods connected with services or technology, whether liable to duty or not, the owner of such goods shall in the Bill of Entry or the Shipping Bill or any other documents prescribed under the Customs Act, 1962 (52 of 1962), state the value, quantity, quality and description of such goods or goods connected with services or technology to the best of his knowledge and belief and in case of exportation of goods or services or technology, certify that the quality and specification of the goods or goods connected with services or technology as stated in those documents, are in accordance with the terms of the export contract entered into with the buyer or consignee in pursuance of which the goods or goods connected with services or technology are being exported and shall subscribe a declaration of the truth of such statement at the foot of such Bill of Entry or Shipping Bill or any other documents.
On the importation into or exportation out of any Customs port of any goods or goods connected with services or technology, the importer or exporter shall in the Bill of Entry or Shipping Bill or, as the case may be, in any other documents prescribed by rules made under the Act or the Customs Act, 1962, state the Importer-exporter Code Number allotted to him by the competent authority.
No person shall use any imported goods or services or technology allotted to him by the State Trading Corporation of India or any other agency recognised by the Central Government in a manner and for the purpose, otherwise than as declared by him in his application for such allotment or in any document submitted by him in support of such application.
No person shall dispose of any good or goods connected with services or technology imported by him against a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits except in accordance with the terms and conditions of such licence, certificate, scrip or any instrument bestowing financial or fiscal benefits.
No person shall make, sign or use or cause to be made, signed or used any declaration, statement or document for the purposes of obtaining a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits or importing any goods or services or technology or goods connected with such services or technology knowing or having reason to believe that such declaration, statement or document is false in any material particular.
No person shall employ any corrupt or fraudulent practice for the purposes of obtaining any licence, certificate, scrip or any instrument bestowing financial or fiscal benefits or importing or exporting any goods or services or technology or goods connected with such services or technology.
Penalty & Punishments
Conclusion
The Foreign Trade (Development and Regulation) Act, 1992 is a cornerstone legislation for India’s external trade management. It provides the government with necessary powers to balance liberalisation with national security and economic interests. For businesses, compliance under this Act, particularly securing IEC and adhering to licensing and policy requirements, is essential for participating in international trade. The Act not only facilitates smoother exports and imports but also safeguards against unlawful or hazardous trade, ensuring India’s global trade is conducted responsibly and transparently.
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