Export restriction - Basic principles in context with Indian Trade Laws.

Classification & Control List

To identify which goods/technologies are sensitive and may harm national security / non-proliferation / public safety if misused.

India has the SCOMET list (Special Chemicals, Organisms, Materials, Equipment & Technologies). Items on this list are dual-use, or potentially usable for WMD etc. Exports of these items are either prohibited or permitted under authorization (licensing).

Free vs Restricted vs Prohibited Categories

Not all goods are equally sensitive; many goods don’t need special controls, others require license, and some cannot be exported at all.

Under the Foreign Trade Policy (FTP) 2023, Schedule II export policy classifies all items under the ITC-HS codes into: Free, Restricted, or Prohibited, etc. If an item is restricted or on the SCOMET list, licensing etc applies.

End-Use / End-User Controls

Even if a good is not obviously dangerous, if the end use or end user is problematic (military, or WMD etc.), export may be restricted.

Indian policy (and DGFT) requires end-use declarations, checks on legitimacy of users. There is also a “catch-all” provision: if exporters know or have reason to believe that an item (even if not on SCOMET) could be used for WMD / delivery systems etc., they may be required to get authorization. (DGFT)

Territorial / Nationality / Jurisdictional reach

Export rules often apply not just to goods exported physically, but to software, technology, intangible transfers, persons (even Indian citizens abroad), etc.

India’s policy states that SCOMET controls apply to goods, software, technology. Also applies to Indian persons / companies wherever located; Indian ships, aircraft etc even if outside territory. (DGFT)

Licensing / Authorization

Restricted items need formal permission; criteria include technical classification, end use, risk, etc.

DGFT is the licensing authority for many categories; for certain categories (e.g. defence / munitions), others (like the Department of Defence Production) may be involved. Licenses are granted under specified conditions.

Compliance / Internal Controls

Exporters are expected to have internal systems to ensure they follow rules: classification, due diligence, record keeping, audits, risk-assessment.

India is rolling out / has drafted Internal Compliance Programme (ICP) for SCOMET items under DGFT’s FTP. Exporters with ICP may get mitigations in case of non-compliance or for voluntary disclosure.

Transparency & Consistency

To reduce uncertainty, ensure export control rules are public, classification is clear, licensing is handled efficiently, interpretations clarified.

India has updated Schedule II, aligned to 8-digit ITC-HS codes; launched consolidated repositories of SCOMET clarifications; made licensing more digital; periodic updates of the SCOMET list in line with multilateral regimes. (India Briefing)

Prohibition / Denial

Some exports are outright prohibited (e.g. certain chemical weapons, sensitive nuclear items etc.), or may be denied based on risk.

Items under certain SCOMET categories are prohibited; WMD related items are strictly controlled; export of some items even with license may be denied if end-use / user is suspect. (web.lawcrux.com)

Catch-All / Deemed Controls

Items not explicitly on control list but which may be misused are still subject to control if certain conditions hold.

India’s “catch-all” provision under FTP: if exporter knows or is notified that an item (even if not on SCOMET) can be used for WMD, delivery systems etc., the export may be restricted / denied. (DGFT)

Penalties & Enforcement

Violations carry penalties: license revocation, fines, even criminal penalties. Customs enforcement, audits, inspections.

Under the Customs Act,FTDR Act, WMD Act etc. Violations may lead to fines, seizure, imprisonment depending on severity. Also voluntary disclosure can mitigate penalties. (DGFT)