Foreign shareholder nationality cannot bar Indian companies from export incentive benefits under a clear trade policy.

Indian companies incorporated and registered in India could not be excluded from Served from India Scheme benefits merely because their shareholders were foreign. The Delhi High Court reasoning treats the company as a separate juristic person and reads the policy term "Indian Service Providers" according to its plain meaning, without inquiry into shareholder nationality. It also holds that the DGFT's interpretative power cannot be used to add a new eligibility condition or narrow clear policy language. On that basis, the additional shareholder-nationality requirement was impermissible, and the petitioners were entitled to the scheme benefits for the relevant periods.

---

---

Issues: (i) Whether Indian companies that are subsidiaries of foreign companies could be denied benefits under the Served from India Scheme on the ground that their shareholders were foreign; (ii) Whether the Director General of Foreign Trade could, by interpreting the Foreign Trade Policy, introduce an additional eligibility condition inconsistent with the policy text.

Issue (i): Whether Indian companies that are subsidiaries of foreign companies could be denied benefits under the Served from India Scheme on the ground that their shareholders were foreign.

Analysis: Under the 2004-09 policy, the relevant eligibility provision covered all service providers satisfying the specified conditions, and there was no basis to exclude Indian companies merely because they were subsidiaries of foreign entities. Under the 2009-14 policy, the expression used was "Indian Service Providers". That expression was held to include all Indian entities incorporated in India, and it did not permit an inquiry into the nationality of shareholders. A company is a separate juristic person distinct from its shareholders, and its incorporation in India and registered office in India made it an Indian company for the scheme.

Conclusion: The denial of SFIS benefits on the ground that the petitioners were subsidiaries of foreign companies was not valid and was against the petitioners.

Issue (ii): Whether the Director General of Foreign Trade could, by interpreting the Foreign Trade Policy, introduce an additional eligibility condition inconsistent with the policy text.

Analysis: The Director General of Foreign Trade has authority to interpret the policy, but that power operates only where the text is ambiguous. It cannot be used to add a new condition or amend the policy under the guise of interpretation. Reading into the policy a requirement that the shareholders of an Indian company must themselves be Indian was held to be an impermissible addition to the eligibility criteria and beyond the DGFT's interpretative power.

Conclusion: The DGFT had no power to impose the additional condition, and the impugned interpretation was against the petitioners.

Final Conclusion: The policy was construed in accordance with its plain language, and the petitioners were held entitled to the Served from India Scheme benefits for the relevant periods.

Ratio Decidendi: Where a foreign trade policy confers benefits on Indian service providers or all service providers meeting stated criteria, the DGFT cannot exclude Indian companies by reading in a shareholder-nationality condition; interpretation cannot be used to amend the policy or narrow clear eligibility terms.

---