Prospective export restrictions govern unshipped goods while licensing applications require timely individual reasoned decisions after hearing.
Prospective export-policy restrictions apply to goods not exported by the effective date; procurement, payment, port storage, and unshipped stock do not create an accrued export right. Earlier free-export classifications or State export tenders do not establish legitimate expectation or promissory estoppel where public-interest resource, security, and planning concerns support change. An Irrevocable Commercial Letter of Credit may validly define transitional eligibility because it is objectively verifiable. Export licensing may regulate rather than prohibit trade, but applications cannot remain frozen pending review: they require timely, individual, reasoned consideration after a hearing, accounting for commercial hardship and national-security factors.
Issues: (i) Whether the notification retrospectively impaired a vested right to export stock acquired but not shipped before its effective date.
(ii) Whether the earlier free-export policy or export tenders created a legitimate expectation or promissory estoppel against the policy change.
(iii) Whether the notification is arbitrary or imposes an unreasonable restriction on trade for want of a separate grace period.
(iv) Whether Paragraph 1.05(b) of the Foreign Trade Policy, 2023 is invalid for confining transitional protection to exporters holding an Irrevocable Commercial Letter of Credit.
(v) Whether the licensing authority may indefinitely defer a restricted-export authorisation application pending policy review.
Issue (i): Whether the notification retrospectively impaired a vested right to export stock acquired but not shipped before its effective date.
Analysis: Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992 and Paragraphs 1.05(b) and 2.01 of the Foreign Trade Policy, 2023 make the policy prevailing on the date of export applicable prospectively. Procurement, payment, storage at port, or possession of stock, without shipping bills, loading, or final export clearances before the effective date, does not create an accrued right to export under the earlier policy.
Conclusion: The notification operates prospectively and does not impair a vested right to export unshipped stock.
Issue (ii): Whether the earlier free-export policy or export tenders created a legitimate expectation or promissory estoppel against the policy change.
Analysis: A free classification under the policy is not a clear governmental assurance that the classification will remain unchanged. The statutory framework permits policy amendment in public interest, and export tenders issued by a State undertaking do not amount to an assurance by the Union that export policy will not change. The strategic-resource and national-security rationale supplies an overriding public-interest basis for the regulatory change.
Conclusion: Neither legitimate expectation nor promissory estoppel restrains the policy change.
Issue (iii): Whether the notification is arbitrary or imposes an unreasonable restriction on trade for want of a separate grace period.
Analysis: A general export-policy notification issued under Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992 need not record its reasons on its face where a rational basis exists. Conservation of depleted strategic mineral reserves, national security, and resource planning provide such a basis. The measure regulates exports through licensing rather than imposing an absolute prohibition, and Paragraph 1.05(b) already supplies a defined transition mechanism. Judicial deference is warranted in economic and strategic policy, and the licensing regime bears a rational and proportionate connection to the public-interest objective under Article 19(6) of the Constitution of India.
Conclusion: The notification is valid, non-arbitrary, and constitutes a reasonable restriction on trade.
Issue (iv): Whether Paragraph 1.05(b) of the Foreign Trade Policy, 2023 is invalid for confining transitional protection to exporters holding an Irrevocable Commercial Letter of Credit.
Analysis: Paragraph 1.05(b) creates a limited exception to the ordinary rule that the policy on the export date governs. An Irrevocable Commercial Letter of Credit is bank-backed, objectively verifiable, and not readily alterable or cancellable, unlike private purchase orders or other payment arrangements. This provides an intelligible basis for distinguishing qualifying commitments from other commercial arrangements and bears a rational nexus to preventing unverifiable claims for transition. The absence of an Irrevocable Commercial Letter of Credit on the effective date determines eligibility; no exporter is required to anticipate a future regulatory change.
Conclusion: Paragraph 1.05(b) is constitutionally valid, and exporters without a valid Irrevocable Commercial Letter of Credit on the effective date are not entitled to its transitional protection.
Issue (v): Whether the licensing authority may indefinitely defer a restricted-export authorisation application pending policy review.
Analysis: Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992 permits export restrictions, but an open-ended freeze on all licensing applications would convert the chosen licensing regime into a prohibition in practice. A restricted-export authorisation application must receive timely, individual, and reasoned consideration after a personal hearing, with due regard to the pre-existing procurement, economic hardship, absence of an alternative domestic market, shipping disruption, and national-security considerations.
Conclusion: The licensing authority cannot indefinitely defer the restricted-export authorisation application solely because a policy review is pending and must decide it by a reasoned order after hearing the applicants.
Final Conclusion: The restrictive export regime and its Irrevocable Commercial Letter of Credit-based transitional framework remain operative, while the statutory licensing mechanism must be exercised through timely, individual, reasoned consideration.
Ratio Decidendi: A prospective export-policy restriction validly governs unshipped goods, and a transitional exception confined to objectively verifiable irrevocable commitments satisfies reasonable-classification requirements.