Do you aspire to import and export goods? But are you aware that the government doesn’t permit the international trade of all goods? Confused and wondering where to find the details?
Worry not, this blog has got you covered.
Role of the DGFT in India’s international trade policy
For enterprises based in India keen to start an import-export business, they must be cognizant of the regulatory framework and documentation required, international procedures and the foreign and procedure-centric market in India. All import-export activity in India occurs under the governance of the Directorate General of Foreign Trade (DGFT). It is India’s official administrating body for imports and exports.
The DGFT lays down the Importer Exporter Code (IEC) to legally sanction the purchase or sale of such items. It maintains a record of all the articles that may be imported or exported to India. Any business that fails to comply with the norms stated in DGFT’s list could lead to severe repercussions. The cargo may get stuck at the port of the other country and may attract demurrage.
Hence, it is mandatory for every business or trading company that imports and exports goods to and from India must be aware of the items on these lists.
Many goods are free to be exported without obtaining any licence. Some are banned and some others are canalized, requiring a license, before export. So, the exporter needs to check whether any licence is required before accepting and executing the export order.
In this blog, we present the items that DGFT has prohibited from being imported/exported into/to India. The items stated below have been sourced from Schedule 1 of the ITC(HS) classifications of Items. However, we advise you to cross-check the list before finalising the import of any item to ensure that it is not present on the list.
Prohibited items
Businesses are not permitted to export or import the following items.
- Narcotic drugs and psychotropic substances
- Pornographic and obscene material
- Counterfeit and pirated goods
- Goods infringing the legally enforceable intellectual property rights
- Antiquities
- Aero models that operate on high radio bandwidths and interfere with the communications networks of security agencies
- Indian coins that are covered by the Antique and Art Treasure Act, 1972
- Maps and literature with incorrect external Indian boundaries
- Chemicals stated in Schedule 1 to the Chemical Weapons Convention of U.N. 1993
- Wildlife products, such as human skeletons, beef, wild animals, their parts and products, and more
- Wood products in the form of logs, timber, pulp and charcoal
Restricted items
Businesses can export and import the following goods only with a licence, following the regulations governing in this regard.
- Firearms and ammunition
- Live birds and animals including pets
- Plants and their produce
- Endangered plant and animal species
- Goods for commercial purposes
- Radio transmitters that are not permissible for normal usage
- Importing gold and silver other than ornaments
- Currency over prescribed limits
- Telephone and related equipment of restricted frequencies
- Medicines and drugs
- Animals, such as cattle, horses and camels
- Semi-processed hides and skins
- Silkworms, silkworm seeds and cocoons
- Family planning devices without NOC from the Ministry of Health
- Vintage products, replicas of antiques or weapons
- Sand and soil
- Whole human blood plasma and certain human blood products
- Sandalwood (barring handicraft products and oil)
Businesses can import the Restricted items (as classified in ITC [HS]) only after obtaining an Import license from the relevant Regional Licensing authority. Additionally, they must use Form no. ANF2B (subsequently modify to ANF 2M w.e.f. 18th March 2019) as the application form for Import of Restrict items from DGFT.
Canalized items
Canalization of goods means these goods can be imported or exported only through the canalizing agencies, i.e. agencies designated by the Central Government, and not by an individual entity. These agencies include the National Agricultural Cooperative Marketing Federation, State Trading Corporation of India, Metals and Minerals Trading Corporation of India, and so on.
Canalisation of goods emphasises foreign trade flow rather than ownership of the agency conducting it.
Canalised exports include:
- Petroleum products
- Gum karaya
- Mica waste
- Mineral ores, concentrates and compounds
- Niger seeds
- Onions
Canalised imports include:
- Arms/ammunitions
- Live or used cartridges
- Minerals and metals
- Crude oil
