WORLD TRADE
ORGANIZATIONG/LIC/N/3/IND/4
4 December 2000
(00-5219)
Committee on Import Licensing Original:  English
REPLIES TO QUESTIONNAIRE ON IMPORT LICENSING PROCEDURES1
Notification under Article 7.3 of the Agreement on Import Licensing Procedures
INDIA
The following notification2, dated 24 October 2000, has been received from the Permanent
Mission of India.
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Outline of the system
1. One of the main objectives of the present trade policy of the Government of India is to phase
out quantitative and licensing control regulating Indi a's foreign trade.  Keeping this objective in view,
the current Export and Import Policy (Exim Policy) has been announced by the Government on31
 March 1997, valid for a period of five years from April 1997 to March 2002.
In terms of Export and Import Policy for 1997-20023, all capital goods, raw materials,
intermediates, components, consumables, spares, parts, accessories, instruments and other goods may
be imported without any restriction except to the extent such imports are regulated by the policy
indicated in the book titled ITC (HS) Classification of Export and Import Items3 or any other
provisions of this policy or any other law in force.
The restricted category of imports consists of (i) prohibited items, import of which is not
allowed under any circumstances;  (ii) canalized items, which can be normally be imported through
the designated canalizing agencies;  and (iii) restricted items, imports of which are allowed against
Specific Import Licences or in accordance with a Public Notice which indicates the conditions underwhich the item can be imported without a licence.
Purpose and coverage of licensing
2. Capital goods, raw materials, components, consumables, spares, intermediates, packing
material, parts, accessories, instruments and other goods may be imported without any restriction
except to the extent that such imports are regulated by the restrictions indicated in the book titled ITC
(HS) Classification of Exports and Import Items or an y other provisions or law in force.  However, to
facilitate the importation of the restricted items, an import licensing system has been adopted.
                                                     
1 See G/LIC/3, Annex, for the Questionnaire.
2 Contains information on import licensing procedures as at 1 April 2000.
3 Available for consultation in the Secretariat (Market Access Division).G/LIC/N/3/IND/4
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The policy and procedures governing import of various items is given in the Exim Policy
which is valid for a specified period.  The Handbook of Import-Export Procedures4 is also published
to supplement the Exim Policy.  In terms of Export and Import Policy, 1997-2002, import of all items
other than those restricted indicated in the book titled ITC (HS) Classification of Export and Import
Items is allowed without any restriction.  The restricted items are imported against specific importlicences or in accordance with Public Notices issued for this purpose.
However, importability of an individual item can be determined as per the policy indicated
against such items in the ITC(HS) classifications of Export and Import Items.  This compilation
adopts the internationally accepted Harmonized System (HS) of Commodity Classifications as
adopted by the Customs Cooperation Council (CCC), Brussels.  Some of the codes have been created
even at a ten-digit level so as to provide a distin ct existence to certain products.  For the purposes of
distinct identity, these codes are called Exim Codes indicating import policy of the goods against such
codes/products.  This publication is considered to be helpful in ascertaining the import policy of
various products as covered by the respective Exim Codes in different Chapters.
However, to facilitate import of the restricted items the import licensing system has been
adopted.  Importers who are willing to avail themselves of these facilities are subject to licensing.
Main licensing systems
(i) Grant of import licence for restricted items:  An application for import of such items may be
made to the Director General of Foreign trade (D GT) or any other licensing authority authorized by
him or his behalf.  The licensing authority may take the assistance and advice of a licensing
committee.  The licensing committee will consist of representatives of technical authorities.
(ii) Special Import Licence (SIL):(a) Export house/Trading house/Star trading house/Super star trading house:
Export house/Trading house/Star trading house/Su per star trading house (defined as those
companies the exports of which have an average f.o.b. of Rs. 12.5 crores;  62.5 crores;  312.5 crores
and 925 crores or Net Foreign Exchange (NFE) earni ngs of 10 crores, 50 crores, 250 crores or 740
crores in the preceding three licensing years and have an f.o.b. of 18.75 crores, 93.75 crores, 468.75
crores or 1387.5 crores or NFE earnings of 15 cr ores, 75 crores, 375 crores or 1110 crores for the
preceding years) are entitled to Special Import Licences at the rate of six per cent, eight per cent, ten
per cent, and 12 per cent of f.o.b. value of exports made or 7.5 per cent, ten per cent, 12 per cent and
15 per cent of NFE on exports in the preceding licensing year.  Two per cent additional Special
Import Licence is also grated for export of products manufactured by units registered as small-scaleindustries provided the export of these products is more than 50 per cent of the export during the
period.  Similarly, one per cent additional Special Import Licence is granted for export of fruits,
vegetables, floriculture and horticulture products, provided the export of these products is more than
ten per cent of export during the period.  One per cent additional Special Import Licence shall be
granted for the export of products manufactured and exported from North Eastern states provided the
export of these products is more than ten per cent of the total exports during the period and one per
cent additional Special Import Licence shall also be granted for the export of products to specified
countries.  SIL  shall not be available for imports made from 1 April 2000.  All SIL issued during
March-April 2001 shall be valid up to 31 March 2001 only.
                                                     
4 Available for consultation in the Secretariat (Market Access Division).G/LIC/N/3/IND/4
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(b) Manufacturers/processors who have acquired the quality status of ISO 9000 (series) or
IS/ISO 9000 (series) or HACCP Certification or WHO-GMP certification shall be eligible for Special
Import Licences at the rate of five per cent of the f.o.b. value of exports made.
3. Almost all India's trading partners receive m.f.n. treatment in the issue of import licences.
The exception to this is Iraq (on account of UN sanctions in the case of Iraq) in case of which import
licences cannot be used or issued.
4. The restrictions on imports are maintained mainly for balance-of-payments purposes as well
as on grounds of safety, security and environment protection policies and ensuring international
agreements.  In respect of certain items, the conditions for import have been specified in a general
way in Public Notices issued for this purpose and the need for licensing in individual cases has beeneliminated.
5. The foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade
(Regulation) Rules, 1993 provide statutory authorit y for administering import licensing.  Section 3 of
the Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to
make provisions on imports and exports.
Licensing is not a statutory requirement.  However, import of any restricted item is possible
either through an import licence or in accordance with any Public Notice issued for this purpose.
Legislation has given full authority to the Government for this purpose.  The Government can abolishthe licensing system without legislative approval.
Procedures
6. I. A quota system is not adopted by the Government of India.  However, import licensing is
maintained for smooth operation of the import of Negative List items.  Formalities for filing
applications for imports are published in the Handbook of Procedure, Vol.I.  These are editions which
are available for sale and also available on the webs ite:  http:/www.nic.in/eximpol.  Wide publicity is
also given to the Export and Import policy through the media.  The quota system is not maintained so
the question of allocating a quota amount to each country does not arise.  However, the quantity and
value of imports to be made from different countries are not published as all countries receive m.f.n.
status;  the only exception is Iraq on account of UN sanctions.
The Export and Import policy is announced at the beginning of the financial year and remains
valid for a specified period.  The current policy is valid for five years from April 1997 to March 2002.
The Handbook of Procedure is also published simultaneously indicating in detail the procedures to be
followed for making applications for import licences.
II. Imports into India are not restricted through maintenance of quotas, as items may be imported
without any restriction except to the extent such imports are regulated by the Negative List of Imports
of the Export and Import policy, 1997-2002, or any other provisions of this policy or any other law in
force.
III. This question is relevant only in cases where a quota system is maintained and a quota system
is not operative in India.  The restrictive items (other than those imports which are prohibited) may be
allowed against Specific Import Licences or in acco rdance with the Public Notices issued for this
purpose.  Such items are subject to Actual User  Conditions unless this condition is specifically
dispensed with.  The names of the licence holders can  be made available to the Government and export
promotion bodies of the expor ting countries upon request.
IV. As already stated, India does not have quota restrictions on imports.G/LIC/N/3/IND/4
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V. The time-limit for processing SIL applications is  five working days.  However, applications for
special licences mentioned in reply 2(ii) above are al so processed within five days after clearance by a
special licence committee.
VI. Import licences, wherever required, are issued with a specified period of validity for shipment
of goods.  It is up to the importer to import goods any time during the validity period of the import
licence.  Import licences are valid for the already sh ipped/arrived goods provided custom duties have not
been paid and the goods have not been cleared by customs.
VII. Import applications are submitted to the Office of the Director-General of Foreign Trade, New
Delhi or its regional offices, as the case may be.  The practice of routing licence applications through thesponsoring authorities has been di spensed with.  Such applications are now considered by a Special
Licensing Committee, wherever necessary, constituted fo r this purpose.  There is a single administrative
organ for considering these applications.
VIII. No quota system is maintained in  India.  The import of restricted list items is allowed  on a first-
come, first-served basis and past-performance basis by the licensing committee.  There is no maximum
limit to be allocated per applicant.  The track record and financial position of new importers is kept in
mind while issuing the licences.  The applications are examined as soon as they are received.
IX. At present, no imports into India are being made under bilateral quotas or export restraint
arrangements.
X. As stated in IX, no imports are made into India on the basis of export permits.
XI. The licences mentioned in reply 2 above are issu ed either with Actual User condition or freely
transferable condition.  However, these licences do not bear the condition that imported goods should be
exported and not sold in the domestic market.
7. (a) The licences shall be valid for goods alr eady shipped/arrived at the port of clearance.
(b) Yes, if the applicant fulfils the legal requirements.
(c) However, Special Import Licences to stat us holders like Export houses/Trading houses
etc. can be issued on a six-monthly basis.  The licence is issued on the basis of past
export performance and realization of the export proceeds.
(d) The importer has to approach the Director  General of  Foreign Trade for an import
licence.  The applicants need not approach other authorities for visa, note or approval.
Only single administrative clearance is required.
8. The licensing authority may refuse to grant an import licence:
(i) if the applicant has contravened any law relating to customs or foreign exchange;
(ii) if it has been decided by the Central Go vernment to canalize imports and distribution
thereof through special or specialized agencies;
(iii) if any action against the applicant is pending under the Foreign Trade (Development
and regulation) Act, 1992, or rules and orders made thereunder;
(iv) if the applicant fails to pay any penalty imposed on him under the said Act;
(v) if the applicant is not eligible for a li cence in accordance with any provisions of the
Export and Import Policy;  and
(vi) if no foreign exchange is available for the purpose.
The aggrieved importer can file a representation with the Office of the DGFT.  The
representation is treated as an appeal by the DGFT.G/LIC/N/3/IND/4
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Eligibility of importers to apply for licence
9. All eligible persons, firms and institutions can apply for a licence provided they hold a valid
Importer Exporter Code Number (IEC).  There is no sy stem of registration of persons or firms permitted
to engage in importation.
Documentational and other requirements for application for licence
10. The application form indicates the type of in formation and the documents normally required for
processing the application.  The application format fo r import of restricted list and SIL items is given in
Appendices 8 and 20-D of the Handbook of  Export and Import Procedures, 1997-2002.
11. The documents required upon actual importation are, besides the import licence:
- shipping documents;
- commercial invoices;  and- certificates of origin, if required.
12. Fees are charged on application for licences accord ing to the value of imports to be made.  The
present rates are:  Rs 200 where the value does not exceed Rs 50,000, and Rs 2 for every Rs 1,000 or
part thereof, subject to a maximum of Rs 1.5 lakh (where the value exceeds Rs 1 crore).
13. There is no deposit or advance payment requi rements associated with the issue of import
licences.
Conditions of licensing
14. An import licence shall normally be endorsed with a period of validity of 12 months. The
licence may be revalidated on merits for such period as the licensing authority may deem fit.
15. No.16. Special Import Licences are freely transferable among importers.  No conditions are imposed on
such transfers.
17. Licences to import restricted items mentioned in  reply 2(i) above are issued with Actual User
condition unless it is dispensed with.  Licences mentione d in reply 2(ii) are freely transferable.  No other
conditions are attached to these licences includ ing the conditions of quantitative restrictions.
Other procedural requirements
18. No.
19. Yes.  Foreign exchange is provided by the au thorized dealers in foreign exchange for import of
goods.  However, for import of items appearing in th e restricted category, an import licence is required.
Foreign exchange is made available to cover impor ts.  Normal banking procedures apply for obtaining
foreign exchange.
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