WORLD TRADE  
ORGANIZATION  G/LIC/N/3/IND/7 
6 June 2005 
 
 (05-2294) 
Committee on Import Licensing Original:   English 
  
 
AGREEMENT ON IMPORT LICENSING PROCEDURES 
 
Notification under Arti cles 1.4(a), 8.2(b), 5 and 7.3 of the
 
Agreement on Import Licensing Procedures  
 
INDIA 
 
  The following communication, dated 2 June 2005, is being circulated at the request of the 
Delegation of India. 
 
_______________ 
  
Outline of system
 
 
1. The principal  objectives of the present five-y ear Export and Import Policy of the Government 
of India are as follows:   Trade is not an end in itself, but a means to  economic growth and national development.  The 
primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic 
activity.  The Foreign Trade Policy is rooted in this belief and built around two major objectives.  
These are:  (i) To double India’s percentage share of global merchandise trade within the next five years; 
and 
(ii) To act as an effective instrument of economic growth by giving a thrust to employment 
generation. 
  The Policy is operative from 1 September, 2004-31 March 2009.  As part of this policy, India 
has already removed all the quantitative restrictions  on imports being earlier maintained on account of 
balance of payment reasons.  Apart from this, I ndia has also reviewed the position of quantitative 
restrictions on Non-BOP items. 
 
The restricted category of imports consists of  (i) prohibited items, import of which is not 
allowed under any circumstances and (ii) restricted items, imports of which are allowed against a 
licence or in accordance with a pu blic notice which indicates the c onditions under which the item can 
be imported. 
 Purpose and coverage of licensing
 
 2. Capital goods, raw materials, components, consumables, spares, intermediates, packing 
material, parts, accessories, instruments and othe r 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) Classifications of Export and Import Items, 2004- 2009 or any other provisions or law in force.  G/LIC/N/3/IND/7 
Page 2  
 
 However, to facilitate the importation of the rest ricted items, an import licensing system has been 
adopted.    The policy and procedures governing import of various items is given in the Foreign Trade 
Policy which is valid for a specified period.  The Handbook of Import-Export Procedures is also 
published to supplement the Foreign Trade Policy.  In terms of Foreign Trade Policy, 2004-2009 
import of all items other than restricted item  is a llowed without any restriction.  The restricted items 
are imported against specific import licences or in accordance with Public Notices for this purpose. 
  Importability of an individual item can be dete rmined as per the policy indicated against such 
items in the ITC(HS) Classifications of Export and Import Items, 2004-2009.  This compilation 
adopts the internationally accepted Harmonized System (HS) of Commodity Classifications as adopted by the Customs Cooperation Council (CCC), Brussels.  The code classification adopted is 
eight-digit level so as to provide a distinct existen ce to certain products.  For the purposes of distinct 
identity, these codes are called Exim Codes indi cating 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 respec tive Exim Codes in different Chapters. 
  However, to facilitate import of the restri cted items the import licensing system has been 
adopted.  Importers who are willing to avail  these facilities are subject to licensing.  Main licensing systems: 
 
Grant of import licence for restricted items
:  An application for import of such items may be made to 
the Directorate General of Foreign Trade (DGFT) or  any other licensing authority authorized by him 
on his behalf.  The licensing authority may take the assistance and advice of a licensing committee.  
The licensing committee will consist of re presentatives of technical authorities. 
 3. All of India’s trading partners receive MFN treatment in the issue of import licences.     4. The restrictions on imports are maintain ed only on grounds of safety, security and 
environment.  In respect of certain items, the cond itions for import have been specified in a general 
way in public notices issued for this purpose a nd the need for licensing in individual cases has been 
eliminated.  5. The Foreign Trade (Development and Regulati on) Act, 1992 and Foreign Trade (Regulation) 
Rules, 1993 provide statutory authority for administering import licensing.  Section 3 of Foreign 
Trade (Development and Regulation) Act, 1992 empowers the Central Government to make 
provisions on imports and exports.   Licensing is not a statutory requirement.  Howe ver, import of any restricted item is possible 
either through an import licence or in accordance w ith any public notice issued for this propose.  
Legislation has given full authority to the Governme nt for this purpose.  The Government can abolish 
the 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 rest ricted items.  Formalities for filing applications 
for imports are published in the Handbook of Proc edures, Vol. 1.  These are editions, which are 
available for sale and also available on, website: http://www.nic.in/eximpol
.  Wide publicity is also 
given to the Export and Import Policy through the media.  A quota system is not maintained so the question of allocating a quota amount to each country does not arise.  However, the quantity and value  G/LIC/N/3/IND/7 
 Page 3 
 
 
 of imports to be made from different countries ar e not published as all countries receive MFN status. 
Unless otherwise specially provided, import/export will be valid from/to any country. However, 
import/export of arms and re lated material from/to Iraq shall be prohibited. 
  The Foreign Trade Policy   remains valid for a specified period.  The current Policy is valid 
for five years from 1 September 2004-31 March 2009.   The Handbook of Procedures 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. 
 
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 (o ther than those imports of which are prohibited) may 
be allowed against Specific Import Licences or in ac cordance with the Public Notices issued for this 
purpose.  Such items are subject to Actual U ser 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 exporting countries upon request.  IV. As already stated India does not have quota restrictions on imports.  V. The application for special licences mentioned in paragraph 2 above are processed within the 
prescribed time period after clearance by the Ex im Facilitation Committee as per prescribed time 
schedule for disposal.  VI. Import licences, wherever required, are issued  within 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 shipped/arrived goods provided customs 
duties have not been paid and the goods have not been cleared by customs.  VII. Import applications are submitted to the Office of the DGFT, New Delhi or its regional 
offices, as the case may be.  The practice of rou ting licence applications through the sponsoring 
authorities has been dispensed with .  Such applications are now considered by an Exim Facilitation 
Committee, wherever necessary, cons tituted for this purpose.  There is a single administrative organ 
for considering these applications.   VIII. No quota system is maintained in India. Th e import of restricted list items is allowed on a 
first-come, first-served basis and past-performan ce 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 bei ng made under bilateral quotas or export restraint 
arrangements.  
 
X. As stated in reply 6.IX, no imports are made into India on the basis of export permits. 
 XI. The licences mentioned in paragraph 2 above are issued either with Actual User Condition or 
freely transferable condition.  However, these licen ces 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 alread y shipped/arrived at the customs’ port but not 
already cleared by the customs.  
 G/LIC/N/3/IND/7 
Page 4  
 
 (b) Yes, if the applicant fulfils the legal requirements. 
 (c) No. 
 (d) The importer has to approach the DGFT for an  import licence.  The applicants need not 
approach other authorities for visa note or appr oval.  Only single administrative clearance is 
required. 
 8. The licensing authority may refuse to grant an import licence:  
(i) if the applicant has contravened any la w relating to customs or foreign exchange; 
(ii) if it has been decided by the Central Govern ment to import through State Trading Enterprises 
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 pe nalty imposed on him under the said act;  and 
(v) if the applicant is not eligible for a licence in accordance with any provisions of the Export 
and Import Policy. 
 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). 
 Documentational and other require ments for application for licence
 
10. The application form indicates the type of  information and the documents normally required 
for processing the application.  The application form at for import of restricted items is given in 
Appendix 8 of the Handbook of Procedures, Vol.1, 2004-2009. 
 11. The documents required upon actual importation are, besides the import licence:  shipping documents; commercial invoices;  and certif icates of origin, if required.  
 12. Fees are charged on application for licences acco rding to the value of imports to be made.  
 
13. There is no deposit or advance payment requirements associated with the issue of import licences.  14. An import licence shall normally be endorsed with a period of validity of 24months.  The 
licence may be revalidated on merits for such pe riod as the licensing authority may deem fit.  
 15-16. No.  17. Licences are only required to import restricted  items mentioned in paragraph 2 above.  These 
licences are issued with Actual User Condition unless it is dispensed with.  
 
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 the restricted category, an import licence is 
required.  Normal banking procedures apply for obtaining foreign exchange. 
 
__________