The Foreign Trade Policy (FTP) 2023–28, released by the Ministry of Commerce & Industry on April 1, 2023, replaced the earlier FTP 2015–20 (which had been extended through the pandemic years). This is the overarching framework governing all of India's foreign trade and is administered by the Directorate General of Foreign Trade (DGFT).

Core Philosophy of FTP 2023–28

Unlike previous policies with fixed export targets, FTP 2023–28 is a dynamic, responsive policy — designed to be updated in real time rather than waiting for a fixed revision cycle. Key pillars include:

• Remission over exemption: The policy shifts from upfront duty exemptions (Advance Authorisation, EPCG) to remission-based schemes (RoDTEP, RoSCTL) to comply with WTO obligations
• Export promotion through collaboration: Focus on Districts as Export Hubs (DEH) and Towns of Export Excellence (TEE) to decentralise export promotion
• Ease of doing business: Paperless, faceless processing, online authorisations, and auto-renewal of IEC
• Emerging sectors focus: E-commerce exports, services exports, and high-value manufacturing are given priority treatment
• Amnesty for past defaults: A one-time Amnesty Scheme was introduced at FTP launch to allow settlement of pending EPCG and Advance Authorisation defaults

The DGFT is the apex body for foreign trade policy and licensing in India. In recent years, DGFT has issued several critical notifications that directly impact the day-to-day operations of importers and exporters.

IEC (Import Export Code) — Mandatory Compliance

The Import Export Code (IEC) is a 10-digit PAN-based registration mandatory for any entity engaged in import or export from India. Key updates:

• IEC must be annually updated/revalidated on the DGFT portal between April 1 and June 30 each year — failure results in deactivation
• IEC is now linked to GSTIN — importers and exporters must ensure consistent details across both registrations
• Deactivated IEC leads to blocking of Bills of Entry and Shipping Bills on ICEGATE — causing immediate operational disruption
• IEC amendment for change of address, directors, or bank details must be done online within 90 days of change

DGFT's Digital Transformation

DGFT has moved almost entirely to a paperless, faceless system. All authorisations — Advance Authorisation, EPCG, SCOMET licences, and REP licences — are now applied for, processed, and issued digitally through the DGFT portal (dgft.gov.in). Physical submission of applications is no longer accepted for most categories.

Recent DGFT Notifications of Importance

The Customs Act, 1962 is the primary legislation governing the import and export of goods in India. It has been amended significantly in recent years through Finance Acts to modernise procedures, strengthen enforcement, and align with international standards.

Major Amendments (Finance Acts 2021–2024)

• Faceless Assessment (Finance Act 2021): Customs assessment is now conducted by officers at a Customs Assessment Centre (CAC), not at the port of import. This removes human interface but requires precision in documentation submitted at filing stage
• Risk Management System (RMS): Goods are assessed as "Green Channel" (no examination), "Yellow Channel" (document verification), or "Red Channel" (physical examination) based on RMS risk score — importer track record significantly affects this scoring
• Section 17 amendments — Self-Assessment: Importers now self-assess duty on Bills of Entry. Errors — even unintentional — can attract penalties under Section 114A
• Pre-Import Amendment (Finance Act 2022): Certain advance pricing agreements and pre-import classification rulings are now available to importers for duty certainty
• Time-bound adjudication: Amendments prescribe time limits for adjudication of Show Cause Notices — providing relief to importers and exporters from indefinite litigation
• Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020: Stricter verification of Certificates of Origin for FTA claims — fake or ineligible CoOs now attract duty plus penalty

Customs Valuation — Key Issues

Customs valuation continues to be one of the most contested areas in Indian import practice. The Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 follow the WTO Valuation Agreement. Common issues include:

• Related-party transactions between subsidiary and parent company — require transfer pricing justification
• Royalty and licence fee additions to assessable value
• Loading of insurance and freight when not separately declared
• Rejection of declared value and enhancement by Customs in high-risk categories

ICEGATE & EDI Filing

All Bills of Entry and Shipping Bills must be filed electronically through ICEGATE (Indian Customs EDI Gateway). Integration of ICEGATE with GSTN, RBI's EDPMS (Export Data Processing and Monitoring System), and DGFT systems means that discrepancies across platforms are automatically flagged.

India offers a robust set of export promotion schemes designed to reduce the cost of exports and make Indian goods competitive globally. Understanding and correctly utilising these schemes can significantly improve export margins.

Duty Drawback

All Industry Rate (AIR) Duty Drawback is available on exported goods as a percentage of FOB value, covering customs duties paid on imported inputs. Brand Rate Drawback can be applied for where AIR is insufficient. Drawback is credited directly to the exporter's bank account through ICEGATE within a specified timeline after Shipping Bill filing.

Under the ITC (HS) Classification of Export and Import Items, every importable item is classified as Free, Restricted, or Canalized. The policy is notified by DGFT and updated regularly.

Notable Recent Changes to Import Policy

• Laptops & personal computers (HS 8471): Import restricted from November 2023, requiring DGFT licence (Import Management System) — subsequently modified to allow import under a monitoring mechanism
• Gold imports: Restricted category; only nominated banks and agencies approved by RBI/DGFT can import gold
• Drones and drone components: Subject to Ministry of Civil Aviation approvals in addition to DGFT import policy
• Telecom equipment: Mandatory MTCTE (Mandatory Testing and Certification of Telecom Equipment) approval required from DoT before import
• Electronic goods: Expanded BIS mandatory certification list for consumer electronics, IT equipment, and electrical goods

SCOMET is India's export control regime for dual-use goods and technologies — items that have both civilian and potential military/strategic applications. The SCOMET list is maintained by DGFT and is India's implementation of international export control obligations under the Wassenaar Arrangement, Australia Group, and Missile Technology Control Regime (MTCR).

Who Needs a SCOMET Licence?

Any exporter dealing with items listed in the SCOMET schedule must obtain a licence from DGFT prior to export. SCOMET categories include:

• Category 0: Nuclear materials, facilities, and equipment
• Category 1: Toxic chemical agents and precursors
• Category 2: Micro-organisms and toxins
• Category 3: Materials, materials processing equipment
• Category 4: Electronics including high-performance computers
• Category 5: Telecommunications and information security equipment
• Category 6: Sensors and lasers
• Category 7: Navigation and avionics
• Category 8: Marine equipment and propulsion
• Category 9: Aerospace and propulsion

India has significantly accelerated its FTA programme in recent years. Active FTAs offer preferential duty rates for both imports into India and Indian exports — making Certificate of Origin (CoO) management a critical compliance area.

Rules of Origin (RoO) — Critical Compliance Area

To claim preferential duty under an FTA, goods must satisfy the Rules of Origin — meaning they must be "substantially manufactured" in the exporting country. CAROTAR 2020 (Customs (Administration of Rules of Origin under Trade Agreements) Rules) places the burden of proof on the importer to verify and maintain records supporting the CoO claim. Customs officers can now call for detailed manufacturing and cost records from importers.

The Authorised Economic Operator (AEO) programme is India's implementation of the WCO SAFE Framework of Standards. It offers significant operational advantages to importers, exporters, and logistics providers who qualify as trusted traders.

AEO Benefits at a Glance

• AEO-T1 (Importers/Exporters): Faster clearance, reduced examination frequency, deferred duty payment facility
• AEO-T2: All T1 benefits plus priority examination, direct port delivery (DPD) for imports
• AEO-T3: Highest tier — 24/7 customs clearance, minimal examination, priority in all customs processes
• AEO-LO (Logistics Operators): For CHAs, freight forwarders, and warehouses
• Mutual Recognition Agreements (MRAs): India has MRAs with South Korea, Hong Kong, Taiwan, and the USA — AEO status recognised reciprocally for faster clearance in partner countries

India's customs and trade enforcement has strengthened considerably. The Directorate of Revenue Intelligence (DRI), Customs Preventive Commissionerate, and DGFT enforcement wings are active — and penalties have been made more stringent through successive Finance Acts.

Use this checklist to assess your current compliance status:

For Importers

• IEC is active, updated on DGFT portal, and linked to current GSTIN
• All import goods are correctly classified under HSN with current duty rates verified
• BIS certifications are in place for all mandated product categories
• Certificates of Origin for FTA claims are verified and records maintained as per CAROTAR 2020
• Customs valuation documentation (especially for related-party transactions) is in order
• All import licences (for Restricted items) are valid and within validity period
• AEO status is assessed — apply if eligible for operational benefits
• RMS score is monitored — non-compliance history affects Green/Yellow/Red channel assignment

For Exporters

• IEC is active and revalidated annually
• RoDTEP registration and scrip generation is set up on ICEGATE
• SCOMET list has been reviewed — goods are confirmed as non-SCOMET or licence obtained
• Export Obligations under Advance Authorisation / EPCG are tracked and within validity
• Shipping Bills are filed with correct declarations; Let Export Orders (LEO) are maintained
• EDPMS entries on RBI portal are closed within 9 months of export (forex realisation)
• GST refund on exports is correctly claimed — LUT is filed where applicable
• EPR obligations fulfilled for exports of plastic-packaged goods

At Vistar Worldwide, we are not just a Custom House Agent — we are your end-to-end trade compliance partner. Our team of licensed CHAs and trade law specialists works with importers and exporters across industries to navigate India's complex regulatory environment.

• Pre-import & pre-export compliance audit — HSN classification, duty optimisation, licensing checks
• Bill of Entry and Shipping Bill filing at JNPT, Mumbai Port, and air cargo stations
• DGFT authorisations — Advance Authorisation, EPCG, SCOMET licensing, IEC amendments
• FTA benefit advisory — Rules of Origin verification, CoO management, CAROTAR compliance
• Export scheme optimisation — RoDTEP, Duty Drawback, RoSCTL, Deemed Exports
• Customs dispute representation — responding to SCNs, assessment disputes, and DRI inquiries
• AEO application assistance — documentation, systems compliance, and application management
• End-to-end freight forwarding — sea freight, air freight, and inland transportation across India