The Indian Trade Clarification (ITC), which is based on the Harmonised System (HS) of coding, classifies goods in India for the purpose of import and export. The eight-digit code used by Indian customs is also based on ITC-HS. For the export of any goods classified as 'restricted goods' in this ITC-HS list, an Export Licence is required.
The Foreign Trade Policy (FTP) considers all goods as freely exportable except those that are restricted or prohibited. In the case of prohibited goods, an Export Licence is not given, while restricted goods can be exported by businesses granted an Export Licence. Some items that typically need an Export Licence are live birds and animals, endangered species of plants and animals, sandalwood, sand and soil, silkworm and silk cocoons, etc.
Schedule II of the ITC-HS code provides the rules and regulations related to export policies. The 97 chapters of the Export Policy Schedule II of the ITC-HS code provide detailed guidelines related to the export of various products. The Directorate General of Foreign Trade (DGFT) is the governing body that brings about amendments to these guidelines.
These chapters indicate the Export Policy classification of the products under each of them. For example, chapter 50 of the ITC-HS under Schedule II of the Export Policy is ‘Silk’. It includes items fitting the description – pure races of silkworms, silkworm seeds, and silkworm cocoons. The Export Policy for silk is ‘restricted’ and thus export of silk from India is permitted only under an Export Licence.
The DGFT has defined the process of application and documentation for an Export Licence. Any exporter looking to export a restricted item must follow this procedure while applying to the DGFT to be granted export authorization of restricted items.
The online application process can be made on the DGFT website. On the homepage, the applicant will have to go the ‘Services’ section, where under the ‘Online ECOM Application’ section, they will have to select ‘Restricted Item Import License/Restricted Export Item’.
The application has to be filed online, and a copy of the application has to be mailed to email@example.com (in PDF format). Along with this, the following must also be attached in the mail:
All these documents must be duly stamped and signed by the exporter/authorized signatory.
Once the DGFT receives the application, the standard procedure followed at their end is as follows:
The administrative ministries and departments can ask for specific documents while processing the application and before giving their NOC/comment/recommendation. These documents vary from item to item and have to be submitted along with the application.
The Export Licence or permission/certificate/authorization, as it may also be called, is generally valid for a specific period defined by the RA. The licence may also be subject to terms and conditions such as the quantity and description of the items, value addition, minimum export/import price, and export obligation. The export will, therefore, be carried out in accordance with the provisions of the Export Licence issued against it or any DGFT public notice relevant to it.