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Legal Aspects
Legal Aspects
Key Regulations:
Exports and Imports
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Imports and exports are the two important components of a foreign trade. Foreign trade is the exchange of goods and services between the two countries, across their international borders.'Imports' imply the physical movement of goods into a country from another country in a legal manner. It refers to the goods that are produced abroad by foreign producers and are used in the domestic economy to cater to the needs of the domestic consumers. Similarly, 'exports' imply the physical movement of goods out of a country in a legal manner. It refers to the goods that are produced domestically in a country and are used to cater to the needs of the consumers in foreign countries. Thus, the imports and exports have made the world a local market. The country which is purchasing the goods is known as the importing country and the country which is selling the goods is known as the exporting country. The traders involved in such transactions are importers and exporters respectively.

In India, exports and imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992, which replaced the Imports and Exports(Control) Act, 1947, and gave the Government of India enormous powers to control it. The salient features of the Act are as follows:-

  • It has empowered the Central Government to make provisions for development and regulation of foreign trade by facilitating imports into, and augmenting exports from India and for all matters connected therewith or incidental thereto.


  • The Central Government can prohibit, restrict and regulate exports and imports, in all or specified cases as well as subject them to exemptions.


  • It authorizes the Central Government to formulate and announce an Export and Import (EXIM) Policy and also amend the same from time to time, by notification in the Official Gazette.


  • It provides for the appointment of a Director General of Foreign Trade by the Central Government for the purpose of the Act. He shall advise Central Government in formulating export and import policy and implementing the policy.


  • Under the Act, every importer and exporter must obtain a 'Importer Exporter Code Number' (IEC) from Director General of Foreign Trade or from the officer so authorised.


  • The Director General or any other officer so authorised can suspend or cancel a licence issued for export or import of goods in accordance with the Act. But he does it after giving the licence holder a reasonable opportunity of being heard.


  • As per the provisions of the Act , the Government of India formulates and announces an Export and Import policy (EXIM policy) and amends it from time to time. EXIM policy refers to the policy measures adopted by a country with reference to its exports and imports. Such a policy become particularly important in a country like India, where the import and export of items plays a crucial role not just in balancing budgetary targets, but also in the over all economic development of the country. The principal objectives of the policy are:-

    • To facilitate sustained growth in exports of the country so as to achieve larger percentage share in the global merchandise trade.


    • To provide domestic consumers with good quality goods and services at internationally competitive prices as well as creating a level playing field for the domestic producers.


    • To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods required for augmenting production and providing services.


    • To enhance the technological strength and efficiency of Indian agriculture, industry and services, thereby improving their competitiveness to meet the requirements of the global markets.


    • To generate new employment opportunities and to encourage the attainment of internationally accepted standards of quality.

Besides this Act, there are some other laws which control the export and import of goods. These include:-

At the central level, the Ministry of Commerce and Industry is the most important organ concerned with the promotion and regulation of the foreign trade in India. The Ministry has an elaborate organizational set up to look after the various aspects of trade. Within the Ministry,the Department of Commerce is responsible for formulating and implementing the foreign trade policy. The Department is also entrusted with responsibilities relating to multilateral and bilateral commercial relations, state trading, export promotion measures and development and regulation of certain export oriented industries and commodities.The matters relating to foreign trade are dealt with by the following divisions of the Department :-

1. Administrative and General Division
2. Finance Division
3. Economic Division
4. Trade Policy Division
5. Foreign Trade Territorial Division
6. Export Products Division
7. Export Industries Division
8. Export Services Division
9. Supply Division

The Department's jurisdiction extends over:-

(a) Two Attached Offices:-

  • Directorate General of Foreign Trade (DGFT):- with its headquarters at New Delhi, is headed by the Director General of Foreign Trade. It is responsible for implementing the Foreign Trade Policy/Exim Policy with the main objective of promoting Indian exports. The DGFT also issues licences to exporters and monitors their corresponding obligations through a network of regional offices. The regional offices are located at 33 places.


  • Directorate General of Supplies and Disposal (DGS&D):- with its headquarters at New Delhi, is headed by the Director General. It functions as the executive arm of the Supply Division of the Department of Commerce for conclusion of Rate Contracts for common user items, procurement of stores, inspection of stores, shipment and clearance of imported stores/cargo. It has three Regional Offices located at Chennai, Mumbai and Kolkata.

(b) Five Subordinate Offices:-

  • Directorate General of Commercial Intelligence and Statistics (DGCI&S):- with its office located at Kolkata, is headed by the Director General. It is entrusted with the work of collecting, compiling and publishing/ disseminating trade statistics and various types of commercial information required by the policy makers, researchers, importers, exporters, traders as well as overseas buyers.


  • Office of Development Commissioner of Special Economic Zones:- The Special Economic Zones (SEZs) are geographically exclusive enclaves separated from domestic tariff areas. The main objective of SEZs is to provide certain common facilities and a duty free environment for exporters. Each Zone is headed by a Development Commissioner and is administered as per the SEZ scheme announced on 31st March, 2000.


  • Office of the Custodian of Enemy Property (CEP):- is located in Mumbai with a Branch office at Kolkata. The office is functioning under the Enemy Property Act,1968. All immovable (like land, buildings, etc.) and movable properties (like securities, shares, debentures, bank balances, viz. fixed deposits and other amounts lying in the enemy nationals' bank accounts, Provident fund balances etc.) all over India belonging to or held by or managed on behalf of Pakistani nationals between the period 10.9.1965 and 26.9.1977 are vested in the Custodian of Enemy Property for India.


  • Pay and Accounts Office (Supply):- The payment and accounting functions of Supply Division, including those of DGS&D, are performed by the Chief Controller of Accounts (CCA) under the Departmentalized Accounting System. Payment to suppliers across the country is made through this organisation.


  • Pay and Accounts Office (Commerce & Textiles):- The Pay and Accounts Office, common to both the Department of Commerce and the Ministry of Textiles, is responsible for the payment of claims, accounting of transactions and other related matters through the four Departmental Pay & Accounts Offices in Delhi, two in Mumbai, two in Kolkata and one in Chennai.

(c) Ten Autonomous Bodies:-

  • Coffee Board :- The Coffee Board of India is an autonomous body, functioning under the Ministry of Commerce and Industry, Government of India. The Board serves as a guide of the coffee industry in India. The Board focuses on research, development, extension, quality upgradation, market information, and the domestic and external promotion of Indian coffee.


  • Rubber Board :- The board is engaged in the development of the rubber industry. This is done by assisting and encouraging scientific ,technical and economic research; supplying technical advice to rubber growers; and training growers in improved methods of plantation and cultivation.


  • Tea Board :- The primary functions of tea board include rendering financial and technical assistance for cultivation,manufacture,marketing of tea; promoting tea exports ;aiding research and developmental activities for augmentation of tea production and improvement of tea quality as well as encouraging and assisting small growers sector financially and technically.


  • Tobacco Board:- The Government of India established the Tobacco Board, in place of Tobacco Export Promotion Council, under the Tobacco Board Act of 1975 to regulate production, promotion of overseas marketing and to control recurring instances of imbalances in supply and demand, which lead to market problems,The Tobacco Board Act aims at the planned development of Tobacco Industry in the country. The activities of the Board includes the regulation of the production and curing of Virginia Tobacco with regard to the demand in India and abroad.


  • Spices Board :- Spices Board was constituted on 26th February 1986 under the Spices Board Act 1986. It is one of the Commodity Boards functioning under the Ministry of Commerce & Industry. It is an autonomous body responsible for the export promotion of the scheduled spices and production or development of some of them such as Cardamom and Vanilla.


  • Export Inspection Council (EIC), New Delhi :- The Export Inspection Council is responsible for the enforcement of quality control and compulsory preshipment inspection of various commodities meant for export and notified under the Export (Quality Control & Inspection) Act, 1963.


  • Indian Institute of Foreign Trade (IIFT), NewDelhi :- is engaged in the following activities:-

    • Training of Personnel in modern techniques of international trade;


    • Organisation of Research in problems of foreign trade;


    • Organisation of marketing research, area surveys, commodity surveys, market surveys;


    • Dissemination of information arising from its activities relating to research and market studies.



  • Indian Institute of Packaging (IIP), Mumbai :- is registered under the Societies Registration Act.The main aim of this Institute is to undertake research of raw materials for the packaging industry, to organise training programmes on packaging technology and to stimulate consciousness of the need for good packaging etc.


  • Marine Products Exports Development Authority (MPEDA), Kochi :- functions under the Ministry of Commerce, Government of India and acts as a coordinating agency with different Central and State Government establishments engaged in fishery production and allied activities. The Authority is responsible for development of the marine products industry with special focus on marine exports. The role envisaged for the MPEDA is comprehensive covering fisheries of all kinds, increasing exports, specifying standards, processing, marketing, extension and training in various aspects of the marine industry.


  • Agricultural and Processed Food Products Export Development Authority (APEDA), New Delhi :- came into existence in 1986 to further develop agricultural commodities and processed foods, and to promote their exports.The aim is to maximize foreign exchange earnings through increased agro exports, to provide better income to the farmers through higher unit value realization and to create employment opportunities in rural areas by encouraging value added exports of farm produce.

(d) Export Promotion Councils (EPCs):-

Presently there are twelve EPCs under the administrative control of the Ministry of Commerce.These councils are registered as non-profit organisations under the Companies Act.The Councils perform both the advisory and executive functions.These councils are also the registering authorities under the Import Policy for Registered Exporters.

(e) Other Organisations:-

(f) Advisory Bodies

  • Board of Trade (BOT):- was set up on May 5, 1989 with a view to providing an effective mechanism to maintain continuous dialogue with trade and industry in respect of major developments in the field of International Trade.


  • Export Promotion Board (EPB):- provide policy and infrastructural support through greater coordination amongst concerned Ministries for boosting the growth of exports.


  • Directorate General of Anti-Dumping & Allied Duties (DGAD):- The Directorate is responsible for carrying out investigations and to recommend, where required, under Customs Tariff Act, the amount of anti-dumping duty/countervailing duty on the identified articles which would be adequate to remove injury to the domestic industry.

(g) Public Sector Undertakings:-

The following trading/service corporations are functioning under the administrative control of the Department of Commerce:-

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Foreign Trade (Regulation) Rules, 1993
Directorate General of Foreign Trade (DGFT)
Export Import Data Bank
The Ministry of Commerce and Industry
Central Board of Excise and Customs
 
 
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