The Foreign Trade (Development and Regulation) Act, 1992

What it does

The Foreign Trade (Development and Regulation) Act, 1992 is the source of India's import and export regulation. It gives the Central Government power to make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. In practice that means three things. The Government may prohibit, restrict or otherwise regulate imports and exports by order. It announces a Foreign Trade Policy, which sets out the framework within which trade is carried on. And it requires a person who imports or exports to hold an Importer-Exporter Code and, where the policy so requires, a licence or authorisation.

The Act is an enabling statute. The detail lives in the Foreign Trade Policy, the Handbook of Procedures and notifications of the Directorate General of Foreign Trade, issued under the Act. A rule that a trader meets in practice, such as an export control on a listed item, is therefore a piece of subordinate legislation whose authority comes from this Act.

Who it binds

It binds importers and exporters of goods, services and technology, and the authorisation holders and exporters of controlled items, including those who ship items, send them for repair, or re-export them. It binds the Directorate General of Foreign Trade as licensing authority, and it reaches persons who contravene its provisions or the orders made under it, or who obtain a code or an authorisation by wrong statements.

What has changed, and when

• The Act was passed in 1992, in the years of India's economic liberalisation.
• It has been amended since. The text as currently in force should be read, as older commentary may refer to the Act as it stood.
• The Foreign Trade Policy 2023 and its Handbook of Procedures are the current instruments made under the Act. The site's note on the SCOMET list shows the Directorate General of Foreign Trade amending the list in Notification No. 31/2025-26 of 23 September 2025 under section 3, read with sections 5 and 14A, of this Act.

What turns on it in practice

The recurring issue is authority. A trade control that is not tied to the Act, or that goes beyond what the Act permits, can be challenged, and a trader facing an order should ask which provision supports it. A well-formed control, such as an authorisation requirement for a dual use item, will cite the sections it rests on.

The second issue is breach. Dealing in controlled goods without the required authorisation, or shipping against a code that has been suspended, can lead to penalty and to suspension or cancellation of the Importer-Exporter Code, and the goods may be liable to confiscation under the customs law. A business should treat an export control as a gate that is passed before shipment and not as a matter to be put right afterwards.

The third is that the Act works alongside other laws. For dual use goods the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 also applies, and customs and foreign exchange rules apply to the same transaction. The site's trade controls note explains one case: India's export control list now names chip manufacturing tools, and shipping or re-exporting them needs a licence. The licence requirement is in the list and the policy. The legal power to impose it comes from this Act.