India is one of the founding members of the World Trade Organization (WTO) and the erstwhile General Agreement on Tariffs and Trade (GATT 1947). India is a party to the WTO Information Technology Agreement (ITA), observer to the WTO Agreement on Government Procurement (GPA) and has ratified the WTO Trade Facilitation Agreement (TFA).

India has signed 13 Free Trade Agreements (FTAs), namely:

• India–Sri Lanka Free Trade Agreement (India–Sri Lanka FTA);
• Agreement on South Asian Free Trade Area (SAFTA);
• India–Nepal Treaty of Trade;
• India–Bhutan Agreement on Trade, Commerce and Transit;
• India–Thailand FTA – Early Harvest Scheme (EHS);
• India–Singapore Comprehensive Economic Co-operation Agreement (CECA);
• India–ASEAN CECA – Trade in Goods, Services and Investment Agreement;
• India–South Korea Comprehensive Economic Partnership Agreement (CEPA);
• India–Japan CEPA;
• India–Malaysia CECA;
• India–Mauritius Comprehensive Economic Co-operation and Partnership Agreement (CECPA);
• India–UAE CEPA; and
• India–Australia Economic Co-operation and Trade Agreement (ECTA).

All FTAs signed by India are in force, including the India–Australia CETA which came into force on 29 December 2022.

India has signed six Preferential Trade Agreements (PTAs) including the Asia-Pacific Trade Agreement (APTA), the Global System of Trade Preferences (GSTP), the SAARC Preferential Trading Agreement (SAPTA), the India–Afghanistan PTA, India–MERCOSUR PTA, and India–Chile PTA. All six PTAs are implemented and currently in force.

India is a member of the Bay of Bengal Initiative on Multi-Sectoral Technical and Economic Co-operation (BIMSTEC), a multilateral organisation for co-operation in 14 priority sectors, namely:

• trade and investment;
• climate change;
• transport and communication;
• energy;
• technology;
• tourism;
• fisheries;
• poverty alleviation;
• agriculture;
• cultural co-operation;
• counter-terrorism and transnational crimes;
• environment and disaster management;
• public health; and
• people-to-people contact.

Currently, India and the European Free Trade Association states (comprising Switzerland, Norway, Iceland, and Liechtenstein) are negotiating a Trade and Economic Partnership Agreement (TEPA). The members held the 20th round of the negotiations in August 2023 and the negotiations are at an advanced stage. In 2022, India and the EU resumed negotiation of a free-trade agreement which has been stalled since 2013. India and the South African Customs Union (SACU) are also exploring a free-trade agreement.

India and the UK recently concluded the 13th round of negotiations and the FTA is expected to be concluded soon.

Negotiations on the India–Canada FTA are currently on pause due to differences arising from political factors which might stall these negotiations. Further, with increasing bilateral trade between India and Israel, these two countries are exploring trade agreements to strengthen bilateral relations.

After its withdrawal from RCEP, India expedited negotiations with its trading partners. In the recent past, India concluded trade agreements with the UAE (India–UAE CEPA) and Australia (India–Australia ECTA). The negotiations for the India–UAE CEPA were concluded within a record time of 88 days.

India has recently initiated the process of re-negotiating FTAs with South Korea (India–South Korea CEPA) and Japan (India–Japan CEPA). To date, ten rounds of discussions between India and South Korea have been completed. The re-negotiation of a trade agreement between India and Japan is at an advanced stage.

The legal and administrative authorities governing Indian customs matters are codified in the Customs Act 1962, the Customs Tariff Act 1975, and the Foreign Trade (Development and Regulation) Act 1992 (“FT D&R Act”). These legal instruments implement the overarching multilateral, plurilateral, and bilateral agreements, such as the General Agreement on Tariffs and Trade (GATT) under the WTO framework, the Customs Valuation Agreement under the World Customs Organisation (WCO), and trade agreements with other countries.

The Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance (MoF) is responsible for formulating policies concerning the levying and collection of customs duty, prevention of smuggling and evasion of duty, customs valuation, and all administrative matters regarding the customs law in India. The functioning of customs is supported by various government agencies such as the Directorate General of Foreign Trade (DGFT) responsible for administering the foreign trade policy, the Directorate General of Trade Remedies (DGTR) for undertaking trade remedial investigation, and the Bureau of Indian Standards (BIS) acting as the National Standard Body for standardisation, marking and quality certification of goods.

The Customs Tariff Act 1975 and FT D&R Act 1992 are two primary legal instruments introduced by India to address any negative impact of trade practice in other jurisdictions. Under the domestic legal framework, Indian authorities may impose quantitative restrictions, minimum import price (MIP) anti-dumping (AD), countervailing (CVD) and safeguard (SG) measures. There is an effective mechanism in place that provides ample opportunity for non-domestic companies to participate in the AD/CVD/SG investigation process.

The review process for trade remedial measures in India is not automatic. The domestic companies normally file an application for review and the opposing non-domestic companies are provided sufficient opportunity to participate in the review process. Post-completion of the original investigation or review, the findings are published in an official gazette and made available to all parties.

In addition to the trade remedial measures, India regulates the import of goods listed under a Negative List which covers three categories of imports, namely prohibited items, restricted items, and canalised items. Prior permission in the form of a licence is required from DGFT by the respective importers. India has also introduced a mandatory certification for a variety of products which is administered by the BIS and Food Safety and Standards Authority of India (FSSAI).

India has recently introduced a new trade policy titled the Foreign Trade Policy of India (FTP) 2023 which is administered by the Directorate General of Foreign Trade (DGFT). The FTP 2023 introduced by India reflects a pragmatic shift from an incentive-based trade policy to a facilitation-based trade policy. India has also done away with a limited-period (five-year) policy and shifted to a policy with no pre-defined timeline of expiry.

The Indian government has also sought to introduce the Development of Enterprises and Services Hub Bill 2022 (DESH Bill), replacing the Special Economic Zone (SEZ) Act 2005. The SEZ Act 2005 was introduced for the establishment, development, and management of Special Economic Zones to promote exports and create additional economic activity. The bill is currently under consultation process by the Ministry of Commerce and Industry.

India has recently announced import conditions on a host of information technology (IT) hardware products including laptops, tablets, all-in-one personal computers, and ultra-small form factor computers and servers falling under HSN 8741. Import of certain IT hardware is now only permitted against a valid licence for restricted imports. This change is notified to have become effective from 1 November 2023.

After the release of the notification, several countries, including the US, South Korea, and China PR raised concerns about the import restriction imposed by India before the WTO’s Committee on Market Access. Taking note of the developments, India is exploring a resolution with its trade partners on these import conditions.

The legal framework to impose sanctions in India can be broadly classified under two categories, viz, trade sanctions and sanctions against individuals and organisations. Trade sanctions are primarily administered by the DGFT and sanctions against individuals/organisations are administered by the Ministry of Home Affairs (MHA). DGFT as well as MHA are assisted by other administrative authorities for an efficient implementation of the sanction regime.

India has also incorporated sanctions imposed by the United Nations Security Council (UNSC) on the protection of human rights, the promotion of peaceful transactions, and the promotion of non-proliferation, amongst others.

Trade sanctions introduced by India are governed by the Foreign Trade (Development and Regulation) Act (“FT D&R Act”) 1992, and are implemented through Chapter 2 of the Foreign Trade Policy (FTP) 2023. The trade sanctions implemented by India recognise India’s obligation under the Wassenaar Agreement restricting trade in arms, munition, and dual-use products for civil and military application and the United Nations Security Council resolutions.

To fulfil the commitments under the United Nations framework, India has introduced an array of domestic legislation, such as:

• the United Nations (Security Council) Act 1947;
• the Chemical Weapons Convention Act 2000; and
• the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act 2005, along with the Weapons of Mass Destruction and their Delivery Systems, Appointment of Advisory Committees and their Powers and Duties Rules 2006, and the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Implementation Rules 2016.

For effective implementation of sanctions, India has also introduced the Unlawful Activities (Prevention) Act 1967 (also known as UAPA or anti-terrorist law), the Foreign Exchange Management Act 1999 (FEMA), and the Prevention of Money-Laundering Act 2002 (PMLA).

There are multiple agencies and government institutions responsible for administering the sanctions regime. In India, sanctions are primarily enforced by the DGFT under the Ministry of Commerce and Industry, MHA, MoF, Ministry of External Affairs, National Authority Chemical Weapons Convention, Ministry of Defence (MoD), Reserve Bank of India (RBI) and other government functionaries.

The jurisdiction of the FT D&R Act 1992 is extendable to any person who contravenes or attempts to contravene or abet any provision under the Act. The jurisdiction of sanctions imposed under UAPA is applicable to:

• every person who is held guilty in India;
• any person who commits an offence beyond India in the same manner as if such act had been committed in India;
• citizens of India outside India;
• persons in the service of the government, wherever they may be; and
• persons on ships and aircrafts, registered in India, wherever they may be.

India maintains a list of sanctioned persons (which includes terrorist individuals as well as terrorist organisations). This list is prepared and maintained by the Home Ministry/MHA. A list of sanctioned individuals and organisations is available here.

There is no stipulated framework for adding persons or organisations to the list of sanctioned persons. The government is empowered to designate any person or organisation as a terrorist or terrorist organisation if it believes that the person or organisation committed or participated in acts of terrorism. A person who is notified under the list of sanctioned persons has the option to request a review and de-notify the organisation or persons as sanctioned persons.

India has incorporated the sanctions imposed by the UNSC on the Democratic People’s Republic of Korea (DPRK), Iran, Somalia, and certain terrorist organisations. Trade sanctions on the import and export of arms and related materials in Chapter 93 of ITC(HS) from/to Iraq are also “Prohibited”, except for the export of arms and related material to the government of Iraq which is permitted subject to “No Objection Certificate” from the Department of Defence Production.

In 2019, India withdrew the Most Favoured Nation (MFN) status accorded to the Islamic Republic of Pakistan on account of the border conflict between the countries. Earlier, India had also banned several Chinese mobile applications on account of national security issues. India is also undertaking a strict scrutiny of the investment from the People’s Republic of China in India due to border tensions.

India has not introduced any secondary sanctions.

Under the Unlawful Activities (Prevention) Act 1967 which governs terrorism related sanctions, any guilty person may be punished up to imprisonment for life or the death penalty and a fine in addition to forfeiture of proceeds and property. Any violations of the FT D&R Act attracts suspension of the Importer–Exporter Code Number, and a penalty of not less than INR10,000, and not more than five times the value of the goods, services, or technology, whichever is more.

Specific licences to regulate the import and export of certain goods and services falling under the “Restricted” category are granted by the DGFT in terms of the FT D&R Act 1992. India does not allow the issuance of licences allowing other prohibited activities.

The Directorate of Revenue Intelligence (DRI) is the organisation under the Customs Act 1962 responsible for enforcement of the Customs Act 1962 and various other statutes including the Arms Act, and Wildlife Act. DRI undertakes collation and dissemination of the information to unearth smuggling, mis-declaration, trade-based money-laundering and smuggling of precious metals, narcotics, and foreign currency. DRI also supports compliance with various multilateral agreements such as the Basel Convention on the Control of Transboundary movements of Hazardous Wastes and their Disposal, and the Convention on the Prohibition of the Development, Production, Stockpiling, and Use of Chemical Weapons and their Destruction.

The MHA is the nodal ministry for regulating the UAPA. The National Investigation Agency (NIA) under the MHA is the specialised counter-terrorism law enforcement agency in India. India follows a principle of strict liability for violation of UAPA.

To prevent money laundering and illegal activities, India has introduced the Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules 2005. These Rules mandate that financial institutions submit the Suspicious Transaction Report (STR) within seven days of such transaction and cash transaction report (CTR) each month to the Financial Intelligence Unit. The RBI has also issued the Master Direction – Know Your Customer (KYC) Direction 2016 which makes the KYC process mandatory for verifying the identity of new customers, and to prevent illegal activities, such as money laundering.

Apart from RBI, the Financial Intelligence Unit – India (FIU) under the MoF is the central, national agency responsible for receiving, processing, analysing, and disseminating information relating to suspect financial transactions to enforcement agencies and foreign FIUs.

India does not have any blocking statute prohibiting adherence to the sanctions by other jurisdictions.

The global economy is currently facing challenges arising from the Ukraine and Russia conflict which has resulted in various countries and regions such as the US, Canada and the EU imposing sanctions against Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT). The goal of these sanctions is to halt the cross-border payment to Russia in US dollar denomination, and to weaken the Russian economy. Consequently, trade of coal, diamonds and petroleum products from Russia has been impacted severely.

India has been a long-standing partner with Russia (especially for defence and oil supplies) and has abstained from any votes on Russian sanctions. There are several Indian state-owned enterprises such as Oil and Natural Gas Corporation (ONGC), Oil India Ltd, and Indian Oil Corporation Ltd (IOCL) that have investments in Russia, primarily in the oil and gas sector. India is also a net energy importer and dependent on Russia and other oil-producing countries to meet its domestic needs. Since the sanctions imposed on Russia resulted in a surge in crude oil prices, India has increased its imports from Russia which were available at a reduced price.

As the payment of sales proceeds to Russia is banned under the SWIFT mechanism, India has resorted to bilateral trade in Indian currency. To facilitate these payments, the Reserve Bank of India has allowed banks in Russia to open “vostro” accounts in India to help facilitate trade in rupees.

However, due to limited exports from India to Russia, the payment by Indian imports in vostro accounts has remained unutilised leading to forex settlement problems. Both countries are now exploring suitable alternatives.

There are no anticipated changes in the sanction regulations in India.

India regulates the export of goods, software, and technology, including munitions, specified in the list of special chemicals, organisms, materials, equipment, and technologies (SCOMET list) under Chapter 10 of the FTP 2023. SCOMET recognises the implementation of various international conventions such as the Missile Technology Control Regime (MTCR), Wassenaar Arrangement (WA), and Australia Group (AG); and harmonised its commitments under the Nuclear Supplier’s group (NSG). Export of Non-SCOMET dual-use products are also regulated in India.

FT D&R Act 1992, Foreign Trade Policy 2023 (FTP 2023), and Handbook of Procedures (HBP) provide the framework for export control. Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act 2005, and the Customs Act 1962 also come under the implementation and enforcement of Export Controls.

The administrative agency involved in the administration of export control in India is the DGFT under the Ministry of Commerce and Industry. The CBIC, a part of the MoF and the Department of Defence Production under the Ministry of Defence aids in the administration of the export control regime in India.

Persons exporting or importing goods, software, and technology mentioned under the SCOMET list and dual-use goods are subject to export controls.

The FTP provides a list of the restricted countries and/or restricted organisations, which is updated as per the resolutions passed by the UNSC. An illustrative list of the countries or persons under the restricted categories are as follows.

• Iran – there is a ban on the export and import of arms and related products from Iran, except with the government of Iran which requires prior permission from the Department of Defence Production. The export of any product, equipment, or technology to Iran is subjected to the UN Security Council Regulations.
• Individuals/organisations – trade in oil and refined oil products, modular refineries, and related materials, besides items of cultural (including antiquities), scientific and religious importance, is prohibited with the Islamic State in Iraq and the Levant (ISIL), Al Nusrah Front (ANF) and other individuals, groups, undertakings, and entities associated, directly or indirectly, with Al Qaida.
• Democratic Republic of Korea – direct or indirect supply, sale, transfer or export of the following items to the Democratic People’s Republic of Korea (DPRK) is prohibited:
1. any battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the United Nations Register on Conventional Arms, or related material including spare parts;
2. all arms and related material, including small arms and light weapons and their related material; and
3. all items, materials, equipment, goods, and technology as set out in the UNSC and International Atomic Energy.
• Somalia – direct or indirect import of charcoal is prohibited from Somalia as per UNSC Resolution 2036 (2012).

India maintains the SCOMET list which regulates trade in sensitive and dual-use items. The SCOMET list is contained in Appendix 3 to Schedule 2 of the ITC (HS). The SCOMET items are classified under nine distinct categories.

• Category 0 – nuclear materials, other nuclear-related materials, equipment and technology.
• Category 1 – toxic chemical agents and other chemicals.
• Category 2 – micro-organisms, and toxins.
• Category 3 – materials, materials processing equipment and related technologies.
• Category 4 – other nuclear-related equipment and technology, not controlled under Category 0.
• Category 5 – aerospace systems, equipment including production and test equipment, related technology, and specially designed components and accessories thereof.
• Category 6 – munitions list.
• Category 7 – reserved.
• Category 8 – special materials and related equipment, material processing, electronics, computers, telecommunications, information security, sensors and lasers, navigation and avionics, marine, aerospace and propulsion.

The central government is empowered to monitor and amend the list of sensitive exports in terms of the FT D&R Act 1992, and FTP 2023.

India has implemented export control based on the nature of the product, item, and technology (ie, product restrictions) and jurisdiction/person-based export control (target restrictions). There is no other list of export controls introduced by India.

Export of specified goods or services or technology covered under the SCOMET list without adequate licence or authorisation attracts penalties, including:

• suspension or cancellation of the import and export licence;
• imprisonment for a minimum period of five years which may extend up to imprisonment for life and a fine; or
• a fine of a minimum of 3 lakhs (INR300,000) which may extend up to 20 lakhs (INR2 million) or five times the value of the exported items.

Chapter 2 of the Handbook of Procedures (HBP) encapsulates the procedure for the application process and granting of licences for the import or export of goods that are under the restricted category. The DGFT is the competent authority for the granting of such authorisation. For the examination of application and approval, the DGFT is assisted by the Exim Facilitation Committee (EFC). The EFC presided by the EFC Chairman evaluates the merit of each licence application.

The jurisdictional agency for the issuance of export licences of SCOMET items are issued by DGFT, the Department of Defence Production (DDP), and the Department of Atomic Energy (DAE). The approval of the licence of SCOMET items under Categories 1,2,3,4,5,7,8 are issued by DGFT. For SCOMET items under Category 0, approval is granted by the DAE. To seek approval for munitions (Category 5), DDP under the Ministry of Defence is the jurisdictional authority for the granting of licences.

The validity of the SCOMET licence is two years, which can be further extendable by six months for a maximum of 12 months.

The persons engaged in the trade of SCOMET items are required to comply with the statutory provisions, and the violation thereof attracts strict liability. The DGFT encourages voluntary self-disclosure of any failure to comply with export control.

Licence for export of SCOMET items is granted under various sub-categories such as licence for repeated orders of SCOMET items, licence for stock and sale of SCOMET items, licence for export of spare parts for SCOMET items, and licence for repair of SCOMET items. Based on the sub-category of the licence, the holder of the licence is required to maintain and submit the relevant data such as statements of exports made from India to the stockist, transfers made by the stockist to the final end-users, and inventory with the stockist.

India and various other countries are witnessing a shortfall in the production of food grains due to the adverse impact of El-Niño and geopolitical tensions, resulting in higher inflation. To balance domestic requirements, India has placed export restrictions on a variety of food products including wheat and wheat products, rice, and sugar. These restrictions are likely to continue for a considerable period.

The DGFT has expressed the intention to enhance export control of dual-use items to avoid misuse by non-state actors. These steps are being taken to restrain global terrorism.

The trade remedial measures are governed by the following legal framework.

• Safeguard measures – Section 8B of Customs Tariff Act 1975 read with the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules 1997 (“Safeguard Rules”).
• Anti-dumping measures – Section 9A of the Customs Tariff Act 1975 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995 (“AD Rules”).
• Anti-subsidy measures – Section 9 of the Customs Tariff Act 1975 and the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty and for Determination of Injury) Rules 1995 (“CVD Rules”).

Measures in the form of quantitative restriction may also be imposed under the FT D&R Act 1992 read with the Safeguard Measures (Quantitative Restrictions) Rules 2012. In addition, bilateral safeguard measures may also be imposed on imports from several countries, for example, India–Korea and India–Malaysia CEPA allow the imposition of country-specific safeguard measures.

The trade remedial investigations are conducted by the Designated Authority, the Directorate General of Trade Remedies (DGTR) which recommends the Ministry of Finance (MoF) to levy duty. The MoF in its discretion may levy the duty or reject the recommendation of duty by the DGTR.

Rule 23 (1A) of the Anti-dumping (AD) Rules allows the Designated Authority to initiate an interim review of the existing duty either suo-moto or based on the petition filed by the domestic companies or any other interested parties. Similarly, Rule 23 (1B) allows the Authority to initiate the expiry review either suo-moto or based on the petition filed by the domestic companies.

Domestic companies may file a petition for review of duty on an ad hoc basis. The DGTR does not undertake a review regularly in the form and manner of administrative review conducted by the US Department of Commerce.

The framework for trade remedial investigations in India is very elaborate and provides the opportunity for non-domestic companies to participate in the review. The interested parties including the non-domestic companies are also provided an opportunity for an oral hearing before the Designated Authority.

Steps involved in anti-dumping, anti-subsidy, and safeguard investigation are largely common, including the following.

• 1. Public Notice issued by the Directorate General of Trade Remedies (DGTR) initiating the investigation/Initiation Notification.
• 2. Letter of Intent to participate in an investigation to be filed by an interested party within 15 days from the date of Initiation Notification.
• 3. Response/Submissions of interested parties to be filed within 30 days from the date of the Initiation Notification unless an extension is granted.
• 4. Preliminary Findings issued by DGTR and provisional duty, if any, is recommended to be imposed on the product under consideration (“PUC”).
• 5. Notification for imposition of provisional duty, if any, by the central government.
• 6. Oral/public hearing.
• 7. Post-hearing written submissions to be filed within the timeframe indicated by the Designated Authority.
• 8. Verification of data filed by the interested parties.
• 9. Issuance of Disclosure Statement by the DGTR inviting comments from the interested parties.
• 10. Final Findings issued by DGTR and duty, if any, is recommended to be imposed on the imports of PUC.
• 11. Notification for imposition of duty, if any, by the central government.

All steps from 1–11 are followed strictly in all anti-dumping and anti-subsidy investigations. In safeguard investigations, there is no obligation for issuance of the Disclosure Statement before rendering the final findings.

The safeguard duty investigation is normally concluded within eight months from the date of initiation. Anti-subsidy and anti-dumping investigations are completed within ten to 12 months.

The final determination of the DGTR is published in the official gazette. The notifications are also made available to all stakeholders on the DGTR official website.

Indian trade remedy law mandates non-imposition of trade remedial measures under the following scenarios.

• Anti-dumping measures – the anti-dumping investigation on imports from the target country shall not be initiated if the volume of imports from such country is found to account for less than 3% of imports of the like product unless countries that individually account for less than 3% collectively account for more than 7% of imports of the like product.
• Anti-subsidy measures – anti-subsidy or CVD measures are not applicable where the DGTR determines the volume of imports from the subject country is negligible or less than 4% of total imports in the case of developing countries. However, CVD measures shall apply if the import volumes of the said developing countries collectively exceed 9% of the total imports in India.
• Safeguard measures – the imports from developing countries do not attract the safeguard duty when the volume of imports from developing countries other than China PR do not exceed 3% individually and 9% collectively from such developing countries.

The legal framework provides that anti-dumping/anti-subsidy duty may be imposed so long as, and to the extent necessary, to counteract dumping/subsidy, which is causing injury. There is no limitation on the number of reviews or maximum duration for anti-dumping/anti-subsidy duty. For safeguard measures, the maximum duration of duty is ten years.

In addition to the definitive duty, provisional duty may be imposed for six months in anti-dumping/anti-subsidy investigation and for 200 days in case of safeguard investigation, after the issuance of the preliminary findings.

AD/CVD measures are normally applied for a period of a maximum of five years. Before the expiry of duty, the domestic producer may file an application before the DGTR seeking review and continuation of duty. In case the DGTR concludes that the expiry of the said anti-dumping/anti-subsidy duty is likely to lead to the continuation or recurrence of dumping/subsidy and injury to the domestic industry, the continuation of duty is recommended. This nature of review is referred to as expiry review or sunset review. For safeguard measures, the DGTR may undertake the review investigation based on positive evidence that the Indian industry is adjusting to unforeseen developments, and duty is necessary to prevent injury. In such case, the DGTR may recommend continuation of safeguard duty.

In addition to the expiry review, the DGTR undertakes a mid-term review (MTR) after the imposition of duty based on positive information filed by the interested parties (including non-domestic companies). If the DGTR in an MTR concludes that the injury to the domestic industry is not likely to continue or recur, the existing anti-dumping or anti-subsidy duty may be revoked or varied before the expiry of the five-year period.

The third form of review is a name change review wherein the DGTR examines whether the duty determined for a particular foreign producer is allowed to be continued after the name change of the company. Normally, the name of the participating producer is changed on account of a change in law, restructuring, merger, or acquisition.

The process of conducting the review is largely the same as followed in the original investigation, except for a name change review. The DGTR typically re-examines all aspects including re-determination of dumping/subsidy margin, evaluation of injury, and causal link.

An appeal against the determination of dumping or subsidy may be filed before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) within ninety days from the date of determination. The CESTAT normally adjudicates all appeals pertaining to a product collectively and allows all interested parties to make their submission before arriving at a decision. The CESTAT, after hearing the parties may either allow the appeal or dismiss the appeal or remand the final findings for re-determination by the DGTR. The decision of CESTAT may be impugned before the Supreme Court for final adjudication.

In terms of Section 130 of the Customs Act 1962, an appeal against the judgment of the CESTAT may be filed before the High Court when the appeal pertains to the rate of duty and the High Court is satisfied that the case involves a substantial question of law. A special leave petition (SLP) may be filed against the decision of the High Court before the Supreme Court.

Post-pandemic, there is a drastic change in the trend of trade remedial measures being imposed by the MoF. From September 2020 till the end of 2022, the DGTR has made 120 positive recommendations before the Ministry of Finance (MoF) for the imposition of anti-dumping duty. The MoF has merely accepted 70 recommendations and decided not to impose measures in the remaining 50 recommendations. This trend is different from the pre-pandemic period wherein the DGTR recommended duty in 1,052 final findings and the MoF merely rejected seven recommendations. This changed trend has created uncertainty amongst the Indian producers seeking relief in the form of trade remedial measures.

Up until 2023, any party aggrieved by the final findings issued by the DGTR had to wait until the issuance of the duty notification by the Ministry of Finance to file an appeal before the CESTAT. This was due to the decision of the Supreme Court in Saurashtra Chemicals Ltd v Union of India [2000 (118) ELT 305 (SC)] which held that unless the recommendations of the DGTR were accepted by the MoF and the duty was levied, there was no cause of action to file an appeal.

The government of India – vide the Finance Act 2023 – brought in a set of amendments (retrospectively w.e.f. 1 January 1995) to the Customs Tariff Act 1975 which allows an appeal to be filed against the final findings of the DGTR itself. After this amendment, a view has been adopted that the scope of a statutory appeal is now limited to impugning the final findings and not the Customs/Duty Notification.

Due to recent amendments, there is currently a challenge in the appeal process filed before the CESTAT. Under the Customs Tariff Act, a party has a period of 90 days to challenge the final findings. Even if an appeal is filed within the time period, the possibility of it getting decided within three months, ie, before the MoF issues a notification, is quite slim. Therefore, there is a possibility that the MoF may issue the duty notification during the pendency of the appeal which would make the entire exercise infructuous.

This issue of whether a duty notification can be challenged before the CESTAT is currently pending judicial review in various high courts. A matter connected to this issue is currently pending before the High Court of Delhi (Writ Petition 5185 of 2022).

India has had a liberal foreign investment policy since the year 1991 which introduced various reforms and attracted global institutions and corporations for investment in India.

Foreign investment in India is regulated by the Foreign Exchange Management Act 1999 (FEMA), Foreign Direct Investment Policy 2020 (FDI Policy), Bilateral Investment Promotion Agreements (BIPA), Foreign Exchange Management (Non-debt Instruments) Rules 2019, and other supplementary regulation, notification, press note, press release, circular, direction or order issued by the administering authorities.

Department for Promotion of Industry and Internal Trade (DPIIT), RBI, Department of Economic Affairs (DEA), and Ministry of External Affairs (MEA) are the leading government agencies responsible for the enforcement of investment security measures in India.

The FDI policy of India allows two entry routes for investment, namely the automatic route, and the government route. Under the automatic route, the investor is not required to seek prior approval from the government of India. Approval of the government of India is required for investment under the approval route. FDI policy has introduced criteria for scrutiny of investment based on the status of investors, sectoral restrictions, and equity restrictions. For example, (i) an entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated or is a citizen of any such country, can invest only under the government route; (ii) foreign investment in lottery and gambling is prohibited; and (iii) investment in multi-brand retail trading is permitted only via government route and limited up to 51% of the equity.

The reporting requirements for any investment in India by an Indian resident are specified under the Foreign Exchange Management (Non-Debt Instruments) Rules 2019. Regulation 4 of the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations 2019 issued by RBI – vide notification No FEMA 395/2019-RB provides the reporting requirement for any investment in India by a person resident outside India.

Foreign investors permitted to make investments under automatic route are exempted from seeking permission from the central government.

The breach of FDI policy attracts a penalty of up to thrice the sum involved in such contraventions where such amount is quantifiable or up to 2 lakh rupees (INR200,000) where the amount is not quantifiable.

In case of a continuing violation, an additional penalty of up to INR5,000 for every day may be imposed. In addition to the penalty, the adjudicating authority may impose confiscation of currency, security, or any other money or property in respect of such contravention. In case of violation by a company, every person who was in charge and responsible for the conduct of the business is deemed to be guilty of the contravention and shall be punished accordingly.

There is no statutory fee associated with the investment filing before the RBI or DPIIT.

Post-pandemic India witnessed a new trend with an increased inflow of investment. Increasing foreign investment in India is largely supported by the Make in India initiative and several central and state government policies, and the China + 1 strategy. To ease the application and approval process, the central government has recently introduced a Standard Operating Procedure (SOP) for processing FDI proposals.

In addition, the Parliamentary Standing Committee on External Affairs has submitted an action taken report on the Tenth Report of the Committee on External Affairs on the subject “India and Bilateral Investment Treaties” before the Lok Sabha Secretariat. The Report recognised the need for new bilateral investment promotion agreements to promote foreign investment in India, the early conclusion of investment agreements with the US and EU, and adoption of a balanced and comprehensive model BIT.

India has ratified the Bilateral Investment Treaty with 74 countries and issued notice to 68 countries for re-negotiations. In effect, six BITs are currently in force. For re-negotiation, India has relied on its model BIT of 2015 approved by the cabinet. While the model BIT has been adopted for more than seven years, the number of new BITs entered as per the model BIT is only a handful.

Since BIT is considered as a tool for investment promotion, India may consider revising or updating its model BIT for re-negotiation or new investment promotion agreements.

FTP 2023 provides various incentives for promoting manufacturing and exports. Apart from incentives under the FTP, the government of India in its annual budget announces various subsidies and incentives for the promotion of trade, manufacturing, export, and other policy objective.

One of the recently introduced incentive programmes includes the Remission of Duties or Taxes on Export Products (RoDTEP) scheme. This scheme has been introduced to replace the erstwhile Merchandise Export Incentive Scheme (MEIS) which was inconsistent with the WTO framework. RoDTEP Scheme has been introduced to neutralise the impact of taxes and duties suffered on exported goods which remain embedded in the export goods and are not credited, remitted or refunded in any manner. This scheme facilitates the rebate of all central, state, and local taxes and duties on exported goods which have not been refunded under any other scheme.

To promote self-reliance, India has also introduced a Product Linked Incentive (PLI) scheme. This scheme provides incentives to Indian and foreign companies based on incremental sales, performance, and value addition. Currently, the PLI scheme caters to 14 key sectors, namely the following.

• Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) – Department of Pharmaceuticals.
• Large Scale Electronics Manufacturing – Ministry of Electronics and Information Technology.
• Manufacturing of Medical Devices – Department of Pharmaceuticals.
• Electronic/Technology Products – Ministry of Electronics and Information Technology.
• Pharmaceuticals drugs – Department of Pharmaceuticals.
• Telecom & Networking Products – Department of Telecommunications.
• Food Products – Ministry of Food Processing Industries.
• White Goods (ACs & LED) – Department for Promotion of Industry and Internal Trade.
• High-Efficiency Solar PV Modules – Ministry of New and Renewable Energy.
• Automobiles & Auto Components – Department of Heavy Industry.
• Advance Chemistry Cell (ACC) Battery – Department of Heavy Industry.
• Textile Products – MMF segment and technical textiles – Ministry of Textiles.
• Specialty Steel – Ministry of Steel.
• Drones and Drone Components – Ministry of Civil Aviation.

India aims to create 60 lakh (6 million) new jobs, and an additional production valued at 30 lakh crore rupees (INR30 trillion) through the PLI scheme over the next five years.

India has enacted the BIS Act 2016 to establish a national standards body for the harmonious development of the activities of standardisation, marking, and quality certification of goods, conformity assessment, and quality assurance of goods, articles, processes, systems, and services provided in India. The said national body is called the Bureau of Indian Standards (BIS).

The BIS, through the process of standardisation, certification, and testing ensures the provision of safe, reliable, and quality goods, minimising health hazards to consumers and helps in promoting exports and import substitutes by also controlling over-proliferation of varieties.

The BIS Act empowers the BIS to notify a specific or different “conformity assessment scheme” for any goods, article, process, system, or service or for a group of goods, articles, processes, systems or services, as the case may be, concerning any Indian Standard or any other standard in a manner as may be specified by regulations.

The BIS certification scheme is voluntary. For several products, compliance to Indian Standards is made compulsory by the central government taking into account other considerations such as public interest, protection of human, animal, or plant health, safety of the environment, prevention of unfair trade practices, and national security. For such products, the central government directs mandatory use of “Standard Mark” under a Licence or Certificate of Conformity (CoC) from the BIS through the issuance of Quality Control Orders (QCOs). The aim of the BIS is not to reduce imports or encourage domestic production. A list of products subject to compulsory certification is available here.

The QCOs are implemented strictly for domestic companies as well as non-domestic companies.

Article XX of the GATT and SPS Agreement provides scope for member countries to enact domestic legal instruments to ensure food safety, animal and plant health and safety. Being a member of the WTO, India has introduced certain SPS measures to protect human, plant, and animal health. The government agencies involved in the development and adoption of sanitary and phytosanitary (SPS) measures are:

• the Food Safety Standards Authority of India (FSSAI) for food safety and human health;
• the Directorate of Plant Protection, Quarantine and Storage, for plant health; and
• the Department of Animal Husbandry and Dairying, for animal health.

These agencies are responsible for the enforcement of the Food Safety and Standards Act 2006, Live Animals and livestock products Livestock Importation Act 1898, Export (Quality Control and Inspection) Act 1963, Export (Quality Control and Inspection) Rules 1964, Agricultural Produce (Grading and Marketing) Act 1937, Insecticide Act 1968, Plant and plant-related products Plant Quarantine Order (Regulations of Import into India) 2003, Destructive Insects and Pests (Amendment and Validation) Act 1992, Insecticides Rules 1971, and Destructive Insects and Pests Act 1914.

SPS measures implemented by India are not aimed to reduce imports and/or encourage domestic production.

The competition regime of India does not administer the price control aimed at reducing imports and/or to encourage domestic production. The role of the competition regime is focused on eliminating practices having adverse effect on competition, promoting and sustaining competition, protecting the interests of consumers and to ensure freedom of trade in the markets of India.

The National Pharmaceutical Pricing Authority (NPPA) is a government regulatory agency that controls the prices of pharmaceutical drugs in India. The price of pharmaceutical drugs is regulated as per the legal framework of the Drugs (Prices Control) Order 1995.

NPPA is an organisation established, inter alia, to fix/revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of medicines in India, under the Essential Commodities Act 1955 and Drugs (Prices Control) Order 1995. NPPA is also entrusted with the role of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers. It also monitors the prices of decontrolled drugs to ensure availability.

In exceptional circumstances, India may impose a Minimum Import Price (MIP) to address a sudden surge in imports in terms of Section 3 of the FT D&R Act 1992. This MIP framework was invoked once in the last ten years to regulate increased imports of steel during 2016.

There are seven state trading enterprises (STEs) in India. STEs are aimed to import agricultural products, fertiliser, and oil products, to ensure a fair return to farmers, food security, and energy security. The products imported by STEs are as follows.

• Wheat and Rice-Food Corporation of India.
• Coconut and its allied products – State Trading Corporation (STC).
• Urea – STC, Indian Potash Ltd, and Minerals and Metals Trading Corporation Ltd.
• Crude oil and its derivatives – Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL).

STEs play an important role in meeting the food and energy security of India. The objective of STEs is neither to reduce imports nor encourage domestic production.

“Buy local” requirements are applicable in India under two categories: (i) local requirement for government procurement, and (ii) local requirement for manufacturing.

• Local requirement for government procurement – the Department for Promotion of Industry and Internal Trade (DPIIT) issued the Public Procurement (Preference to Make in India) Order 2017 (PPP-MII order) which promotes the procurement of domestic goods. The order’s objective is to promote the manufacturing and production of goods and services in India to enhance income and employment. The order applies to the procurement of goods, services, and works by:

1. central ministries/departments;
2. their attached/subordinate offices;
3. autonomous bodies controlled by the government of India; and
4. government companies.

India has also introduced a Policy for Providing Preference to Domestically Manufactured Iron & Steel Products in Government Procurement (DMI&SP Policy).

• Local requirement for manufacturing – over a period, India has introduced local content requirements for capacity building in new technologies. For example, India initially introduced local content requirements regarding solar cells and modules under the Jawaharlal Nehru National Solar Mission. This scheme was disputed by the US before the WTO Panel which held the local content requirement inconsistent with GATT and TRIMs Agreement. Subsequently, India has launched the PM Kusum Scheme for farmers with limited local content requirements for solar pumps used by farmers. A scheme with local content requirements has also been introduced for electric vehicles.

Geographical indication of Goods in India does not provide any restriction on import or encourage domestic production. India has a comprehensive regime for recognising geographical indication consistent with Articles 22 to 24 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement.

All relevant issues and recent developments have been detailed within the rest of the guide.