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India’s Export, Import Controls and Sanctions Regime – a Tale of National Interest and Diplomacy


In India, exports and imports are ‘Free’ except when regulated by way of prohibition, restriction or requirement of exclusive trading through State Trading Enterprises. The manner of regulation is specified in the Indian Trade Classification (Harmonized System) [ITC (HS)] of Exports and Imports. Further, there are some items which are free, albeit subject to conditions stipulated in other applicable legislation.

The ITC (HS) is a compilation of codes classifying all goods for export/ import at 2/4/6/8 digits. ITC(HS) is aligned at a 6-digit level with the international Harmonized System maintained by World Customs Organization. Schedule 1 of ITC (HS) lays down the Import Policy regime while Schedule II of ITC(HS) lays down the Export Policy regime.

Towards this regulation, India has established an evolved export controls regime to prohibit or regulate the export of munitions and dual use goods, services and technology having civilian and military applications. These serve India’s national security interests and its international commitments, while encouraging trade.

India’s export control regime is in consonance with the four multilateral export control regimes – Missile Technology Control Regime, the Wassenaar Arrangement, the Australia Group, all three of which India is a member.  India is also an adherent of the Nuclear Suppliers Group. India has ratified the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction and the Biological and Toxin Weapons Convention, which have also been incorporated into the Indian legal system through the respective legislation.

India’s imports are guided by their compliance with domestic laws and regulations, which are applicable to domestically produced goods. In recent times, imports are also being guided by India’s efforts to strengthen its domestic production, particularly in the defence sector.

India has also incorporated the sanctions imposed by the United Nations Security Council (hereinafter, UNSC), including general resolutions, such as UNSC Resolution 1373 (2001) and 1540 (2004); country-specific resolutions, such as UNSCR 1718 (2006) and 2231 (2015) against DPRK and Iran, respectively; and organization, group, or individual specific resolutions, such as UNSC Resolution 2199 (2015).

Presently, India regulates trade with Iraq, Iran, DPRK/ North Korea and Somalia and prohibits trade with organizations including Islamic State in Iraq and the Levant (ISIL, also known as Daesh), Al Nusrah Front and other individuals, groups, undertakings and entities associated with Al Qaida. India also maintains a list of terrorist organizations and individuals pursuant to the Unlawful Activities (Prevention) Act, 1967.

Export Controls

Export of items, software and technology, including munitions, specified in the List of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET List) are regulated and subject to permission/ notification from the government. The SCOMET List items may be tangibly (physically) and intangibly (electronically or by sharing of information) exported, including software and technology in the form of technical data and technical assistance.

The Foreign Trade (Development & Regulation) Act, 1992[1], along with the Foreign Trade Policy and Procedures, regulates foreign trade by facilitating imports into and augmenting exports from India.

Additionally, the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 also regulates the export, transfer, re-transfer, transit and trans-shipment of material, equipment, or technology of any description as are identified, designated, categorized or considered necessary by the Central Government, as pertinent or relevant to India as a Nuclear Weapon State, or to the national security of India, or to the furtherance of its foreign policy or its international obligations under any bilateral, multilateral or international treaty, Covenant, Convention or arrangement relating to weapons of mass destruction or their means of delivery, to which India is a party.

To ease export of the SCOMET items, the government has introduced several types of authorizations, e.g., for Entering into an Arrangement or Understanding for Site Visits, On-site Verification and Access to Records / Documentation; for “Stock and Sale”; for repair/ replacement; for demo/ display/ exhibition/ tenders/ RFP/ RFQ/ NIT, for re-export/return of imported SCOMET items to the same foreign entity or to its OEM, and so on.

In recent years, licensing has been simplified and liberalized with the introduction of general licenses that can cover multiple transactions. Some of the general licenses introduced are the Global Authorization for Intra-Company Transfers for export of Category 8 items, General Authorization for Export of Chemicals and related equipment, General Authorisation for Export of Drones and General Authorisation for export after repair of imported SCOMET items. Three Open General Export Licenses have also been introduced for defence exports of specific components to selective countries: for the intra-company transfer of technology; for the export of major platforms and equipment and for the export of parts and components.

Import Controls

Imports into India are required to comply with domestic laws/ technical specifications/ environmental/safety and health norms. For instance, there is a list of specified Electronic and IT Goods, including automatic data processing machines, biometric scanners, smart card readers, mobile phones, etc., that require compulsory registration with the Bureau of Indian Standards (BIS) prior to arriving in India. Similarly, specific authorization is required under India’s e-waste rules, inter alia, for the imports and sale of electrical and electronic equipment to regulate generation of e-waste by consumers or as rejects from refurbishment and repair processes. The government has also issued several quality control orders pertaining to steel products, chemicals, solar modules, bullet-proof jackets, toys, footwear, and many more. Arguably, most of these are to monitor cheap imports from the neighboring countries.

India has also issued a list of restricted items intended for defence use that mandate an import license from the Department of Defence Production. Apart from this, the Department of Military Affairs has also introduced four Positive Indigenization Lists that prescribe defence items that will be procured only from indigenous sources, including India Defence Public Sector Undertakings and private undertakings.[2]

Additionally, Import Certificate from the following Import Certificate Issuing Authority may be obtained for the import of specified capital goods, raw materials and components from the United States under the Indo-US Memorandum of Understanding:

  • The Department of Electronics for computer and computer-related systems;
  • The Department for the Promotion of Industry and Internal Trade, Technical Support Wing, for organized sector units registered under it, except for computers and computer-based systems;
  • The Ministry of Defence for defence-related items;
  • The Director General of Foreign Trade for small-scale industries not covered above; and

Sanctions or Prohibitions

While India does not impose unilateral sanctions, it has put in place its sanction regime, referred to as “prohibitions”, based on its obligations imposed by the UN Security Council Resolutions. The extant prohibitions are:

  1. Direct or indirect import and export to/from Iran in accordance with UNSCR 2231 (2015) and S/2006/263 (UNSC document). These include items listed in INFCIRC/254/Rev.9/Part 1 and INFCIRC/254/Rev.7/Part 2 (International Atomic Energy Agency, ‘IAEA’ documents) as updated by the IAEA from time to time. It includes materials, equipment, goods and technology that could contribute to Iran’s enrichment, reprocessing, or heavy water-related activities, or to development of nuclear weapon delivery systems.
  2. Direct or indirect import and export from/to the Democratic People’s Republic of Korea (hereinafter, DPRK) of items, technology and software in UNSCRs 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2094 (2013), 2270 (2016), 2231 (2016), 2356 (2017), 2371 (2017) and 2375 (2017) and 2397 (2017), including munitions items, luxury goods and items (excluding food and medicines) which could contribute to operational capabilities of the DPRK’s armed forces
  3. Import and export of arms and related material from/to Iraq, except the government of Iraq, which requires a No-Objection Certificate;
  4. Import of charcoal from Somalia;
  5. Trade with ISIL (Daesh), Al Nusrah Front and other individuals, groups, undertakings and entities associated with Al Qaida.

In addition to this, violation of financial sanctions comes within the purview of the Prevention of Money-laundering Act, 2002 and the Unlawful Activities (Prevention) Act, 1967, enforced by inter-departmental actions, including the Ministry of External Affairs, Department of Economic Affairs, Ministry of Home Affairs, Financial Intelligence Unit India, Reserve Bank of India, Securities and Exchange Board of India and the Insurance Regulatory Development Authority.

While India has never passed unilateral sanctions in the form of arms embargoes, foreign assistance reductions and cut-offs, export and import limitations and so on, against another country, it has resorted to other restrictive measures in furtherance of its national security needs. For instance, after the Indo-China border stand-off and the Galwan Valley clash, India has imposed cross-border investment restrictions bringing Chinese investments into India under strict scrutiny. Several Chinese applications have also been banned. Similarly, after the Pulwama attack, Pakistan’s MFN status stands withdrawn.[3]

India has not adopted unilateral sanctions imposed by other countries that are not binding on it in international law. India’s trade relations with other countries are guided by its national interests and diplomatic relations. Viewing this in the current scenario of the Russia – Ukraine war, while the western countries have announced a slew of sanctions against Russia, India continues to purchase crude oil from Russia. India’s purchase has increased over the past year and account for almost 85% of its energy requirements.

Even for defence purchases, Russia has historically been India’s strategic partner. India’s recent purchase of the S-400 missile defence system from Russia brought it within the radar of Countering America’s Adversaries Through Sanctions Act, 2017 (CAATSA), a law that imposes sanctions on Iran, Russia and North Korea and on entities that trade with these countries in related items. CAATSA had also imposed a ban on the import of oil from Iran. While India was first granted a waiver that allowed it to import the oil without sanctions, this was subsequently lifted in 2019, pursuant to which India was forced to stop buying oil from Iran in 2019.[4]

While the threat of CAATSA loomed over the S400 deal with Russia, United States granted an India-specific waiver for CAATSA sanctions on July 14, 2022,[5] possibly keeping in view the national security objectives with respect to China that the United States and India both possess.  This may be contrasted with the imposition of sanctions on Turkey for the purchase of the S400 from Russia, which includes a ban on all United States export licenses and authorizations to Turkey’s Presidency of Defense Industries (SSB) and an asset freeze and visa restrictions on Dr. Ismail Demir, SSB’s president, and other SSB officers.[6]

Secondary sanctions imposed by other countries impact India’s business and commerce. India and Russia are engaged in bilateral economic cooperation, with significant trade and investment in sensitive sectors including defence, technology and energy. In the wake of the mounting sanctions against Russia, India’s trade with Russia in US Dollars is impacted. This has resulted in India establishing its rupee settlement mechanism where international trade settlements may be executed in Indian rupees.[7] Russian banks like VTB, Sberbank, Vnesheconombank, Promsvazbank and Gazprombank have also opened Representative Offices/Branches in India and Indian banks setting up joint ventures for the provision of banking services in Russia.[8]

Secondary sanctions also irrefutably impose a country’s political agenda on a third country by economic coercion, violating basic principles of international law such as sovereignty, territorial integrity, political independence, self-determination and non-interference. Nevertheless, due to the increasing relevance of India in the geopolitical scenario, primary or secondary sanctions have not yet been imposed against India for its economic relations with Russia, particularly in light of CAATSA. India has managed to navigate its policies to ensure the best interest of its own traders and has also withdrawn when the situation calls for it, such as when it ceased buying oil from Iran in 2019. In this manner, India’s policies, with a focus on its national interests, security and diplomatic relations, have ensured the strengthening of its economy and its rising place in the global supply chain in the present world order.


[2] Import Embargo List of Defence Weapons/ Platforms,; Second Positive Indigenization List, ; Third Positive Indigenization List,; Fourth Positive Indigenization List,








Ameeta Verma Duggal , Founding Partner, DGS Associates and
Aditi Warrier, Senior Associate, DGS Associates