Public Diplomacy Public Diplomacy

India’s System of Controls over Exports of Strategic Goods and Technology

August 01, 2004

Brief History:

  • India has been exercising control over the export of material, equipment and technology of direct and indirect application to Weapons of Mass Destruction and the means of their delivery. In fact, the first control over exports of such materials was affected in 1947 in the context of control on export of Monazite and Thorium Nitrate. India's first Prime Minister Pandit Jawaharlal Nehru set out the basis for future controls over strategic exports by noting at the time that the export was "not merely a financial matter. It has international implications….It is desirable for the Government of India to prohibit the export of monazite and thorium nitrate from India (and) this would mean that any export would be in accordance with the explicit permission of the Government of India and subject to the conditions laid down".
  • India's scientific, technological and industrial capabilities have matured to a stage where India is now a user and producer of a range of dual-use materials, equipment and technologies. This maturation calls upon India to extend itself further as a responsible member of the international community with regard to uncontrolled proliferation of these dual-use products and technologies. India has therefore instituted a domestic regime to prevent the illegal export of dual-purpose items and technologies through the creation of laws and an inter-departmental administrative mechanism.

    Development of a formal system of control on strategic exports from India:
  • In early 1993, a "Small Group on Strategic Export Controls" was constituted by the GOI to initiate the process of institutionalizing a system of controls over strategic exports from India. The Group finalized a list of items whose export was to be made subject to licensing. This list, described as "Special Materials, Equipment and Technology (SMET)", was notified in the Export Import Policy announced on March 31, 1995, effective April 1, 1995 (Public Notice 68EXP(PN)/92-97). Subsequent amendments to these provisions were notified from time to time.
  • Separately, but effective from the same fiducial date (i.e. April 1, 1995), the DAE issued gazette notifications, under the Atomic Energy Act, 1962, listing prescribed equipment and prescribed substances, that are subject to export licensing by the DAE.
  • India's signature to the Chemical Weapons Convention (CWC) in January 1993 required notification of dual-use chemicals contained in the three schedules annexed to the CWC. In a Public Notice, effective 31 March 1993, the Director General of Foreign Trade specified a list of dual-purpose chemicals, the export of which is either prohibited or permitted only under licence.
  • Given the growing importance of biotechnology and advances in recombinant DNA technology, the export of micro-organisms from India was also administered. Pursuant to the Environment Protection Act, 1986, a gazette notification was issued by the Government of India in 1989 on rules for the manufacture, use, import, export and storage of hazardous microorganisms/genetically engineered organisms or cells.

    Further strengthening of the domestic regime:
  • A second Small Group on Strategic Export Controls was set up in 1999 to review the implementation of the existing system and make recommendations for enhancing its effectiveness. Subsequently, through a notification effective April 1, 2000, the Director General of Foreign Trade specified a list of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET), the export of which is either prohibited or permitted only under license. The grant of license inter alia depends upon end-use cum end-user certification. The SCOMET List is now notified in the Export Policy in Schedule 2 Appendix 3 of the Indian Tariff Classification (Harmonized System) - ITC(HS) Classifications of Export and Import Items, 2002-2007.
  • The current SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) list contains all dual-use items and technologies within 8 categories, in keeping with our requirements. These are as follows:

    Category 0: Nuclear materials, facilities and related equipment

    Category 1: Toxic chemical agents and other chemicals

    Category 2: Micro-organisms and Toxins

    Category 3: Special Materials, Materials Processing Equipment, and Related Technologies

    Category 4: Avionics and Navigation

    Category 5: Aerospace materials, equipment, systems and related technologies

    Category 6: Reserved

    Category 7: Electronics, computers, and information technology including information security
  • The current EXIM policy permits free exports of certain listed military stores, low-tech in nature. This list is specified in Appendix I to Schedule II of the ITC(HS) Classifications of Export and Import Items, 2002-2007. All other military stores require a "no objection certificate” from the Department of Defence Production & Supplies (DDP&S), MoD. This permission inter alia rests upon inter-agency consultations and end-user certification, which may also include a clause on non-transfer to third parties within or outside the recipient country. This permission is also in conformity with the GOI’s foreign policy objectives and takes into account any sanctions under the UN as applicable. Exports of defense stores to all rebel groups operating under established Government anywhere and to all groups which have terrorist connections or affiliations are proscribed.

    Legal basis:
  • The following laws provide the legal basis for exercising export controls:
    • The Explosive Substances Act, 1908;
    • The Narcotic Drugs and Psychotropic Substances Act, 1985;
    • The Environment Protection Act, 1986;
    • The Atomic Energy Act, 1962, No.33 of 1962;
    • The Customs Act, 1962;
    • The Arms Act, 1959 and The Arms Rules, 1962
    • The Foreign Trade (Development and Regulation) Act, 1992, No.22 of 1992 which last came into force on August 7, 1992, and covers items not regulated by any other Act.
  • Detailed regulations and procedures are notified by the Government of India under the above Acts. Other regulations and procedures are detailed in Volume 1 of the `Handbook of Procedures' (1 April 2002-31 March 2007) issued by the Ministry of Commerce and Industry.
  • Various agencies of the Government are empowered to enforce the provisions of these laws that form the legal and regulatory basis of India's system of export controls.

    Administrative procedures:
  • When a filled-in application form for grant of license is received in the Directorate-General of Foreign Trade, it is circulated to concerned agencies in the Government of India, which include Ministry of External Affairs, Ministry of Defense, Central Board of Excise & Customs, intelligence agencies, and concerned Ministries/Departments (e.g. Departments of Atomic Energy/Space/DRDO) as required for technical advice.
  • Agency representatives meet in Committee (Inter Ministerial Working Group) under the Chairmanship of the Export Commissioner, DGFT and decide, by consensus, on whether or not to approve a particular export. The decision is embodied in the issue of an Export Licence and the conditions attached thereto. Pre-license checks are conducted through the agencies and our missions abroad. Post-shipment verifications are made part of licensing conditions.

August 2004

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