Directorate General of Foreign Trade

Directorate General of Foreign Trade
Name	Directorate General of Foreign Trade
Formation	1948
Type	Central Board
Headquarters	New Delhi
Parent organisation	Ministry of Commerce and Industry

Directorate General of Foreign Trade is an agency under the Ministry of Commerce and Industry responsible for administering Foreign Trade (Development and Regulation) Act, 1992 and implementing India’s export-import licensing regime. It issues export promotion measures, formulates Foreign Trade Policy instruments, and coordinates with multilateral and bilateral partners such as the World Trade Organization, United Nations Conference on Trade and Development, and regional blocs. The office interfaces with agencies like the Central Board of Indirect Taxes and Customs, Reserve Bank of India, and state export promotion bodies to facilitate international commerce.

History

The office traces roots to post-independence trade regulation efforts alongside institutions such as the Indian Tariff Commission and the Central Board of Excise and Customs. Early measures linked to the Import Licensing Policy and the Five-Year Plans shaped its mandate during the Nehruvian era. Major reforms in the 1990s coincided with the 1991 economic liberalisation in India and the enactment of the Foreign Trade (Development and Regulation) Act, 1992. Subsequent policy cycles interacted with international events including the Uruguay Round, the formation of the World Trade Organization, and regional initiatives like the Bangladesh–India–Myanmar Trilateral Highway. Key leadership and policy dialogues involved figures associated with the Ministry of Commerce and Industry and institutions such as the Confederation of Indian Industry and the Federation of Indian Export Organisations.

Organization and Administration

The agency is administratively located within the Ministry of Commerce and Industry and works with central bodies such as the Central Board of Indirect Taxes and Customs, Department for Promotion of Industry and Internal Trade, and the Reserve Bank of India. Its structure comprises divisions reflecting sectors linked to the Textiles Committee, Agricultural and Processed Food Products Export Development Authority, Marine Products Export Development Authority, and commodity boards like the Tea Board of India and Coffee Board of India. It coordinates with statutory bodies including the Directorate General of Civil Aviation on air freight, the Ministry of Shipping on ports, and the Ministry of Electronics and Information Technology on digital procedures such as the Indian Customs Electronic Data Interchange. Staffing draws from services like the Indian Administrative Service and specialists engaged with organizations such as the Export-Import Bank of India.

Functions and Responsibilities

Core responsibilities include issuance of the Export Promotion Capital Goods Scheme authorizations, administration of the Special Economic Zone Act, 2005 linked measures, and management of tariff quotas and preferential arrangements like the South Asian Free Trade Area preferences and bilateral Comprehensive Economic Partnership Agreements. It administers incentive schemes used by exporters interacting with market access arrangements under the General Agreement on Tariffs and Trade framework, and consults with industry groups such as the National Association of Software and Service Companies. The agency negotiates procedural harmonization with partners including the International Chamber of Commerce, World Customs Organization, and national bodies like the National Bank for Agriculture and Rural Development for agro-exports.

Trade Policy and Export Promotion

The office drafts the Foreign Trade Policy chapters that set out incentive mechanisms such as the Merchandise Exports from India Scheme and the Services Exports from India Scheme. It aligns export promotion with trade agreements such as the India–United Arab Emirates Comprehensive Economic Partnership Agreement and the India–ASEAN Free Trade Area. Policy design has interfaced with trade missions led by the Ministry of Commerce and Industry to partner markets including United States, European Union, China, Japan, South Korea, United Kingdom, Australia, Germany, France, Russia, Brazil, South Africa, and Canada. Collaboration extends to export financing instruments with the Export-Import Bank of India and export credit frameworks influenced by the Organisation for Economic Co-operation and Development.

Programs and Schemes

Notable programs administered include the Merchandise Exports from India Scheme, Services Exports from India Scheme, support for Special Economic Zones, and incentives covering sectors represented by the Automotive Component Manufacturers Association of India and the Pharmaceuticals Export Promotion Council of India. Schemes coordinate with certification bodies such as the Bureau of Indian Standards and the Food Safety and Standards Authority of India to meet import requirements of markets like United States Food and Drug Administration, European Medicines Agency, and United Kingdom Medicines and Healthcare products Regulatory Agency. Export promotion events link to organizations such as the Indian Council for Cultural Relations and trade fairs like the India International Trade Fair.

Compliance, Licensing and Enforcement

The agency issues licences, implements procedural compliance in coordination with the Central Board of Indirect Taxes and Customs, and enforces controls under the Foreign Trade (Development and Regulation) Act, 1992. It works with investigative and adjudicatory bodies such as the Directorate of Revenue Intelligence and the Central Bureau of Investigation when cases involve contravention, and engages judicial forums including the Customs, Excise and Service Tax Appellate Tribunal and the Supreme Court of India on litigated matters. Digital initiatives interface with systems like the Indian Customs Electronic Data Interchange and standards promoted by the World Customs Organization.

Criticism and Reforms

Critiques have included administrative complexity noted by think tanks such as the Indian Council for Research on International Economic Relations and policy commentators associated with the Observer Research Foundation. Calls for reform reference trade liberalisation advocates linked to the Centre for Policy Research and economists influenced by the World Bank and the International Monetary Fund. Proposed reforms focus on simplification of licensing, harmonization with World Trade Organization commitments, improved coordination with the Reserve Bank of India on foreign exchange measures, and enhanced digitalization in line with practices promoted by the United Nations Conference on Trade and Development and the World Customs Organization.

Category:Indian government agencies Category:Foreign trade of India