In exercise of powers conferred by Section 3 read with Section 5 of FT D and R Act,

## Policy Analysis Report: Amendment to Foreign Trade Policy 2015-2020 (Para 2.07) **1. Executive Summary:** This report analyzes an amendment to Paragraph 2.07 of the Foreign Trade Policy (FTP) 2015-2020, as notified by the Directorate General of Foreign Trade (DGFT) on August 10, 2021. The amendment concerns the principles of restrictions and prohibitions on imports and exports. The core purpose of the amendment, based on the text, is to align the FTP with international agreements regarding restrictions and prohibitions on trade. Key findings indicate a shift in the specific reasons for imposing trade restrictions and a clarification of existing provisions. **2. Introduction:** This report provides an overview of the amendment to Paragraph 2.07 of the Foreign Trade Policy (FTP) 2015-2020, based solely on the official notification issued by the Directorate General of Foreign Trade (DGFT). The report aims to inform stakeholders about the specific changes to the policy and their potential implications. **3. Policy Overview:** * This analysis pertains to an amendment of an existing policy. The original policy is the Foreign Trade Policy 2015-2020. * Core Objective(s): The core objective of the *amendment*, as inferred from the text, is to ensure that the principles governing restrictions and prohibitions on imports and exports are in line with international agreements. **4. Background and Rationale:** The amendment appears to be driven by a need to update and harmonize the Foreign Trade Policy with prevailing international standards and agreements related to trade restrictions. The explicit mention of aligning with international agreements in the "Effect of the Notification" section strongly suggests that the original policy may have been perceived as not fully compliant or needing clarification in light of evolving international norms. **5. Key Provisions / Changes:** This section details the specific changes introduced by the amendment to Paragraph 2.07 of the Foreign Trade Policy 2015-2020. * **Specific Part of Original Policy Changed:** Paragraph 2.07 of the Foreign Trade Policy 2015-2020, concerning the principles of restrictions and prohibitions for imports and exports, is being amended. * **New Rule/Provision:** The amendment replaces the existing list of reasons for imposing prohibitions or restrictions on exports and imports with a revised list. The new list includes specific justifications for import and export restrictions or prohibitions. Here's a comparison of existing and revised provisions based on the policy text: | Category | Existing Provision Examples | Revised Provision Examples | | ------------------------------------------ | -------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | | **Shortages** | Preventing or relieving critical shortages of foodstuffs or other essential products. | (This category remains, but with slight rephrasing) preventing or relieving critical shortages; | | **Public Morals** | Protection of public morals; | Protection of public morals or to maintain public order; | | **Standards & Regulations** | Application of standards or regulations for the classification, grading or marketing of commodities. | (No change here) | | **Human, Animal, Plant Life & Health** | Protection of human, animal or plant life or health; | (No change here) | | **Intellectual Property** | Protection of patents, trademarks and copyrights, and the prevention of deceptive practices; | Necessary to secure compliance with laws and regulations including those relating to intellectual property rights. | | **Prison Labor** | Prevention of use of prison labor; | (This category remains) | | **National Treasures** | Protection of national treasures of artistic, historic or archaeological value; | (This category remains) | | **Natural Resources** | Conservation of exhaustible natural resources; | (This category remains) | | **Fissionable Material** | Protection of trade of fissionable material or material from which they are derived; | (This category remains, with changed language) relating to fissionable materials or the materials from which they are derived; | | **Arms, Ammunition & Implements of War** | Prevention of traffic in arms, ammunition and implements of war; | (This category remains, with changed language) relating to the traffic in arms, ammunition and implements of war; | | **Country's External Financial Position** | Safeguarding country's external financial position and ensuring a level of reserves. | removed from the updated provision list | | **Sudden increase in Imports** | Preventing sudden increases in imports from causing serious injury to domestic producers | Preventing sudden increases in imports from causing serious injury to domestic producers | | **Fisheries** | Not mentioned in existing provision | Added in new provision list | | **Establishment of a particular industry** | Not mentioned in existing provision | Added in new provision list | | **Gold and Silver** | Relating to the importation or exportations of gold or silver | Removed from the updated provision list | | **Acquisition or distribution of products** | Not mentioned in existing provision | Added in new provision list | | **Security Interests** | Not mentioned in existing provision | Added in new provision list | * **Difference/Effect of the Change:** The amendment refines and expands the justifications for trade restrictions and prohibitions. The inclusion of alignment with international agreements as a justification suggests a move towards greater transparency and adherence to global trade norms. The removal of "Country's External Financial Position" and "Gold and Silver" from the list indicates a change in approach to managing these aspects through trade restrictions. **6. Target Audience and Stakeholders:** The target audience and stakeholders directly affected by this amendment include: * Exporters and importers in India. * Domestic producers who may be affected by import competition. * Government agencies involved in trade regulation and enforcement, particularly the DGFT. * Industries reliant on specific imported or exported goods. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Directorate General of Foreign Trade (DGFT) is the primary responsible body, as they issued the notification. The notification also mentions the Ministry of Commerce and Industry, suggesting their oversight. * **Timelines/Procedures:** No specific timelines or procedures are detailed in the provided text. However, the amendment is effective from the date of notification (August 10, 2021). The DGFT is empowered to issue notifications to implement the restrictions and prohibitions. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of this amendment include: * Greater alignment of India's trade policies with international norms and agreements. * Increased transparency and predictability in the application of trade restrictions. * Potential adjustments in import and export activities due to the revised list of justifications for restrictions. **9. Conclusion:** The amendment to Paragraph 2.07 of the Foreign Trade Policy 2015-2020 represents a significant step towards aligning India's trade policies with international agreements. The revised provisions provide a framework for imposing trade restrictions based on a broader and more clearly defined set of justifications. Stakeholders, especially exporters and importers, should carefully review the amended policy to assess the potential impact on their operations. The explicit mention of aligning with international agreements underscores the government's commitment to a rules-based international trade system.

Key Entities Referenced