The Foreign Trade (Development and Regulation) Act, 1992

Summary of the Foreign Trade (Development and Regulation) Act, 1992
Overview
Enactment: By Parliament in the Forty-third Year of the Republic of India Commencement:
• Sections 11 to 14 came into force at once.
• Remaining provisions deemed to have come into force on 19th June, 1992.
Key Provisions
1. Powers of Central Government
• Make Orders for developing and regulating foreign trade (Imports & Exports).
• Prohibit, restrict, or regulate imports/exports of goods, services, or technology.
• Formulate and announce Foreign Trade Policy (FTP) and amend it.
2. Director General of Foreign Trade
• Appointment by Central Government.
• Advises on FTP formulation and is responsible for its implementation.
• May be delegated certain powers by the Central Government.
3. Definitions
• Import/Export: Broadly defined for goods, services, and technology, with specific clauses for services and technology.
• Services/Technology: Defined with clarity on what constitutes supply/import/export.
• Other key definitions: Adjudicating Authority, Appellate Authority, Conveyance, etc.
4. Regulatory Framework
• Licenses: Not necessary unless required under this Act or its rules/orders.
• Prohibitions/Restrictions: Goods under prohibition/regulation deemed so under the Customs Act, 1962.
• Continuance of Existing Orders: Orders under the Imports and Exports (Control) Act, 1947, continue unless inconsistent.
5. Repeal and Savings
• Repeals the Imports and Exports (Control) Act, 1947, and the Foreign Trade (Development and Regulation) Ordinance, 1992.
• Savings clause for previous operations, rights, and liabilities under the repealed Acts.
6. Penalty, Confiscation, and Adjudication
• Power of Search and Seizure (mentioned but details not provided in the context).
• Contraventions: Lead to penalty/confiscation (details not provided).
• Adjudicating Authority: Established for deciding on contraventions.
• Owner's Opportunity: Right to be heard before action on seized goods.

Legislative History:

The Foreign Trade (Development and Regulation) Act, 1992

Short Title The Foreign Trade (Development and Regulation) Act, 1992

Act Number / Year 22 of 1992

Act ID (India Code) 199222

Presidential Assent / Enactment Date August 7, 1992

Enforcement Date June 19, 1992

Nodal Ministry Ministry of Commerce and Industry

Precedent & Statutory Rationale

• Transition from Control-Oriented Regime to Liberalization:

o Prior to 1992, India’s foreign trade was stringently controlled under the Imports and Exports (Control) Act, 1947, a restrictive framework designed primarily for a command-style economy with absolute government oversight over physical imports and exports.

o Following the sweeping economic reforms of 1991, India shifted its policy paradigm toward globalization, export-led growth, and integration with the world economy, rendering the old control-centric framework obsolete.

• Legislative Intervention and Regularization:

o Enacted to provide a modern statutory foundation focused on the development and regulation of foreign trade rather than mere restrictions.

o The core objective was to empower the Central Government to formulate and announce the Foreign Trade Policy (FTP), facilitate imports, augment exports, introduce the mandatory Importer-Exporter Code (IEC), and regulate specific cross-border transactions smoothly.

Parliamentary Trajectory & Enactment

• Formulation: Developed by the Ministry of Commerce to institutionalize structural trade reforms and provide legal teeth to export promotion schemes and trade facilitation procedures.

• Parliamentary Passage: Passed by both houses of Parliament, receiving formal presidential assent on August 7, 1992.

• Enforcement: Enforced on June 19, 1992.

• Source: India Code and Ministry of Commerce and Industry Official Records.