While the majority of the goods are freely importable, the
Exim Policy (2007) of India prohibits import of certain categories of products as well
as conditional import of certain items. In such a situation it becomes important
for the importer to have an import license issued by the issuing authorities of
the Government of India.
Import License Issuing Authority
In India, Import License is issued by the Director General of Foreign Trade.
DGFT Delhi office is situated in Udyog
Bhawan, New Delhi 110011.
Validity of Import License
Import Licenses are valid for 24 months for capital goods and 18 months for raw
materials components, consumable and spares, with the license term renewable.
Sample of Import License
A typical sample of import license consists of two copies-
Exchange Control Copy: To be utilised for effecting remittance to foreign seller
or for opening letter of credit
Customs Copy: To be utilised for presenting to Customs authority enabling them
to clear the goods. In the absence of custom copy, import will be declared as an
unauthorised import, liable for confiscation and or penalty.
Categories of Import
All types of imported goods come under the following four categories:
Freely importable items: Most capital goods fall into
this category. Any product declared as Freely Importable Item does not
require import licenses.
Licensed Imports: There are number of goods, which can
only be importer under an import license. This category includes several
broad product groups that are classified as consumer goods; precious and
semi-precious stones; products related to safety and security; seeds, plants
and animals; some insecticides, pharmaceuticals and chemicals; some
electronically items; several items reserved for production by the
small-scale sector; and 17 miscellaneous or special-category items.
Canalised Items: There are certain canalised items that can only
be importer in India through specified channels or government agencies.
These include petroleum products (to be imported only by the Indian Oil
Corporation); nitrogenous phosphatic, potassic and complex chemical
fertilizers (by the Minerals and Metals Trading Corporation) vitamin- A
drugs (by the State Trading Corporation); oils and seeds (by the State
Trading Corporation and Hindustan Vegetable Oils); and cereals (by the Food
Corporation of India).
Prohibited items: Only four items-tallow fat, animal
rennet, wild animals and unprocessed ivory-are completely banned from
Category of Importer
On the basis of product to be imported and its target buyer, importers
divided into three groups for the purpose of obtaining import licensing:
Actual Users- An actual user applies for and receives a
license to import of any item for personal use rather than for business or
Registered exporters; defined as those who have a valid
registration certificate issued by an export promotion council, commodity
board or other registered authority designated by the Government for
purposes of export-promotion.
The two types of actual user license are:
General Licenses : This license can be used for the
imports of goods from all countries, except those countries from which
imports are prohibited;
Specific Licenses: This license can only be used for
imports from a specific country.
Any violation in the import license is usually scanned by the custom officials
of the custom department. Customer inspector and other custom officials have
authority to inspect and evaluate the goods to be imported. It’s a part of their
job to determine whether imports conform to the description in the import
License or not. Custom official even have right to charge fines and penalties if
any violation in the import license is found to be done by the importer.
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