The Foreign Trade (Development and Regulation) Amendment Bill, 2010, (Sill’) has been passed by Rajya Sabha on 9 August 2010. The Bill seeks to amend the Foreign Trade (Development and Regulation) Act, 1992 (‘the Act’) which empowers the government to regulate trade in goods.

The amendment now seeks to bring in ‘services’ and ‘technology’ within the purview of this Act. It also aims to impose Quantitative Restrictions and to bring in provisions for more stringent control for trade of dual-use goods and technologies.

However, the effective date of the provisions would be notified separately.

Highlights of the Bill

The Bill proposes to extend the ambit of the Act to regulate the export and import on ‘specified goods or services or technology’;

‘Service’ to include service of any description which is made available to potential users and includes all the tradable services specified under the General Agreement on Trade in Services entered into by India and other countries;

‘Specified goods or services or technology’ to mean the goods or services or technology, the export, import, transfer, re-transfer, transit and transshipment of which is prohibited or restricted because of imposition of conditions on the grounds of their being pertinent or relevant to India as a Nuclear Weapon State, or to the national security of India or to the furtherance of its foreign policy or its international obligations under any bilateral, multilateral or international treaty, covenant, or agreement relating to weapons of mass destruction or their means of delivery to which India is a party;

‘Technology’ to mean any information (including information embodied in software i.e floppy disc, compact disc or any other medium), other than information in the public domain, that is capable of being used in:

(i)                   the development, production or use of any goods or software;

(ii)                 the development of, or the carrying out of, an industrial or commercial activity or the provision of service of any kind.

The Importer Exporter Code (‘IEC’) Number shall be necessary only when the service or technology provider is taking benefits under the foreign trade policy or is dealing with specified services or specified technologies;

The penalty provisions under the Act proposed to be amended so as to impose the penalty on contravention of any of the provisions of the Act or rule in so far the same are applicable for services or technology;

A new Chapter to be introduced in the Act so as to grant the Central Government a power to impose quantitative restrictions on import of any goods into India, in case the goods are coming into India in such increased quantities which may cause injury to domestic industry. Such restriction would not applicable in case the goods are coming from a developing country and the share of imports of such goods from that country does not exceed 3% or in case of more than one developing country, the aggregate should not exceed 9% of the total imports of such goods into India. The quantitative restrictions imposed shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such imposition;

The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005, is to be applicable on export, transfers, re transfers, brought in transit, transshipment of and brokering of specified goods, services and technology;

No person shall export any material, equipment or technology knowing that the same is to be used in the design or manufacture of a biological weapon, chemical weapon, nuclear weapon or other nuclear explosive device or in their missile delivery system.

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