Introduction: The Directorate General of Foreign Trade (DGFT) holds a crucial role in facilitating exports, as mandated by Parliament. However, its failure to efficiently manage SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) authorizations is crippling both exporters and national interests.
The most significant point to understand is that the DGFT is mainly an export promotion authority & therefore as per the mandate of the Parliament a trade facilitator. Further, it is equally significant that we spend thousand of crores in terms of exemptions & remissions every year & there is a Foreign Trade Policy as well as the Handbook of Procedures to lay down the ground rules. Another significant point is that administration of entitlements is not export promotion but the bounden duty of the DGFT to ensure that the exporters are not harassed & their efforts frustrated due to no accountability, incompetence & sick mindset (why should I care) of the officials in position. It is pertinent to point out there is no transparency & the officials in position simply absolve themselves from any responsibility & even go the extent of that any number of follow ups & escalations are a wasteful exercise. If you seek your vested rights as per the provisions of the law then there is a serious problem & escalation of the in case of delay is considered an unpardonable offense. The authorities pretend to be higher than Gods & therefore the exporters should bow down like in an Idi amin regime & there is no way out. This is shameful & disgusting but then there is no way out even after the matter is taken up with the DGFT as well as the relevant Addl. DGFT at the headquarters in Delhi. This is the ground reality & does not auger well for the future but then the moot question is why this should be acceptable. It is not that those in position do not comprehend the significance of timeliness but then at the cost of re-iteration who cares is the issue to be dealt with.
This is about the issuance of SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) authorization for the purpose of exports. There are numerous chemicals, which are dual use (civil as well as military use) therefore their exports & imports is regulated by the relevant authorities in respective jurisdictions so that these cannot be misused as per the UN initiatives/agreements. There is no doubt that proliferation & control under International obligations cannot be overlooked in any case but then for the DGFT, it is important that the dual use chemicals have various other civilian uses therefore after exercising strict controls that trade is not hindered or frustrated. It is this delicate balance, which needs to be appropriately handled by the DGFT. To begin with, the foreign buyer is required to give end-use declarations in the prescribed format regarding the civil use of the imports. These are uploaded with the SCOMET license application & then these are reportedly circulated to the relevant Ministry & the Indian consulate in the importing country for the clearance for the purpose of export. Thus, a set process exists so as to ensure that safe passage rightly carved out specifically for civil use. Reportedly, the Indian Consulate will carry out the importer verification by way of business registration, track record & Financial stability etc. & End-user verification in terms of legitimacy, end-use declaration & non-proliferation commitment etc. therefore it is a fairly simple exercise involving documentary evidences & in case the SCOMET item is particularly sensitive, there may be further scrutiny but otherwise the permission may be granted. Let’s consider the example of Dimethylamine Hydrochloride being a versatile chemical used by the pharmaceuticals, dyes & pesticides industry & also has application as corrosion inhibitor, fuel additive or pH control. Therefore, it is the sole responsibility of the DGFT to ensure that the license for exports of Dimethylamine Hydrochloride are granted expeditiously after exercising due controls for export failing which the exports are lost forever because no foreign buyer is willing to wait in eternity for the license to be issued. However, the moment SCOMET License application is made, the trouble starts by way of frivolous queries & the issuance of the licenses is invariably delayed pointing to a complete & abject failure of the system as a whole. What I mean about frivolus queries to delay the issuance of the license is the following. The DGFT does not raise the queries in the system but by way of an email & it is difficult to comprehend that why this should be the case & why the DGFT officials are avoiding the system. It is pertinent to point out here that the DGFT officials have been asked to raise the query in the system so that there is a permanent record of it. In one instance, the officials not only called for wrong declaration in form 2 S (i) but repeatedly did so despite the fact that Dimethylamine Hydrochloride is a category 1 item appearing at Entry No. 1D008 & therefore Appendix 2 S (ii) is relevant for the end-user declaration. In another instance, reportedly the Indian Consulate in Hamburg failed to contact the customer & the customer’s email were not received & the excuse was that there was an IT issue for quite some time. Since, there was an inordinate delay, the DGFT was asked to provide the relevant details of the Indian Consulate & the details were furnished & the case resolved but when the details were asked in another case & country of export, the details are refused. The details are refused pointing out that these details are of sensitive nature. How can this be true when as an exporter, the exporter is seeking the details of the responsible official in the Indian consulate to pursue his own case. In another instance, the DGFT insisted that the relevant End-use declarations should be on the letterheads of the business entities & that signed & stamped declarations are otherwise not acceptable though same were deemed valid & license for export issued earlier. Another frivolous query is that the exporter is asked to fill in the details of the End-user despite the fact that these are specified to be optional. Finally, what is of significance is the fact that anyhow, the end-user declaration is placed on record therefore there is no discrepancy as such. Therefore, the whimsicality & arbitrariness is starkly apparent. Is this what is expected from an export promotion authority? What are the ulterior motives in harassing the exporters & in making their lives miserable?
If the DGFT officials pretend that neither they are responsible nor accountable & the DGFT remains a mute spectator showing no courage to revamp the system so that the permissions are granted in less than a month for sure then surely it is time to relook & put more competent personnel because in international trade any delay is intolerable. Anything & everything in terms of verification is possible at the click of mouse therefore 30 days is ample time & no excuse for delay should be acceptable because there is no scope for it in international trade. Not only this, the inability to ship the material as per the shipment schedule exposes the Indian exporter to levy of penalty & losing the Customer in itself. As on date, the ego & arrogance of the officials is the biggest stumbling block because they don’t seem to have a mindset to facilitate the exporters & help the nation. The SCOMET licenses are delayed beyond 60 days & exports are at a loss & the exporters getting killed for the inefficient & incompetent handling of a simple process. Finally, it is pertinent to point out here that when the officials are working on the systems, there is a footprint left in the system to find out by way of the case study that what & where are the bottlenecks to be taken care off but then there has to be a willing & hardworking official to ensure that & that does not seem to be the case. This is the reason we are unable to deliver & realize our true potential & whenever the foreign buyer calls up, bow down my head in shame, thanks to the abject failure of the DGFT.
Conclusion : The current state of affairs at the DGFT is untenable. Exporters are suffering, national interests are compromised, and India’s competitiveness is undermined. Urgent reforms are needed to overhaul the system, prioritize efficiency, and restore confidence in India’s export ecosystem. Only then can we fulfill our true potential on the global stage and prevent further damage to the nation’s economic prospects. It’s time for decisive action to rectify the abject failure of the DGFT.
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