Industrial Chemicals Allowed in Bonded Warehouses Under FTP 2023 Clarification

Clarification on Warehousing of Chemical under Para 2.36(a) of Foreign Trade Policy (FTP) 2023 by DGFT dt 6th Feb 2026

India’s Foreign Trade Policy (FTP) 2023 marks a shift toward continuity, adaptability, and trade facilitation, anchored on four pillars: remission-based incentives, collaborative export promotion, ease of doing business, and support for emerging areas like e-commerce. A key issue arose under Paragraph 2.36, which governs private and public bonded warehouses, as it excluded “hazardous chemicals.” Industry stakeholders highlighted that many industrial chemicals—such as intermediates, petrochemicals, and pharmaceutical inputs—are essential to supply chains and are already handled under regulated frameworks at ports and CFSs. Responding to these concerns, the government clarified that the exclusion was intended to restrict unregulated warehousing of hazardous waste, not legitimate industrial chemicals. Accordingly, warehousing of industrial chemicals is now permitted in bonded warehouses, subject to strict compliance with the Customs Act, 1962, import-export regulations, and safety laws. This clarification aligns FTP 2023 with its trade-facilitative intent, ensuring supply chain continuity while maintaining regulatory safeguards.

Introduction

India’s Foreign Trade Policy (FTP), 2023 is based on four key pillars:

(i) incentive to remission;

(ii) export promotion through collaboration;

(iii) ease of doing business and reduction in transaction costs; and

(iv) emerging areas like e-commerce (Press Information Bureau 2023).

The FTP 2023 is a step up from the earlier trade policies as it moves away from five years regime, and focuses more on continuity with in-built feedback mechanisms to adapt to new and emerging challenges. Furthermore, the policy effectively employs nudge by acknowledging exporters as partners in capacity building and development.

Extract of 2.36 of Foreign Trade Policy(FTP) 2023 deals with Private/Public Bonded Warehouses for Imports:

Para 2.36 of Foreign Trade Policy (FTP), 2023 states as under:

(a) Private/ Public bonded warehouses may be set up in OTA as per rules, regulations and notifications issued under the Customs Act, 1962. Any person may import goods except prohibited items, arms and ammunition, hazardous waste and chemicals and warehouse them in such bonded warehouses.

(b) Such goods may be cleared for home consumption in accordance with provisions of FTP and against Authorisation, wherever required. Customs duty as applicable shall be paid at the time of clearance of such goods.

(c) The clearance of the warehoused goods shall be as per the provisions of the Customs Act, 1962.

Clarification:

• The industry has highlighted that hazardous chemicals such as industrial raw materials, intermediates, Speciality chemicals, petrochemicals, and pharmaceutical inputs play a significant role in the value chain of India’s external trade.
• stakeholders have argued that the current exclusion of “hazardous chemicals” under Para 2.36(a) creates a lack of uniformity, as the handling and storage of such cargo are already operationally permitted at various ports and Container Freight Stations (CFS) under established regulatory frameworks.
• It was represented that permitting these chemicals in bonded warehouses is critical for ensuring continuity in supply chains, industrial productivity, and trade
• In order to address the issues raised above, in exercise of powers conferred under Para 2.58 of the FTP 2023, it is hereby clarified that the exclusion of “hazardous chemicals” in Para 2.36(a) was primarily intended to restrict the unregulated warehousing of hazardous waste and chemicals along with other prohibited items mentioned therein.
• Further, to facilitate trade in the true spirit of Para 36 of FTP 2023, read with the relevant rules and regulations under the Customs Act, 1962 (as amended), it is clarified that warehousing of industrial chemicals is permitted in public and private bonded warehouses under Para 2.36(a) of FTP, 2023, provided the following conditions are met:
• The facility shall comply with all applicable domestic laws, rules, and regulations governing the safe storage and handling of chemicals. The authority competent to approve and/or license such facilities under the Customs Act, 1962, and the rules and regulations framed thereunder, shall ensure due compliance with the said requirements in respect of the storage and handling of such chemicals.
• The chemicals proposed to be warehoused shall comply with all applicable conditions prescribed under the Import and Export Policy notified pursuant to the Foreign Trade (Development and Regulation) Act, 1992, as well as the relevant provisions of the Customs Act, 1962, and the rules and regulations made thereunder, as amended from time to time.
• Further, all other provisions of Paragraph 2.36 of the Foreign Trade Policy, 2023, shall be duly complied with.

Hazardous chemicals

Under the Foreign Trade Policy (FTP) 2023, hazardous chemicals are classified as prohibited goods, meaning their import or export is generally banned to protect national security and public health.

• The FTP 2023 prohibits the import and export of hazardous waste and chemicals, and violations can lead to confiscation and penalties.
• Hazardous chemicals must be imported only after obtaining prior authorization from competent authorities.
• The import of hazardous chemicals is restricted, and warehousing is not permitted without specific permissions.
• For more detailed information, you can refer to the official FTP 2023 guidelines.