Government imposes curbs on certain gold jewellery, articles

• There have been repeated incidents when substantially cheaper gold is imported from specific countries, taking advantage of a free trade agreement.
• Case of Korea: Jewellers were importing gold jewellery from South Korea under the Indo-Korea Comprehensive Economic Partnership Agreement, which was later addressed by an excise duty. This justified on the basis that South Korea does not mine any gold and was only exporting the metal to India after doing value addition through processing.
• Case of Indonesia: Here advantage was taken of the India-Asean Free Trade Agreement (FTA), where post GST adoption, Indonesian gold became cheaper relative to the major gold imported which is taxed at 15%. In case of Indonesia, applying excise was difficult as it is a gold-mining nation and thus fulfils the local value-addition norm as required under the free trade agreement.

IEC (Import Export Code) is required by anyone looking to start an import/export business in the India. It is issued by the DGFT. IEC is a 10-digit code that is valid for a lifetime. Generally, importers cannot import goods without the Import Export Code, and exporters cannot benefit from the DGFT for the export scheme, etc. without the IEC.

Situations Where IEC is not required

• According to the most recent government circular, IEC is not required for all GST-registered traders. In all such cases, the trader’s PAN will be interpreted as a new IEC code for the purposes of import and export.
• Import Export Code (IEC) is not required if the goods exported or imported are for personal use only and are not used for commercial purposes.
• Import/Export done by Government of India Departments and Ministries, as well as Notified Charitable Institutions, do not require an Import Export Code.

Below are designated import certificate issuing authorities:

• The Department of Electronics for computer and computer-related systems;
• The Department for the Promotion of Industry and Internal Trade, Technical Support Wing, for organized sector units registered under it, except for computers and computer-based systems;
• The Ministry of Defense for defense-related items;
• The Director General of Foreign Trade for small-scale industries not covered above

Categories of Import

1. Freely importable items: Most capital goods fall into this category. Any product declared as Freely Importable Item does not require import licenses.
2. Licensed Imports: There are a number of goods, which can only be importer under an import license. This category includes some 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.
3. Canalised Items: There are certain canalised  items that can only be imported 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).
4. Prohibited items: Only four items-tallow fat, animal rennet, wild animals and unprocessed ivory-are completely banned from importation.

Import licensing refers to the requirement of obtaining a license or permit from the importing country’s government or designated authority before importing certain goods. This license may be necessary for various reasons, such as ensuring compliance with health and safety standards, controlling the import of certain sensitive goods, or implementing trade restrictions for specific reasons.

WTO and import licensing 

• The WTO recognizes that import licensing can be used as a legitimate trade policy tool. However, it also sets certain rules and guidelines to prevent the misuse of import licensing measures, ensuring that they are not used as unnecessary barriers to trade or protectionist measures that discriminate against foreign products.
• Under the WTO’s Agreement on Import Licensing Procedures (ILP), member countries are required to establish transparent and predictable procedures for issuing and administering import licences. These procedures should be applied in a non-discriminatory manner, without unnecessary delays or restrictions.
• Additionally, the WTO’s General Agreement on Tariffs and Trade (GATT) prohibits quantitative restrictions on imports, such as quotas or bans, unless they fall under specific exceptions allowed by the agreement. Import licensing measures should generally be in the form of non-quantitative restrictions and should not be used as a means to restrict imports beyond what is necessary.