Oct 03, 2019

India’s Export Control – The SCOMET List


Sometime in 1984, a United Nations investigation team found that Iraq had used chemical weapons in its war with Iran. The team found that only some of the chemicals and materials for its chemical weapons had been sourced through legitimate business channels. To curb sale of certain chemical products, some countries introduced export controls. But such export controls were never uniform as they differed from nation to nation and attempts were made to circumvent these regulations. This led to the formation of Multilateral Export Control Regimes which provided uniform norms and regulations for the member nations to control the export of sensitive items and technologies.

The Indian Government has liberalized import and export restrictions to a large extent in the last decade. Yet, some restrictions continue to exist like those intended to cover goods and technologies which can potentially have dual-use. This article aims to discuss India’s export control regime with a special emphasis on the Special Chemicals, Organisms, Materials, Equipment and Technologies (‘SCOMET’) list which governs the export of dual-use items from India with a view to ensure that such sensitive items do not fall into the hands of proliferators, non-state actors and terrorists.


The Foreign Trade Policy of India (‘FTP’) which governs the export and import of goods and services provides that exports and imports are free (i.e. without any licensing requirement or governmental approval) unless specifically prohibited or regulated or subject to exclusive trading through the State Trading Enterprises. Over the years, trade in majority of the cases has been free, in some cases regulated, and in very few cases prohibited. Prohibition can be basis a country (Iran / Democratic People’s Republic of Korea), product (charcoal from Somalia), organization or individual (individuals or entities associates with Al Qaida).

In such environment of unrestricted international trade, there exists the regulated export of SCOMET items that are listed in Appendix 3 of Schedule 2 of Indian Trade Classification (Harmonized System) [‘ITC(HS)’] Classification of Export and Import Items.

Regulatory framework of India’s Foreign Trade

The Foreign Trade (Development & Regulation) Act, 1992 (‘FTDR Act’) provides for the development and regulation of India’s international trade. The FTDR Act has been enacted with an intention to provide a framework for the development and standardization of India’s foreign trade by the way of facilitating imports into enhancing exports from India and all the other matters related to the same. The FTDR Act empowers the Government of India to enact the FTP.

The FTP is a detailed policy statement on India’s international trade and facilitates the exports from and imports into India. The FTP also contains within its ambit the Handbook of Procedures (‘HBP’) along with the item-wise export and import policy called the ITC(HS) which is notified by the Directorate General of Foreign Trade (‘DGFT’).

Under the FTP, import into and export from India is ‘free,’ unless specifically ‘restricted’, i.e., subject to a license, permit or authorization or, ‘prohibited.’ The policy restrictions under the FTP are contained in the Schedules appended to the ITC(HS). Schedule 1 of the ITC(HS) pertains to the Import Policy, whereas, Schedule 2 of the ITC(HS) pertains to the Export Policy. Further, the DGFT is the authority responsible for the effective implementation of the FTDR Act as well as the FTP as amended from time to time.


As discussed above, SCOMET is an acronym for Special Chemicals, Organisms, Materials, Equipment and Technologies. This list contains goods which are considered as dual-use items, i.e., goods, technology, chemicals, organisms etc. which potentially have both, civil as well as military applications and are capable of being deployed as weapons of mass destruction.

The SCOMET list of items was notified under Section 5 and Section 14A of the FTDR Act of 1992. In 2010, the FTDR Act of 1992 was amended and a new Chapter IV-A was introduced. This newly inserted chapter deals with controls on exports of specified goods, services and technologies and empowers the Central Government to monitor and amend the list of such goods, services and technologies.

The SCOMET list is included in Appendix 3 of Schedule 2 of ITC (HS). The export of the items under the SCOMET list is restricted and subject to an authorization/license. The SCOMET items are classified under 9 distinct categories:

i.     Category 0:
Nuclear materials, nuclear related other materials, equipment and technology

ii.    Category 1:
Toxic chemical agents and other chemicals

iii.   Category 2:
Micro-organisms, toxins

iv.    Category 3:
Materials, Materials Processing Equipment and related technologies

v.     Category 4:
Nuclear-related other equipment and technology, not controlled unde

vi.    Category 5:
Aerospace systems, equipment including production and test equipment, related technology and specially designed components and accessories thereof

vii.   Category 6:
Munitions list

viii.  Category 7:

ix.   Category 8:
Special Materials and Related Equipment, Material Processing, Electronics, Computers, Telecommunications, Information Security, Sensors and Lasers, Navigation and Avionics, Marine, Aerospace and Propulsion.

It has been further clarified that the SCOMET list also includes used items falling under the list, non-controlled items containing one or more controlled component(s) where the controlled component(s) is the principal element, as well as technology which is required for the development, production or use of items controlled under Category 8 of the SCOMET items.

Multilateral Export Control Regimes and India

The Multilateral Export Control Regimes are informal groups of like-minded supplier nations which seek to protect their interests and regulate the export of sensitive dual-use items so that such items do not fall into the hands of non-state actors and terrorists. Today, there exists four such Multilateral Export Control Regimes, which are:

i.     Missile Technology Control Regime for the control of rockets and other aerial vehicles capable of delivering weapons of mass destruction;

ii.    Wassenaar Arrangement on export controls for conventional arms and dual-use goods and technologies;

iii.   Australia Group for control of chemical and biological technology that could be weaponized; and

iv.    The Nuclear Suppliers Group, for the control of nuclear related technology.

India has recently become a part of three of the above mentioned export control regimes, the only exception being the Nuclear Suppliers Group, to which India is adherent. Upon becoming a member of these regimes, India has aligned its SCOMET list with them thereby enabling it to better monitor and control the export of dual-use items. It also enables the Government and industry to ensure that Indian exports are not accessed by proliferators, terrorist groups and non-state actors. Further, it enables Indian exports to become a part of the global supply chains wherein India’s trading partners prefer adherence of Indian exports to the highest international standards.

Consequences of Exporting SCOMET Items without Authorization

In a case where any of the items falling under the SCOMET list are exported without the proper authorization or license, penal provisions under the FTDR Act and the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities)  Act, 2005 may be attracted. The penalties, inter-alia, include:

i.     Suspension or cancellation of the Importer- Exporter Code (“IEC”)[1];

ii.    Imprisonment for a period of not less than 5 years, which may extend to imprisonment for life along with a fine.

iii.   Fine of not less than INR 3 lakhs which may extend up to INR 20 lakhs or five times the value of the items exported.

Recent Developments

The global economy today is more inter-connected than ever before. Accordingly, it is imperative that a nation’s export-control framework, an indispensable component of its trade-facilitation measures, keeps track of an ever changing global economic and regulatory landscape. The DGFT, on its part, has been open to listening to the concerns of the industry, take into consideration the best practices from existing export control frameworks of other countries and make suitable amendments/ revisions to India’s SCOMET policy to reflect such international best practices. The following summarizes few recent developments in this regard.

i.     The DGFT has introduced Global Authorization for Intra-Company Transfers (‘GAICT’) for granting an advance bulk license for re-export of SCOMET items to overseas group companies availing license exception for original exports of such items to India. The scheme, which requires a case-to-case basis pre-export authorization, applies to re-export of all SCOMET items other than SCOMET items falling under Categories 0 (Nuclear materials), 1B, 1C (Toxic chemicals, to the extent re-exports to States not party to CWC), 3A401 (Prescribed high explosives, etc.), 5 (aerospace systems, etc.) and 6 (Munitions List), subject to the specific conditions prescribed by the DGFT.

ii.    The DGFT has permitted export of certain chemicals (Chloropicrin: Trichloronitro- Methane and Methyldiethanolamine) to State Parties to the Chemical Weapons Convention without an export authorization but subject to the condition that the exporter must notify such export in the prescribed format along with the End-Use Certificate to the National Authority, Chemical Weapons Convention, Cabinet Secretariat; the Ministry of External Affairs (D&ISA); the Department of Chemicals and Petro-chemicals and the DGFT within 30 days of such export. The exporter is also required to submit a copy of the bill of entry into the destination State Party to the DGFT within 30 days of delivery.

iii.   The DGFT has amended certain provisions in the HBP pertaining to the export of SCOMET items for (i) repair/ replacement abroad and subsequent return; (ii) repair/ replacement of indigenously produced SCOMET items in India and subsequent re-export; and (iii) export of imported SCOMET items to the same entity, or any authorized entity abroad after repair in India.


Notwithstanding the aforementioned developments, some challenges continue to exist for Indian exporters/ industries with regard to export of SCOMET items. A few of them are highlighted as under:

i.     An application for authorization of export of any item under the SCOMET list pertains to a specific export and does not provide any blanket authorization for export of such items by an exporter, if the item is not covered under GAICT. This makes the to and fro exchange of information not possible for development of software/technology at beta stages.[2] This is likely to affect the software and IT industry.

ii.    Export of specified chemicals (included in the SCOMET list) to certain countries is allowed without authorization subject to fulfilment of prescribed procedural conditions. However, such exemption has not been extended to software and technology pertaining to such chemicals.

In light of the above, it is imperative that the DGFT and industry continue to work together to iron out such remaining challenges so as to enable India to simplify its export framework, facilitate international trade and continue to be a significant player in the region.


The views and opinions expressed in this article are those of the authors. This article should not be construed as a legal opinion.


Suresh Varanasi, Partner
Sagnik Chatterjee, Associate
Suhail Bansal, Associate

[1] The FTP mandates that import into and export from Indian may only be undertaken upon obtaining an IEC from the DGFT. Accordingly, suspension/ cancellation of IEC effectively puts an end to an entity’s ability to undertake international trade.
[2] It may be noted that GAICT is applicable only for such goods/ software/ technology etc. which have been exported into India under a license exception. Accordingly, export of software at a development stage continues to remain a challenge.





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