Alerts & Updates 17th Jul 2025
Dear Reader,
We are writing to you with an important update concerning the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) policy. The Directorate General of Foreign Trade (DGFT) has circulated a draft document containing Management System Requirements for Internal Compliance Program for the exports of dual-use items and is seeking stakeholder consultations.
| Background | The DGFT maintains the SCOMET list, which includes dual-use items i.e., the goods, software, and technologies, that can be used for both civilian and military applications, including as weapons of mass destruction. The list is organized into eight (8) categories. Export of SCOMET list items is permitted only with export authorization from the government, unless the item concerned is specifically exempted or prohibited for export.
In order to remove the need for a case-to-case basis pre-export authorization for the export/re-export of certain SCOMET Items/Software/Technology, the Foreign Trade Policy (FTP) introduced the option of seeking general authorizations including the Global Authorization for Intra-Company Transfers (GAICT) or the General Authorization for export after repair (GAER) issued by the DGFT, and the Open General Export License (OGEL) issued by the Department of Defence Production (DDP). While submitting applications for these general authorizations, applicants are required to submit a certified or approved Internal Compliance Program (ICP) of the organization as an application pre-requisite. An ICP provides an organization’s internal policies and procedures to ensure necessary compliance with export control laws and regulations. |
| Features of DGFT’s draft management system requirements for ICPs | The DGFT, vide Trade Notice No. 07/2025-26 dated July 14, 2025, has circulated the draft document containing management system requirements for ICPs (ICP MSRs). The purpose of the ICP MSRs is to assist organizations identify and minimize risks associated with export or transfer of dual-use items, and to ensure compliance with national export controls laws and regulations. Its notable features are as below:
The DGFT has also provided a case study in implementation of an ICP by a technology manufacturing company in Annex A of the ICP MSRs. |
| ELP’s Preliminary Remarks | Organizations engaged in the export or transfer of dual-use items will benefit by instituting ICPs for the purpose of complying with Indian export controls laws and regulations. The ICP MSRs circulated by the DGFT are a step towards helping such organizations build effective ICPs. At the same time, the DGFT’s draft ICP MSRs come at a time when regulatory changes are afoot in global export controls and the risk of regulatory fragmentation must be taken into consideration. |
| Way Forward/What should companies do? | While we at ELP would be making our comments to the DGFT, we would request Stakeholders to also contribute their comments within a specified period of 8 days (i.e., until 24 July 2025) from the date of the Trade Notice to submit their comments to scomet-dgft@gov.in. |
For any queries or comments on this update, please feel free to contact us at elptrade@elp-in.com or the authors: sanjaynotani@elp-in.com, ambarishsathianathan@elp-in.com, harikabakaraju@elp-in.com and shantanusingh@elp-in.com.
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