Alerts & Updates 29th Mar 2024

Liberalization of Export Control Policy: Exports of Telecommunication-related items, and Information Security items


Sanjay Notani Partner | Mumbai
Ambarish Sathianathan Partner | Mumbai
Harika Bakaraju Principal Associate | Mumbai

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  • Introduction

    In furtherance of the powers conferred under the Foreign Trade (Development and Regulation) Act 1992, on 27 March 2024, the Directorate General of Foreign Trade (DGFT) issued an amendment in Paragraph 10.08 of the Foreign Trade Policy and Chapter 10 of the Handbook of Procedures of the FTP concerning bulk-licensing.

    Prior to the amendment, an export authorization was required for each export/re-export of Telecommunication-related items, and Information Security items falling under category 8A5 of the Special Chemicals, Organisms, Materials, Equipment, and Technologies List (SCOMET list). However, post amendment, an Indian exporter intending to export/re-export certain Telecommunication-related items and Information Security items falling under category 8A5 can apply for General Authorization for the Export of Telecommunication items (GAET) and General Authorization for the Export of Information Security items (GAEIS) respectively.

    The amendment mainly obviates the need for a case-to-case basis pre-export authorization for the export/re-export of certain items falling under category 8A5.

  • Scope of GAET/GAEIS

    A GAET can be obtained for Telecommunication items under category 8A5 Part 1 excluding technology and software falling thereunder and items as listed in Annexure-I to the GAET. As regards GAEIS, it can be obtained for Information Security items excluding technology under category 8A5 Part 2. While the items covered under both policies differ, the eligibility for applying for the GAET/GAEIS license and the post-reporting requirements prescribed under these policies remain the same. Accordingly, the below analysis takes into account both GAET and GAEIS.

  • Eligibility for exporting without pre-export authorization

    Any Indian entity (Indian exporter/exporter) can export without case-to-case pre-export authorization subject to inter alia the following:

    • The applicant exporter shall submit an online application in the prescribed format along with certain supporting documents:

    – Detailed description of the items sought to be exported.

    – End-user certificate from all the entities in the supply chain.

    – A list of countries where the exports are sought to be made.

    – An undertaking on the letterhead of the applicant stating the following:

    a) On-site inspection will be allowed by the applicant, if required, by the DGFT or the authorized representatives of the Government.

    b) Items sought to be exported shall not be used for purposes other than those indicated in the EUC.

    c) The use shall not be changed not items modified or replicated without the prior consent of the Indian Government.

    d) After the issuance of the GAET/GAEIS, if the licensee has been notified by the DGFT or if the licensee knows or has reason to believe that the item may be intended for military end use or has potential risk of use or diversion to weapons of mass destruction or in delivery of their missile system, the exporter would not be eligible for GAET/GAEIS.

    e) Action will be taken against the exporter for any misdeclaration.

    – Certified/approved internal compliance program (ICP) by the company’s compliance manager.

    – Authorized Economic Operator (AEO) T2 certification.

    – In the case of re-export, certain additional documents such as the proof of import should be submitted.

    The above application and supporting documents would be assessed by the Inter-Ministerial Working Group (IMWG) for the issue of GAET/GAEIS.

  • Ongoing compliance – after issuance of the GAET/GAEIS and before the actual export

    As part of ongoing compliance, the applicant is required to ensure inter alia the following after the issuance  of the GAET/GAEIS but before the actual export is made:

    • On a quarterly basis, the applicant must provide the details of exports made along with the EUC for each export in prescribed formats. The EUC must be prepared for each entity involved in the supply chain.
    • Existence of an agreement or a purchase order among others.
  • Ongoing compliance – after exports made under GAET/GAEIS

    For the exports made under GAET/GAEIS, the Indian exporter shall be required to submit the following:

    • On a quarterly basis, the applicant must submit post-shipment details for each export/re-export under the GAET/GAEIS for a period of three years.
    • In the case of re-export, certain additional documents such as the proof of import should be submitted.

    Any failure to meet these requirements may result in the imposition of a penalty and/or suspension/revocation of GAET/GAEIS.

    In addition, the exporter has to keep records of all the export documents in electronic form for 5 years from the issuance of GAET/GAEIS.

  • Validity of GAET/GAEIS
    • GAET/GAEIS shall be valid for a period of three (3) years from issuance.
    • This is however subject to fulfilling the post reporting requirements on a quarterly basis.
    • GAET/GAIES cannot be revalidated as per the HBP.
  • Other relevant points/conditions for the issuance of GAET/GAEIS
    • GAET/GAEIS shall not be issued in case the SCOMET items are used to design, develop, acquire, or manufacture, possess, transport, transfer, and or used for military applications, explosives, chemical biological, nuclear weapons, or missiles capable of delivering weapons of mass destruction and their delivery system.
    • GAET/GAEIS shall not be granted for the countries/entities covered under the UNSC embargo or sanctions list, or on assessment of proliferation concerns or national security and foreign policy consideration, etc.
    • In case of an amendment to the list of countries to the existing list of countries submitted with the application, the applicant must obtain prior permission.
    • IMWG has the right to deny the GAET/GAEIS without providing any reasons.
  • ELP Comments

    Globally recognized for its telecommunications and information security services, India’s telecommunication market is the second largest market in the world.[1] The GAET/GAEIS policy serves to bolster this sector, facilitating increased and timely exports while adhering to export control regulations. Notably, unlike the Global Authorization for Intra Company Transfer (GAICT policy), the GAET/GAEIS policy does not mandate a pre-condition regarding the relationship between the applicant and the end-user. This progressive approach aligns with the Government of India’s (GOI) objective of promoting global exports under the “AatmaNirbhar Bharat” initiative.

    That said, certain aspects require stakeholders to be vigilant in using the GAET/GAEIS:

    As part of the application process, the applicant is required to provide a list of countries to which the exporter intends to export. After obtaining the GAET/GAEIS, the said list can be amended with the approval of the DGFT. This is a departure from the pre-condition set forth under the GAICT policy (whereunder it requires that the exports should ultimately be made to a specified list of countries under the GAICT policy). While the Indian government has liberalized the number of countries to which exports can be made, it remains to be seen if the

  • References

    [1] Indian telecom industry in 2023: Setting on the pathway to global success, December 20, 2023, available at URL:

Disclaimer: he information contained in this document is intended for informational purposes only and does not constitute legal opinion or advice. This document is not intended to address the circumstances of any individual or corporate body. Readers should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.