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Annexure: Draft Public Notice for amendments in Para 10.10 of Handbook of Procedures
Public Notice No. /2024-2025
New Delhi, Dated the
Subject:- Amendments in Para 10.10 of Handbook of Procedures for issue of export
authorization for "Stock and Sale" of SCOMET items
In exercise of the powers conferred under Paragraph 1.03 of the Foreign Trade Policy,
2023, the Director General of Foreign Trade, hereby makes amendments to Paragraph 10.10
(Stock and Sale) of the Handbook of Procedures (HBP) of the Foreign Trade Policy (FTP) 2023,
with immediate effect.
2. The paragraph 10.10 of the Handbook of Procedures (HBP) of the Foreign Trade Policy
2023 is substituted to read as under:
“10.10 Issue of export authorization for "Stock and Sale" of SCOMET items
Application for grant of authorization for bulk export of SCOMET items (excluding Category 0,
Category 3A401, Category 6 and transfer of technology under any category) from an Indian
exporter to an entity abroad (hereinafter referred to as ‘Stockist’) for subsequent transfer to the
ultimate end users shall be considered by IMWG, on the following conditions:
Applicability and scope of policy
a. Stockist refers to an entity abroad to whom the SCOMET items are originally exported by
Indian Exporter. Stockist entity should be a subsidiary/principal (parent) company abroad of
the Indian exporter. The stockist entity could also be an affiliate of the Indian Exporter,
Indian or Foreign Original Equipment manufacturer(OEM)/Electronic Manufacturing Services
(EMS)/Contract Manufacturer(CM)*.
* This could be considered based on additional documents submitted by the Indian
company such as AEO certification, contract / agreement between the Indian company and
its Original Equipment Manufacturer, etc.
For the purpose of this policy, EMS is defined “as a business service provided by companies
that specialize in the manufacturing, assembly, testing, return, repair and sometimes design
of electronic products for OEMs. These providers are responsible for assembling electronic
components and devices based on the customer’s specifications, and the services are often
provided at a cost-effective price compared to setting up internal manufacturing facilities.”
b. Export shall be permitted from the Indian company (applicant exporter) to ‘Stockist’ entity
on the basis of an End Use declaration from the ‘Stockist’, through the specified End User
Certificate (EUC) for 'Stock & Sale' purpose;
Note: IMWG may relax the provisions of a. and b. above in certain cases, considering the
description/end use/end user of the item.
Application for export to stockist abroad and transfer to end users in specific countries
c. The exporter shall submit application in prescribed proforma (ANF-10B) along with
following documents from the stockist:
i.
Documentary proof regarding corporate relationship between the Indian exporter and
stockist;
ii.
End-use/End-user Certificate from stockist entity abroad in Appendix-10j (iii);
iii.
List of countries (in the EUC) to which the items imported from India would be exported
by the stockist;
iv.
Purchase Order(s)/Invoice(s) or a document in lieu thereof;
v.
Technical specifications of the product(s);
vi.
Copy of Internal Compliance Program (if applicant exporter/ stockist entity has one)
vii.
Copy of AEO certificate (in case of *).
viii.
Undertaking on the letterhead of the firm duly signed and stamped by the authorized
signatory stating, “The applicant exporter declares that subsequent to the issuance of
export authorization, if the licensee has been notified in writing by DGFT or if they know or
has reason to believe that an item may be intended for military end use or has a potential
risk of use in or diversion to weapons of mass destruction (WMD) or in delivery of their
missile system, the exporter would not be eligible for Stock & Sale policy for export of
that/those item(s) and would apply separately to DGFT for a fresh authorization in terms of
regular policy”. Action will be taken against the exporter under FT (D & R) Act, 1992 for any
mis-declaration.
ix.
Copy of corporate registration/business registration or certificate of incorporation of
stockist entities in the destination countries.
In-principle approval for export to the stockist, and, for sale by stockist within the
country of the stockist, and, for re-export by stockist to end user in other countries
d. The application would be assessed for grant of authorization for export to the stockist,
and, for grant of in-principle approval for re-export to specified countries of ultimate end
use approved by the IMWG;
e. No authorization would be required for transfer from the stockist to the ultimate end
user(s) within the country of the stockist and for re-export to end users in such approved
countries;
f. Re-export to such approved countries would be subject to the export control regulations
of the country of the stockist;
g. Country would denote an independent sovereign entity which is a distinct national entity
in political geography. Hence, transfers within an economic union or a customs union
would not qualify as “same country transfers”;
Post-reporting for same country transfer and re-export to pre-approved countries by the
stockiest
h. In case of sale/transfer by the stockist within the same country and for re-export/re-
transfer to the end users in countries, for which, in-principle approval has been granted,
the Indian exporter/licensee shall submit details of all such transfers to SCOMET
Division of DGFT (Hqrs) in ANF-10B, including EUCs[Appendix-10J(i), 10J(ii) as
applicable] from all ultimate end users and Bill of Entry into the ultimate destination
countries(for export outside the country of stockist), within 3 months of every such
transfer;
Application for re-export to other countries (other than pre-approved)
i.
In respect of re-export/re-transfer of items from the stockist entity to the end users
outside the country of the stockist, for which, in-principle approval has not been granted
at the initial stage, the Indian exporter (stock and sale authorization holder) shall submit
application for re-export/re-transfer to SCOMET Division in DGFT (Hqrs), in ANF 10B,
through email (scomet-dgft@nic.in), after obtaining following documents from the
stockist entity:
i.
End-use/End-user Certificate from each link in the supply chain as per Appendix-
10J(i) /10J(ii), as applicable;
ii.
Purchase Order(s)/Invoice(s) or a document in lieu thereof ;
iii.
Technical specifications of the product to be transferred (only if there is any value
addition in the product by the stockist)
j. IMWG shall consider export authorizations for allowing such re-export/re-transfer based
on end use/end user verification;
Repeat Order cases
k. Applications for export of same SCOMET items to same stockist entity, and re-export/re-
transfer of same SCOMET items from the stockist entity to the end-users (within the
country of stockist entity and only the countries of ultimate end use where in-principle
approval has been granted), i.e. repeat orders, shall be considered by Chairman IMWG,
without any consultation with IMWG members;
Annual reporting on inventory of the stockist and transfers/re-exports
l. The Indian exporter (Stock & Sale Authorization holder) shall submit a statement of
exports made from India to the stockist, transfers made by the stockist to the final end-
users and inventory with the stockist, as on 31st December of each calendar year, by
31st January of the following year. A failure to do so may entail imposition of penalty and
/or cancellation of authorization under the stock and sale policy;
m. The items exported to the stockist entity under the stock and sale authorization should
be transferred to the final end-user(s) within the validity period of the authorization as in
paragraph 10.17 of HBP;
n. The authorization may be revalidated as per the procedure mentioned in paragraph
10.20 of HBP;
3. Effect of this Public Notice:
The existing "Stock and Sale" policy under Paragraph 10.10 of the Handbook of Procedures
(HBP) of the Foreign Trade Policy (FTP) 2023 has been amended to revise the applicability of
the policy, and allow export from the Indian company (applicant exporter) to its subsidiary /
principal (parent) company abroad / Original Equipment Manufacturer under the Stock and Sale
policy.
(Santosh Kumar Sarangi)
Director General of Foreign Trade
Ex-officio Additional Secretary, Government of India
E-mail: dgft@nic.in
(Issued from F.No. 01/91/171/37/AM10/EC(S))
