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Introduction:

With globalisation, the world has begun a common market or aa small village connecting each and every corner. As the world became a free market movement of products initiated with a great speed, now the question was which authority, rules, regulations etc will govern above such kind of transactions in a global market. When it comes to international trade, there have been many losses governing only certain aspects of the trade. India as a developing country needs to maintain relation with different nations with the object of economic growth, diverse market, commerce and other activity involving the movement of goods.

A law such as custom act came into the picture with the prospect of gaining control over the movement of goods on an international scale now the question is, why do we need a law for trade on an international scale, international trade is a term which defines market can be accessible by any individual without any restrictions with such freedom comes with the risk of potential hazard /threat to curve that situation every nation comes with their sets of rules and regulations to act as an aid and as well as to promote healthy trading in the market there have been various laws, but the foreign trade act 1992 specifically deals in overall international trade with the aim of promoting products which are required for this nation to grow.

Historical Background

Considering overall regulations introduced by the government of India did not focus specially and specifically on trade and foreign relation we have laws such as custom act 1962 which played a vital role in imports and exports of the country by providing guidelines for the commodities which is to be permitted on this land and vice – versa but the custom act has its limitations it sure does provide the details of goods exported or imported, it mainly focused on the tax regime. With the emergence of new economic policy, a set of freedom or free trade at a global scale provided various traders to get into the international market for trade being aware of the situation, the government introduced THE FOREIGN TRADE ACT 1992 the components of this act focused on exports and imports with the free and legal movement of goods.

The whole purpose is to not only achieve a great number of trade but along with that international relations will also be considered just like India, every country who is majorly involved in international trade has their own trade policies this foreign trade policy came into existence by replacing import and export act 1947 with the intent to provide a framework for the standardization of foreign trade.

Government Intervention

The central government holds absolute power with respect to the movement of goods. Section 9A of the act provides the power of government to impose restrictions, there are times when the government feels after an inquiry that such trade would not be suitable then in such case then it will be completely restricted. One of the important points is that to know such restrictions will be imposed on any developing countries who import to engage in any foreign trade that individual must come under the provision of this act only then that individual can engage in foreign trade the right is provided under section 7 of the act the license gives power to the holder to engage in business with foreign countries to buy and sell goods legally it’s been more than twenty years, so far the government and license holder work hand In hand.

Whenever any goods are imported the government or the competent authority holds the right to search and seize goods on the grounds of any violation and impose any condition as a deem fit, this power is not limited up to inspection but also includes enduring premises where the goods stored, manufactured, produced, kept supplied received and traded for the purpose and objective of import and export. Documents, articles, information can be seized with respect to such trade. It was pointed out that in case of failure of export obligation provided under section 6(2)(b) wherein the exporter entered into bond would be held liable under Foreign Trade act and not in customs act[1].

Specific Goods

There are certain commodities which cannot be dealt without special regulations, Supreme court observed that any item which is not in compliance of law would require prior permission, in this case, the respondent imported device which was clearly in violation of Waste management rules and such would attract penalty and reexport[2], finally came to the conclusion that action of custom authority held valid. In one instance any such product or goods or objects or articles which is somehow related to, or comes under the provision of the Weapons of Mass Destruction and their delivery system Act 2005 cannot be traded without permission and authority of the competent authority.

No imports of such kind can be made as well. As per section 14C, no such trade can be initiated which involves any technology, machinery, material, equipment which is intended to be used in manufacture, design, development of any weapon such as biological, chemical, nuclear, explosives or in any manner whatsoever causes serious injury, a threat as determined the government can cancel the license and barred from entering into any such trade ever again such action will be taken before giving a chance to hear the reasons of such actions the director general or any person authorised by him holds such authority.

Limitations

Even though the act provides vast guidelines with respect to trades but its not exhaustive enough, one of the major reasons of not completely relying on foreign trade is war and differences (dispute). In any war situation, lots of discrepancies can be seen as too much reliance on imports or exports causes weak internal import system which often leads to starvation. One of the other limitations is the undue influence of the supreme nation at times may threaten developing country like India to engage in trade compromising of laws. Many more reasons exist which cannot be avoided when we deem in foreign trade.

Adjudicating Authority

In case of any violation, the director-general who acts as the adjudicating authority may impose penalties, fines, and such actions accordingly if any individual aggrieved by such order of the director-general may prefer an appeal against the order within the period of 45 days. Final order under appeal will be given after considering the necessary enquiry a reasonable chance will be given to hear the appeal once the order is made by the authority shall be final section 16 provides for the power to review the order of appeal in a case wherein the person is not satisfied with the adjudication of appellant authority may go for review on the following grounds:

  • Wherein within a period of two years of such order under appeal may provide a reason as to buy such order shall be varied.
  • When the opportunity was not given to being heard at that time can be a ground for review all such power vested with the adjudicating authority is as good as the power of the civil court under the Code of Civil Procedure while trying any suit and in case of any adjudication under this law will be deemed as under the code of criminal procedure.

The petitioner filed writ under 226 withholding the power of commissioner to shut down the factory on violation of misusing duty-free raw materials[3]. 

Savings

As there are strong and strict actions against violation of provisions there are also provisions which prevent from such harsh action.

  • When any act is done in good faith will come under the saving provision of section 18.
  • This law cannot be substituted or delegated on behalf of any other law for the time being in force.

Conclusion

For any developing country, international trade is important for maintaining relation on a global scale, providing leverage on diplomatic levels too. one aspect of this relations usually aids in long term standing relations with the difference in culture and opinion. It empowered the state to implement provisions with the target of achieving the goal for regulation in international trade and providing an increase in exports from the country and clearing the way for smooth imports with regards to all faction of foreign trade.

This act provides the target with the objective of economic development to the licensed trader providing reliefs, set offs, an exemption for achieving the specified deficiency for the country. This act runs concurrently with the customs act and any law which set out guidelines for protection and conservation of the environment, society or living beings. The formulation policy vested with certain power to modify, restrict, govern exporter or importer who holds ICE code who follows the command of Director-General or any authorised officer by DG. Facilitate in sustainable growth as the exports of abundance in the country, the channel of distribution for quality product and services at the internally competitive prices reached to the domestic consumer, it also penetrates economic growth by giving a path to the material for enhancement in technological development in every industry, also to meet every requirement at a very convenient price.


References:

[1] M/S. Fal Industries Limited vs Directorate General of Foreign Trade on 21.08.2013. HC Madras.

[2] Commissioner of Customs vs Atul Automations Private Limited

[3] J.S Gupta v. Union of India 01.03.2005. Allahabad HC


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