Paragraphs 1 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Paragraphs 1.00 to 1.05 are the opening paragraphs of the Policy. They say under which law the Policy is made, from when it runs, how it can be changed, who notifies the procedure, which provision wins when two conflict, and what happens to older authorisations and to pending import contracts when an item's policy changes. The Handbook paragraphs 1.01 to 1.03 are read with them. If you want the text applied to a live contract or a changed item, a legal consultation can take you through it.
This article is based on the chapter-wise text of the Foreign Trade Policy, 2023 published on the DGFT website, as consulted on 2 October 2026; the copy carries no "updated up to" date. The procedure is taken from Chapter 1 of the Handbook of Procedures, 2023 as published on the DGFT website (file of July 2026), consulted on 2 October 2026. Later Notifications, Public Notices and Trade Notices should be checked before you act.
The Policy is notified by the Central Government under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (paragraph 1.00). It came into force on 1 April 2023 and continues until specified otherwise or amended (paragraph 1.01). The Handbook of Procedures is notified by the Director General of Foreign Trade through a Public Notice (paragraph 1.03). Where a specific provision exists, it prevails over the general one (paragraph 1.04). Authorisations issued before the Policy began stay valid for the purpose and duration for which they were issued (paragraph 1.05(a)).
What the Policy says
Paragraph 1.00: legal basis
The Policy is notified by the Central Government in exercise of powers under section 5 of the Foreign Trade (Development & Regulation) Act, 1992, "as amended". The Policy is therefore not a statute of its own. It is policy made under the Act, and it binds through the Act and through the conditions of each authorisation. Our article on section 5 of the Foreign Trade (Development and Regulation) Act, 1992 sets out that power; this article does not restate it.
Paragraph 1.01: duration
The Policy covers export and import of goods and services. It came into force with effect from 1 April 2023 and continues to operate "unless otherwise specified or amended". It has no end date. The paragraph also says that all exports and imports made up to 31.03.2023 are governed by the relevant earlier Policy, unless otherwise specified. For a shipment on either side of that date, the date of import or export decides which Policy applies.
Paragraph 1.02: amendment
Under paragraph 1.02(a) the Central Government, using the powers in section 3 and section 5 of the Act, reserves the right to amend the Policy by notification in public interest. See our article on sections 3 and 4 of the Act. In practice this means the Policy you read today can differ from the chapter you downloaded last year. Amendments come by notification, and a chapter file may lag behind a recent one.
Paragraph 1.03: Handbook, Appendices and Aayat Niryat Forms
The Director General of Foreign Trade may, by Public Notice, notify the Handbook of Procedures, including Appendices and Aayat Niryat Forms, or any amendment. The procedure laid down is the one to be followed by an exporter, an importer, a Licensing or Regional Authority or any other authority, for implementing the Act, the Rules and Orders made under it, and the Policy. The Handbook's own power is traced to section 6 of the Act; see section 6 of the Act on the Director General of Foreign Trade.
Paragraph 1.04: the specific prevails
Where the Policy or the Handbook spells out a specific provision, it prevails over a general one. When two paragraphs seem to say different things, look first for the one that deals with your exact situation.
Paragraph 1.05(a): earlier authorisations
Any licence, authorisation, certificate, scrip or instrument bestowing a financial or fiscal benefit, issued before the Policy began, continues to be valid for the purpose and duration for which it was issued, unless otherwise stipulated.
Paragraph 1.05(b): change of policy for an item
Item-wise import and export policy sits in Schedule I and Schedule II of the ITC(HS); this article states none of it. What paragraph 1.05(b) fixes is the rule for a change. The importability or exportability of an item is governed by the policy on the date of import or export. The paragraph points to paragraph 2.17 of the Handbook for how that date is defined, and says the Bill of Lading and the Shipping Bill are the key documents for deciding the date of import and of export respectively.
The Policy uses a different one-word label for items that need no authorisation; this article calls them items permitted without an authorisation. If the policy of an item changes from that position to restricted, prohibited, state trading or otherwise regulated, then imports and exports already made before the date of the regulation are not affected. Imports through high sea sales are not covered by this facility.
There is a further relief for a pending contract. Import or export on or after the date of the restriction is allowed for an importer or exporter who has a commitment through an Irrevocable Commercial Letter of Credit (ICLC) opened before the restriction date. It is limited to the balance quantity, value and period available in the ICLC. To get the ICLC listed for operational use, the applicant must register it with the jurisdictional Regional Authority against a computerised receipt within 15 days of the restriction or regulation. The paragraph closes by saying that a policy change for an item applies prospectively, from the date of Notification, unless otherwise provided.
What the Handbook requires
Paragraph 1.01 of the Handbook is the notification itself. Acting on paragraph 1.03 of the Policy, the Director General notifies the procedure in three compilations: (a) the Handbook of Procedures, (b) the Appendices and Aayat Niryat Forms, and (c) the Standard Input Output Norms (SION). They come into force from the date of the notification and continue until specified otherwise or amended. Paragraph 1.02 states the objective: simple, transparent and digitally compatible procedures that are user friendly and easy to comply with and administer. Paragraph 1.03 says the definitions and glossary of the Act, the Rules, the Orders and the Policy apply for the Handbook as well.
| Provision | Subject | What it fixes |
|---|---|---|
| Policy 1.00 | Legal basis | Section 5 of the Act |
| Policy 1.01 | Duration | In force from 1 April 2023; no end date |
| Policy 1.02 | Amendment | By notification, sections 3 and 5 |
| Policy 1.03 | Handbook | Notified by Public Notice of the DGFT |
| Policy 1.04 | Conflict | Specific provision prevails |
| Policy 1.05 | Transition | Earlier authorisations continue; ICLC registered within 15 days |
| Handbook 1.01 | Compilations | Handbook, Appendices and Forms, SION |
A worked example
Suppose Harbour Lane Traders, an invented importer, opens an irrevocable commercial letter of credit for a consignment of an item that is then permitted without an authorisation. A Notification later makes that item restricted. Under paragraph 1.05(b), a shipment whose Bill of Lading is dated before the Notification is not affected. A shipment dated on or after it can still be imported only up to the balance quantity, value and period left in the letter of credit, and only if Harbour Lane registered the letter of credit with its Regional Authority within 15 days of the restriction. If the goods came by high sea sale, the facility does not apply at all.
Need help with a policy question?
If a Notification has changed the position of an item you trade in, or you are unsure whether an older authorisation still covers your shipment, our team can read the text with you on a legal consultation and set out what the paragraphs allow.
Key takeaways
- The Policy is made under section 5 of the Act; the Handbook is notified by Public Notice under paragraph 1.03.
- The Policy has been in force since 1 April 2023 with no end date, and can be amended by notification.
- A specific provision prevails over a general one.
- Authorisations issued before the Policy remain valid for their purpose and duration, unless otherwise stipulated.
- For a changed item policy, the date of import or export decides, and a registered letter of credit can protect the balance of a contract.
Read next
- FTP 2023: the legal framework, and FTP against HBP
- What is DGFT? Meaning, example and uses
- Paragraphs 1.07(A) and 1.07(B): consultation with stakeholders
- Paragraphs 1.06 to 1.11: trade facilitation, export consignments and Niryat Bandhu
Disclaimer: Based on the chapter-wise text of the Foreign Trade Policy, 2023 and the Handbook of Procedures, 2023 published on the DGFT website, and on the later Notifications named in this article, as consulted on 2 October 2026. The copies carry no "updated up to" date. Notifications, Public Notices, Trade Notices, the ITC(HS) schedules, Appendices and forms change often; the current text on the DGFT website should be checked before acting. This article is general information, not legal advice; check the official text before acting.