Paragraph 2 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.
Paragraph 2.14 says what can happen to a holder of an authorisation who breaks its conditions, fails to fulfil an export obligation or fails to pay a demand, what is expected of an applicant who certifies information himself, and how a firm can be placed on, kept in abeyance on, and removed from the Denied Entity List (DEL). It has no matching Handbook paragraph in this plan.
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. Later Notifications, Public Notices and Trade Notices should be checked before you act. If an action has been taken against your firm, or a notice has been received, a legal dispute resolution engagement can take you through the options in the Act.
A holder who violates a condition, fails to fulfil export obligation or fails to deposit the amount within the period in a demand notice is liable to action under the Act, the Rules, the Policy and any other law (paragraph 2.14(a)). A false self-certification is liable to action too (clause (b)). A Regional Authority may place a firm on the Denied Entity List under rule 7 of the 1993 Rules, for reasons recorded in writing; new authorisations are then blocked (clause (c)). The order may be kept in abeyance for not more than 60 days at a time (clause (d)) and the name can be removed (clause (e)).
What the Policy says
Clause (a): action for violation, default or non-payment
If an authorisation holder (i) violates any condition of the authorisation, (ii) fails to fulfil the export obligation, or (iii) fails to deposit the requisite amount within the period specified in a demand notice issued by the Department of Revenue and/or the DGFT, he is liable for action in accordance with the Foreign Trade (Development & Regulation) Act, the Rules and Orders made under it, the Policy, and any other law for the time being in force.
The Act's penalty provisions are in section 11 of the Act on contravention, penalty and settlement and section 11 of the Act on recovery of penalty, confiscation and redemption. The paragraph does not itself say which penalty applies; it points to the Act and the Rules. The Policy is made under section 5 of the Act.
Clause (b): self-certification
With a view to raising ethical standards and ease of doing business, the DGFT has provided for self-certification under various schemes. Applicants must undertake self-certification "with sufficient care and caution" in filling up information and particulars. Information or particulars subsequently found untrue or incorrect are liable for action under the Act, 1992 and the Rules in addition to penal action under any other Act or Order.
Clause (c): the Denied Entity List
A firm may be placed under the Denied Entity List by the concerned Regional Authority under the provisions of rule 7 of the Foreign Trade (Regulation) Rules, 1993. Our article on rule 7 of the 1993 Rules deals with the rule. On issuance of such an order, "for reasons to be recorded in writing", a firm may be refused the grant or renewal of a licence, authorisation, certificate, scrip or any instrument bestowing financial or fiscal benefits. If a firm is placed under the DEL, all new licences, authorisations, scrips, certificates and instruments are blocked from printing, issue or renewal.
Clause (d): abeyance
A DEL order can be placed in abeyance, for reasons to be recorded in writing by the concerned Regional Authority, for a period of not more than 60 days at a time. The paragraph does not say how many times, or on whose application.
Clause (e): removal
A firm's name can be removed from the DEL by the concerned Regional Authority, for reasons recorded in writing, if the firm (i) completes the export obligation, (ii) pays the penalty, (iii) fulfils the requirement of the demand notice or notices issued by the Regional Authority, or (iv) submits the documents required by the Regional Authority. The list reads as alternatives, joined by "or"; the paragraph does not say which of them applies to which kind of default.
How the clauses fit together
| Stage | Clause | What happens |
|---|---|---|
| Default | (a) | Violation of a condition, unfulfilled export obligation or unpaid demand makes the holder liable to action |
| Self-certification | (b) | Untrue or incorrect particulars are liable to action |
| Listing | (c) | The Regional Authority may place the firm on the DEL under rule 7, with written reasons; new authorisations are blocked |
| Relief in the interim | (d) | Abeyance for not more than 60 days at a time, with written reasons |
| Exit | (e) | Removal on completing the obligation, paying the penalty, meeting the demand or submitting the required documents, with written reasons |
The Act's provisions on issue, suspension and cancellation of a licence, which sit near this subject, are in section 9 of the Act; paragraph 2.14 does not refer to that section.
A practical example
Crescent Valley Garments, an invented manufacturer, holds an authorisation under which it had to export a fixed value of goods. It misses the export obligation, and the Regional Authority issues a demand notice. The firm does not pay within the period. Under clause (a) it is liable to action; under clause (c) the Regional Authority may place it on the DEL, recording reasons in writing, and its new authorisations and scrips are blocked from issue. The firm then fulfils the requirement of the demand notice and applies. Under clause (e) the Regional Authority may remove its name, again with written reasons. If it needs time while a matter is resolved, clause (d) allows abeyance for not more than 60 days at a time. A different firm that had certified a detail in an application without checking it would face clause (b) if the detail is later found incorrect.
Need help with a DEL order or notice?
An order or a demand notice carries dates and consequences, and it is better to respond with the right documents than to wait. Our team can examine the order and your options through a legal dispute resolution engagement.
Key takeaways
- Violation of a condition, unfulfilled export obligation and unpaid demand make the holder liable to action (clause (a)).
- Self-certification must be done with sufficient care; untrue particulars are liable to action (clause (b)).
- The Regional Authority may place a firm on the DEL under rule 7, with reasons in writing; new authorisations are blocked (clause (c)).
- Abeyance is for not more than 60 days at a time (clause (d)); removal is possible on the grounds in clause (e).
- Check the Act and Rules for the penalty actually applicable.
Read next
- Handbook paragraphs 2.20 to 2.28: revalidation and duplicate authorisation
- Paragraphs 2.15 and 2.61: NCLT proceedings and the Settlement Commission
- Rule 7 of the Foreign Trade (Regulation) Rules, 1993: refusal of licence and recovery of benefits
- Section 11 of the Foreign Trade (Development and Regulation) Act, 1992: contravention, penalty and settlement
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.