Paragraphs 9 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.
The last two paragraphs of Chapter 9 of the Foreign Trade Policy, 2023 deal with goods that come back and with use of the hubs. Paragraphs 9.05 to 9.07 of the Handbook of Procedures add the time limits for returns, a yearly certificate from a professional, the record-keeping duty and a route for disputes between the Exporter-on-Record and the Seller-on-Record.
The Exporter-on-Record owns and manages reverse logistics, bears its costs and may not sell returned or rejected consignments in the domestic market under any circumstances (paragraph 9.18). It uses notified E-Commerce Export Hub infrastructure to the extent practicable (paragraph 9.19). Under the Handbook, goods that fail the specification go back to the seller within 7 days, returned consignments are dealt with within 30 days of receipt in India, a compliance certificate is due within 90 days of each financial year end, and records are kept for five years.
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 9 of the Handbook of Procedures, 2023 as published on the DGFT website (file of August 2026), consulted on 2 October 2026. Later Notifications and Public Notices should be checked before acting. The Policy is made under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (section 5 of the FTDR Act), and the Handbook under section 6. A dispute between an exporter and a seller can often be handled early; our legal dispute resolution team advises on the options.
Paragraph 9.18: reverse logistics and returned consignments
| Sub-paragraph | What it says |
|---|---|
| (i) | The Exporter-on-Record "shall own and manage all reverse logistics processes" for returned or rejected consignments |
| (ii) | Returned or rejected consignments shall not, "under any circumstances", be sold or supplied in the domestic market by the Exporter-on-Record, whether directly or through any other person or entity |
| (iii) | The costs of reverse logistics are borne by the Exporter-on-Record |
The ban in (ii) is wide. It covers a sale through a third party as well as a direct one. Together with paragraph 9.15(iv), which keeps inventory tied to a confirmed export order, it keeps the export route from becoming a back door to the home market. The paragraph prints no penalty for breach; the Handbook's certificate (below) is one of the checks.
Paragraph 9.19: use of E-Commerce Export Hubs
The Exporter-on-Record "shall, to the extent practicable, utilise notified E-Commerce Export Hub (ECEH) infrastructure" for operations under the Framework, "subject to the operational readiness and available capacity of such facilities". The obligation is qualified twice: by practicability and by readiness and capacity. Where no hub is ready, the paragraph does not require the Exporter-on-Record to wait. The hubs themselves are explained in our article on paragraphs 9.07 to 9.12.
Procedure under the Handbook
Paragraph 9.05: reverse logistics and returned consignments
- (i) The Exporter-on-Record returns goods received from the Seller-on-Record that fail the required descriptions, specifications or quality parameters "within 7 days of acceptance or deemed acceptance".
- (ii) Returned or rejected consignments received from buyers outside India are re-exported, returned to the Seller-on-Record, or disposed of by destruction or other agreed means, "not later than 30 days from the date of receipt of such consignment in India".
- (iii) The terms for handling such goods, including cancellation, return or rejection of the export order, repair, re-export, destruction or disposal, are explicitly defined in the agreement between the Seller-on-Record and the Exporter-on-Record. The terms shall be "fair, transparent, and verifiable".
The paragraph lists three outcomes for a returned consignment in (ii): re-export, return to the seller, or destruction or agreed disposal. Domestic sale is not among them, which agrees with paragraph 9.18(ii) of the Policy.
Paragraph 9.06: compliance certification and records
- (i) The Exporter-on-Record obtains from an independent Chartered Accountant, Cost Accountant or other professional specified by DGFT a certificate confirming compliance with the Framework's obligations, including: maintenance and segregation of Export Inventory; prohibition on domestic diversion, including of returned or rejected consignments; seller visibility and brand disclosure; payment settlement, including the payment period and the disbursement period for rebates and refunds; accuracy of the apportionment calculations; and handling and disposal of returned or rejected consignments.
- (ii) The Exporter-on-Record gives all books of account, records and assistance reasonably needed for the certification.
- (iii) The certificate is furnished to DGFT "within 90 days from the end of each financial year in respect of that financial year, or at such other intervals as DGFT may prescribe".
- (iv) Records relating to operations under the Framework are maintained and preserved for five years from the end of the financial year in which the Export Inventory concerned is finally exported, re-exported, returned, rejected, destroyed or otherwise disposed of.
- (v) The record-keeping duty survives cancellation, suspension or voluntary surrender of registration and continues for the full five-year period.
For the professional who signs, the list in (i) is a checklist of six subjects; for the Exporter-on-Record, it shows what DGFT will look at. The five-year clock runs from the end of the financial year of final disposal of each lot, so different lots run to different dates.
Paragraph 9.07: dispute resolution
A dispute or grievance between the Exporter-on-Record and the Seller-on-Record arising under the Framework may be referred to the Regional Authority of DGFT having jurisdiction. The Regional Authority gives both parties a reasonable opportunity of being heard and "shall endeavour to facilitate resolution" within 30 days of receipt of the complaint, "without prejudice to the rights of the parties under applicable law".
The dispute lies before the Regional Authority with jurisdiction over the place of business of the Seller-on-Record from which the supply in dispute was made. Where the dispute is unresolved when the period ends, or the Regional Authority considers the matter needs further examination, it may, for reasons recorded in writing, refer it to DGFT (Headquarters), which may call for records, information or comments before issuing administrative directions or recommendations.
Nothing in the paragraph derogates from the rights of a Seller-on-Record that is a micro or small enterprise under the Micro, Small and Medium Enterprises Development Act, 2006, including the right to make a reference to the Micro and Small Enterprises Facilitation Council under section 18 of that Act. Our article on section 18 of the MSMED Act, 2006 explains that route. The words used are "endeavour to facilitate", so the Regional Authority is not given a power to decide the dispute.
An example
Sundar Spices Private Limited, an invented Exporter-on-Record, receives a lot from Gomti Foods that fails the specification. Under paragraph 9.05(i) of the Handbook it returns the lot within 7 days of acceptance or deemed acceptance. A separate consignment is rejected by a buyer abroad and comes back to India. Sundar may re-export it, return it to Gomti Foods or destroy it, but within 30 days of receipt in India, and it may not sell it at home, directly or through any other person. The agreement between Sundar and Gomti should have defined these terms already. When Gomti disputes the handling, it can go to the Regional Authority having jurisdiction over Gomti's place of business, and if Gomti is a small enterprise it keeps the section 18 route.
Need help with an Exporter-on-Record and seller dispute?
Disputes about rejected goods, payment timing or the sharing of rebates are easier to resolve with the agreement and the records in hand. Our legal dispute resolution team can review the agreement against paragraphs 9.05 to 9.07 and prepare the reference to the Regional Authority.
Key takeaways
- Paragraph 9.18: the Exporter-on-Record manages and pays for reverse logistics and may not sell returned goods in the domestic market.
- Paragraph 9.19: use notified ECEH infrastructure to the extent practicable.
- Handbook 9.05: 7 days to return failed goods to the seller; 30 days from receipt in India to deal with returned consignments.
- Handbook 9.06: yearly professional certificate within 90 days of the year end; records for five years.
- Handbook 9.07: disputes before the Regional Authority, with an endeavour to facilitate resolution within 30 days; MSME rights are saved.
Read next
- Paragraphs 9.16 and 9.17 of the Foreign Trade Policy, 2023: export inventory and payment to the Seller-on-Record
- Paragraphs 9.13 to 9.15 of the Foreign Trade Policy, 2023: the inventory-based cross-border e-commerce framework
- Section 18 of the MSMED Act, 2006: reference to the Facilitation Council
- The Mediation Act, 2023 for commercial and trade disputes
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.