Rule 6 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.
Rule 6 sets the conditions that attach to a licence. Some are deemed to attach to every export licence, some are deemed to attach to every import licence, and the licensing authority may add others to an import licence, such as a bond. Sub-rule (4) adds a further duty for imports from the United States of America under the Indo-US Memorandum of Understanding on Technology Transfer. The 2015 Amendment Rules replaced "licence" with "licence, certificate, scrip or any instrument bestowing financial or fiscal benefits" and "goods" with "goods or services or technology" throughout rule 6. This article explains rule 6 as per the Rules as notified in 1993 read with the 2015 Amendment Rules.
Every export licence carries two deemed conditions: no transfer except under the Policy, and the goods must be the licensee's property at the time of export. Every import licence carries four: no transfer except under the Policy, goods owned by the licensee from import to customs clearance, goods new unless the licence says otherwise, and no re-export without the Director General's written permission. The authority may also require a bond and impose a disposal condition on an import licence.
Where rule 6 comes from
Section 9(3) of the Act (in its 1992 words; the 2010 Act widened "licence" there) says a licence granted or renewed "shall—(a) be in such form as may be prescribed; (b) be valid for such period as may be specified therein; and (c) be subject to such terms, conditions and restrictions as may be prescribed or as specified in the licence". Section 19(2)(d) allows rules on the form, terms, conditions and restrictions. Rule 6 is the part of the Rules that prescribes conditions. See our articles on section 9 and section 19.
The rule's heading, after 2015, covers "licence, certificate, scrip or any instrument bestowing financial or fiscal benefits". To keep the text readable, this article says "licence" for the whole phrase. The quotations below are in the 1993 words, and the 2015 replacements are to be read into them. The 2015 notification replaced the single word in the heading and in sub-rules (1), (2) and (3), and replaced "goods" with "goods or services or technology" in sub-rules (1) to (4).
If you are applying for a licence that carries these conditions, our restricted items import-export licence service can help you read the conditions before you accept them.
Rule 6(1): deemed conditions of every export licence
Rule 6(1) reads: "It shall be deemed to be a condition of every licence for export that:
(i) no person shall transfer or acquire by transfer any licence issued by the licensing authority except in accordance with the provisions of the Policy;
(ii) the goods for the export of which the licence is granted shall be the property of the licensee at the time of the export."
Printing slip: the first word of rule 6(1) is printed "Iit" in the 1993 gazette. It is flagged and the rule is read as "It".
"Deemed" means the condition applies whether or not the licence itself says so. There are two:
| Condition | Plain meaning |
|---|---|
| (i) No transfer | A licence cannot be sold or passed on, and nobody can acquire it by transfer, except as the Policy allows |
| (ii) Property of the licensee | At the time of export the goods (after 2015, goods or services or technology) must belong to the licence holder |
The second condition is tested "at the time of the export".
Rule 6(2): conditions the authority may add to an import licence
"The licensing authority may issue a licence for import subject to one or more of the following conditions, namely:
(a) that the goods covered by the licence shall not be disposed of except in accordance with the provisions of the Policy or in the manner specified by the licensing authority in the licence;
(b) that the applicant for a licence shall execute a bond for complying with the terms and conditions of the licence."
These are optional. The word is "may". The licensing authority (rule 2(d): an authority authorised under section 9(2)) decides whether to add them. A condition added in the licence must be stated there. Condition (b) asks for a bond. The rule does not say the amount, form or surety. The sources consulted do not give them, and they depend on the Policy and the Handbook of Procedures.
For the policy side, FTP 2023, para 2.09 (in the copy consulted) deals with the Actual User condition on imports that need an authorisation, and HBP 2023, para 2.46 (in the copy consulted) deals with transfer of imported goods subject to that condition. These are policy and procedure matters and may change.
Rule 6(3): deemed conditions of every import licence
"It shall be deemed to be a condition of every licence for import that:
(a) no person shall transfer or acquire by transfer any licence issued by the licensing authority except in accordance with the provisions of the Policy;
(b) the goods for the import of which a licence is granted shall be the property of the licensee at the time of import and upto the time of clearance through customs;
(c) the goods for the import of which a licence is granted shall be new goods, unless otherwise stated in the licence;
(d) the goods covered by the licence for import shall not be exported without the written permission of the Director General."
| Clause | Condition | Notes |
|---|---|---|
| (a) | No transfer or acquisition by transfer except under the Policy | Same as export rule 6(1)(i) |
| (b) | Goods are the licensee's property at the time of import and up to clearance through customs | The ownership test runs over a period, not a moment |
| (c) | Goods must be new | Unless the licence states otherwise |
| (d) | No re-export | Without the written permission of the Director General |
Clause (b) fixes ownership from import until the goods clear customs; conditions on later disposal come from rule 6(2)(a), the Policy and rule 13. Clause (c) allows the licence to say that second-hand goods are acceptable.
Example: Pioneer Textiles (an invented firm) receives an import licence for knitting machines that is silent on conditions. Under rule 6(3) it must own the machines until they clear customs, the machines must be new, and it cannot export them without the Director General's written permission.
Rule 6(4): imports from the United States under the Memorandum
"Any person importing goods from the United States of America in accordance with the terms of the Indo-US Memorandum of Understanding on Technology Transfer shall also comply with all the conditions and assurances specified in the Import Certificate issued in terms of such Memorandum, and such other assurances given by the person importing those goods to the Government of the United States of America through the Government of India."
The 2015 Rules extended "goods" to "goods or services or technology". The sub-rule adds duties on top of the licence conditions: the person importing must comply with the Import Certificate and with the assurances given to the United States Government through the Government of India. HBP 2023, para 2.36 (in the copy consulted), headed "Imports under Indo-US Memorandum of Understanding", says that import of specified capital goods, raw materials and components from the United States is subject to US Export Control Regulations and that US suppliers must obtain an export authorisation based on an import certificate issued in India. The Memorandum itself is not in the sources consulted, so its terms are not stated. The current Handbook should be checked.
What a breach can lead to
Rule 6 itself states no penalty. Elsewhere in the Rules a breach of a condition is a ground for cancelling a licence (rule 10) and may expose imported goods to confiscation (rule 17). Section 11(1) of the Act bars any export or import except in accordance with the Act, the rules and orders and the Policy; see our article on section 11.
Need help with licence conditions?
If you are about to accept a licence and want the conditions checked, or a condition has been breached by mistake, our restricted items import-export licence service can help you review the terms and the next step. Later amendments to the Act, the Rules and the Policy should be checked.
Key takeaways
- Every export licence carries two deemed conditions: no transfer except under the Policy, and the goods must be the licensee's property at export.
- Every import licence carries four: no transfer, ownership until customs clearance, new goods unless stated otherwise, and no re-export without the Director General's written permission.
- The licensing authority may add a disposal condition and require a bond on an import licence (rule 6(2)).
- Rule 6(4) adds the Import Certificate and assurances for imports under the Indo-US Memorandum on Technology Transfer.
- The 2015 Rules widened the words to "licence, certificate, scrip or any instrument bestowing financial or fiscal benefits" and "goods or services or technology".
- A breach can lead to cancellation (rule 10) or confiscation (rule 17).
Read next
- Rule 5: application fee, exemptions and refund
- Rule 7: refusal of licence and recovery of benefits
- Rules 8 and 10: amendment and cancellation of licence
- Advance Authorisation and the DGFT scheme conditions
Disclaimer: Based on the Foreign Trade (Development and Regulation) Act, 1992 as enacted read with the Amendment Act of 2010, and on the Foreign Trade (Regulation) Rules, 1993 as notified read with the Amendment Rules of 2015, as consulted on 2 October 2026. Later amendments, the current Foreign Trade Policy and the Handbook of Procedures should be checked. This article is general information, not legal advice; check the official text before acting.