Section 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.
Section 2 tells you what the key words of the Act mean: who the Adjudicating Authority is, what a conveyance, a licence or an Order is, and what "import" and "export" cover. This article takes clauses (a) to (i), as per the Act as enacted in 1992 read with the 2010 Amendment Act. The services and technology definitions added in 2010 are in a separate article.
Section 2(e), substituted in 2010, now defines "import" and "export" for goods (bringing into, or taking out of, India by land, sea or air) and for services and technology (supplying them across the border in four listed ways). "Licence" means a licence to import or export and includes a customs clearance permit and any other permission issued or granted under the Act. Special Economic Zone trade is routed to the Special Economic Zones Act, 2005.
Why definitions matter here
Almost every duty in this Act is expressed in these words. A penalty under section 11 attaches to an "export or import" made against the Act. An Importer-exporter Code is needed for an "import or export" under section 7. If a transaction does not fall within the definition, the section may not bite. So the definitions are worth reading before the operative sections, such as the Code in section 7.
If your business moves goods or services across the border and you are unsure whether a step is an "import" or "export" for this Act, an Importer-exporter Code registration review is a sensible first check.
The definitions, clause by clause
Section 2 begins "In this Act, unless the context otherwise requires". The current clauses (a) to (i) are:
| Clause | Term | Meaning as printed |
|---|---|---|
| (a) | Adjudicating Authority | The authority specified in, or under, section 13 |
| (b) | Appellate Authority | The authority specified in, or under, sub-section (1) of section 15 |
| (c) | Conveyance | Any vehicle, vessel, aircraft or any other means of transport including any animal |
| (d) | Director General | The Director General of Foreign Trade appointed under section 6 |
| (e) | Import and export | See below (substituted in 2010) |
| (f) | Importer-exporter Code Number | The Code Number granted under section 7 |
| (g) | Licence | A licence to import or export, including a customs clearance permit and any other permission issued or granted under the Act |
| (h) | Order | Any Order made by the Central Government under section 3 |
| (i) | Prescribed | Prescribed by rules made under the Act |
Clauses (a), (b), (c), (d), (f), (g), (h) and (i) are unchanged from 1992. Clauses (j) to (m) were inserted by the 2010 Act after clause (i).
Adjudicating Authority and Appellate Authority
Clause (a) points to section 13, which allows the Director General, or an officer authorised by notification, to impose a penalty or adjudge confiscation; see sections 13 and 14. Clause (b) points to section 15(1), where the appeal lies to the Central Government if the Director General decided, or to the Director General or an authorised superior officer otherwise.
Conveyance
The definition is wide: any vehicle, vessel, aircraft "or any other means of transport including any animal". Section 11(8) makes conveyances liable to confiscation along with goods, so the width matters. Example: a trader moving goods across a border route on pack animals may find the animals themselves treated as the conveyance.
Clause (e): "import" and "export" after 2010
In 1992 the clause read that "import" and "export" mean respectively "bringing into, or taking out of, India any goods by land, sea or air". The 2010 Act substituted it. It now has two limbs.
(I) In relation to goods: bringing into, or taking out of, India any goods by land, sea or air. This keeps the 1992 wording.
(II) In relation to services or technology: supplying services or technology in the four ways listed for inward supply (clause (II)(i)) and the four ways listed for outward supply (clause (II)(ii)). These are set out one by one in the companion article linked at the top.
The proviso. "Import" and "export" in relation to goods, services and technology regarding a Special Economic Zone, or between two Special Economic Zones, "shall be governed in accordance with the provisions contained in the Special Economic Zones Act, 2005". The reader should check the current law under that Act for zone transactions; this article does not explain it.
Example
Ritu Handloom Pvt Ltd ships a container of fabric from a port to a buyer overseas. That is an export of goods under clause (e)(I): taking goods out of India by sea. If instead its unit in a Special Economic Zone sells goods to another unit in the same zone, the proviso sends the question to the Special Economic Zones Act, 2005, not to clause (e) alone.
Clause (g): "licence" and the 2010 wording in section 9
Clause (g) says a licence "means a licence to import or export and includes a customs clearance permit and any other permission issued or granted under this Act". The 2010 Act did not amend this clause. It did amend section 9, which now speaks of a "licence, certificate, scrip or any instrument bestowing financial or fiscal benefits". The text does not say whether a certificate or scrip is itself a "licence" under clause (g), so the safe reading is that section 9 and the 2015 Rules use the longer phrase wherever they mean all four. See section 9.
Clauses (f) and (h): Code and Order
Clause (f) simply ties the Importer-exporter Code Number to section 7. Clause (h) ties "Order" to section 3. In practice, the Orders include the exemption Order explained in our article on the Exemption Order. For the Code in practice, see the guides listed under Read next.
Need help with Importer-exporter Code questions?
If you are starting to import or export, or want to confirm whether a transaction needs the Code, our Importer-exporter Code registration team can walk through the facts with you. Later amendments to the Act and the Policy should be checked before you rely on any definition.
Key takeaways
- Clauses (a) to (i) of section 2 define the terms the rest of the Act relies on.
- "Import" and "export" were substituted in 2010 to cover goods, and services and technology.
- Special Economic Zone trade is governed by the Special Economic Zones Act, 2005 under the proviso to clause (e).
- "Licence" in clause (g) was not amended in 2010, but section 9 now uses "licence, certificate, scrip or any instrument bestowing financial or fiscal benefits".
- A conveyance includes any animal.
Read next
- Section 2: services, technology and specified goods defined
- Section 7: the Importer-exporter Code Number
- Key definitions under the Customs Act: goods, import, export
- Import Export Code (IEC): complete registration guide
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.