Section 5 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 5 is the short provision from which every Foreign Trade Policy takes its authority. It lets the Central Government formulate, announce and amend the policy by notification in the Official Gazette. As substituted in 2010, it also contains a proviso for Special Economic Zones. This article explains it as per the Act as enacted in 1992 read with the 2010 Amendment Act.
The Central Government may, from time to time, formulate and announce the foreign trade policy by notification in the Official Gazette and amend it in the same manner. The proviso lets it direct that, for Special Economic Zones, the policy applies to goods, services and technology with exceptions, modifications and adaptations specified by notification. In 1992 the section spoke of the "export and import policy"; the 2010 Act substituted the whole section.
What section 5 says
Section 5, as substituted by section 5 of the 2010 Amendment Act, reads in substance: the Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy.
Four points follow from the text.
- Who acts. The Central Government, not the Director General. Section 6(3) confirms that powers under section 5 cannot be passed to the Director General or a subordinate officer by an Order; see section 6.
- How. By notification in the Official Gazette. A policy statement made in any other way does not meet the words of the section.
- When. "From time to time". The section does not fix a term in years or a date. The text is silent on duration.
- Amendment. The power to amend is in "like manner", that is by notification in the Official Gazette.
What changed in 2010
The 1992 section read that the Central Government may formulate and announce "the export and import policy" by notification and amend it in like manner. The 2010 Act substituted a new section 5 that uses "foreign trade policy". It also changed the Chapter II heading from "Export and Import Policy" to "Foreign Trade Policy", and the same words were changed in section 6(2). The 2010 Act was brought into force by notification; the date is not in the sources consulted.
The substitution fits the wider 2010 reform: once "import" and "export" took in services and technology (see section 2(e)), a policy limited to "export and import" of goods no longer described the subject.
The proviso on Special Economic Zones
The proviso says the Central Government "may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette".
So the policy does not simply apply as it stands inside a zone; the Government may apply it with exceptions, modifications and adaptations. Section 2(e) separately sends zone imports and exports to the Special Economic Zones Act, 2005. The reader should check the current law under that Act.
Where the policy appears in the rest of the Act
| Provision | How "foreign trade policy" is used |
|---|---|
| Section 2(k), 2(l) | Service supplier takes benefit under it; specified items are defined by reference to it |
| Section 6(2) | The Director General advises on formulation and carries out the policy |
| Section 7 proviso | Code needed for services or technology only when benefits are taken under it, or specified items are dealt with |
| Section 8(1)(a), (c) | Contravention of the policy can lead to suspension or cancellation of the Code |
| Section 11(1), (2), (8) | No export or import except in accordance with the policy; penalty and confiscation for contravention |
Because section 11 ties penalty to the policy, a breach of a condition in the policy can lead to action under the Act; see section 11. Conditions that sit in the policy rather than in the Act, such as registration with an export promotion council, are worth checking early; our RCMC registration page is a starting point.
Example: Lakshmi Spices exports whole spices. The Policy notified under section 5 sets the conditions; if a later notification amends them mid-year, the exporter must follow the amended text. A shipment made against the old condition may be a contravention under section 11(2).
How the Foreign Trade Policy 2023 relates to section 5
The Foreign Trade Policy 2023 says it is notified by the Central Government in exercise of powers under section 5 of the Foreign Trade (Development & Regulation) Act, 1992 "as amended" (FTP 2023, para 1.00, in the copy consulted). Para 1.02 says the Government reserves the right to amend the policy by notification, in public interest, under sections 3 and 5. Para 1.03 says the Director General may, by Public Notice, notify the Handbook of Procedures, Appendices and Aayat Niryat Forms laying down procedures for implementing the Act, the Rules, the Orders and the policy. For more, see our guides on the legal framework of the Foreign Trade Policy and how it differs from the Handbook and on Foreign Trade Policy 2023 itself.
Whether any particular scheme or rate currently applies depends on the policy in force, so check the latest notification.
Need help with a policy-linked registration?
Some policy conditions, such as membership of an export promotion council, depend on the Policy in force and your product. Our RCMC registration service can help you check whether and how it applies to you. If you want a document-by-document review of your own exports, we can also look at the wider position. Later amendments to the Policy should be checked.
Key takeaways
- Section 5 is the legal source of the foreign trade policy.
- The Central Government formulates, announces and amends it by notification in the Official Gazette.
- The 2010 substitution replaced "export and import policy" with "foreign trade policy" and added a Special Economic Zones proviso.
- The Act does not fix a term for the policy; it says "from time to time".
- Contravention of the policy is a ground for penalty under section 11 and for action against the Code under section 8.
Read next
- Section 6: the Director General of Foreign Trade
- Section 11: contravention, penalty and settlement
- Section 4: Orders and existing Orders
- FTP 2023: the legal framework, and FTP against HBP
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.