Trade laws to spell out N-controls, end licences

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Nuclear energy to meet rising needs, says PM

When the Nuclear Suppliers’ Group (NSG) begins its two-day meeting in Vienna this Thursday to clear a special waiver for India and put the Indo-US nuclear deal on its last lap, the Manmohan Singh government is expected to act on two key commitments in the draft NSG agreement – putting in place export control systems and lists to control the transfer of nuclear material, technology and equipment.

Going a step further, the government would also try to leave behind the country’s infamous ‘licence raj’ legacy in spirit and letter. In foreign trade laws, the word ‘licence’ will be replaced with ‘authorisation’ in line with the World Trade Organisation norms.

The ministry of commerce has finalised changes to the Foreign Trade (Development & Regulation) Act of 1992

(FTDR Act), which entail tightening norms on trade in items meant for dual use–both military and civilian purposes. The law, which governs India’s foreign trade, would also incorporate the provisions of ‘The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act 2005,’ including its penal clauses.

The list of special chemicals, organisms, materials, equipment and technologies (Scomet) under the FTDR Act will be expanded to impose restrictions on trade in items, including nuclear materials, toxic chemical agents and other chemicals, micro-organisms, aerospace equipment and items used for information security.

Service providers who pass on certain secret and classified information regarding trade and use of such items will now be made liable under the FTDR Act, too. India is already a signatory to the Chemicals Weapons Convention requiring notification of dual-use chemicals.

The foreign trade law amendments are likely to be cleared this week.

While New Delhi would be keen to send out the right signal to the NSG representatives meeting in Vienna on August 21 and 22, the changes proposed to the foreign trade law include a slew of reforms.

The amendments to the FTDR Act would restrict the use of the word ‘licence’ to trade in ‘restricted items.’ In all other respects, the word ‘licence’ would be replaced with ‘authorisation.’ Also included is a proposal to give more teeth to customs authorities and the directorate general of foreign trade (DGFT) to enforce the law more effectively. Violations under the law are punishable by a maximum penalty of five times the value of the exports, but currently, DGFT is required to write to the state governments to collect such fines from the trader.