DGFT Clarifies Warehousing of Industrial Chemicals is Permitted Under FTP 2023 Para 2.36(a), Subject to Compliance [Read Notification]

The Directorate General of Foreign Trade, Ministry of Commerce and Industry, has issued a clarification on warehousing of industrial chemicals under the Foreign Trade Policy 2023. Through a recent trade communication, DGFT has clarified that warehousing of industrial chemicals is permitted under Para 2.36(a) of FTP 2023, subject to compliance with applicable laws and regulations.

The clarification comes amid queries from trade and industry regarding whether industrial chemicals can be stored in bonded warehouses before further sale, export or domestic clearance. DGFT has now made it clear that such warehousing is allowed, provided the importer or trader complies with all regulatory requirements.

Para 2.36(a) of FTP 2023 allows goods to be imported and stored in bonded warehouses in accordance with Customs provisions. DGFT has explained that industrial chemicals are not barred from such warehousing merely on account of their classification, as long as the importer follows the conditions prescribed under Customs law and other applicable rules.

The permission is not unconditional. The following points must be kept in mind:

• Compliance with Customs Act and related warehousing regulations is mandatory.
• All safety, environmental and hazardous substance regulations must be followed.
• Any specific licensing or restriction applicable to particular chemicals must be complied with.
• Storage conditions must meet the standards prescribed by competent authorities.

This clarification is huge for importers, chemical traders and warehouse operators across India. Many businesses use bonded warehouses to defer payment of customs duty until goods are cleared for home consumption. The ability to warehouse industrial chemicals provides flexibility in inventory management and cash flow planning.

DGFT has advised stakeholders to carefully review applicable regulations and obtain necessary approvals before warehousing industrial chemicals. Importers are encouraged to coordinate with customs authorities and other regulators to avoid compliance issues.

The clarification is expected to benefit the chemical trade sector and support smoother import operations under the current foreign trade policy framework.

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