Trader Challenges Sandalwood Import Cap of 5,000 Cubic Meters: Delhi HC Directs DGFT To Review within 12 Weeks [Read Order]

In this case, the Delhi High Court directed the Directorate General of Foreign Trade (DGFT) to consider a trader’s challenge to the 5,000 cubic metre quantitative cap on sandalwood imports and to pass a reasoned decision on that challenge within a specified time period.

Shaleen Jain, a small-scale trader engaged in importing and processing sandalwood, filed a writ petition questioning the validity of the applicable import policy and the DGFT circulars dated 7 April 2006 and 31 December 2007, which prescribe a quantitative ceiling for sandalwood imports.

These circulars lay down the procedure and limit for the import of sandalwood and effectively restrict the total permissible quantity to 5,000 cubic metres.

The petitioner’s counsel argued that this restriction violates the fundamental right to carry on any occupation, trade or business under Article 19(1)(g) of the Constitution of India. They further argued that the 5,000 cubic metre cap has become obsolete, has outlived its original purpose, and is now contributing to an artificial scarcity of sandalwood in the market.

The petitioner explained that this shortage is adversely affecting artisans in the unorganised sector who depend on sandalwood for handicrafts and perfumery products. They also pointed out that domestic production is not sufficient to meet the growing demand, making such a rigid quantitative cap harmful to genuine trade.

The petitioner also argued that the existing ceiling is inconsistent with the second proviso to Section 9A(2) of the ForeignTrade (Development and Regulation) Act, 1992, which regulates the imposition and duration of quantitative restrictions. Section 9A permits the Central Government to impose safeguard measures in the form of quantitative limits, but the provisos place conditions on the manner and period for which such restrictions may continue.

After hearing the matter, the single-judge bench of Justice Sachin Datta observed that the writ petition would be treated as a representation to the DGFT. The court directed the DGFT to examine the issues raised in the petition and, if required, to consult the Ministry of Environment, Forest and Climate Change and other concerned stakeholders before issuing a speaking order.

The court directed that the DGFT must dispose of this representation within twelve weeks from the date of the order. In view of these directions, the writ petition itself was disposed of, leaving it to the competent authorities to reconsider the existing sandalwood import policy in light of the petitioner’s grievances.

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