Policy Circular No. 09/2025-26, Dated 06-02-2026
The Directorate General of Foreign Trade (DGFT) has issued a policy circular clarifying the scope of warehousing of chemicals under Para 2.36(a) of the Foreign Trade Policy (FTP) 2023.
The clarification addresses interpretational issues arising from the exclusion of “hazardous chemicals” under the said provision.
1. Background and Regulatory Intent
DGFT has clarified that the exclusion of hazardous chemicals under Para 2.36(a) was primarily intended to restrict unregulated warehousing of:
- Hazardous waste and hazardous chemicals, and
- Other prohibited or restricted items
The intent was not to prohibit the warehousing of industrial chemicals that are legitimately used in manufacturing, processing, or trade.
2. Permissibility of Warehousing of Industrial Chemicals
The circular clarifies that:
- Warehousing of industrial chemicals is permitted under Para 2.36(a) of FTP 2023
- Such warehousing may be undertaken in public or private bonded warehouses
These industrial chemicals typically include:
- Raw materials
- Intermediates
- Inputs used in manufacturing and trading activities
3. Compliance with Domestic Laws and Safety Regulations
While permitting such warehousing, DGFT has emphasised that:
- Warehousing of industrial chemicals must be in full compliance with all applicable domestic laws, rules, and regulations
- This includes laws governing safe storage, handling, transportation, and environmental protection
4. Compliance with Customs and Trade Regulations
In addition, the circular reiterates that:
- The chemicals must comply with the Import and Export Policy
- All provisions of the Customs Act, 1962, along with the rules and regulations framed thereunder, must be adhered to
- All other conditions prescribed under Para 2.36 of FTP 2023 must be duly followed
5. Regulatory Objective
The clarification seeks to:
- Remove ambiguity in the interpretation of Para 2.36(a)
- Facilitate legitimate trade and manufacturing activities
- Prevent misuse of bonded warehousing for prohibited or unsafe materials
- Balance trade facilitation with safety and regulatory oversight
6. Key Takeaway
DGFT has clarified that industrial chemicals used for legitimate commercial purposes may be warehoused under FTP 2023, provided all safety, customs, and regulatory requirements are strictly complied with. The exclusion under Para 2.36(a) targets unregulated hazardous waste and chemicals, not bona fide industrial inputs.
