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India’s Export Controls: Current Status and Possible Changes on the Horizon

Recent developments in India’s nonproliferation policies could have significant implications for companies that trade in goods and technologies with potential applications to weapons of mass destruction (WMD), missiles, and conventional arms (known collectively as “strategic items”). In an effort to facilitate greater access to advanced technology products (ATP), India is currently seeking membership in the four main multilateral export control regimes (MECRs) – the Nuclear Suppliers Group (NSG), Australia Group (AG), Missile Technology Control Regime (MTCR), and Wassenaar Arrangement (WA). As part of this effort, the Government of India (GOI) has already begun to take marked steps to align its trade control system with the guidelines and practices of the regimes, including amending relevant laws, updating its national control list, and modifying its licensing procedures. This brief will provide an overview of the Indian export control system, summarize recent developments, highlight areas where India’s national control list differs from the MECR lists, and identify potential changes to India’s strategic trade control system that industry might expect in anticipation of India joining the MECRs. Overview of India’s Export Control System Legal Authorities The Foreign Trade (Development and Regulation) Act No. 22 of 1992 or FTDR (as amended by the FTDR Amendment Act 2010)1 is the principal legal basis for India’s strategic trade control system. It empowers the GOI to “make provisions for prohibiting, restricting, or otherwise regulating” all or specified classes of exports or imports upon public notification in the Official Gazette.1 It further authorizes the Indian government to formulate and amend India’s foreign trade policy, which the GOI issues in five-year increments and updates annually (Foreign Trade Policy 2010-2011). The FTDR empowers the Directorate General of Foreign Trade (DGFT), situated within the Department of Commerce and Industry (DCI), to license the export and import of items on the Indian Tariff Classification (Harmonized System) or ITC (HS) list. The ITC (HS) is an 8-digit commodity classification system based on Harmonized System Codes (HS-codes) that is used by India to identify all trade-related transactions. The ITC (HS) is divided into two schedules: Schedule 1 (imports) and Schedule 2 (exports). India’s national dual-use export control list, the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) list can be found in Appendix 3 of Schedule 2 of the ITC (HS).

1 Certain provisions of the FTDR were amended by the FTDR Amendment Act 2010. These revisions are discussed in

greater detail in the “Recent Developments” section.

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In 2005, the Indian government significantly expanded the scope of its trade controls with the passage of the Weapons of Mass Destruction and Their Delivery Systems (Prohibition of Unlawful Activities) Act No. 21 of 2005 (WMD Act). The WMD Act authorizes the GOI to regulate the export, re-transfer, re-export, transit, and transshipment2 of any items related to the development, production, handling, operation, maintenance, storage, or dissemination of a WMD or missile delivery device.3 It also established a catch-all control that restricts exports of non-listed items destined for a WMD end-use, and it provided a rudimentary legal basis to regulate technology transfers. Additional authorities establish controls on trade in other sensitive items such as firearms, explosives, nuclear substances, and chemicals designated in the Chemical Weapons Convention (CWC):

The Atomic Energy Act, 1962 prohibits the export and import of designated substances, equipment, plants designed for the production, development, and use of atomic energy or related research, and radioactive substances, unless the transaction is licensed by GOI authorities.4

Notification on the Schedule of prescribed substances under the Atomic Energy Act, 1962 (20 January 2006) denotes those goods and technologies that are subject to licensing by India’s Department of Atomic Energy (DAE) under the Atomic Energy Act.

Resolution No. AEA/27(1)/2005-ER, Guidelines for Nuclear Transfers (Exports) supplements the Atomic Energy Act by prohibiting the export of prescribed substances, equipment, or related technology to any country for the development of or use in a nuclear explosive device or in instances when there is an unacceptable risk of diversion for the development or use of a nuclear explosive device or acts of nuclear terrorism.5 The guidelines also impose restrictions on re-transfers of controlled nuclear items to anyone other than the end-user of record.6

The Chemical Weapons Convention (CWC) Act of 2000 prohibits the export and import of designated toxic chemicals or precursor substances unless the activity is conducted in accordance with relevant laws. It requires entities that wish to engage in activities involving CWC-listed chemicals to register with the Indian government.7

The Arms Act of 1959 requires entities seeking to possess, manufacture, sell, or transfer firearms to obtain a license from the GOI,8 and it empowers Indian officials to restrict or prohibit the transport of arms through the country. This includes transshipment activities9 (the offloading of cargo from one transport and loading of it onto another.)

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Scope of Control Exports The FTDR defines an export as “taking out of India any goods, technologies, or services by land, sea or air.” Goods, technologies, and services subject to export licensing requirements are listed in India’s national export product control list, known as the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) list. The SCOMET list is located in Appendix 3 of Schedule 2 of the ITC (HS). The Indian government periodically amends the SCOMET list,10 and may designate controlled items in an order or notification published in the Official Gazette.11 The DGFT last updated the SCOMET list on March 31, 2011 in Notification No. 38 (RE-2010)/2009-2014. The SCOMET list is divided into eight distinct categories (Categories 0 – 7). The DGFT is the primary licensing agency for most items on the SCOMET list (Categories 1 through 7),12 while the DAE issues licenses for all the nuclear and nuclear dual-use commodities found in SCOMET Category 0.13 The SCOMET list does not fully correspond with the lists of the multilateral export control regimes. Although India controls many of the commodities found on the regime lists, it does not follow the regimes’ classification conventions or those of the United States or European Union (EU). Instead, the Indian government employs its own system of classifying controlled items. The SCOMET list utilizes a two- to -five digit classification scheme that bears some resemblance to Export Control Classification Numbers (ECCNs), but the categories, specific numbering of items, and technical descriptions tend to differ from those in the U.S. and EU lists. In particular, the SCOMET list sometimes has broader, less detailed item descriptions than the MECR and other control lists. The differences between the SCOMET list and U.S., EU, and regime lists have resulted in some confusion concerning whether or not the SCOMET list controls all of the items contained on the NSG, MTCR, AG, and WA lists.14 An analysis of the SCOMET list indicates that it is not yet fully consistent with the Australia Group Common Control Lists. The SCOMET list contains CWC precursor chemicals (SCOMET Category 1), biological agents, animal and plant pathogens (SCOMET Category 2), most AG chemical dual-use items, and a few AG biological dual-use items (SCOMET Category 3). Nonetheless, several items found on the AG Biological Dual-Use List and at least one item from the AG Chemical Dual-Use List are notably absent from the SCOMET list and do not appear to be subject to Indian strategic trade controls. The SCOMET list includes almost all chemical dual-use items with the exception of AG Chemical Dual Use List entry 2.0 (toxic gas monitoring systems). More importantly, the SCOMET list is nearly devoid of items on the AG Biological Dual Use List. The SCOMET list does not appear to contain AG Biological dual-use entries such as: complete P3 or P4 containment facilities; fermenters; centrifugal separators; cross (tangential)

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flow filtration equipment; freeze-drying equipment; aerosol inhalation chambers; and spraying or fogging systems and components thereof.15 The SCOMET list does not yet regulate the majority of conventional arms and conventional dual-use goods, technologies, and services listed by the Wassenaar Arrangement. At present, the SCOMET list contains only a handful of items that correspond with WA dual-use entries. Among the WA dual-use entries on the SCOMET list are electronics (SCOMET Category 7A), electronic test equipment (SCOMET Category 7B), and computers (SCOMET Category 7C). The SCOMET list also contains several WA Munitions List (WAML) items that are scattered throughout SCOMET Categories 3, 5, and 7. Conversely, the SCOMET list contains most of the goods and technologies listed in the Annexes to the MTCR, though the SCOMET technical descriptions are often vaguely worded and do not meet the same technical specifications set forth by the regime. In fact, there are a number of major technical discrepancies between the item descriptions on the SCOMET list and the closest corresponding listings on the MTCR lists. In certain instances, the SCOMET list consolidates numerous MTCR entries under one heading. In other cases, the SCOMET description is so open-ended or broad that the item described could conceivably be found on multiple regime lists. Finally, the SCOMET list integrates all nuclear-related goods and technologies listed by the NSG. Category 0 of the SCOMET list corresponds with the goods and technologies designated on the NSG Trigger List. However, the SCOMET list differs slightly in that it does not specifically identify certain sub-set items identified on the NSG Trigger List. For example, SCOMET list entry 0B005 (corresponding to NSG Trigger List entries 5.1 thru 5.9) fails to identify the sub-set items listed according to the NSG. Notwithstanding these omissions or differences, the SCOMET list directly corresponds with the goods and technologies contained on the NSG Trigger List. Likewise, the SCOMET list includes all nuclear dual-use items (SCOMET Categories 0, 3 and 4), with technical descriptions identical to those found on the NSG Dual-Use List Indian officials evaluate export license applications for SCOMET items on a case-by-case basis. According to India’s Handbook of Procedures (Vol. 1)16 licensing authorities take the following factors into consideration when evaluating applications:

The credentials of the end-user, the credibility of declarations of end-use of the item or technology, the integrity of chain of transmission of item from supplier to end-user, and the potential of the item or technology, including the timing of its export, to contribute to end-uses that are not in conformity with India’s national security or foreign policy goals and objectives, objectives of global nonproliferation, or India’s obligations under treaties to which it is a party;

The risk that items will fall into the hands of terrorists or non-state actors;

Export control measures instituted by the recipient country;

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The recipient state’s capabilities and objectives visà-vis weapons and their delivery systems;

The stated end-use of the item(s); and

The applicability of an export license to relevant bilateral or multilateral agreements to which India is a party.17

Imports India’s strategic import licensing system is substantially less developed than its controls on exports. Presently the Indian government regulates imports of only selected sensitive products primarily for environmental, health, and safety (EHS) reasons. The Indian government requires a license for imports of the following sensitive items found on the ITC (HS): 1) nuclear and radiological materials, including irradiated fuel elements of nuclear reactors, heavy water, other nuclear fuels, inorganic and organic compounds of rare earth metals, uranium ores, and related substances;18 2) selected hydrocarbons and derivative substances from countries that are not parties to the Montreal Protocol; 3) CWC-listed chemicals,19 some organic chemicals, hazardous chemicals, and pesticides; 4) explosives, including gunpowder and detonators; 5) aircraft and spacecraft; 6) warships; 7) nickel and articles thereof; and 8) conventional arms and ammunition.20 The DGFT and designated Regional Authorities (RAs) license imports of most restricted items found on the ITC (HS),21 but there are some exceptions. The DAE issues licenses for imports of nuclear materials.22 The CWC National Authority licenses imports of CWC Schedule I chemicals.23 Multiple district-level and regional authorities are responsible for authorizing imports of munitions, including small arms and light weapons (SALW).24 Any person importing goods from the United States into India must do so in accordance with the terms of the Indo-U.S. Memorandum of Understanding on Technology Transfer.25 The importation of specified capital goods, raw materials, and components from the U.S. is subject to U.S. export control regulations. U.S. suppliers of such items are required to obtain an export authorization based on an import certificate issued by the GOI. A trader that wishes to request an import certificate for goods that are to be imported from the U.S. must complete and submit an Aayaat Niryaat Form 2C (ANF 2C) also known as an “Import Certificate under Indo-US Memorandum.” The import certificate is not a substitute for an import license for restricted items designated in the ITC (HS).26 Technology Transfer The DGFT is authorized to license and regulate electronic transmissions of strategic technologies designated on the SCOMET list.27 The WMD Act and the FTDR (as amended) define “technology” as “any information (including information embodied in software), other than information in the public domain, that is capable of being used in the development, production,

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or use of any goods or software; or the development of, or the carrying out of, an industrial or commercial activity or the provision of a service of any kind.”28 Transfers of sensitive technologies – whether listed or restricted under India’s catch-all provision – are subject to control in India under the following circumstances:

A person located within India seeks to transfer restricted technologies to a person or a place outside India;29

A person who is an Indian citizen or resident located outside India wishes to transfer restricted technologies to a person or a location which is also outside India,30 and

An item is exhibited, sold, supplied, or transferred to a foreign entity or a foreigner who is resident, operating, visiting, studying, or conducting research or business within Indian territory, airspace, or an Exclusive Economic Zone (EEZ).31

“Catch-All” Control India’s WMD Act and FTDR (as amended)32 impose restrictions on trade in non-listed items that appear to be destined for a WMD-relevant end-use. A trader must apply for an export license from the DGFT, even if the item does not appear on the national control list, if he or she “knows” that the item is “intended to be used in the design or manufacture of a biological weapon, chemical weapon, nuclear weapon or other nuclear explosive device, or in their missile delivery systems.”33 The Indian catch-all control extends to individuals or entities facilitating the execution of a transaction (brokers and intermediaries), if they are aware that the transaction in question is related to a prohibited activity.34 End-User Controls India prohibits transfers to non-state actors or terrorists of any material, equipment, or technology that could contribute to the development of a WMD.35 India abides by UN Security Council (UNSC) Resolutions and has enacted export prohibitions against several sanctioned countries, entities, and terrorists. India prohibits the “direct or indirect” import or export of designated arms and WMD-related goods and technologies to or from Iran, North Korea, and Iraq. India maintains an exporter black list known as the Denied Entities List (DEL), which consists of parties to which the Indian government previously denied an export license. The DEL is not publicly available. The Indian government denies licensing privileges to commercial entities that appear on the DEL as well as the individuals or persons that control these entities.36 The DEL reportedly contains entities that appear on many of the sanctions and denied parties lists maintained by the United States Government (USG), the UN, and other countries, as well as entities that are listed based on Indian inputs. If a company submits an inquiry to DGFT concerning a particular end-user, DGFT will provide a “yes” or “no” answer regarding the entity’s status on the DEL.

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When applying for a license, exporters must include, among other things, an End-User Certificate (EUC) and assurances that the recipient will not re-export or re-transfer the item to anyone other than the end-user of record.37 Pursuant to the terms and conditions of an export license (ANF 2E), the Indian government requires an EUC indicating the end product and/or end-purpose and details on the end-user for the export of SCOMET items.38 The DAE may require additional assurances in order to export certain nuclear-related goods and technologies. For certain items in Category 0 of the SCOMET list, the DAE may request formal assurances from the recipient State to certify adequate physical protection and International Atomic Energy Agency (IAEA) safeguards,39 mitigate the risk of diversion, and ensure the items will not be used in a nuclear explosive device.40 The assurances are in accordance with the guidelines set forth by the NSG. Recent Developments Over the past several years, the Indian government has focused on strengthening bilateral relationships and obtaining greater access to high technology goods and services. It has signed a variety of nuclear agreements with a range of countries in order to expand its growing civil nuclear capabilities and facilitate bilateral trade in controlled commodities. After receiving a waiver from the NSG in 2008, India is now seeking full membership in the NSG and the other multilateral export control regimes, and there appears to be a groundswell of international support. Indeed, the United States, Germany, Russia, France, and the UK are all advocating Indian admission and appear committed to ensuring increased strategic trade with India into the future. India’s broader policy initiatives and bilateral arrangements have prompted modifications to parts of its strategic trade control system. In recent months, the GOI has amended and updated the statutory basis for India’s strategic trade controls and released a new version of its national control list and licensing procedures. In August 2010, the Indian parliament passed the Foreign Trade (Development and Regulation) Amendment Act of 20 August 2010 (FTDR Amendment Act 2010). The act incorporated the provisions of the WMD Act (2005) into the FTDR (1992), which expanded the scope of control on strategic trade in India. The FTDR Amendment Act 2010 extended the definition of exports and imports within the FTDR to include “services” and “technologies,” which were previously identified only in the WMD Act. India subsequently issued an updated control list and a streamlined application for the export of SCOMET items. In March 2011, under the authority of the FTDR Amendment Act 2010, the DGFT released a new version of the SCOMET list in the annexure to DGFT Notification No. 38 (RE-2010)/2009-2014. The DGFT also issued a revised and simplified export license application form (Aayaat Niryaat Form 2E - ANF 2E) with the release of the “new” control list.

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India’s Multilateral Export Control Regime Membership: Potential Implications for Industry India’s quest to join the multilateral export control regimes likely will involve further revisions to its trade controls, and industry should prepare for these possible changes in upcoming months. If India intends to join the regimes, then it will be necessary for the GOI to implement all of the regime guidelines into its domestic controls and fully harmonize its national control list with those of the regimes. In order to make a more compelling argument to the Wassenaar Arrangement, the Indian government may expand the scope of its technology transfer and brokering controls to apply to conventional arms-related as well as dual-use activities. Because the WA Guidelines call upon Member States to develop “national laws and regulations with clear definitions of ITT, via both oral and electronic means of transmission,”41 the GOI may seek to clarify ambiguities in its technology and information transfer controls. While both the FTDR and the WMD Act address transfers of “technology,” India’s existing legal authorities do not explicitly define the term “intangible transfer of technology.” Likewise, Indian legislation does not expressly mention “deemed” technology exports or address oral communications or other specific forms of intangible transfer.42 Indian legislation does not explicitly define the term “brokering”, and the GOI does not require brokers to obtain a license before mediating transactions involving strategic commodities. Further, Indian brokering controls do not appear to extend to arms brokering activities, and dual-use brokering activities appear to be regulated only under India’s catch-all control.43 As the WA Guidelines and Procedures mandate that member states “introduce appropriate provisions to control arms brokering activities,”44 the GOI may choose to institute more stringent licensing requirements for brokering transactions. As previously discussed, India has yet to fully harmonize its SCOMET list with the most up-to-date lists of the WA, AG and MTCR, and there are numerous commodities controlled by the U.S. and other MECR states that are noticeably missing from the SCOMET list. To facilitate regime admission, India may seek to modify the SCOMET list so that it more closely mirrors the regime lists.45 SCOMET revisions may also include alterations to the technical descriptions associated with some entries. It likely will be necessary for the Indian government to reconcile any discrepancies between the SCOMET control list and those of the regimes prior to entry. Fully-harmonized technical descriptions, consistent with those provided by the MECRs, should make it easier for companies conducting business in India to classify their commodities and determine when a license is required, thereby lessening the likelihood for violations. In sum, the Indian government’s recent nonproliferation policy decisions likely will result in stricter and more expansive trade controls, and companies should prepare to adapt their internal compliance programs to address these heightened restrictions. At the same time,

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however, India’s prospective membership in the regimes arguably brings with it new opportunities for companies. Indian admission to the multilateral export control regimes could enable foreign suppliers to boost exports of ATP to India and develop better relationships with strategic industries on the ground. Moreover, the alignment of India’s strategic trade controls with those of other major supplier states and with the guidelines of the multilateral regimes likely will help to facilitate high technology trade between Indian and foreign suppliers. In the near term, Indian and foreign firms may face greater challenges in ensuring compliance with India’s new trade controls, but in the longer term these changes may lead to new opportunities for companies to establish lucrative trading relationships.

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1 Foreign Trade (Development and Regulation) Act No. 22 of 1992 (FTDR), Chapter II, Section 3(2), available at

Director General of Foreign Trade (DGFT) website, <http://dgft.delhi.nic.in/>. 2 Section 4(k) of the WMD Act subsumes re-transfers and extra-territorial re-exports under the omnibus term “re-

transfer”. Re-transfer is defined as “transfer of any item notified under this Act from any country or entity to which it has been exported from India, to yet another country or entity;” Section 4(b) of the WMD Act defines “brought in transit” as “to bring goods from any country into India by land, air, or amphibious transportation, where the goods are to be taken out from India on the same conveyance on which they are brought into India without any landing in India, but does not include a conveyance in innocent passage through Indian territory, Indian territorial waters, or Indian airspace of a foreign conveyance carrying goods;” Section 4(n) of the WMD Act defines “transshipment” as “removal of goods from the conveyance on which they were brought into India and to place the goods on the same or another conveyance for the purpose of taking them out of India, where these acts are carried out on a through bill of lading, through airway bill, or through manifest. 3 WMD Act, Section 13(1).

4 Atomic Energy Act, Sections 14 and 16. Text available at Indian Atomic Energy Regulation Board website, <http://

www.aerb.gov.in/t/actsrules/atomicenergyact_1962.htm>. 5 Resolution No. AEA/27(1)/2005-ER, Section A(1)(a) and (b).

6 Resolution No. AEA/27(1)/2005-ER, Section A(8).

7 CWC Act, Chapter III, Section 18, Government of India, Ministry of Chemicals and Fertilizers, Department of

Chemicals and Petrochemicals website, <http://chemicals.gov.in/policy.htm>. 8 Arms Act, Chapter II, Articles 3(1) and 5, Government of India, Ministry of Home Affairs website,

<http://mha.gov.in/pdfs/arms%20act-1959.pdf>. 9 Arms Act, Chapter II, Article 12.

10 FTDR, Section 5, and Foreign Trade Policy (2009-2014), Paragraph 2.1.

11 WMD Act, Sections 5(1) and 5(2). These provisions refer in particular to items relevant to WMD activities.

Section 13(4) further states that the GOI may subject any item to the Act’s provisions. 12

Note: The export of items in Category 2 of the SCOMET list (micro-organisms, toxins, pathogens, etc) may also be controlled by other applicable guidelines and exporters of items in this category are advised to seek guidance from the DGFT. Foreign Trade Handbook of Procedures, Vol. 1 (2010-2011 supplement), Paragraph 2.48, Note 3, <http://www.infodriveindia.com/exim/dgft/exim-procedures/2010-2011/chapter_2_general_provisions_regarding_exports_imports.aspx#2.50>. 13

“India’s System of Controls over Exports of Strategic Goods and Technologies,” Ministry of External Affairs website, <http://mea.gov.in/disarmament/01da02.htm> and, “Defence Production,” MOD website, <http://mod.nic.in/product&supp/welcome.html>. 14

For more information on the SCOMET list, please consult Appendix 2 of this document. 15

The SCOMET list fails to regulate all AG biological, dual-use software and technologies.AG Biological Dual Use entries 2.0 (technology) and 3.0 (software) are not found on the SCOMET list, nor subject to Indian export controls. 16

To assist companies and individuals in navigating the Indian trade control system, the DGFT publishes a Handbook of Procedures (Vol. 1) (also in five-year increments with annual updates) that outlines the rules related to applying for, obtaining, and using an import or export license, as well as information on special re-export rules related to the incorporation of U.S. materials and technology. 17

Note: Exporters wishing to export Category 1 chemicals must go through the provisions very carefully. The export of Category 1A chemicals is prohibited in India. See Foreign Trade Handbook of Procedures, Vol. I (2009-2014), Paragraph 2.49(I) a-f. 18

ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 28, Inorganic Chemicals; Organic or Inorganic Compounds of Precious Metals, of Rare Earth Metals, of Radioactive Elements or of Isotopes, <http://www.infodriveindia.com/exim/dgft/itc-hs-export-schedule2/2009-14/table-b-ch-28-inorganic-chemicals-organic-inorganic-compounds-of-precious-metals.aspx>; ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 84, Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Parts Thereof; <http://www.infodriveindia.com/exim/dgft/itc-hs-export-schedule2/2009-14/table-b-ch-84-nuclear-reactors-

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boilers-machinery-and-mechanical-appliances-parts-thereof.aspx> and, DGFT Notification No. 90 (RE-2007)/2004-2009, 28 March 2008, DGFT website. 19

DGFT Notification No. 57 (RE-2007)/2004-2009, 30 November 2007, DGFT website, <http://www.eximguru.com/notifications/Amendments-in-Schedule-1-Imports-of-19635.aspx>. 20

See ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 29, Organic Chemicals, <http://www.infodriveindia.com/exim/dgft/itc-hs-export-schedule2/2009-14/table-b-ch-29-organic-chemicals.aspx> and, ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 38, Miscellaneous Chemical Products, <http://www.infodriveindia.com/exim/dgft/itc-hs-export-schedule2/2009-14/table-b-ch-38-miscellaneous-chemical-products.aspx>.; ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 36, Explosives; Pyrotechnic Products; Matches; Pyrophoric Alloys; Certain Combustible Preparations, <http://www.infodriveindia.com/hs-codes/36-chapter-36-explosives-pyrotechnic-products.aspx>; ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 88, Aircraft, Spacecraft and Parts Thereof, <http://www.infodriveindia.com/hs-codes/88-chapter-88-aircraft-spacecraft-and.aspx>; ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 89, Ships, Boats and Floating Structures, <http://www.infodriveindia.com/hs-codes/89-chapter-89-ships-boats-and.aspx>; ITC (HS) Classifications of Export and Import Items, 2009-2014, Chapter 93, Arms and Ammunition; Parts and Accessories Thereof, <http://www.infodriveindia.com/exim/dgft/itc-hs-export-schedule2/2009-14/table-b-ch-93-arms-and-ammunition-parts-and-accessories-thereof.aspx>. 21

Foreign Trade Handbook of Procedures, Vol. I (2009-2014), Paragraph 2.37. 22

Notification No. 90 (RE-2007)/2004-2009, 28 March 2008, Government of India, DGFT website, <http://dgft.gov.in/exim/2000/not/not07/not9007.htm> and, ITC (HS) Classifications of Export and Import Items, Section VI, Section XVI, Chapter 84, Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Parts Thereof, <http://www.infodriveindia.com/content/Exim/DGFT/ITC-HS-Codes-Import-Schedule-1/ch%2084.doc>. 23

CWC Act, Chapter III, Section 15 and, DGFT Notification No. 59 (RE-2007)/2004-2009, 30 November 2007, Section 1A, DGFT website. 24

Arms Rules of 1962, Section 5, available at, <http://www.abhijeetsingh.com/arms/india/laws/rules/rule_1_5.html>. 25

Foreign Trade (Regulations) Rules 1993. Section 6(4), Government of India, DGFT website, <http://www.eximguru.com/content/exim/appendices-forms/dgft-appendices-2009-14/appnd-38c.doc>. 26

Foreign Trade Handbook of Procedures, Vol. 1 (2009-2014), Paragraph 2.11. 27

In sum, there are 16 entries containing “dual-use” technologies and 23 “software” entries that appear on the SCOMET list. 28

When technology is described wholly or partly by reference to the uses to which it (or the goods to which it relates) may be put, it shall include services which are provided or used, or which are capable of being used, in the development, production or use of such technology or goods. FTDR Amendment Act 2010, Section 2(m). Also see, WMD Act, Section 4(l). 29

WMD Act, Section 13(3)(a). 30

WMD Act, Section 13(3)(b). 31

WMD Act, Section 13(4). 32

FTDR Amendment Act 2010, Article 14C. 33

WMD Act, Section 11 and, FTDR Amendment Act 2010, Article 14C. 34

The WMD Act, Sections 11 and 12, and The Foreign Trade (Development and Regulation) Amendment Act 2010, (hereafter the FTDR Amendment Act), Article 14C, Government of India, DGFT website, <http://www.infodriveindia.com/exim/dgft/acts-and-rules/foreign-trade-development-and-regulation-act-2010.aspx>. 35

WMD Act, Section 9. 36

DGFT Circular F. No. 18/24//HQ/99-2000/ECA II, Guidelines for Maintaining the Denied Entities List (DEL), Government of India, DGFT website, <http://dgft.gov.in/exim/2000/cir/Enfor.htm>.

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Chapter 2 of the Handbook of Procedures (Vol. 1), ), available on the Government of India, Ministry of Commerce & Industry, Department of Commerce website: http://dgftcom.nic.in/exim/2000/procedures/ftp-hbcontents0910.pdf 38

Beginning in 2009, India has made a number of changes to its strategic trade control system. Amendment No. 122 of August 19, 2009, the GOI requires all businesses registered or operating in India that manufacture, process, or use dual-use items on the SCOMET list to obtain the permission of the GOI before entering into any agreements that include a requirement that a foreign third-party or government make a site visit This approval process will be handled in the same manner as a license application. 39

Foreign Trade Handbook of Procedures, Vol. I (2009-2014), Paragraph 2.49(III), and Resolution No. AEA/27(1)/2005-ER, Guidelines for Nuclear Transfers (Exports), Section A(3)(a) and (b). 40

Foreign Trade Handbook of Procedures, Vol. I (2009-2014), Paragraph 2.49(III) - (IV). 41

“Best Practices for Implementing Intangible Transfer of Technology Controls,” The Wassenaar Arrangement website, <http://www.wassenaar.org/guidelines/docs/ITT_Best_Practices_for_public_statement.pdf>. 42

There is no evidence to suggest that controls on intangible and deemed transfers have been implemented by Indian authorities. 43

Note: The mere carriage, without knowledge, of persons, goods or technology, or provision of services, including by a public or private carrier of goods, courier, telecommunication, postal service provider, or financial service provider, shall not be an offence under the WMD Act. 44

“Elements for Effective Legislation on Arms Brokering,” The Wassenaar Arrangement website, <http://www.wassenaar.org/guidelines/docs/Elts_for_effective_legislation_on_arms_brokering.pdf>. 45

Revisions to the SCOMET list are an administrative function and do not require parliamentary approval or amendments to existing Indian legal authorities. To update the SCOMET list, the DGFT would simply have to issue a Notification in the Official Gazette.