New Delhi
10 July 2006
New Delhi is likely to explore the benefits of bifurcation of the
Directorate General of Foreign Trade (DGFT) into two entities dealing with export
"promotion" and export "control" in order to address the security implications of
exponential growth of strategic commerce.
The DGFT can also be expected to evolve a procedure so that companies trading in dual
use items or technology can obtain an indication from the government about the likely
success of an export licence application before concluding negotiations with companies
in the United States and elsewhere.
According to well-placed sources, government agencies are working on a risk
management project linking four ports in the country and making those ports EDI-enabled
(Electronic Data Interchange-enabled) to bring them online on a real time basis with the
DGFT or other appropriate agencies.
The sources observed that the trend of outsourcing high-technology trade from India
warranted real-time communication capability between customs and container depots
with experts based at a centralised location and specialised training for customs
officials to deal with SCOMET (Special Chemicals, Organisms, Materials, Equipment and
Technologies) items.
The sources also said there was a need to emphasise on the "security imperative" of
export control in addition to the "economic imperative" of export promotion in order to
avert a repeat of the incident involving Malaysia-based Scomi company's involvement
with Pakistani scientist AQ Khan's nuclear network.
However, industry sources maintain that while Indian businesses are willing to go in for
internal compliance programme, the field officers of the DGFT were not suitably
competent to advise exporters on the intricacies of strategic commerce and export
control legislations.
Some of them cite the December 30, 2005 sanctions imposed by the US on Sabero
Organics Gujarat Limited and Sandhya Organics Limited for allegedly supplying
chemicals to Iran as a case in point. Washington similarly sanctioned a scientist, Dr
YSR Prasad, under the Iran Proliferation Act of 2000.
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