The Directorate General of Foreign Trade (DGFT) is an Indian government agency under the Ministry of Commerce and Industry. It is an institution responsible for regulating and promoting India's imports and exports.
The DGFT was established in 1991 following the economic liberalization policies, replacing the earlier office of the Chief Controller of Imports & Exports (CCI&E). The problem it solved was shifting the focus from a restrictive 'controller' of trade to a 'facilitator' and promoter of international commerce.
The DGFT's mechanism is centered on formulating and implementing the country's Foreign Trade Policy (FTP), which is typically announced every five years. Its authority is derived from the Foreign Trade (Development and Regulation) Act, 1992, which empowers the Central Government to make provisions for the development and regulation of foreign trade. The DGFT operationalizes the FTP by issuing the mandatory Importer-Exporter Code (IEC), granting licenses for restricted items, and administering export promotion schemes like the Export Promotion Capital Goods (EPCG) Scheme.
The DGFT is intrinsically connected to the Foreign Trade (Development and Regulation) Act, 1992, which replaced the restrictive Import and Export (Control) Act of 1947. It works closely with other institutions like the Customs and the Reserve Bank of India (RBI) to implement the FTP.
Recently, the DGFT has amended the Foreign Trade Policy (FTP) 2023 to introduce new paragraphs 1.07A and 1.07B, which formally mandate stakeholder consultation before making future policy changes, thereby increasing transparency. The government retains suo moto powers to act swiftly in emergencies without consultation. The DGFT also recently tightened import policies for certain silver bars, changing their status from "Free" to "Restricted" under Chapter 71 of the ITC (HS) 2022 import policy, using its powers under Section 3 and Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.