Foreign Trade – Ban on export of non-basmati rice –

By the Notification No.20/23 dated 20.7.2023 under Section 3 read with Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the export policy was amended, and export of Non-Basmati Rice against ITC (HS) Code 1006 30 90 was prohibited.   However, export was permitted on four conditions. The said conditions were clarified on 18.8.2023 by Trade Notice No.23/2023 that export is allowed in case of fulfilment of one of four conditions.

The petitioners have entered various customers and sale contracts before issuance of the impugned notice.   No reasons given in the impugned notification for sudden ban on the export.  There is legitimate expectation to fulfil the contracts.

Transitional arrangement in para 1.05 of the Foreign Trade Policy, 2023, permits exports in respect of concluded contracts.   However, this is not made application as per the impugned notification.

Right of a trader, to fulfill his obligation under concluded contract, on the basis of policy as then existing on the date of concluded contract needs consideration.

HELD that no reasons are forthcoming for denial of benefit of transitional arrangements in FTP 2023 to the petitioners, though same was granted in similar circumstance, to the export of wheat.  Moreover, the impugned notification is applicable prospectively but clauses 2(i) to (iv) in their effect also take in its sweep that transitional arrangement to save concluded contracts is not applicable.

Judgment dated 10.5.2024 in W.P.No.5601 of 2023 of M/s. Shriram Food Industry Ltd  Vs. Union of India and others with connected matters.