𝐒 𝐉 𝐄𝐗𝐈𝐌 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 15.07.2025

DGFT Releases Draft Internal Compliance Programme (ICP) for SCOMET Items Exports

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, has released a pivotal Trade Notice No. 07/2025-26 dated 14th July 2025, calling upon exporters, industry stakeholders, and trade bodies to provide feedback on the Draft Internal Compliance Programme (ICP) for the export of dual-use items categorized under the SCOMET list.

This move marks a significant step towards institutionalizing standardized compliance measures across Indian exporters engaged in sensitive trade.

What is the Internal Compliance Programme (ICP)?

An Internal Compliance Programme is a set of internal policies, procedures, and management practices implemented by companies to ensure adherence to export control regulations, particularly for items with dual-use applications — items that can be used for both civilian and military purposes.

The new draft ICP framework is aimed at standardizing industry compliance to India’s obligations under international non-proliferation regimes and aligning domestic practices with global best standards like ISO 37301 (Compliance Management) and ISO 31000 (Risk Management).

Background: Why Now?

India is a committed member of international export control regimes such as:

• Wassenaar Arrangement
• Missile Technology Control Regime (MTCR)
• Australia Group

The draft ICP is being introduced in light of:

• The need to prevent unauthorized transfer of sensitive technologies.
• Ensuring preparedness of Indian exporters for global scrutiny.
• Aligning with schemes such as GAICT (Global Authorisation for Inter-Company Transfers) and OGEL (Open General Export Licence).

Highlights of the Draft ICP Framework

1. Scope and Applicability

The framework applies to all organizations involved in the export or transfer of dual-use items listed in the SCOMET List.

2. Core Components of the ICP

The draft outlines a ten-part structure designed to ensure robust compliance, including:

• Leadership and Commitment: Top management must provide written compliance policies and appoint a Chief Export Control Officer.
• Risk Identification and Mitigation: Procedures for item classification, end-user screening, and diversion risk mitigation.
• Performance Monitoring: Through internal audits, key performance indicators (KPIs), and management reviews.
• Training and Awareness: Mandatory compliance training and capacity-building across all staff levels.
• Recordkeeping: Maintenance of export-related documentation for a minimum of 5 years, as per FTP norms.

3. Emphasis on Technology Control

The ICP specifically addresses controls around intangible transfers such as design files, source codes, and electronic communication — an area growing in importance with digital exports.

4. Support for Sustainable Development Goals (SDGs)

The ICP aligns with:

• SDG 3: Preventing harm from WMD.
• SDG 16: Promoting peace, justice, and strong institutions.
• SDG 17: Enhancing global partnerships through responsible trade.

Implementation and Case Study

To guide adoption, the DGFT has included a case study of a mid-sized Indian electronics manufacturer who successfully implemented the ICP. Key takeaways include:

• Integrating export controls with the ERP system.
• Conducting ISO-aligned training.
• Using real-time denied party screening tools.
• Achieving faster SCOMET licensing and GAICT recognition.

This illustrates how Indian exporters can embed compliance in their operational DNA to enhance global competitiveness and reduce regulatory risks.

Invitation for Industry Feedback

As per Para 1.07A of FTP 2023, the DGFT is seeking comments, suggestions, and feedback from exporters, industry associations, and legal/technical experts. Stakeholders must send their submissions within 10 days of the notice via email to scomet-dgft@gov.in.

Implications for Exporters

Exporters dealing with sensitive technologies and dual-use items must:

• Begin aligning their internal systems with the ICP framework.
• Prepare the necessary documentation, training modules, and classification tools.
• Explore benefits under GAICT and OGEL once ICP systems are certified.

Non-compliance could lead to penalties, license cancellations, or loss of international trust — emphasizing the importance of early and robust implementation.

Conclusion

The release of the Draft ICP by the DGFT is a landmark step in promoting a culture of compliance, accountability, and transparency in India’s export ecosystem. It is not just a regulatory formality but a strategic move to position Indian businesses as responsible global players in high-stakes international trade.

Exporters are encouraged to review the draft thoroughly and contribute constructively to ensure that the final framework is both practical and enforceable.

Listen to this on our #YouTube Channel

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: DGFT

Disclaimer

Handy Download:

Connect with us for more-

@ Team S J EXIM SERVICES, New Delhi, IN

CP: Ms. Shubhra Jha, Founder

Tel: +91-11-4999 2707 I +91-9999005693

Web: www.sjexim.services

EMAIL: operations@sjexim.services  I shubhra@sjexim.services

Facebook: www.facebook.com/sjeximservices

LinkedIn: https://www.linkedin.com/company/90794255/admin/feed/posts/

YouTube: https://www.youtube.com/@sjeximIndia

Subscribe our WhatsApp Channel: https://whatsapp.com/channel/0029VaTxDT8JZg4CHEOSoK47

Subscribe our Telegram Channel: https://t.me/sjeximindia