DGFT Clarifies Warehousing of Industrial Chemicals Under Foreign Trade Policy 2023

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Dated: 09.02.2026

DGFT Clarifies Warehousing of Industrial Chemicals Under Foreign Trade Policy 2023

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, Government of India, has issued Policy Circular No. 09/2025-26 dated 6th February 2026, providing critical clarification on the warehousing of chemicals under Paragraph 2.36(a) of the Foreign Trade Policy (FTP) 2023. This clarification addresses concerns raised by stakeholders regarding the interpretation of the policy and aims to streamline the handling and storage of industrial chemicals in bonded warehouses.

Background: Understanding Para 2.36 of FTP 2023 

Paragraph 2.36 of the FTP 2023 outlines the provisions for setting up private and public bonded warehouses under the Customs Act, 1962. It allows the importation and storage of goods, except prohibited items such as arms, ammunition, hazardous waste, and chemicals, in these warehouses. The policy also specifies that goods stored in bonded warehouses can be cleared for home consumption upon payment of applicable customs duties and compliance with FTP provisions.

However, the exclusion of “hazardous chemicals” under Para 2.36(a) raised concerns among industry stakeholders, particularly those involved in the trade of industrial raw materials, intermediates, specialty chemicals, petrochemicals, and pharmaceutical inputs. These chemicals are vital components in India’s industrial and trade value chain, and their exclusion from bonded warehouses was seen as a potential barrier to trade competitiveness and supply chain continuity.

Stakeholder Concerns

Industry representatives highlighted the lack of uniformity in the treatment of hazardous chemicals. They pointed out that the handling and storage of such chemicals are already permitted at various ports and Container Freight Stations (CFS) under established regulatory frameworks. The exclusion of hazardous chemicals from bonded warehouses was perceived as inconsistent with existing practices and detrimental to industrial productivity and trade efficiency.

Clarification Issued by DGFT 

To address these concerns, the DGFT has clarified that the exclusion of “hazardous chemicals” under Para 2.36(a) was intended to restrict the unregulated warehousing of hazardous waste and chemicals, along with other prohibited items. The clarification emphasizes that industrial chemicals, which are essential for trade and industrial operations, can be warehoused in public and private bonded warehouses under Para 2.36(a) of FTP 2023, subject to compliance with specific conditions.

Conditions for Warehousing Industrial Chemicals 

The DGFT has outlined the following conditions for the warehousing of industrial chemicals:

Compliance with Domestic Laws: The storage and handling of chemicals must adhere to all applicable domestic laws, rules, and regulations governing safety standards.
Approval and Licensing: The competent authority under the Customs Act, 1962, and its associated rules and regulations must approve and/or license the bonded warehouse facilities. These authorities are responsible for ensuring compliance with safety and handling requirements.
Import and Export Policy Compliance: The chemicals proposed to be warehoused must comply with all applicable conditions prescribed under the Import and Export Policy notified under the Foreign Trade (Development and Regulation) Act, 1992, as well as the Customs Act, 1962.
Adherence to FTP Provisions: All provisions of Paragraph 2.36 of the FTP 2023 must be duly complied with.

Implications for Trade and Industry

This clarification is a significant step toward facilitating trade and ensuring the smooth operation of supply chains. By permitting the warehousing of industrial chemicals in bonded warehouses, the DGFT has addressed the industry’s concerns and aligned the policy with existing regulatory frameworks. This move is expected to enhance industrial productivity, support trade competitiveness, and ensure the continuity of supply chains.

Conclusion

The DGFT’s clarification on the warehousing of chemicals under Para 2.36(a) of FTP 2023 reflects the government’s commitment to fostering a conducive environment for trade and industry. By allowing the regulated storage of industrial chemicals in bonded warehouses, the policy ensures compliance with safety standards while supporting India’s external trade and industrial growth.

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Source: DGFT

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