Economic, Commercial and Intellectual Property Laws · Foreign Trade Policy and Procedure

Foreign Trade Policy under Section 5 of the FTDR Act

Updated 11 October 2026 · Fact-checked

Under Section 5 of the FTDR Act, 1992, the Central Government may from time to time formulate and announce the foreign trade policy by notification in the Official Gazette, and may amend it in the same way. The Director General of Foreign Trade advises on it and carries it out. For SEZs, the policy applies with notified exceptions and modifications.

Understand Foreign Trade Policy under Section 5 of the FTDR Act

The Foreign Trade Policy (FTP) is the Government's statement of how it wants to develop and regulate India's imports and exports. It sets the rules, incentives and conditions that exporters and importers work within. The FTDR Act, 1992 gives it a legal base.

Section 5 is short. It says the Central Government may, from time to time, formulate and announce the policy by notification in the Official Gazette. It may also amend the policy in like manner, which means again by Gazette notification. The word "may" shows the power is enabling. The policy has no fixed life in the section. The Government decides when to announce or change it.

The section was substituted with effect from 27 August 2010. Before that, the policy was called the "export and import policy". The 2010 amendment changed the name to foreign trade policy, so it now also covers services and technology, not only goods.

There is one proviso. The Central Government may direct that, for Special Economic Zones, the policy applies to goods, services and technology with such exceptions, modifications and adaptations as it specifies by Gazette notification. So SEZ units do not automatically get the general policy as it stands.

Section 5 works with other sections. Section 3 lets the Government make Orders to facilitate imports, increase exports, and prohibit, restrict or regulate them. Section 6 makes the Director General of Foreign Trade the person who advises the Government in formulating the policy and is responsible for carrying it out. Section 6(3) also says the Government's powers under Sections 3, 5, 15, 16 and 19 cannot be delegated to the Director General. So the power to announce and amend the policy stays with the Central Government itself.

Key rules to remember

Power under Section 5: Central Government → formulates and announces FTP → by notification in the Official Gazette; The power is exercised from time to time. It is enabling ("may"), not a duty with a fixed period.
Amendment: Amendment of FTP → "in like manner" → by Gazette notification; The amendment uses the same route as the original announcement.
SEZ proviso: FTP applies to SEZs → with exceptions, modifications and adaptations specified by Gazette notification; The Central Government must direct this by notification. It covers goods, services and technology.
Role of the Director General (Section 6): DGFT advises on formulating FTP and is responsible for carrying it out; Powers under Sections 3, 5, 15, 16 and 19 cannot be delegated to the DGFT under Section 6(3).
Related source of power (Section 3): Orders under Section 3 → facilitate imports and increase exports; prohibit, restrict or regulate; Section 3(4): no permit or licence is needed for import or export except as required under the Act, rules or orders.

How to solve Foreign Trade Policy under Section 5 of the FTDR Act questions

Use this method for any question on Section 5 or on how the Foreign Trade Policy is made and changed.

1Identify what is asked: formulation, announcement, amendment, SEZ application, or the role of the DGFT.
2State the rule in Section 5: the Central Government may from time to time formulate and announce the policy by notification in the Official Gazette.
3Add the amendment rule: it may amend the policy in like manner, that is, by Gazette notification.
4If SEZs are involved, quote the proviso: the policy applies to goods, services and technology with the exceptions, modifications and adaptations specified by notification.
5Link to the supporting sections where relevant: Section 3 (Orders), Section 6 (DGFT advises and implements, but cannot exercise the Section 5 power).
6Apply the rule to the facts given. Check who acted and how: Central Government or an officer, notification or a mere letter.
7Close with a clear conclusion that names the Act and section.

Quickest way: Who, how, what: a three-point check

When to use it: Use it for short-answer questions or when time is tight.

Who: the Central Government holds the power. The DGFT only advises and implements.
How: by notification in the Official Gazette, for both announcing and amending.
What: the policy for goods, services and technology, with notified exceptions for SEZs.
Write the section number (Section 5, FTDR Act, 1992) once in the answer and give a one-line conclusion.

Common mistakes in Foreign Trade Policy under Section 5 of the FTDR Act

Saying the Director General of Foreign Trade announces the Foreign Trade Policy.
The DGFT issues many public notices and the policy documents, so students link him with announcing the policy.
Fix: Write that the Central Government announces it under Section 5. The DGFT advises on it and carries it out under Section 6(2). Section 6(3) bars delegation of the Section 5 power.
Stating that the policy must be announced every five years.
Past policies were framed for set periods, and students treat this as a rule of the Act.
Fix: Section 5 says only "from time to time". Do not attach a fixed period to the section.
Forgetting that amendment must also be by Gazette notification.
Students remember the power to announce but skip the words "in like manner".
Fix: Write that amendment follows the same route: notification in the Official Gazette.
Saying the policy applies to SEZs exactly as it applies elsewhere.
The proviso is short and is often skipped.
Fix: Quote the proviso: the Central Government may direct that it applies with exceptions, modifications and adaptations, by notification.
Treating the policy as covering goods only.
Older material spoke of the "export and import policy".
Fix: Since 27 August 2010 the policy is the foreign trade policy and the Act deals with goods, services and technology.
Mixing up Section 5 with Section 3.
Both relate to regulation of trade and both involve Gazette publication.
Fix: Section 5 is about the policy. Section 3 is about Orders that facilitate, prohibit, restrict or regulate imports and exports.

Worked examples

Example 1

Explain how the Central Government formulates and amends the Foreign Trade Policy under the FTDR Act, 1992. Can the Director General of Foreign Trade amend it on his own?

Show the solution

Provision: Section 5 says the Central Government may, from time to time, formulate and announce the foreign trade policy by notification in the Official Gazette. It may amend the policy in like manner.
Meaning: both announcement and amendment need a Gazette notification. The power is enabling and there is no fixed period.
Role of the DGFT: under Section 6(2), the Director General advises the Central Government in formulating the policy and is responsible for carrying it out.
Delegation: Section 6(3) allows the Central Government to delegate some of its powers by Order, but excludes the powers under Sections 3, 5, 15, 16 and 19.
Application: the amendment power is under Section 5, so it cannot be delegated to the DGFT.

Answer: The Central Government formulates, announces and amends the policy by notification in the Official Gazette under Section 5. The DGFT advises and implements, but cannot amend the policy on his own, because Section 6(3) excludes the Section 5 power from delegation.

Example 2

The Central Government wants the Foreign Trade Policy to apply to a Special Economic Zone with certain changes. Advise whether it can do so and how.

Show the solution

Provision: the proviso to Section 5 lets the Central Government direct that, for Special Economic Zones, the policy applies to goods, services and technology with such exceptions, modifications and adaptations as it specifies.
Method: the direction must be given by notification in the Official Gazette.
Scope: the proviso covers goods, services and technology, not goods alone.
Related law: under the Act's definition of import and export, trade in goods, services and technology regarding an SEZ, or between two SEZs, is governed by the Special Economic Zones Act, 2005. The proviso to Section 5 is a separate power on how the policy applies to SEZs.
Conclusion: the Government can do this, if it issues a Gazette notification specifying the changes.

Answer: Yes. Under the proviso to Section 5, the Central Government may by Gazette notification direct that the Foreign Trade Policy applies to SEZs with specified exceptions, modifications and adaptations.

Exam tips

Learn the wording of Section 5 almost by heart: "from time to time", "notification in the Official Gazette", "in like manner". Examiners reward exact phrases.
Always pair Section 5 with Section 6. A common question asks who frames the policy and who implements it.
Mention the SEZ proviso whenever the question refers to SEZs.
Follow the ICSI style: provision, application to the facts, conclusion. Cite the Act and section.
Do not give dates or features of a particular policy document unless the question asks and you are sure of them.

Practice questions from Foreign Trade Policy and Procedure

Foreign Trade Policy under Section 5 of the FTDR Act in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Foreign Trade Policy under Section 5 of the FTDR Act: frequently asked questions

What does Section 5 of the FTDR Act say?

It lets the Central Government formulate and announce the foreign trade policy from time to time by notification in the Official Gazette, and amend it in like manner. A proviso deals with the policy's application to Special Economic Zones.

Who amends the Foreign Trade Policy?

The Central Government does, by Gazette notification under Section 5. The Director General of Foreign Trade advises it and implements the policy. Section 6(3) excludes the Section 5 power from delegation.

Is the Foreign Trade Policy made for a fixed period under the Act?

Section 5 does not fix any period. It says the Government may act from time to time. Any period of a particular policy is a matter of that policy, not of the section.

Does the Foreign Trade Policy apply to services and technology?

Yes. Since the 2010 amendment, the Act deals with imports and exports of goods, services and technology. The SEZ proviso to Section 5 also names goods, services and technology.

How does the policy apply to SEZs?

The Central Government may direct by Gazette notification that the policy applies to SEZs with specified exceptions, modifications and adaptations. So the general policy does not apply to SEZs unchanged by default.