Free, Restricted & Prohibited Imports in India

India’s import regime classifies every tradable product into one of three buckets under the Foreign Trade Policy (FTP) administered by the Directorate General of Foreign Trade (DGFT): Free, Restricted, or Prohibited. The classification is what decides whether you can bring goods in freely, need a licence first, or cannot import them at all. For handicraft businesses — sourcing raw materials from abroad or bringing in finished craft for re-export — getting this classification right upfront is the difference between a smooth customs clearance and a held shipment.

How the three categories work

The FTP, issued under the Foreign Trade (Development and Regulation) Act and updated periodically by DGFT, sets out an Import Policy schedule that maps goods to one of the three categories. The same product can change status when a policy revision is published, so the policy you read today may not be the policy in force next quarter.

• Free: Any importer holding a valid IEC (Import Export Code) issued by DGFT can bring the goods in, subject to routine customs duties and any sector-specific rules (BIS standards, plant quarantine, wildlife clearances, etc.). No import licence is needed from DGFT for the trade-policy angle.
• Restricted: The goods can be imported, but only against a specific import licence or authorisation issued by DGFT (or another notified authority, depending on the item). Without that licence, the consignment will be held at customs.
• Prohibited: The goods cannot be imported at all. Customs will detain and re-export (or destroy) the shipment, and penalties may follow.

The list is in the FTP’s Import Policy schedule, and DGFT issues notifications, public notices, and policy circulars that amend it. Always check the live schedule — not a cached PDF from a year ago.

What “Free” really means in practice

“Free” is a trade-policy label, not a duty-free label. A free import can still attract:

• Basic Customs Duty (BCD) and Integrated GST (IGST) levied by CBIC at the port of entry.
• Compensation Cess on certain goods.
• Anti-dumping duty, safeguard duty, or countervailing duty if the product is under such a measure.
• BIS / quality control requirements under the Bureau of Indian Standards, especially for products on the mandatory standards list.
• Plant quarantine, FSSAI, wildlife (CITES), or textile committee checks where applicable.

So a handicraft item classified “free” still goes through normal customs clearance, HS-code-based duty assessment, and any product-specific regulatory check.

What “Restricted” imports need

A restricted import requires a licence or authorisation before the goods are shipped. The process typically involves:

1. Identifying the correct ITC-HS code (8-digit) for the product.
2. Checking the Import Policy schedule under the current FTP to confirm “Restricted” status.
3. Applying on the DGFT online portal for the relevant licence — the category of licence (EPCG, Advance, etc., or an item-specific authorisation) depends on what the schedule prescribes.
4. Submitting supporting documents (IEC, cancelled cheque, technical specs, end-use declaration, etc.) and paying the applicable fee.
5. Receiving the licence with conditions and validity, and presenting it to customs at the time of clearance.

Customs will not release a restricted consignment against a “we applied last week” assurance. The licence must be in hand and active when the goods land.

What “Prohibited” imports mean

Prohibited goods are an absolute bar. Examples relevant to the craft sector include certain wildlife-derived materials (ivory, specific reptile skins, shahtoosh) and items flagged under international conventions India has ratified. The bar is enforced at customs; attempting to misdeclare a prohibited item as a free one is a serious offence under the Customs Act and can lead to confiscation, fines, and prosecution.

How to check the current status of a product

Use this short checklist before you commit money to a purchase order:

• Step 1 — Code the product correctly. Find the 8-digit ITC-HS code on the Indian Customs ICEGATE portal or in the DGFT ITC-HS publication. The right code is the foundation for every downstream check.
• Step 2 — Read the import policy schedule. Open the current FTP on DGFT (https://www.dgft.gov.in/CP/?opt=ft-policy) and look up the chapter relevant to your code. Note the policy entry: Free, Restricted, or Prohibited, plus any conditional notes.
• Step 3 — Check related DGFT notifications. Restrictions are often added or removed by Notification / Public Notice / Policy Circular between FTP editions. Skim recent DGFT updates for your chapter.
• Step 4 — Check sector regulators. Confirm with BIS, FSSAI, Plant Quarantine, Wildlife (CITES), or the Textile Committee if your product touches their domain.
• Step 5 — Verify with a customs broker. For anything non-trivial, confirm the classification and policy status with a licensed customs broker (CHA) before shipping.

Always verify the live position with DGFT and CBIC; do not rely on a third-party summary alone.

A worked example for a handicraft importer

A small Indian studio wants to import finished wooden toys from a Southeast Asian supplier for the upcoming festive season.

1. They look up the likely ITC-HS chapter for wooden toys and find the relevant 8-digit code.
2. On the DGFT FTP page, they check the chapter’s import policy entry: the product is listed as Free.
3. They still need to factor in BCD, IGST, and any applicable BCD exemption (verify current rates with CBIC).
4. They check BIS: if wooden toys for children are under mandatory Indian standards, a BIS registration/ licence may be required before sale, even if import is free.
5. They confirm CITES is not triggered (no protected wood species).
6. With the IEC and customs broker in place, they file a Bill of Entry on ICEGATE, pay duties, and clear the cargo.

If, instead, the same studio tried to import a wildlife-derived decorative item on the prohibited list, the answer at step 2 would be a hard stop — no licence route exists.

Common pitfalls and good practice

• Trusting outdated policy PDFs. The FTP is amended frequently; always read the current schedule on DGFT.
• Picking the wrong HS code. A misclassification can move a product from Free to Restricted without warning.
• Forgetting that “Free” still has duties. Customs duty, IGST, and sectoral compliance all apply.
• Skipping EPCH (Export Promotion Council for Handicrafts) engagement for handicraft-specific schemes and guidance.
• Ignoring RoDTEP and other export-side benefits when the same business also exports — the import side and export side of the FTP interact.

GreenFlip India plugs handicraft traders into the wider GreenFlip network (greenflip.org), so import-side compliance and global buyer demand can be managed in one place.

Bottom line

Before you book any international purchase for your craft business, identify the right ITC-HS code, read the current FTP Import Policy schedule on DGFT, and confirm any sector-specific licences (BIS, FSSAI, wildlife, plant quarantine). Treat “Free” as a trade-policy status, not a duty-free pass, and treat “Restricted” as a hard gate — no licence, no clearance. When in doubt, verify directly with DGFT and your customs broker before the container sails.

Note: This guide is general information for planning, not legal, tax, or customs advice. Indian trade rules change — always confirm current requirements on the official portal (DGFT, ICEGATE/CBIC, the GST portal, or BIS) or with a licensed customs broker before you ship.