The Indian government can ban, limit or add conditions to the export of a farm product, often at short notice. When that happens, shipments that are not yet cleared may be stopped, even if you have a signed contract and have paid an advance.
Restrictions are usually aimed at keeping domestic food prices stable. They tend to hit staples that Indian households rely on most, but any agri product can be affected.
How restrictions are announced
The Directorate General of Foreign Trade (DGFT) issues export policy notifications. A notification may move a product to "prohibited" or "restricted", set a minimum export price, or set other conditions. Export duties may also be used to slow exports without a full ban. Notifications may include transition rules, for example for goods already handed to customs, but these vary each time.
Because the rules change, always check the current position on the DGFT website, or ask your supplier and customs broker to confirm it, before you sign and again before you ship.
Past examples
Recent years show how varied these measures can be.
- Wheat: exports were banned in May 2022.
- Non-basmati white rice: exports were banned in July 2023, and the ban was later relaxed in 2024.
- Onion: exports were banned from December 2023. The ban was lifted in May 2024, with conditions such as a minimum export price and an export duty for a period.
What a restriction does to your supply
- Stopped shipments: goods not yet cleared may be stuck, and contracts may be unenforceable while the ban lasts.
- Price shock abroad: buyers rush to other origins, so prices outside India can rise.
- Price fall at home: Indian domestic prices may drop, which can change supplier behaviour once exports reopen.
- Changed terms on reopening: a minimum export price or duty can change the landed cost of the same product.
- Related products: a ban on a raw crop may or may not cover processed forms, such as dehydrated onion. Check the exact product codes in the notification.
How to protect yourself
You cannot stop a restriction, but you can limit what it costs you. Most of the protection sits in your contract and payment terms. Our article on forward or seasonal price booking covers contract terms, and our guide to payment terms for agri imports from India explains how to limit advance risk.
- Know your exposure: staples and widely consumed products carry more policy risk than niche spices.
- Keep advances modest, and agree in writing that an advance is refunded if a restriction stops shipment.
- Add a clause on government action that says what happens to price, timing and payment.
- Watch the signs: sharp domestic price rises for a staple often come before government action.
- Ship booked volume promptly rather than leaving all of it to late in the contract.
- Have a second origin or product form in mind for critical items.
Where we come in
We watch DGFT notifications for the products our buyers take, flag early signs of policy change, and help you write contracts that deal with it. To review your exposure, ask for a free sourcing review.