Paragraphs 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Three paragraphs of the Policy deal with bonded warehouses. Paragraph 2.36 allows private and public bonded warehouses for imports, paragraph 2.37 gives a special rule for hides, skins and semi-finished leather, and paragraph 2.51 allows private bonded warehouses exclusively for exports. Paragraph 2.33 of the Handbook adds the one-year period, the clearance for home consumption and the re-export.
This article is based on the chapter-wise text of the Foreign Trade Policy, 2023 published on the DGFT website, as consulted on 2 October 2026; the copy carries no "updated up to" date. The procedure is taken from Chapter 2 of the Handbook of Procedures, 2023 as published on the DGFT website (file of July 2026), consulted on 2 October 2026. Later Notifications and Public Notices should be checked. Customs law is linked, not explained.
A person may import goods, except prohibited items, arms and ammunition, hazardous waste and chemicals, and warehouse them in a private or public bonded warehouse set up in the Domestic Tariff Area (paragraph 2.36(a)). Goods are cleared for home consumption in accordance with the Policy and against an authorisation where required, with Customs duty paid at the time of clearance (paragraph 2.36(b)). Under the Handbook, goods are kept for one year without payment of applicable customs duties (paragraph 2.33(a)).
Paragraph 2.36 of the Policy: bonded warehouses for imports
Paragraph 2.36 has three sub-paragraphs.
- (a) Setting up and importing. Private or public bonded warehouses may be set up in the Domestic Tariff Area as per the rules, regulations and notifications issued under the Customs Act, 1962. Any person may import goods except prohibited items, arms and ammunition, hazardous waste and chemicals, and warehouse them in such warehouses.
- (b) Clearance for home consumption. Such goods may be cleared for home consumption in accordance with the provisions of the Policy and against an authorisation wherever required. Customs duty as applicable is paid at the time of clearance.
- (c) Customs Act governs clearance. The clearance of warehoused goods is as per the provisions of the Customs Act, 1962.
What this means in practice: the Policy does not create the warehouse. The licence, the bond and the rules of storage belong to the Customs Act, and the Policy only says that the import into such a warehouse is open to any person for goods that are not barred. When the goods come out for use in India, the Policy test applies again: is the item importable without an authorisation, or does it need one? A warehouse does not turn a restricted item into an unrestricted one. Filing on the Customs portal is covered in our ICEGATE registration service.
The Customs side is covered in our articles on sections 57 and 58 of the Customs Act, 1962 on licensing of warehouses, section 61 on the period for which goods may remain warehoused and sections 68 and 69 on clearance for home consumption and export.
Paragraph 2.37: hides, skins and semi-finished leather
Hides, skins and semi-finished leather may be imported into a public or private bonded warehouse for the purpose of sale in the Domestic Tariff Area. The unsold items can be re-exported from such bonded warehouses on payment of the applicable rate of export duty. The paragraph prints no rate; it points to the export duty applicable at the time. Check the item's entry in ITC(HS) for the policy on these goods.
Paragraph 2.51 of the Policy: private bonded warehouses for exports
Paragraph 2.51 has two sub-paragraphs.
- (a) Private bonded warehouses exclusively for exports may be set up in the Domestic Tariff Area as per the terms and conditions of notifications issued by the Department of Revenue.
- (b) Such warehouses are entitled to procure goods from domestic manufacturers for manufacturing and other operations in accordance with section 65 of the Customs Act, 1962.
No section-wise article on section 65 is live on this site. The relevant guide is Customs bonded manufacturing (section 65 MOOWR) scheme. The Policy states no conditions of its own for these warehouses; it points to the Department of Revenue's notifications and to section 65.
Paragraph 2.33 of the Handbook: the procedure
Paragraph 2.33 of the Handbook is headed "Warehousing Facility".
| Point | What the Handbook says |
|---|---|
| Where | Public or private Customs bonded warehouses may be set up in the Domestic Tariff Area as per Chapter IX of the Customs Act, 1962, to import items in terms of paragraph 2.36 of the Policy |
| How long | On receipt, the warehouse keeps the goods for one year without payment of applicable customs duties (paragraph 2.33(a)) |
| Home consumption | Goods can be cleared against a Bill of Entry for home consumption on payment of customs duty and submission of the authorisation wherever required, after the competent customs authorities issue an order for clearance (paragraph 2.33(a)) |
| Duty-exempt or concessional categories | For clearance against duty-exempt or concessional-duty categories, the exemption or concession from duty shall be allowed (paragraph 2.33(a)) |
| Re-export | Goods can be re-exported without payment of customs duty if a shipping bill or bill of export is presented and the competent customs authorities have made an order for export (paragraph 2.33(b)) |
The one-year period is stated in the Handbook paragraph. Whether it can be extended, and what interest or consequence follows, is a Customs question; the Handbook paragraph is silent, and our article on section 61 above is the place to read it. The Policy and Handbook paragraph give no fee.
The Policy paragraphs here rest on policy made under section 5 of the Foreign Trade (Development and Regulation) Act, 1992; the Act's sections are not named in them. Read our article on section 5 of the FTDR Act. For the Handbook procedure, the Director General's power appears in our article on section 6 of the FTDR Act.
Policy against Handbook: how they fit
The Policy fixes who may import into a warehouse and says duty is paid at clearance; the Handbook fixes the one-year keeping period, the Bill of Entry route for home consumption and the shipping bill route for re-export. Paragraph 2.36(b) of the Policy and paragraph 2.33(a) of the Handbook agree that duty is paid at clearance for home consumption. The Handbook then adds that duty-exempt categories still get their exemption.
A worked example
Lakshmi Leather Traders, an invented firm, imports semi-finished leather into a public bonded warehouse for sale in the Domestic Tariff Area. Part of the stock is sold and cleared for home consumption on a Bill of Entry with duty paid at clearance. The unsold balance is re-exported from the warehouse under paragraph 2.37 on payment of the applicable rate of export duty, and under paragraph 2.33(b) of the Handbook the shipping bill and an order for export by the competent customs authorities are needed.
Need help filing the Customs side of a warehoused import?
A warehoused consignment still needs a clean Bill of Entry or shipping bill filed on the Customs portal. Our team can set up your account and walk through the filing with our ICEGATE registration service.
Key takeaways
- Private or public bonded warehouses in the Domestic Tariff Area are set up under the Customs Act, 1962 (paragraph 2.36(a) of the Policy).
- Prohibited items, arms and ammunition, hazardous waste and chemicals cannot be warehoused.
- Duty is paid at clearance for home consumption (paragraph 2.36(b)); goods stay one year without payment of duty (Handbook paragraph 2.33(a)).
- Unsold hides, skins and semi-finished leather may be re-exported on payment of the applicable export duty (paragraph 2.37).
- Private bonded warehouses for exports work under Department of Revenue notifications and section 65 (paragraph 2.51).
Read next
- Paragraphs 2.34 and 2.35 of the Foreign Trade Policy, 2023: lease financing, legal undertaking and bank guarantee
- Paragraphs 2.38 to 2.42 of the Foreign Trade Policy, 2023: high sea sales, merchanting trade and third party exports
- Sections 59 and 60 of the Customs Act, 1962: warehousing bond and permission to deposit goods
- Sections 64, 66 and 67 of the Customs Act, 1962: owner's right to deal with warehoused goods
Disclaimer: Based on the chapter-wise text of the Foreign Trade Policy, 2023 and the Handbook of Procedures, 2023 published on the DGFT website, and on the later Notifications named in this article, as consulted on 2 October 2026. The copies carry no "updated up to" date. Notifications, Public Notices, Trade Notices, the ITC(HS) schedules, Appendices and forms change often; the current text on the DGFT website should be checked before acting. This article is general information, not legal advice; check the official text before acting.