Importing a used CNC machine, packaging line, printing machine, textile equipment or another industrial asset into India can save significant capital expenditure. But before the seller dismantles the equipment or the freight forwarder books the shipment, the importer needs to answer one critical question:
Does this second-hand machinery actually require DGFT Import Authorisation?
The answer is not always.
Under the current Foreign Trade Policy, specific categories of second-hand capital goods are Restricted, but all other second-hand capital goods falling outside the specified restricted categories are classified as Free under Para 2.31(I)(d).
The correct approach is therefore to classify the machinery first, check its exact import-policy status and applicable product regulations, and apply for DGFT authorisation only where the law requires it.
DGFT—the Directorate General of Foreign Trade—administers India’s Foreign Trade Policy and the policy framework governing Free, Restricted and Prohibited imports.
FTP 2023 specifically states that the general ITC(HS) import policy applies to new goods, while the regime for second-hand goods is provided under Para 2.31.
Where a second-hand item is classified as Restricted, an importer needs the applicable DGFT Authorisation before importing it in accordance with the prescribed conditions.
The Handbook of Procedures provides that applications for items marked Restricted in ITC(HS) are filed online with DGFT through ANF-2M. DGFT may also obtain assistance from technical authorities or the EXIM Facilitation Committee while considering an application.
No.
This is one of the most important distinctions for an importer to understand.
Para 2.31 currently divides second-hand goods into different categories.
| Second-hand item | DGFT import policy |
| Desktop computers | Restricted |
| Specified refurbished/reconditioned computer/laptop spares | Restricted |
| Air conditioners | Restricted |
| Diesel generating sets | Restricted |
| Electronics/IT goods notified under the applicable compulsory-registration order | Restricted, subject to applicable conditions |
| Refurbished/reconditioned spares of capital goods | Free, subject to prescribed Chartered Engineer residual-life certification |
| Other second-hand capital goods not falling in the specified categories | Free |
| Certain used IT assets moving from SEZ to DTA | Special conditions apply |
| Second-hand goods other than capital goods | Restricted |
| Goods imported for repair/refurbishing/reconditioning/re-engineering and re-export | Separate Free route subject to stated conditions |
Therefore, the fact that equipment is old or previously operated abroad does not by itself establish that a DGFT licence is required.
FTP Chapter 11 defines capital goods to include plant, machinery, equipment and accessories required directly or indirectly for manufacturing, production or rendering services.
It also covers equipment used for replacement, modernisation, technological upgradation or expansion and specifically refers to machinery such as packaging equipment, refrigeration equipment, power-generating sets, machine tools, testing equipment and pollution-control equipment.
For a manufacturer importing a used production machine for installation in its factory, this definition is therefore an important starting point.
However, the final assessment should also examine the actual nature of the equipment and its 8-digit ITC(HS) classification.
Use this framework before placing a non-refundable order for overseas machinery.
Confirm whether it has previously been installed, operated or used.
Determine whether it is plant, machinery or equipment intended for manufacturing, production, services, modernisation, replacement or a similar capital purpose.
Pay particular attention to desktop computers, air conditioners, diesel generating sets and covered electronic/IT equipment.
Para 2.31(I)(d) currently classifies all other second-hand capital goods, other than the preceding specified categories, as Free.
“Free” under DGFT policy does not mean “compliance-free.”
FTP Para 2.03 states that applicable domestic laws, technical specifications, environmental requirements, safety requirements and health norms also apply to imports unless specifically exempted.
Depending on the machinery, this can make a product-specific regulatory review essential.
A blanket statement that every machine older than a particular age automatically requires DGFT authorisation should be avoided.
The current consolidated Para 2.31 classifies “all other second-hand capital goods” as Free and does not prescribe a general ten-year age threshold for that category.
There are specific age conditions in special situations. For example, the SEZ-to-DTA provision for specified used IT assets includes five-year age conditions in certain cases.
That special IT-asset condition should not be converted into a general age rule for every imported industrial machine.
A DGFT application becomes relevant when the exact goods are classified as Restricted under the applicable policy.
For second-hand machinery, this may arise because:
The assessment should be completed before shipment, particularly where there is uncertainty.
Commercial import/export activity generally requires an IEC; FTP Para 2.05 states that IEC is mandatory for undertaking import/export activities, subject to the policy’s specific exceptions.
Where the equipment has been confirmed as Restricted, the current HBP requires an online application to DGFT through ANF-2M.
Identify:
A generic description such as “old industrial machine” is not sufficient for serious regulatory assessment.
The current ANF-2M asks for details including the country of origin, ITC(HS) code, technical description/specifications, quantity, unit of measurement and CIF value.
For machinery specifically, the form also asks for:
year of manufacture and residual life.
ANF-2M includes the purpose of import, port details and a detailed justification for the proposed import.
The justification should therefore explain the actual commercial and industrial requirement rather than merely stating that the machinery is cheaper than a new machine.
The HBP provides for online submission to DGFT Headquarters for Restricted imports.
DGFT or the authorised Regional Authority may take assistance from the EXIM Facilitation Committee and relevant technical authorities. The HBP states that the EFC normally meets once every month.
This should not be interpreted as a guaranteed one-month approval period.
Where approval is granted, verify:
FTP also provides that where an import requires Authorisation, the Actual User condition generally applies unless specifically dispensed with.
The exact document set depends on the machinery and the reason it is Restricted. A practical file may need information from several parties.
| Party | Information/documents to prepare |
| Indian importer | IEC, company details, ITC(HS), intended use, quantity/value, port, import history where required, application justification |
| Overseas seller | Commercial invoice, machinery description, model/serial details, manufacturing year, technical literature and transaction documents |
| Technical/engineering professional | Condition, manufacture year, residual-life and valuation/appraisement information where applicable |
| Customs broker/import team | Bill of Entry data, classification, valuation documents, port documentation and authorisation reference where required |
| Regulatory consultant | Applicability mapping, policy review, ANF-2M preparation, deficiency/query response and cross-regulatory review |
The ANF itself asks for machinery’s manufacture year and residual life, alongside item particulars and import justification.
Under the currently published Appendix 2K, the application fee for an import licence for a Restricted item/permission/certificate is:
one per thousand of the applicable CIF value/duty-saved amount, subject to a minimum of ₹500 and maximum of ₹1,00,000.
This is the DGFT application fee.
It should not be confused with:
The actual Customs tax liability depends on classification, valuation, applicable tariff treatment, exemptions and other circumstances and should be determined separately.
These are frequently confused, but they perform different functions.
Refurbished or reconditioned spares of capital goods are classified as Free subject to a Chartered Engineer certificate confirming at least 80% residual life of the original spare.
That specific 80% condition should not automatically be imposed on every category of used machinery.
CBIC Circular No. 07/2020-Customs deals separately with inspection and appraisement of second-hand machinery for Customs valuation.
CBIC states that imports of second-hand machinery/used capital goods should ordinarily be accompanied by an inspection/appraisement report from an overseas Chartered Engineer or equivalent. Where an importer cannot obtain that overseas report, the machinery can be inspected by an eligible Chartered Engineer empanelled with the relevant Customs House under the circular’s procedure.
Therefore:
A Chartered Engineer appraisal does not replace a DGFT Restricted Import Authorisation when the goods are Restricted, and a DGFT Authorisation does not replace Customs valuation requirements.
An importer can correctly determine that a machine falls under Para 2.31(I)(d) and is Free as second-hand capital goods, yet still encounter another regulatory requirement.
That is because FTP Para 2.03 keeps applicable Indian technical, environmental, safety and health requirements relevant to imported goods.
For example, notified electronics and IT products receive specific treatment under Para 2.31(I)(b). DGFT Notification No. 13/2024-25 aligned the provision with the Electronics and IT Goods (Requirements of Compulsory Registration) Order, 2021 and states that non-compliant notified products can be Prohibited.
The safest compliance sequence is therefore:
ITC(HS) → Second-hand policy → Product regulation → DGFT requirement → Customs valuation → Shipment
Do not dispatch the machine until these questions can be answered clearly:
If several answers are uncertain, complete a pre-import regulatory review before making the shipment irrevocable.
This can result in unnecessary filing and delay. Current Para 2.31 expressly places the residual category of other second-hand capital goods under Free import policy.
The opposite assumption is equally risky. Desktop computers, air conditioners, diesel generating sets and specified electronics/IT products are among categories receiving Restricted treatment.
Classification can change the applicable policy conditions and associated regulatory requirements.
Customs valuation/appraisement and DGFT import policy are separate compliance layers.
If the imported material is genuinely waste or scrap rather than functional capital equipment, different import-policy and waste-management rules can become relevant. Para 2.32 separately deals with metallic waste and scrap.
Importing goods contrary to an applicable prohibition can expose the consignment to confiscation proceedings under Section 111 of the Customs Act, while Section 112 provides for penalties relating to improper importation.
Pre-shipment compliance is generally much easier than trying to resolve a regulatory mismatch after arrival.
These examples are illustrative and are not Green Permits client cases.
A manufacturer intends to purchase a used machining centre from Europe for installation in its Indian plant.
If the machinery qualifies as capital goods and does not fall under a specific Restricted category or another restrictive ITC(HS) policy condition, Para 2.31(I)(d) may allow it as Free second-hand capital goods.
Customs valuation/appraisement requirements still need to be prepared separately.
Diesel generating sets are specifically listed under the Restricted second-hand capital-goods category.
The importer should therefore assess and obtain the required DGFT Authorisation rather than relying on the general Free category for other machinery.
A refurbished spare of a capital good falls under a specific Free category, but Para 2.31 requires a Chartered Engineer certificate stating that the spare has at least 80% residual life of the original spare.
The compliance route is therefore different from both a complete used machine and a Restricted item.
The biggest risk in second-hand machinery imports is often not completing the DGFT form—it is choosing the wrong regulatory route before filing anything.
Green Permits can assist with:
For broader DGFT compliance, see DGFT License in India. Green Permits’ current service information also covers DGFT licensing within its licences and certifications portfolio.
No. Current FTP Para 2.31(I)(d) classifies other second-hand capital goods outside the specified restricted categories as Free.
Potentially yes if it qualifies as second-hand capital goods under Para 2.31(I)(d) and is not otherwise Restricted under its exact ITC(HS) classification or another applicable regulation. A product-specific assessment should be completed before shipment.
The current Para 2.31 does not prescribe a blanket ten-year limit for all other second-hand capital goods. Special age conditions exist for particular categories, including certain SEZ-to-DTA used IT assets.
ANF-2M includes item classification and specification details and specifically requests the machinery’s year of manufacture and residual life. It also seeks purpose and detailed justification for import.
No. Chartered Engineer documentation can be relevant to Customs inspection/appraisement and is expressly required for the specific FTP category covering refurbished/reconditioned capital-goods spares. A DGFT Authorisation is a separate permission where the import policy is Restricted.
Appendix 2K currently prescribes one per thousand of the applicable CIF value/duty-saved amount, subject to a minimum of ₹500 and maximum of ₹1,00,000, for an import licence covering a Restricted item/permission/certificate.
Before paying the overseas supplier or dispatching a second-hand machine to India, Green Permits can review whether the equipment is Free, Restricted or subject to additional product compliance.
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Regulatory note: Import policy and product-specific requirements can be amended. Recheck the latest DGFT ITC(HS), FTP provisions, notifications and applicable technical regulations against the exact machinery before shipment.
