FHRAI Seeks Relief for Hospitality Sector from DGFT’s Secondary Conditions

The Federation of Hotel & Restaurant Associations of India (FHRAI) has initiated legal action to seek appropriate remedies for hotel members affected by adverse provisions from the Delhi High Court for the hospitality sector from the Directorate General of Foreign Trade’s (DGFT). These conditions have posed challenges for the industry, particularly in light of adverse economic circumstances exacerbated by events such as the global recession, terrorist attacks, and the COVID-19 pandemic.

FHRAI has advocated for relief for the hospitality sector through persistent representations to the Ministry of Tourism and DGFT since 2017. Despite sustained efforts, the sector still needs to receive the necessary relaxations, prompting FHRAI to seek legal intervention.

DGFT, in the year 2007-08 in the new EXIM policy, introduced an additional condition which not only meant that over and above the primary condition, the industry need to comply with a secondary condition of maintaining 3 years average past performance continuously over & above the Specific EO and the Average has to be maintained for the entire block of 8/6 years till the redemption of license. Unfortunately post the introduction of the secondary condition, the hospitality industry suffered a huge decline and thereby reduction in the FOREX due to which the industry has not been in a position to fulfil the secondary condition of maintaining the 3 years average past performance.

The hospitality industry had brought this issue of decline in foreign contribution to the notice of DGFT way back in February 2017 itself and that coincided with completion of 1^st block of the 8 years when the license expired post the introduction of the secondary condition in the year 2007-08. Since then, the industry has been continuously requesting to the Government to grant the following reliefs as per the available provisions in the Handbook of Procedures 2015-20.