Madras High Court Upholds Barytes Export Curbs, Orders DGFT To Decide Licence Plea In 4 Weeks

The Madras High Court has upheld the Centre's decision to restrict the export of certain grades of Barytes, a mineral used in industries including oil and gas drilling.

It held that the government can regulate exports to conserve scarce mineral reserves.

The bench further directed the Directorate General of Foreign Trade (DGFT) to decide a company's pending request for permission to export its existing stock within four weeks.

A Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan was hearing a challenge to DGFT Notification No. 12/2026-27 dated April 17, 2026, which changed the export status of Grade A and Grade B Barytes from “Free” to “Restricted”.

Under the revised rules, these two grades of Barytes can be exported only after obtaining a licence from the DGFT, while Grade CDW Barytes remain freely exportable.

Gimpex Private Limited and another petitioner filed the petition, citing stock of about 1.895 lakh metric tonnes of Grade A and Grade B Barytes, valued at around ₹225 crore, lying at Chennai Port.

The company purchased the mineral from the Andhra Pradesh Mineral Development Corporation under tenders that required export.

The company argued that it had purchased the stock before the export restrictions were introduced and was unable to ship it due to disruptions in shipping routes amid the US-Iran conflict and the situation around the Strait of Hormuz.

It challenged the restrictions and the requirement under the Foreign Trade Policy, 2023, to obtain an In-Principle Clearance Letter (ICLC) for protection under transitional arrangements.

The Union government defended the restrictions, stating that Barytes is a strategic mineral with important applications in the oil and gas and defence sectors. It cited concerns over declining reserves and the need to regulate exports.

The High Court held that the notification operated prospectively from April 17, 2026, and did not retrospectively take away any completed export transaction. The fact that Gimpex had purchased and paid for the mineral before the notification did not give it an automatic or vested right to export the stock under the earlier policy.

Rejecting the company's arguments based on legitimate expectation and promissory estoppel, the Bench said the government could change its policy in the public interest. The earlier classification of Barytes as freely exportable did not amount to a promise that the policy would remain unchanged or that any future restrictions would necessarily include a grace period.

"On the plea of violation of Article 19(1)(g) of the Constitution of India, it needs to be noted that the notification does not ban Baryte exports. It subjects Grade A and Grade B to a licensing system and the respondents state a licence is available. Grade CDW stays free. The restriction aims to conserve a strategic resource and protect national security. This is in the general public interest within Article 19(6) of the Constitution of India", the Court observed.

It further stated that "Notification No.12/2026-27 dated 17.04.2026 is not retrospective. It does not defeat any vested right. It is not hit by legitimate expectation or promissory estoppel. It is not arbitrary and it is a reasonable restriction under Article 19(6) of the Constitution of India".

The High Court also rejected the challenge to paragraph 1.05(b) of the Foreign Trade Policy, 2023. The provision generally makes the policy in force on the date of export applicable, while providing transitional protection to certain export commitments supported by an ICLC issued before the change.

It further stated that "Para 1.05(b) of the Foreign Trade Policy, 2023 is not unconstitutional. The ICLC condition rests on a rational difference and has a rational link to its purpose."

The bench opined that "...Mere procurement or warehousing of stock in anticipation of export, without a bank-confirmed ICLC or completed loading/bills of lading under Para 1.05(b), does not create an irreversible, indefeasible transactional commitment that overrides a prospective statutory policy restriction."

Although the Court upheld the restrictions, it took exception to the DGFT's decision to keep the company's export authorisation application pending until the government's policy review was completed.

The Court observed that a licensing system could function only if applications were decided within a reasonable time. If every application remained pending indefinitely, a restriction that legally permitted exports with authorisation would effectively become a prohibition in practice. Neither the notification nor the governing law permitted such an outcome.

"...While economic hardship cannot override public/national security interest, it mandates that the DGFT considers the application with due urgency and fairness", it said.

The Court therefore directed the DGFT to decide the company's export authorisation application, filed on April 22, 2026, within four weeks.

The Court clarified that an ongoing policy review could not be used to postpone the decision indefinitely. Even if the policy changed during the process, the DGFT would still have to decide the application within the stipulated period.

The Court accordingly disposed of the writ petition with these directions, while refusing to declare the export restrictions unconstitutional or direct the release of the company's shipping bills without the required authorisation.

For Petitioner: Senior Advocate Arvind Datar, instructed by Advocate Rahul Unnikrishnan

For Union Government: Additional Solicitor General A.R.L. Sundaresan, assisted by Senior Panel Counsel A. Kumaraguru

For Customs Authorities: DGFT. Senior Standing Counsel M. Sanathanaraman