ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 13.12.2025
Delhi High Court Partially Allows Chillies Exporters Associationβs Petition Against TMA Scheme Foreclosure
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.
In a significant judgment delivered on December 10, 2025, the Delhi High Court partially ruled in favor of the Chillies Exporters Association India in their petition challenging the foreclosure of the “Revised Transport and Marketing Assistance (TMA) for Specified Agricultural Products” scheme. β The case, W.P. β(C) 9463/2024, revolved around the retrospective withdrawal of export incentives under the TMA Scheme by the Directorate General of Foreign Trade (DGFT).
Background of the Case β
The TMA Scheme was introduced by the Government of India in February 2019 to provide assistance for the international transportation and marketing of specified agricultural products. β The scheme aimed to mitigate the higher costs of transportation and promote brand recognition for Indian agricultural products in overseas markets. β Initially, the scheme was applicable for exports from March 1, 2019, to March 31, 2020, and was later extended until March 31, 2021.
In September 2021, the government issued a revised TMA Scheme notification, making it applicable retrospectively for exports from April 1, 2021, to March 31, 2022. β However, this notification was withdrawn on March 25, 2022, effectively foreclosing the scheme. β The Chillies Exporters Association India challenged the retrospective withdrawal, arguing that it unfairly denied exporters the incentives they were entitled to under the scheme. β
Key Arguments
The petitioners contended that the notification dated March 25, 2022, was ultra vires as it retrospectively rescinded the benefits of the TMA Scheme, which had been operational from April 1, 2021, to March 31, 2022. β They argued that the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act), under which the scheme was introduced, does not empower the government to issue notifications with retrospective effect. β The petitioners also invoked the principle of legitimate expectation, stating that exporters had relied on the scheme to make business decisions and that the retrospective withdrawal of benefits was arbitrary and unfair.
The respondents, represented by the DGFT, argued that the notification was issued to revamp and redesign the scheme for better outcomes. They emphasized that the government has the authority to amend or rescind policies in the public interest, especially in complex economic matters, and that such decisions should not be subject to judicial review unless malice or arbitrariness is established. β
The Courtβs Decision
The Delhi High Court ruled that the government does not have the authority under Sections 3 and 5 of the FTDR Act to issue notifications with retrospective effect. β The court held that the notification dated September 9, 2021, which introduced the revised TMA Scheme, could only operate prospectively. Therefore, the court concluded that chilli exporters who made exports between September 9, 2021, and March 24, 2022, are eligible to claim incentives under the scheme, provided they meet the eligibility criteria. β
However, the court also ruled that no rights had accrued to chilli exporters for exports made between April 1, 2021, and September 8, 2021, as the scheme was not in operation during that period. β The retrospective application of the September 9, 2021, notification was deemed impermissible under the FTDR Act. β
Implications of the Judgment
This judgment is a landmark decision in the realm of foreign trade policy and government schemes. It reinforces the principle that delegated or subordinate legislation cannot have retrospective effect unless explicitly authorized by the governing statute. β The ruling also highlights the importance of the principle of legitimate expectation, emphasizing that public authorities must act in a consistent, transparent, and predictable manner. β
For chilli exporters, the judgment provides partial relief, allowing them to claim incentives for exports made between September 9, 2021, and March 24, 2022. β However, it also underscores the limitations of retrospective policy changes, which can disrupt business planning and create uncertainty for exporters. β
Conclusion
The Delhi High Courtβs decision in W.P. β(C) 9463/2024 serves as a reminder of the legal boundaries within which government policies must operate. While the government has the right to amend or rescind policies in the public interest, such actions must comply with statutory provisions and cannot infringe upon the legitimate expectations of stakeholders. This case is a significant development for exporters and policymakers alike, setting a precedent for the treatment of retrospective policy changes in Indiaβs foreign trade framework. β
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Source: Delhi High Court
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