Guide · India
FTWZ or bonded warehouse for an India-Europe shipment?
Choose the storage arrangement from the goods' customs status, ownership and planned operations. A Free Trade and Warehousing Zone and a Customs Act bonded warehouse follow different regimes. Neither is a compulsory step for ordinary Indian goods exported to Europe. Confirm the authorised operator, permitted activities, declarations and exit conditions before moving stock.
For an Indian exporter, the first question is what the goods need to do while in storage. Waiting for several suppliers, holding imported stock for re-export and carrying out an authorised activity under a special regime are different requirements.
A Free Trade and Warehousing Zone (FTWZ) operates within India's Special Economic Zones framework. Customs bonded warehousing for imported goods follows the Customs Act. Ordinary consolidation storage does not acquire either status simply because a forwarder calls it a warehouse.
Which arrangement matches the goods and the operation?
| Arrangement | Starting point | What to establish |
|---|---|---|
| Ordinary consolidation or receiving facility | Indian goods awaiting grouping and export | Receiving arrangements, custody, permitted handling and the export procedure |
| FTWZ unit | A proposed trading and warehousing operation within the SEZ framework | Unit authorisation, client and owner, permitted activity, transaction structure and movement documentation |
| Customs Act bonded warehouse | Imported goods entered for customs warehousing | Warehouse licence, warehousing procedure, bond/security, permitted operations and the route out of warehousing |
The Customs Manual 2025, chapter 10, consulted 19 October 2026, describes customs warehousing of imported goods and the public/private warehouse licensing framework. It is not evidence that domestic export stock needs to enter a customs bond.
For goods manufactured in India that need only supplier grouping before export, first assess a normal consolidation plan. Add an FTWZ or another special regime only when its authorised scope addresses an identified requirement.
What activities does the FTWZ framework describe?
SEZ Rule 18(5) permits FTWZ units to hold goods on the owner's account and trade with or without labelling, packing or repacking, without processing. Its proviso also permits specified activities such as refrigeration storage and assembly of completely or semi knocked-down kits for units undertaking those activities. It is not a general manufacturing permission.
The rule also addresses resale, re-invoicing and re-export of imported goods. The exact activity must fit the unit's authorisation. Read the official SEZ rules compilation, Rule 18(5), page 28, with subsequent amendments and instructions. The compilation itself runs through February 2020; the official amendment index was checked on 19 October 2026, including its October 2026 entries.
For each proposed task, ask the operator to identify what is authorised: storage, labelling, repacking, assembly or another activity. Avoid describing all warehouse work as "value addition" without specifying the operation and its legal basis.
Who owns the goods, and who operates the site?
Record the stock owner, seller, buyer, authorised FTWZ unit and party responsible for each movement. The Department of Commerce's Instruction 60 of 6 July 2010, consulted 19 October 2026, clarifies that goods may be held for a foreign or Domestic Tariff Area supplier/buyer, subject to Rule 18(5).
Client onboarding and records are also part of the operating framework. Instruction 117 of 24 September 2024, checked on 19 October 2026, requires know-your-customer (KYC) checks before the first transaction and sets controls for records and customs processing. It prohibits subletting of the allotted space.
OVRSEA offers FTWZ and bonded warehousing through partners in India. We assess the proposed stock flow with the warehouse operator, including the permitted activities, movement documents and onward shipment.
How do goods leave the warehouse?
Agree the intended exit before stock arrives: export to Europe, clearance into India's Domestic Tariff Area, or another permitted movement. Each route can require different declarations, permissions and payments.
For imported goods under Customs Act warehousing, the manual distinguishes home-consumption clearance under section 68 from export under section 69. Section 69 provides a conditional route for export without payment of import duty; it requires the applicable export declaration, payment of export duty and specified amounts where payable, and a clearance order. It is not a blanket exemption from all taxes.
Warehouse transfers also need current rules. Section 150 of the Finance Act 2026, enacted 30 March 2026 and consulted 19 October, replaced Customs Act section 67 with transfer subject to prescribed conditions. Do not rely solely on the earlier manual's transfer wording. Separately, FTWZ-to-FTWZ transfers are restricted by Instruction 117 to specific exceptional cases considered by the Unit Approval Committee. These are different regimes.
What should the commercial comparison include?
Compare receiving, handling, storage, stock reporting, documentation, customs work, insurance responsibilities and the onward movement. Ask which events start charging and what happens if a buyer changes the order.
Storage duration, duty deferral, interest and exit conditions depend on the regime and goods. Do not cost the operation on an assumption of unlimited storage or automatic tax savings. Have the proposed operator, customs specialist and finance team validate the actual treatment. Detailed GST treatment and Domestic Tariff Area returns require a separate transaction review.
Illustrative situation: an Indian trading company combines Indian-made components with imported items for a European buyer. Identify each item's ownership, customs status and proposed handling before deciding whether the goods can share a facility and which records must remain separate. Have the operator and customs specialist review the combined flow before moving either category of goods.
What should you send for a feasibility discussion?
Provide the goods' origin and current customs status, owner and trading parties, product descriptions, quantities, proposed operations, expected holding period and destination. Include the reason ordinary receiving storage may be insufficient.
Use the export document guide to assign document owners. For an EU destination, the importer must separately check the European Commission's import requirements, consulted 19 October 2026.
Discuss an India-Europe warehousing requirement with OVRSEA. The discussion should establish the suitable arrangement and authorised parties before a service is committed.
FAQ
Can an FTWZ hold goods on behalf of a supplier or buyer established in India?
The Department of Commerce's Instruction 60 clarifies that FTWZ units may hold goods for a Domestic Tariff Area supplier or buyer, as well as a foreign supplier or buyer, subject to Rule 18(5). This does not establish that every domestic movement or activity is eligible; the unit must confirm the proposed arrangement.
Can the trading currency affect the FTWZ arrangement?
SEZ Rule 18(5) provides for FTWZ transactions in convertible foreign currency. Ask the authorised unit and your finance team to map the actual transactions and applicable requirements before agreeing the commercial structure.
Does storage in an Indian FTWZ remove European import formalities?
No. The destination importer must still check the applicable customs, product, origin and tax requirements. Indian storage or re-invoicing alone does not establish a preferential origin claim. EU rules apply only where the destination is in the EU.
Discuss your warehousing needs with OVRSEA
OVRSEA offers FTWZ and bonded warehousing through partners in India, alongside in-house customs support. We help you examine the storage and handling your goods need before the onward shipment, taking their customs status and intended destination into account.
Tell us what you need to store, for how long and what must happen before dispatch. We’ll assess the suitable arrangements with the warehouse operator and prepare the transport options. Discuss your stock flow.