SCOMET, EAR, and ITAR: The Export Control Rules Your Sales and Engineering Teams Probably Don't Know About

Your sales team just signed a major contract with a US-based client in the semiconductor sector. Your engineering team is finalizing technical specifications. Everything feels aligned, until compliance asks a single question: "Does this involve EAR-controlled technology?"

The silence that follows is rarely a good sign.

For Indian companies with international operations, export controls are not abstract regulatory concepts. They are operational realities that affect deal velocity, technology transfer, hiring, and ultimately, your ability to do business globally. Yet many companies treat them as someone else's problem.

They're wrong. And 2026 is the year to fix it.

What is India’s SCOMET list, and who needs a licence?

SCOMET is India’s list of dual-use and military items whose export needs a specific DGFT licence. Any company that exports, transfers or re-transfers a listed item, including technology, needs one.

India's SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) list is maintained by the Directorate General of Foreign Trade (DGFT), under the Foreign Trade (Development and Regulation) Act, 1992, under the Ministry of Commerce & Industry. It covers items that require a specific license from DGFT before export, defense items, chemicals for weapons, sensitive manufacturing equipment, and certain biological agents.

If your company manufactures or exports items on the SCOMET list, you need an explicit license. If you don't know whether your items are on the list, you're already non-compliant.

Indian exporters often assume that if something is legal to manufacture and sell domestically, it's legal to export. SCOMET disproves this assumption immediately.

When do the US EAR and ITAR apply to an Indian company?

The EAR can apply when your product or technology contains US-origin components, software or technical data above the de minimis level. ITAR applies when it is a defence article or defence service.

But here's where it gets complex: if your item or technology passes through US-origin components, software, or technical data, and controlled US content exceeds 25% of its value (10% for some destinations, and with no de minimis level at all for certain items), the US Export Administration Regulations (EAR) likely apply. And if your product touches defense, aerospace, or munitions, the International Traffic in Arms Regulations (ITAR) applies instead, with even stricter rules.

An Indian IT services company providing software development to a defense contractor? Potentially ITAR-controlled. A pharma company exporting a drug that uses a US-licensed process? Potentially EAR-controlled. A semiconductor services firm testing circuits based on US-origin specifications? You're in the grey zone.

Do EU dual-use rules affect Indian exporters?

Yes, if you export to Europe or have European customers: items with both civilian and military uses need screening there too.

And if you're exporting to Europe or have European customers, the EU Dual-Use Regulation adds another layer: items and technologies with both civilian and military applications require screening. EU regulations are alignment-focused with US controls but have their own nuances and enforcement history.

How do SCOMET, EAR, ITAR and EU controls compare?

They differ in who administers them, what they cover and how hard they bite. The table sets them side by side.

What should Indian companies do about export controls now?

Three practical shifts you need to make immediately: screen before the sale, classify every product and technology, and understand the end-use undertakings you sign.

1. Screening Before the Sale: Before your sales team engages with any international customer, compliance must run end-user screening against sanctioned lists (US OFAC SDN list, EU consolidated list, UN lists, BIS Entity List). If the customer is on any list, the deal is off.

2. Product Classification: Your engineering and product teams need to classify every product, service, and technology against SCOMET, EAR, ITAR, and EU controls. "Deemed export" rules mean that transferring technical data to a foreign national inside India or abroad also requires a license in many cases.

3. End-Use Undertakings: Increasingly, customers require you to commit to end-use restrictions, agreeing that the product won't be re-exported or used for military/weapons purposes. Your legal and compliance teams need to understand what you're committing to.

Non-compliance isn't a fine. It's sanctions, Entity List designation, and being unable to do business with any US-regulated company, which, in a global supply chain, is most of them.

Why does export control enforcement matter more in 2026?

Geopolitical tensions in 2026 mean tighter enforcement. The US Department of Commerce is more active in pursuing violations. Indian companies expanding into defense, semiconductors, pharma, and IT services are in the crosshairs.

Your sales team needs to understand these frameworks. Your engineering team needs to know what's controlled. Your compliance team needs processes that catch violations before they happen. Our Sanctions & Trade Compliance course and the wider sanctions and trade compliance training hub are built for those teams.

The alternative, learning about export controls after a deal goes wrong, is not an option.