The Supreme Court affirmed the Reserve Bank of India's implementation of the prohibition on the export of Personal Protective Equipment (PPE) Kits imposed by the Union Government in light of the Covid-19 outbreak. The petitioner worked as the managing director of a company that produced and sold medical supplies, including PPE kits, and drugs. He obtained a contract to operate as a middleman in the sale of PPE products from a Chinese supplier to an American customer. The export of PPE items was nevertheless prohibited by the RBI's Revised Guidelines on Merchanting Trade Transactions (MTT), which were published in January 2020.
The petitioner requested documentation from his bank in a letter to complete the Merchanting Trade Transactions (MTT) contract, such as a letter of credit. He was, however, refused the same. The petitioner claimed that the export ban on PPE items was unjustified and infringed on his right to equality. The appeal, however, got no response.
The appellant then presented the Madhya Pradesh High Court with a writ petition under Article 226. The RBI's Revised Guidelines on Merchanting Trade Transactions' Clause 2(iii) was affirmed by the High Court.
In the instant case titled Akshay N Patel v. Reserve Bank of India The issue raised for clarification before the Supreme Court was:
Whether the prohibition violated the petitioner's right to equality?
With regard to this issue, The Apex Court reasoned that the prohibition was founded on a reasonable objective in the appeal, rejecting the petitioner's contention. The Court rejected a businessman's claim that the limits violated his basic right to freedom of trade and business, which is protected by Article 19(1)(g) of the Indian Constitution. Insofar as it related to PPE, the Apex Court determined that the ban on Merchanting Trade Transactions under Clause 2(iii) of the 2020 Revised Guidelines on Merchanting Trade Transactions issued by RBI under Sections 10(4) and 11(1) of FEMA, 1999, was proportionate and not unconstitutional under Article 19(1)(g) of the Constitution of India.
The Court categorically held that,
“When an Indian entity facilitates the trade of PPE products to another nation, it takes away from India’s possible stock in the global market. There is a rational nexus in the prohibition of MTTs in respect of PPE products and the public health of Indian citizens."