In Brief
Akshay Patel, an Indian entrepreneur engaged in merchanting trade transactions (MTTs), challenged RBI's prohibition on MTTs for PPE products under the Revised 2020 MTT Guidelines. The goods in MTTs transit between foreign countries with India acting as intermediary. The RBI linked MTT permissibility to India's Foreign Trade Policy, which banned PPE exports during COVID-19. The Supreme Court upheld the prohibition using a four-pronged proportionality test: the measure served the legitimate aim of securing adequate domestic PPE supplies; was suitable because MTTs affect India's foreign exchange reserves similarly to traditional trade; was necessary to prevent foreign hoarding of supplies; and was not disproportionate. The Court emphasized that fundamental rights cannot become weapons to disable public-interest regulations, and that the RBI's expert regulatory decisions warrant circumspect deference within constitutional bounds.
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