Foreign Exchange control was first introduced in India in 1939 by virtue of the emergency powers derived from the Defence of India rules. These emergency powers were later enacted into the Foreign Exchange Regulation Act, 1947. Thereafter, the Foreign Exchange Regulation Act, 1973 was legislated in 1973 containing comprehensive provisions for the regulation and control of foreign exchange dealings in India and by Indian citizens visiting abroad. This Act provided for the statutory basis to the present system of exchange control of India. The Enforcement Directorate established under this act is concerned with the enforcement of the provisions of the Foreign Exchange Regulation Act, to prevent leakage of foreign exchange occurring through malpractices. The Enforcement Directorate detects cases of violation and also performs substantial adjudicatory functions to curb such malpractices. The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 was enacted with an objective to provide for preventive detention in certain cases for the purposes of conservation and augmentation of foreign exchange and prevention of smuggling activities and for connected matters.