The realm of international trade, encompassing both imports and exports, is governed by a set of procedures and regulations in India. These are primarily aimed at facilitating trade while ensuring compliance with the nation's economic and security interests. 

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Import-Export Code (IEC) Registration

• Mandatory Requirement: The Import-Export Code (IEC) is a fundamental prerequisite for anyone looking to start an import or export business in India. It is a 10-digit alphanumeric code issued by the Directorate General of Foreign Trade (DGFT).

• Lifetime Validity: Once obtained, the IEC has lifetime validity, eliminating the need for periodic renewals.

• Online Application Process: The application for IEC is entirely online through the DGFT website (https://www.dgft.gov.in).

• Steps for Registration:

  1. Visit the DGFT website and navigate to the 'Services' tab, then select 'IEC Profile Management' and 'Apply for IEC'.

  2. Register on the portal by providing necessary details and verifying with an OTP.

  3. Log in and start a fresh application, filling in general information, details of the business owners/directors, bank information, and other required details.

  4. Attach the Digital Signature Certificate (DSC) and make the online payment of the application fee (currently ₹500).

  5. Upon successful payment, the IEC certificate is usually sent to the registered email ID and can also be downloaded from the DGFT portal.

• Documents Required: The specific documents may vary based on the type of entity but generally include:

  • PAN card copy of the individual, firm, or company.

  • Address proof of the business premise (e.g., sale deed, rent agreement, utility bills).

  • Identity proof of the proprietor/partners/directors (e.g., Voter ID, Aadhaar card, Passport).

  • Proof of establishment/incorporation/registration (e.g., partnership deed, certificate of incorporation).

  • Cancelled cheque of the current bank account of the entity.

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Essential Documents for Import and Export

Besides the IEC, several documents are crucial for the customs clearance of goods:

For Imports:

• Bill of Entry: A legal document filed by the importer for customs clearance, detailing the shipment.

• Commercial Invoice cum Packing List: Contains details of the goods, their value, and packaging.

• Bill of Lading/Air Way Bill: A document of title and a receipt for the shipment.

• Import License: Required for specific restricted goods.

• Insurance Certificate: To verify if the shipment is insured.

• Purchase Order: Outlines the terms and conditions of the sale.

• Certificate of Origin: Specifies the country where the goods originated.

For Exports:

• Commercial Invoice: A legal document between the exporter and buyer.

• Shipping Bill/Bill of Export: Details the goods being exported.

• Packing List: Specifies the contents of each package.

• Bill of Lading/Air Way Bill: Similar to imports, but issued by the carrier for export.

• Export License: Required for certain restricted goods.

• Customs Declaration Form: A form to be signed and submitted to customs.

• Warehouse Receipt: Proof that the goods are ready for shipment.

• Foreign Exchange Control Form (SDF): For foreign exchange regulations.

Depending on the nature of the goods, additional documents like inspection certificates, technical standards certificates, or dangerous goods forms might be required.

 

Key Regulatory Aspects

• Foreign Trade Policy (FTP): The Department of Commerce formulates the FTP, which provides a framework for foreign trade, including guidelines for imports and exports, and various export promotion schemes. The current FTP 2023 aims to increase India's exports significantly by 2030, focusing on ease of doing business and supporting manufacturing and services sectors.

• Customs Act, 1962 and Customs Tariff Act, 1975: These acts govern the levy of customs duties, classification of goods, and procedures for import and export. The Indian Trade Classification (ITC)-Harmonized System (HS) code is used to classify goods for both import and export.

• Directorate General of Foreign Trade (DGFT): This is the primary authority responsible for implementing the Foreign Trade Policy and regulating import and export activities.

• Goods and Services Tax (GST): GST is applicable to import and export transactions. Exporters can often claim refunds on GST paid on inputs used for export.

• Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs): India has signed FTAs and PTAs with various countries, which can provide customs duty exemptions subject to compliance with the Rules of Origin.

• Restricted and Prohibited Items: Certain goods are restricted (requiring licenses) or prohibited for import and export based on the prevailing EXIM policy and other regulations.

• Compliance with Other Laws: Depending on the specific goods, compliance with other laws related to food safety (FSSAI), pharmaceuticals, environmental regulations, etc., might be necessary.

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Notes on IEC

• IEC is valid for lifetime (unless canceled or surrendered)

• No renewal required

• Not required for goods/services exempted under foreign trade policy

• Even individuals or sole proprietors can apply

• IEC is mandatory even if the business is not yet active

 

Other Related Registrations for Import Export Business

RegistrationPurpose

GST RegistrationRequired for trading businesses in India

FSSAI LicenseFor import/export of food products

APEDA/RCMCFor agricultural exports (e.g., APEDA, Spice Board, Tea Board)

Customs Registration (ICEGATE)To file shipping bills and customs documents

Bank AD CodeFor customs clearance at ports

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Documents Checklist

For Proprietorship

• PAN card (individual)

• Aadhaar card

• Cancelled cheque

• Address proof

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For Company/LLP

• PAN card of company

• Certificate of Incorporation

• Director's identity & address proof

• Company bank details

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Post-Registration Steps

• Open current account for international transactions

• Register with ICEGATE for online customs filing

• Identify products, target countries, and required compliances

• Choose international shipping/logistics partners

• Understand Incoterms and payment methods (LC, advance, etc.)

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