In today's global market, businesses need an Import Export Code (IEC) to expand internationally. The IEC is a required identification number for companies in India to import or export goods.
Obtaining an Import Export Code can be costly for small to medium-sized businesses. This is because of the different administrative expenses involved, such as processing fees and legal consultations. A business loan can help cover upfront costs, allowing a business to get its IEC without hurting cash flow. A business loan can be a helpful tool in managing these upfront costs while maintaining a healthy working capital. Check your business loan eligibility to explore financing options that can support your registration process.
In this article we will explain what an Import Export Code is. It will also discuss why it's needed and how businesses can obtain it. Having an Import Export Code is necessary for businesses to participate in international trade. This process plays a role in ensuring compliance with the broader business environment, helping companies expand globally.
Latest Updates on IEC
Recent regulatory updates have introduced key changes impacting MSME exporters and service exporters. Here are the latest highlights you should be aware of:
Interest Equalisation Scheme (IES): The interest subvention for MSME manufacturers is capped at Rs. 5 crore per IEC until 30 September 2024. For the period from 1 July to 31 August, the cap is limited to Rs. 1.66 crore per IEC for manufacturer exporters.
RoDTEP Scheme Extension: The RoDTEP scheme for exports under SEZ, EOU, and Advance Authorisation has been extended until 5 February 2025.
Mode of Export of Services Field: DGFT has made it mandatory to declare the "Mode of Export of Services" in the eBRC format for service exports, effective from 1 May 2025.
What is the IEC Code (Import Export Code)?
The Import Export Code (IEC) is a 10-digit unique identifier required by businesses in India engaged in international trade. It serves as a registration mechanism with the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industries. Having an IEC (Import Export Code) is essential for businesses to take part in international trade. It gives them a legal identity in global markets, helping to promote entrepreneurship in foreign trade.
The IEC is mandatory for entities involved in importing or exporting goods and services from India. This code facilitates customs clearance for shipments and enables businesses to avail benefits under various government schemes and incentives. Essentially, the IEC acts as a primary document for recognition by authorities, allowing businesses to participate in global trade transactions smoothly and legally. Check your pre-approved business loan offer to ensure your business is financially prepared to take advantage of these trade opportunities.
Key Points on IEC
Importers and exporters must stay compliant with IEC regulations to avoid disruptions in trade. Here are the key points to keep in mind:
Mandatory annual update: All IEC holders must electronically update their IEC details every year between April and June, even if no changes have occurred.
Consequence of non-updation: If the IEC is not updated within the given timeframe, it will be deactivated, stopping all import and export activities.
Reactivation process: A deactivated IEC can be reactivated by updating the details online through the DGFT portal.
IEC and PAN linkage: With the introduction of GST, the IEC now matches the Permanent Account Number (PAN) of the business.
Benefits of IEC: It is essential for customs clearance, regulatory compliance, and banking transactions related to international trade.
Situations where IEC is required
The Import Export Code (IEC) is required in various situations for businesses engaged in international trade in India:
- Importing Goods: IEC is mandatory for businesses importing goods into India for commercial purposes. This ensures compliance with export-import regulations and is crucial for managing a capital structure.
- Exporting Goods: Businesses exporting goods from India must have an IEC to comply with customs regulations.
- Availing Export Incentives: To benefit from export promotion schemes like MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme).
- Sending and Receiving Payments: IEC is necessary for receiving payments in foreign currency for exported goods and services.
- Customs Clearance: IEC is essential for customs clearance of goods at ports and airports during import and export operations.
Steps involved in IEC (Import/Export Code) registration
To start an import or export business in India, obtaining an IEC is mandatory. Here is a simplified step-by-step guide to registering for IEC on the DGFT portal:
Visit the official DGFT website and go to the ‘Services’ tab on the homepage.
From the dropdown, select ‘IEC Profile Management’ and click on ‘Apply for IEC’.
On the next page, choose the ‘Register’ option and enter your details. Click on ‘Send OTP’.
Enter the OTP received on your registered contact details and click on ‘Register’ to complete the process.
Once the OTP is validated, you will receive a temporary password, which you can later change after logging in.
Log in to the DGFT website using your credentials and click on ‘Apply for IEC’ from the dashboard.
Select the ‘Start Fresh Application’ option to begin a new application.
Fill in the required sections, including general information, director or proprietor details, bank information, and any additional required fields.
Attach your Digital Signature Certificate (DSC) and proceed with the payment of the application fee.
Once the payment is successful, you will be redirected to a confirmation page. Download the payment receipt for future reference.
Your IEC Certificate will be emailed to you. You can also download it by logging into the DGFT portal and selecting the ‘Print IEC’ option under ‘IEC Profile Management’.
This streamlined online process helps businesses get registered with minimal paperwork and ensures a faster approval timeline.
Documents required for IEC (Import Export Code) registration
To successfully apply for IEC registration in India, applicants must submit a set of documents that establish their identity, business legitimacy, and address details. Below is the detailed list of required documents:
PAN card: A copy of the PAN card of the individual, firm, or company is mandatory. It serves as the primary identification for tax purposes and business recognition.
Identity proof: For proprietors or individual applicants, a valid identity proof such as Aadhaar card, Voter ID, or passport is required for verification.
Proof of business entity: Depending on the type of organisation, submit a relevant incorporation document. This includes a certificate of incorporation (for companies), partnership deed (for partnerships), registration certificate (for proprietorships or societies), or HUF documents.
Address proof of business premises: Acceptable documents include a recent electricity bill, telephone bill, mobile bill, rent agreement, lease deed, or property ownership documents for the registered office address.
Bank proof: Submit a cancelled cheque or a bank certificate (on the bank’s letterhead) to validate the account details of the business.
Passport-sized photograph: A recent passport-size photo of the applicant (proprietor/authorised signatory) is required for identity validation.
Digital Signature Certificate (DSC): Necessary for submitting the online application securely via the DGFT portal.
Self-addressed envelope (if physical delivery is opted): In case a physical IEC certificate is requested, include a self-addressed envelope for postal delivery.
These documents collectively help verify the applicant's identity and establish the legitimacy of the business seeking to engage in import-export activities.
Benefits of IEC Registration
Obtaining an Import Export Code (IEC) registration in India offers several benefits for businesses engaged in international trade:
Global Market Access: IEC registration allows businesses to legally enter international markets and expand their customer base beyond domestic boundaries. With a valid IEC, companies can export goods or services globally, participate in trade fairs, and build international partnerships. It serves as the foundation for global trade operations and opens up new revenue opportunities.
Legal Compliance: Holding an IEC ensures your business meets the legal requirements under Indian customs laws. It is mandatory for customs clearance at ports and for filing shipping and logistics documentation. Compliance with IEC regulations helps avoid delays, penalties, or confiscation of goods during import and export processes.
Avail Government Benefits: Registered exporters and importers become eligible for various government schemes such as the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS). These schemes offer duty drawbacks, tax benefits, and financial incentives that reduce overall trade costs and improve competitiveness.
Establish Credibility: An IEC adds authenticity and professionalism to your business, making it more trustworthy in the eyes of overseas buyers, suppliers, and banks. It signals that your business is officially recognised by the DGFT, which helps build stronger relationships in international markets.
Ease of Customs Clearance: IEC simplifies customs documentation and speeds up the clearance of goods at ports. With valid registration, businesses can avoid excessive scrutiny, complete declarations smoothly, and ensure timely movement of shipments across borders, thus improving overall trade efficiency.
Collectively, these benefits make IEC registration an essential step for any business planning to operate in the global trade ecosystem.
Steps involved in IEC (Import/Export Code) registration
The steps involved in IEC (Import/Export Code) registration in India are as follows:
- Online Application: Fill out the IEC application form on the DGFT (Directorate General of Foreign Trade) website.
- Document Submission: Upload required documents such as PAN card, Aadhaar card, bank details, and photograph.
- Payment of Fees: Pay the application fee online through the designated payment gateway.
- Processing by DGFT: The application is processed by the DGFT regional authority.
- IEC Issuance: Once approved, the IEC is issued electronically and can be downloaded from the DGFT portal.
- Confirmation: Receive confirmation of IEC registration via email or SMS. An understanding of network marketing can complement international trade efforts by building relationships and expanding the market base.
Completing these steps ensures businesses are legally authorised for international trade activities.
Documents required for IEC registration
The documents required for IEC (Import Export Code) registration in India include:
- PAN Card: For identity and tax purposes.
- Aadhaar Card: For identity verification.
- Bank Certificate or Cancelled Cheque: Proof of bank account details.
- Passport-sized Photograph: For identity confirmation.
- Digital Signature: Required for online application submission.
- Certificate of Incorporation/Partnership Deed: For business entity verification.
- Address proof, such as an electricity bill, a rent agreement, or property documents.
These documents are essential to verifying the identity of the applicant and the legitimacy of the business entity applying for the IEC. Submitting them ensures compliance with regulatory requirements for international trade operations.
Benefits of IEC Registration
Obtaining an Import Export Code (IEC) registration in India offers several benefits for businesses engaged in international trade:
- Global Market Access: This enables businesses to participate in global markets and expand their reach.
- Legal Compliance: Ensures compliance with customs regulations and facilitates smooth import and export operations.
- Avail Government Benefits: Eligibility for various export promotion schemes and incentives like MEIS and SEIS.
- Establish Credibility: This enhances credibility and trustworthiness in international transactions.
- Ease of Customs Clearance: simplifies customs procedures for faster clearance of shipments.
Overall, IEC registration opens doors to international opportunities, promotes business growth, and facilitates seamless cross-border trade activities.
Cases where the Import-Export Code (IEC) is not mandatory
The Import-Export Code (IEC) is not mandatory in specific cases within the Indian context:
- Import/Export for Personal Use: Individuals importing or exporting goods for personal use are exempt from the IEC requirement.
- Government Departments and Agencies: Government entities and specific agencies engaged in import and export activities may not need an IEC.
- Certain Notified Goods: Import or export of certain goods as per notification by the Directorate General of Foreign Trade (DGFT) may not require IEC.
- Export to Nepal or Bhutan: The export of goods to Nepal or Bhutan, subject to specific conditions, may not necessitate an IEC.
In these cases, the IEC exemption allows for simplified procedures and encourages certain types of trade activities.
Who can apply for Import Export Code?
Import Export Code (IEC) is essential for individuals and entities engaged in international trade. Obtaining an IEC ensures compliance with regulatory frameworks governing global trade. When it comes to who can apply for Import Export code, here is some information:
- Any individual intending to import or export goods commercially must apply for an IEC.
- Sole proprietorship firms can apply for IEC to facilitate their import-export activities.
- Partnerships involved in international trade also need an IEC for compliance.
- A private limited company engaged in import-export operations require IEC for legal transactions.
- A public limited company dealing in international trade must obtain an IEC.
- Trusts managing trade activities across borders can apply for an IEC to streamline operations.
Who issues the IEC code in India?
The Import Export Code (IEC) in India is issued by the Directorate General of Foreign Trade (DGFT), which operates under the Ministry of Commerce and Industry, Government of India. The DGFT is responsible for regulating and promoting India's foreign trade through various policies and initiatives. For businesses to fully leverage the cost of capital, it is essential to comply with these regulations.
They issue the IEC to eligible businesses and individuals engaged in importing or exporting goods and services from India. The IEC serves as a unique identification number for facilitating international trade transactions and complying with customs regulations. Applicants can apply for and obtain the IEC online through the DGFT's dedicated portal.
How to apply for the IEC Code online in India?
To apply for an Import Export Code (IEC) online in India, follow these steps:
- Visit the DGFT website: Go to the Directorate General of Foreign Trade's (DGFT) website.
- Create an account: Register on the DGFT website and create a user account.
- Complete the application form: Provide accurate details in the online IEC application form.
- Upload Documents: Upload required documents such as PAN card, Aadhaar card, and bank details.
- Submit Application: Pay the application fee online through the designated payment gateway.
- Track Application: Monitor the application status on the DGFT portal.
- Download the IEC Certificate: Once approved, download the IEC certificate from the DGFT website.
This streamlined online process ensures efficient registration for international trade activities.
How to download your IEC Code?
To download your IEC Code, follow these steps:
- Visit the official DGFT website and log in.
- Navigate to the Services tab and select 'IEC', then click 'Manage IEC'.
- Verify your details and click 'Print IEC' to download the certificate in PDF format.
How to edit and renew IEC?
To edit and renew your IEC:
- Log in to the DGFT portal and select 'IEC Portfolio Management'.
- Click 'Update/Modify IEC' and link your IEC by entering the number and verifying with OTP.
- Update your IEC details, verify with digital signature or Aadhaar, and submit the form for renewal.
How to cancel IEC?
To cancel your IEC:
Submit an online request on the DGFT website to surrender your IEC with required documents. Once processed, your IEC will be revoked.
How to link IEC with DGFT and GST?
For those wondering how to start an export business, securing an IEC is the initial milestone. Once obtained and linked with GST, entrepreneurs can navigate the complexities of international trade confidently, unlocking opportunities for global expansion.
Steps to Link IEC with DGFT and GST:
- Log into the DGFT Website:
- Open your web browser and go to the DGFT website.
- Click on the "Login" button and enter your credentials to log into your account.
- Navigate to 'Link IEC':
- After logging in, look for the 'Link IEC' option in the dashboard or menu.
- Click on 'Link IEC' to proceed.
- Authenticate Using Aadhaar-based OTP or Registered DSC:
Choose your preferred authentication method:- Aadhaar-based OTP:
- Enter your Aadhaar number.
- You will receive an OTP on your registered mobile number.
- Enter the OTP to authenticate.
- Registered DSC (Digital Signature Certificate):
- Attach the DSC to your computer.
- Follow the prompts to authenticate using your DSC.
- Aadhaar-based OTP:
- Ensure Compliance:
- Once authenticated, the linking process will be completed.
- Make sure to link your IEC annually to stay compliant with the DGFT requirements.
By following these steps, you will successfully link your IEC with DGFT and GST, ensuring compliance with the annual linking requirements.
What is Import Export Code Validity?
The Import Export Code (IEC) remains valid for a lifetime and does not require renewal. It is crucial, however, to keep the information on the IEC updated, particularly details such as bank information or address changes. Amendments can be made through the DGFT website by submitting the necessary applications.
If you decide to discontinue import-export operations, you have the option to surrender your IEC. The Directorate General of Foreign Trade (DGFT) will then deactivate the code upon surrender. This process ensures compliance with regulatory requirements related to international trade activities.
What is the fee for IEC?
The application fee for obtaining an Import Export Code (IEC) in India is Rs. 500. This amount is payable to the Directorate General of Foreign Trade (DGFT) at the time of submitting the application online. In addition to this government fee, applicants may also incur professional charges if they choose to hire consultants or agencies to assist with the registration process.
Conclusion
In conclusion, obtaining an Import Export Code (IEC) is essential for businesses in India looking to engage in international trade. The IEC, issued by the Directorate General of Foreign Trade (DGFT), streamlines customs procedures, and enables access to global markets, fostering business growth and competitiveness. It not only ensures compliance with regulatory requirements but also opens doors to export incentives and benefits provided by the government.
Moreover, business loans play a crucial role in supporting businesses in obtaining an IEC. They provide the necessary capital for expanding into international markets, with affordable business loan interest rate, investing in infrastructure, and fulfilling working capital needs. Access to financial resources through bank loans empowers businesses to leverage the opportunities facilitated by IEC registration effectively.
