How to get an Import-Export Code (IEC) number

Alibaba.com AUGUST 21, 202211 MIN READ
How to get an Import-Export Code (IEC) number

International trade creates tremendous opportunities for business and economic expansion. India has steadily nurtured its global trade profile over the past decade, and last year, the country’s exports increased by 20%.1 As a result, the country saw the fastest GDP growth rates globally, between 2013 and 2018.2

The government continues to ensure these successes by providing incentives for international trade. However, prospective traders need to obtain the right permits and approvals before they can conduct business internationally. An Import-Export Code (IEC) is one of these approvals.

This article provides an overall introduction to the IEC. It explains the requirements, processes, steps for registering for the IEC, and the benefits of having this code.

What is an Import-Export Code (IEC)?

An import-export code (IEC) is a key business identification number required for all international trading in India. This 10-digit alpha-numeric code is given by the regional office of the Director General of Foreign Trade (DGFT), Ministry of Commerce. The code is important for all Indian businesses who want to enjoy the benefits of International trade.

The Importer usually declares their IEC number together with the bill of lading to customs. This helps the officials effectively administrate cross-border business and also curb illegal imports and exports. The import-export code is a necessity for businesses intending to explore either importation or exportation of goods and services.

The government of India makes registering for IEC code mandatory under the Foreign Trade (Development and Regulation) Act, 1992.3 The perk, however, is that it doesn’t require any filing of returns and has lifetime validity.

The IEC code also avails importers and exporters of several benefits provided by the DGFT, the Exports Promotion Council, and the Customs Department. It should be noted however that persons who are importing or exporting goods for personal use are not required to register for an IEC code.

Import-Export Code (IEC)

When is an IEC required?

The ministry of commerce requires an IEC for all exports from India or imports to India with the exemption of goods imported or exported for personal use and not for commercial usage. An IEC is not also required for imports and exports done by government departments, ministries, and other charitable institutions.

Additionally, traders who are registered under Goods and Service Tax (GST) are not obligated to have an IEC. They can use their Permanent Account Number (PAN) as a new IEC for imports and exports. Here are some specific instances where an IEC is required:

  • Clearing imports: Importers need to obtain an IEC before they can file for a bill of entry from the DGFT. The customs office also requires an IEC before the goods imported can be cleared. Businesses usually submit their IEC alongside the bill of lading relating to that import.
  • Payment for imports: Importers send payments for their goods which usually cost a large amount via a bank wire transfer and the bank would need to verify their capacity to initiate that transaction. This is done using the IEC code. An IEC is requested by financial institutions When an importer sends money overseas through a bank before the payment for an import is affected.
  • Initiating exports: India’s economy is pro-exports but in as much as exports are encouraged, due process needs to be followed. An IEC number is requested by the customs port when an exporter wants to send shipments to ensure they are eligible to participate in cross-border trading.
  • Receiving payments from exports: The IEC proves that one is eligible to partake in cross-border trading. Every legitimate business or person who does so should have an IEC. The receiving bank would, thus, require an IEC from the customer (exporter) before releasing the funds, paid in foreign currency. This would also checkmate that businesses tender an IEC before initiating exports.

However, IEC is not always necessary for service imports and exports unless the relevant service provider is receiving benefits under the Foreign Trade Policies. The purpose of the IEC number is to establish a standard of excellence among Indian enterprises conducting cross-border business, not to restrict imports or exports.

The ease of obtaining an IEC number proves this. Securing an IEC from the DGFT only takes 10-15 days after the initial application. The criteria for successful IEC applications are covered in the section below.

The requirements for an IEC registration

Several qualifications and documents are required before one can register for an import-export code. Let’s take a look at them:

  • Two recent passport photographs of the applicant: This requirement applies when the applicant is an individual and not a corporate entity.
  • The person’s or firm’s copy of PAN card: The income tax department issues a Permanent account number (PAN) card and any Indian citizen can apply for one online. The PAN only costs Rs. 93 for a domestic communication address and Rs.864 for a foreign communication address with goods and service charges exclusive. This single document can be gotten in 48 hours.
  • A valid government-issued identification: A valid proof of identity is required when applying for an IEC to limit cases of fraud. The identification accepted by the DGFT is Driver’s License, Voter’s ID, Aadhar card, or International passport.
  • The person or firm’s copy of a canceled cheque or current bank account certificate: Per FEMA regulations, this is a step to limit foreign exchange fraud. A copy of current bank accounts can be easily gotten from the bank account on request.
  • Proof of residence or establishment: To apply for IEC, you need to validate your residence as a person or the address of your business establishment. Several documents and even bills can be used to do this. These are copies of the rent agreement, sale or lease deed, and utility bill (electricity bill, telephone landline bill, and mobile postpaid bill).
  • The application letter: Application letter with the company letterhead with the subject “Request for Issue of New IEC Certification.”
  • A Self-addressed envelope: A Self-addressed envelope for delivery of the IEC certificate by registered post and an RS.25 post stamp for delivery of the IEC certificate by registered post.

contact with alibaba.com

A Step-by-step guide on how to get an IEC number

The Ministry of Commerce through the Director General of Foreign Trade now permits the online submission, handling, and issuance of IEC applications. Several service providers have also found a niche in IEC registration which they offer to their clients in India at a fee. However, the process of getting an IEC is now easier than ever as prospective importers and exporters can apply for an IEC number from the convenience of their homes or places of work. Let's proceed step by step.

  • Step 1: Visit the official DGFT page (dgft.gov.in): The page is compatible with most browsers; all you need is a device connected to the internet.
  • Step 2: On the home page, click on “Apply for IEC” at the bottom of the paragraph titled “Register for your IEC”: A new page will load after you click on the “Apply for IEC” icon.
  • Step 3: Fill in your know-your-customer (KYC) information and pass the ReCaptcha test: This page requires information about the type of business you are applying for (importer/exporter, technical authorities, bank officials…) and other personal details. A PAN number and Pin Code are also required. At the bottom of the page, there is a “Send OTP'' option. Click on that to submit your form and generate a one-time password (OTP).
  • Step 4: Enter the generated OTP in the text box provided: This would automatically give you access to the online application page to fill in the entity details.
  • Step 5: Fill in the application entity details including branch details and director/ partner details: These require you to provide more specific information about your business and the business partners and directors.
  • Step 6: Upload scanned copies of the required documents: The necessary documents have been listed prior to now all you need to do is to pick the document type (PDF or JPEG) and click on the “Upload” icon.
  • Step 7: Payment for fees: You may proceed to pay the IEC registration fee of RS. 500 with either debit and credit cards or via net banking.
  • Step 8: Preview and print application: Preview the application to ensure that there are no errors and you can also print it to further scrutinize or for business purposes. Click on “Proceed” after thorough verification of the information on your application.
  • Step 9: Submit application: Submit and generate an IEC certificate. Processing and issuance of the IEC code take 10 - 15 days. However, if your application is not accepted, the office of the DGFT will notify you within 2 days by mail with a corresponding reason for rejection.

5 benefits of IEC registration

The fundamental advantage of IEC registration is that it enables local industries and businesses to expand the boundaries of their markets across their borders.

  • Business expansion and growth: One tried-and-true strategy for achieving business expansion and growth goals is to expand into new markets, which is simple to do through international trade. Therefore, IEC registration is a crucial document that your company would require to successfully enter these new markets.
  • Subsidies: An IEC code offers the bearer subsidies on the export of goods. These can take the form of conventional export subsidies or, in the case of imports, excise tax breaks.
  • Tax Relief: The government provides tax relief for imports completed within a certain time frame.
  • Facilitates cross-border payments for imports and exports: Banks and other financial institutions require the IEC number to carry out transactions for their customers across borders.
  • Verification and fraud checks: The customs office uses the IEC number to verify a company's legitimacy in India and determine its eligibility to engage in imports and exports.

Import-Export Code (IEC)

Frequently asked questions (FAQs)

What is the import-export code?

An import-export code (IEC) is a 10-digit alpha-numeric code given by the regional office of the Director General of Foreign Trade (DGFT), Ministry of Commerce, India that serves as a key business identification number required for all cross-border trading related to India.

How do I find my IEC?

The IEC can be obtained via the DGFT website and also monitored via the same means using the following six steps.

  • Visit the official DGFT website
  • Enter the given username and password
  • Click on “Services”, navigate to “IEC” and then click on “Manage IEC”
  • Verify your details
  • Click on “Print IEC”
  • A PDF version file will be available for you to print

What is the validity of the IEC?

The IEC code has lifetime validity and only needs to be registered once. However, the DGFT requires every IEC holder to update their information electronically every year. Failure to do this would lead to deactivation. To reactivate your IEC, all you have to do is complete the yearly update.

Is IEC required for services?

IEC is not required to export services except when the service provider benefits from the Foreign Trade Policy.

Is IEC registration required when you have GST?

IEC is not required for persons or businesses with GST. These groups of people can use their PAN as a new IEC for imports and exports.

How long does it take to get an IEC?

After submitting the documents required, that is, two recent passport photographs, a copy of PAN card, valid government ID, bank account certificate, proof of residence, and application letter, it takes 10 - 15 days for the IEC number to be ready.

Who is exempted from having an IEC?

The classes of people exempted from having an IEC are government departments, ministries, and other notified charitable institutions. Additionally, traders who have registered under GST are not obligated to have an IEC.

Become a Seller on Alibaba.com

Explore international markets, reach over 20 million active buyers, double your revenues, and achieve your business growth and expansion goals with Alibaba.com.

The platform has features that protect the interests of buyers and sellers by creating a welcoming environment for healthy competition. Additionally, Alibaba.com’s trade assurance service promotes greater trust between buyers and sellers and reduces the risk associated with global trade.

Furthermore, as a seller on Alibaba.com, you gain access to first-rate customer care and knowledgeable assistance to help you out and give your business wings. Open a seller account now to become part of a global network of buyers and sellers on the world’s largest international marketplace.

References:
1. https://commerce.gov.in/trade-statistics/
2. https://www.timesnownews.com/amp/business-economy/economy/article/india-becoming-worlds-fastest-growing-economy-shows-imf-data-5-points/333792
3. https://www.cbic.gov.in/htdocs-cbec/customs/cs-act/formatted-htmls/cs-fortrade-regulation

Welcome to Alibaba seller central, what can I do for you?