Import Export Code Registration in India has witnessed significant growth in recent times despite the negative impact of demonetization. Indian export business touched $274.65 billion during the year 2016-2017. The Indian IEC registration market is surging ahead globally mainly due to rapid business innovations and flexible government reforms.
Looking at the growth of the import and the export of goods and services in India in recent times, business entrepreneurs and start-ups are keen to venture into this area. But many jump in without knowing the consequences rather than laughing their way to the bank. But in most cases, it turns to be a nightmare experience.
The government has come up with several steps to make the policies easily related to the exports in order to minimize corruption. Hence every entrepreneur and start-ups must be aware of the legal policies such that they can sow their seeds to start the export business in India. You cannot even imagine about starting a business without IEC registration. So, let’s explore more about how to get your Import Export Code Registration in India.
So how do you know if your business venture is ready to enter the import-export market? Here are a few things you need to know in order.
- Set up
The first and the foremost thing one should have to start an IEC registration is a business setup. It is suggested that one can proceed with a sole proprietorship in the initial stage.
- To obtain a PAN for the business
Once you have received the required registration, it is very important to have a PAN card for starting an IEC registration. The same will be issued by the Income Tax Department.
- Opening of a current account
After receiving the business registration and PAN card, one needs to open a current account with any of the commercial banks exclusively for IEC registration.
- To obtain IEC license
To obtain IEC license it is very important to start IEC business in India. This registration is mandatory to run the business in a legal manner.
Import Export Code registration can be obtained by applying online at the DGFT portal. IEC is a unique 10 digit number issued to any individual/ company by the Director General of Foreign Trade (DGFT), part of Ministry of Industry and Commerce so that they can undertake the IEC business smoothly without any hindrances. The IEC issued is with lifetime validity.
Importance of IEC Registrations
Import Export Code registrations are required in the following situations:
- To clear the shipments of the importers from the custom department
- When importers send money abroad through banks then it’s required by the banks through SWIFT Code
- IEC registration is very much required when exporters have to send the shipments to other nations
- When exporters receive money in foreign currency directly getting deposited in the bank then IEC registration is very important.
How to apply for Import Export Code Registration?
We have understood the importance of IEC registration. Any business entities undertaking any form of import-export business have to get the IEC registration which is mandatory. Without IEC registration, it is impossible to carry on the business. Moreover, it is also considered illegal to undertake such business activities without IEC registration.
The first and the foremost thing is how one can apply for IEC registration? This is considered to be an important factor before proceeding further. The following steps will help in applying for IEC registration in a most hassle-free manner.
Step 1 – One has to prepare an application form in the prescribed format and file the same with the concerned DGFT office.
Step 2 – Submit the required documents related to the applicant with ID, address and legal entity proof along with the bank details and certificates.
Step 3 – Once the application has been completed, file with the DGFT along with the required fees.
Step 4 – Once your submitted documents have been verified and approved one will get the import-export code certificate in the soft copy from the concerned department.
Documents required for IEC Registration
The following documents are required for the purpose of IEC registrations.
- Copy of the PAN card
- Aadhar card, voter ID, Passport
- Cancelled cheque copy of the current account
- Copy of rental agreement, sale deed, electricity bill
Obtaining the Registration cum Membership Certificate (RCMC)
After obtaining the IEC, one needs to get the Registration cum Membership Certificate (RCMC) granted by the concerned Export Promotion Councils to get permission to import and export or for availing any other benefit.
There are about 26 export promotion councils from where one can get the RCMC issued.
After getting the IEC and RCMC issued, you can set up your import and export business from India. These are valid across all branches or business premises across India. It may take less than 5 working days to get all the registration done.
One Major Point to be noted:
Earlier while applying for the IEC registration, the concerned persons had to get the Digital Signature Certificate (DSC). But now as per the new rule, No Digital Signature Certificate is mandatory for applying for IEC registration.
Top 5 benefits of IEC Registration:-
One may ask what advantages do IEC registration has.
Actually speaking IEC registration has several benefits that are listed below.
- Business Expansion
IEC registration helps in taking your services or products to the global market and leads to the expansion of the business.
- Avail Several Benefits and Subsidies
With IEC registration importers and exporters can avail several benefits and subsidies from the DGFT, Customs, and Export Promotion Council.
- Lifetime Validity
When all the procedures related to IEC registration are done Import Export Code License will be issued which is valid for lifetime. This requires no renewal.
- No Need to File Returns
IEC does not require the filing of any returns. Once allotted, there is no requirement to follow any sort of process for sustaining its validity. Even for export transactions, no need to file any returns with DGFT.
- Easy Processing
It is easy to obtain IEC certificate from the DGFT within a period of 5 working days after submission of the documents.
Opportunities galore with exporters
IEC registration has shown the doors open for exporters. India being a fast developing country has always maintained a cordial relationship with other foreign nations. Because of the good relationship, it has with other countries, export of the goods and services have increased by leaps and bounds in recent times. This has given the exporters a golden opportunity of their lifetime.
The import and export of goods or services is an integral part of a country’s economy. No country can progress unless interacting with other nations. As stated above there are many avenues one can explore. Some of these are listed below.
- Exploring online market places
Many might have heard about reputed online portals like Amazon, Alibaba, and many more online market platforms. Many of these websites have allowed the exporters to enlist themselves as vendors on their sites. This has made them connect with the customers across the globe. The internet is playing a crucial role as a bridge for the exporters to export their product to customers located thousands of kilometers away.
- Exploring the international markets
Each country has a rich surplus in their own resources that can be exported. Similarly, it needs to import certain resources in which it is a deficit. Hence you need to explore the international markets to ascertain what you can export to the needy country and in exchange what you can import.
For example, if you want to trade in agricultural equipment, then one can go to Brazil, which is one of the leading agricultural processing equipment country in the world. China is well known for electronic equipments. Countries in the Middle East like Saudi Arabia and Kuwait are famous for petroleum and crude oil. Since India is the largest producer of tea in the world, it can trade with countries like Brazil, China and, Saudi Arabia in exchange for petroleum, agricultural equipments, and electronics.
- Exploring the product opportunities
If India is exporting an Indian made product to the world, it does not mean that India can’t import a high demand product from abroad. There are many product opportunities that one can look into. The opportunities for exploring the products are unlimited.
For example, let us take the leather product. India has held a strong position for years in exporting leather products like belts, wallets, shoes, and handbags. Many small and mid-sized companies are undertaking this business successfully over the years.
India is one of the emerging suppliers of medical equipments in the world. Manufacturers are having a good reputation due to the quality and reliability. Some of the medical appliances exported are gloves, gauzes, face masks, bandages etc.
Export of crude oil is major revenue to the Indian government. But also at the same time it one of the biggest importers of petroleum products.
Now the government has made the process more user-friendly and a hassle-free process. One can also apply for IEC application via online.
New procedure for online IEC application/modification has been introduced by the Government of India under the Directorate General of Foreign Trade.
- Mandatory documents to be uploaded for new IEC registration
- Bank certificate/ Pre-printed cancelled cheque
- Address proof of the firm
Any of the following documents: Sale deed, rental agreement, lease deed, electricity bill, landline bill, post-paid mobile bill, Aadhar card, passport, voter id. (In case the address proof is not in the name of the applicant firm, a No Objection Certificate (NOC) by the firm premises owner in favour of the firm along with the address proof is to be submitted.)
- Digital Signature Certificate – Now not required
Copy of PAN card – Now not required
Photograph – Now not required
We hope the procedure for IEC registration is now clear.
We at Aavana would love to assist you with any queries related to Import Export Code registration.