IMPORT EXPORT CODE
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FAQs ABOUT IEC CODE
Ever since the early days of Indian civilization, dating back thousands of years, there has been a steady flow of trade with the outside world.This trade happens to be something that has continued well into the modern era.Starting in 1947, when the country gained independence from the British, the country has started to gain an ever-more important presence in the international marketplace.Much of this growth took off starting in the 1970s when the country started to open up its markets to the rest of the world. Everything began to really take off starting in 1991 when the country opened up its economy, through policies which supported privatization, trade liberalization, etc.
Today, the country is playing an active role in the international marketplace, in terms of both imports and exports. India is one of the important trading partners for many countries, with trade deals allowing for newer markets to be accessed and so on.It is estimated based on present market statistics that in the near future, India could become one of the biggest and perhaps the largest trading country on earth.The task of regulating foreign trade in India is managed by the Directorate General of Foreign Trade.Part of the larger Ministry of Commerce and Industry, the governmental body is responsible for the formulation of trading policies, regulatory framework and issuance of licenses.
One such activity involves the issuance of the IE Code or the Import Export Code. It is the document which is required by businesses that wish to engage in import or export activities.Among both businesses and traders, there is a certain degree of confusion that exists regarding the IEC Code.
Given in the below list are some of the most importantly asked questions about the subject.
1.) How long will it take for obtaining an IE code?
A.) The total time for obtaining an IEC online or offline, is about 1 day after submitting the necessary documents and paying the fees.
In addition to this, it should be noted that in certain cases, the total time taken may vary as well.
2.) Should you file any returns after obtaining an IE code?
A.) There is no requirement to file any returns. The IE code is just a reference number when any import or export is engaged in.
3.) Should you renew your IE code?
A.) There is no need for one to renew an IE code after the initial IEC registration online or otherwise.
The IEC code registration is permanent and will remain the same without expiring.
4.) Can you obtain an IE code if you are not into foreign trade?
A.) Yes, anyone can go for an import export code registration, regardless of whether or not they are into exports and imports. There is no restriction for doing so in any way.
5.) Do you require a company to register for an IE code?
A.) No, there is no requirement for one to have a company to obtain an IEC code online or otherwise. Even private individuals can obtain the same, if they so desire.
6.) Can you cancel your IE code online or otherwise?
A.) Yes. The IE code can be cancelled if so desired by the holder of the same.
7.) How do you cancel your IE code?
A.) To cancel the IE code, one will need to request for the same with the DGFT. This can be done online. The cancellation is usually immediate.
8.) Is there any penalty for not having an IE code for exports?
A.) No. There is no penalty. But without an IE code, no exports or imports can take place, as they will not be allowed to clear customs.
9.) How many IE codes do you need?
A.) IE codes are issued on a per entity or applicant basis. In other words, each trader and business is issued a single IE code.
10.) Can you get an IE code through a third party?
A.) Yes, it is possible for one to get an IE code registered with the Directorate General of Foreign Trade. There are in fact several companies and individuals who cater to this demand.Do make sure to check their credentials and other details of the entity before giving them important documents or making any payment.
The Process Of Registering For Import Export Code
International trade is something which India has engaged in since ancient times.
Ever since the early days of Indian civilization, the people of the region have actively traded with the outside world. With the passage of time, this trade has steadily grown, well into the modern era.
Today, India is an active and important player in the international market.
Ever since the country opened up the economy, beginning largely in 1991, the country’s share of international trade has grown steadily.
In fact, it is estimated that in the coming years, India will become one of the most important players in the international marketplace.
When it comes to international trade, the department responsible is the Directorate General of Foreign Trade.
It is a governmental body that has been authorized to regulate international trade between India and the rest of the world. Among the many different functions it engages in are the formulation of trade policies, issuance of trading license, etc.
One such activity that the department engages in is the issuance of the IE code or the Import Export Code. It is one of the most important documents that need to be acquired before engaging in foreign trade.
HOW TO OBTAIN AN IE CODE
When it comes to the obtaining of an IE code or import export code, there is certainly a great deal of confusion. There is a lot of information on how to go about doing this. The below will give a rough understanding about the entire process.
- The first thing to understand is whether or not an Import export code is required. Given that this applies only to those traders and businesses that engage in foreign trade, businesses that operate entirely in the domestic market do not have to apply for the same.
- If in case the business is engaged in foreign trade, it is likely that the business will need to obtain the import export code. Even here, there are a couple of exemptions. Some of them include imports and exports by the Indian government, a few categories of trade with Nepal and so on. Given that there are a couple of different categories regarding this, the best way to know if an import export code is required is to check the department.
- With regard to the documentation required for the same, one will need to submit two pieces of paperwork, namely, Identity and business proof and a cancelled check copy. Identity card refers to documents like driving license, aadhar card or any other government issued photo ID, while business proof refers to the documents concerning businesses such as company PAN, partnership deed, incorporation letter, etc. As for the cancelled check copy, one can submit the same from any government recognized bank.
- The cost of the filing fee is Rs 500 and will need to be done by the concerned party online. The same can also be done using a DD through offline means by submitting the same along with a self-addressed envelope and an Rs 20-50 stamp (depending on total distance) to the nearest branch of the DGFT.
- Once an Import Export Code has been generated, it will be updated on the website of the Directorate General of Foreign Trade. The total time for the generation of an Import Export Code is about 10 days, although the same may vary in certain cases.
In all, getting an Import Export Code is something that is very important for almost any Indian business that wishes to engage in foreign trade.
Given that there an enormous amount of potential in the international market for growth as well as profits, this is one thing that almost no business can overlook.
Business Considerations Before Applying For An IE Code Registration
One of the things that India has been famous for are its products.
The Indian subcontinent has been well known for trade since ancient times, which date back thousands of years.
The region, with its natural seaports and easy land routes in the west and various mountain passes, has enjoyed a fairly advantageous position in the international marketplace.
In fact, one of the reasons why the British came to the country was to gain a monopoly of this lucrative trade.
Coming to the modern era, there has been a steady degree of international trade with each passing year. Ever since India started liberalizing its economy and opened up its markets, there has been enormous growth of both imports as well as exports. In fact, it is estimated that the country will soon be one of the most important players in the global marketplace in the near future.
When it comes to the modern era, international trade offers an exciting opportunity for both businesses as well as individuals. Businesses can look forward to accessing foreign markets and increase their profits, while individuals will be able to access goods and services of better quality.
In the case of India, these activities are managed by a department of the government called the Directorate General of International Trade. It is the legal body tasked with the regulation of import and export activities in the country, as well as formulation of policies that support the same.
Among the many different functions that it engages in, is the issuance of the IE Code or the Import Export Code. This is something which is necessary for those who would like to engage in importing and exporting of goods in the country.
BUSINESS CONSIDERATIONS BEFORE APPLYING FOR AN IE CODE
The fact is that there is a great deal of money to be made in the import and export business. To do the same, the law requires that one have an IE code during shipment and receiving payments.
At the same time however, this is not something one should engage in, unless a few key details have been addressed. Given below are some of the considerations that should be taken care of before applying for an IE code.
1.) Do you really want to go global?
This is the first thing that must be considered. It might be exciting to go global. But do you really want to do so?
The reason for this is because international trade is a lot more complex than domestic trade, with a various trade regulations, rules, tariffs, duties, customs and more in the way of your global aspirations.
If you aren’t serious about taking your business global, there is probably no need to apply for an IE code.
2.) Can you make the same amount of money trading at home?
What is the reason for you going global?
For most people, the main reason for doing so is making more money. Therefore, check whether you can earn the same amount of money at home as opposed to abroad.
If you foreign earnings are as much as what you could earn at home, it is a good idea to focus on the domestic market rather than the international one.
3.) Do you have sufficient capital?
This is especially important when it comes to import businesses.
One of the things that must be taken into account is the way in which international payments work. Most international payments are done using international currencies like Dollars, Euros, Yen, etc.
Given that the price of foreign currencies fluctuates every day, you should have sufficient amount of money to pay for imports at times, regardless of whether the rupee value appreciates or depreciates.
4.) Are you sure of your suppliers and buyers?
Another thing which you should take into consideration before registering an iec code is your suppliers and buyers.
There are cases where traders and entities have been cheated of their payments after their goods consignment was shipped. In addition to this, the same is true of payment as well, where the payment was made for the goods, which were never shipped.
This can become a real problem if you don’t know whether your suppliers and buyers are genuine. And also, given that they are in a foreign country, dealing with such issues can be a lot more difficult than what would have been the case if it were to have happened within the country.
5.) Is there a sound marketing strategy?
This is a fairly cliché advice that any business will understand. In this case, it applies to those people who would like to take up exporting of goods and services.
To have a sound marketing strategy is to have sound way of attracting customers. Therefore, it is important that you know how to attract buyers in a foreign market. Doing this will require you to deal with a great deal of barriers like diversity, dealing with cultural and traditional values, language, etc.
As a whole, one can say that there is a great deal of profits in the import and export business.
Given that the whole world is accessible for just about anything and everything, it is clear that there are plenty of business opportunities.
Should any Indian trader or business be interested in being part of this international trade, it is advisable that they first check whether they are ready to go global and sustain their business activities. If the business conditions seem to be favorable, one can look forward to applying for an IE Code and follow other business regulations necessary, before starting trade activities with foreign markets.
If there is one country that is well known for its role in international trade, it is India.
Indian products have been famous across the world for a very long time. It is in fact one of the main reasons why the British came to India; they were seeking to establish their dominance over the trade with India.
International trade goes back way beyond the early days of colonialism however. In fact, the timeline for the same goes back as far as thousands of years.
Thousands of years ago, India was a major maritime trading partner for the civilizations and empires in its surroundings like Arabia, etc. Through the many land routes, be they the western frontier or the many mountain passes, the Indian subcontinent established trade links with civilizations like that of Europe and China.
Coming to the modern era, the country has come a long way when it comes to foreign trade.
Ever since the country gained independence in 1947, its share of the global trade has been increasing steadily with each passing year.
The greatest increases of this trade however, took off starting in the 1970s and really increased after 1991, when the country opened up its economy to foreign trade.
Today, foreign trade is an important part of the Indian economy, as well as a major source of foreign exchange. Given that India’s share in the international marketplace has been steadily growing with each passing year, it can be said that the country will soon be one of the most dominant players in the near future.
When it comes to present-day international trade in India, the practice is regulated in the country by the Directorate General of International Trade.
The governmental body is a part of the larger Ministry of Commerce and Industry, and is the sole authority for much of the foreign trade taking place in the country, be it exports or imports.
It is the department tasked with the formulating policies, managing foreign trade practices and issuing necessary permits. One such permit is that of the IE Code or the Import Export Code. It is one of the most important documents that businesses must acquire, if they wish to engage in importing or exporting.
Coming to the subject of the IEC Code, there are plenty of people who are fairly confused about the concept.
Given in the list below are some of the common FAQs about the same.
1.) What is an IEC code?
A.) An IE code or import export code is a ten digit number that is issued by the Directorate General of Foreign Trade.
2.) What is the purpose of an IE code?
A.) The IE code is required for all businesses and traders who wish to engage in export and import activities.
3.) What does IE stand for in IE code?
A.) IE is an acronym that stands for ‘Import-Export’, indicating that it is required for those who wish to engage in trade activities that involve imports and exports.
4.) Who is required to apply an IE code?
A.) Anyone who is engaged in export or import activities must go for an IEC code registration.
5.) Is the IE code mandatory?
A.) Yes, the Import Export code registration is mandatory with certain exceptions.
6.) Who are the exempt parties for the IE code?
A.) There are a few except parties when it comes to obtaining an IE code. Among them are the state and central government bodies, private individuals not directly involved in business activities (of agriculture, industry and trade) and imports coming from Nepal and Myanmar.
There is an upper limit for trade with Nepal and Myanmar, with the upper value of goods being Rs 25,000 per consignment, after which an IE code is required. The same is true at Nathula as well, with the exception that the upper limit are Rs 1,00,000 rather than Rs 25,000.
7.) What is the cost of obtaining an IEC code?
A.) The cost of obtaining an IE code is Rs 1499.
It is the same for registering IEC online as well as offline.
8.) What are the necessary documents for obtaining an IE code?
A.) There are a couple of documents that are required to obtain an IE code. Among them are PAN, government issued ID like aadhar, company registration and incorporation documents, trade licenses, etc. In this manner, one can obtain the IEC code online as well as offline.
9.) Can you do the same offline?
A.) Yes, the process of obtaining an IE code offline as well as online is possible.
10.) What is the general process for obtaining an IE code?
A.) The process is the same with regard to the paperwork and fees. In addition to this, there is a requirement for the documents to be submitted with a self-addressed envelope and a stamp of Rs20-50, depending on the distance to the nearest office of the DGFT.
The process of IEC code registration online as well as offline is more or less the same.
As a whole, it can be summarized that the IE Code or the Import-Export code is one of the most important documents issued by the Directorate General of Foreign Trade in India.
Required for almost any import and export businesses, the document is one thing that no businessman or trader can do without.
When Is It Not Mandatory For An IEC Registration Online or Offline?
If there is one country in the world famous for international trade, it is India.
The country, or rather the subcontinent region of India, has been an important player in international trade for a very long time.
With a history going back as far as thousands of years, the people of India have traded with other civilizations of the world like Europe, China and Arabia, by land as well as sea.
After the rise of colonialism in India, the country endured a great deal of economic losses, as the colonists were largely interested in their own welfare or that of the United Kingdom.
With the country achieving independence from the British in 1947, this situation has greatly improved almost everywhere. Today, India has become one of the largest economies in the world, and is estimated to become the world’s biggest economy in the near future.
If there is one thing that has benefited from the opening up of the country’s economy, it is the growth of the import and export industry.
Ever since barriers were removed and tariffs were slashed, the country has experienced an enormous growth of both imports as well as exports. In fact, it is estimated that India will soon be one of the biggest economic players in the global market.
Coming to present day international trade, the department responsible for the same is the Directorate General of Foreign Trade.
Part of the larger Ministry of Commerce and Industry, the governmental body is responsible for the issuance of trade licenses, formulating policies and regulates trade practices.
Among the many different functions that it carries out, it is tasked with issuing the IE Code or Import Export Code, which is necessary for those who might be interested in carrying out foreign trade.
THE LIST OF CURRENT IE CODE EXEMPTIONS
There are a couple of different IE code exemptions that are currently given by the Indian Directorate General of Foreign Trade. The exact details of the same are given below.
- Private Use – Imports for private use are exempt from being required to have a done an IEC code registration, online or offline. As long as the products being used are strictly for personal use, there is no requirement for the concerned parties in any way to register for an IE code.
At the same time however, there is a restriction here that needs to be taken into consideration. The parties can only use them if they are in no way involved with the economic activities involving agriculture, manufacturing or trade. Should one be involved in any of the three activities in any way, it will become necessary to apply for an IEC registration online or offline.
- Trade with Nepal and Bhutan – Due to diplomatic and trade treaties between India, Nepal and Bhutan, there are no requirement for an IE code for either the export or the import of goods between the countries.
This however comes with an upper limit on the value of the goods being traded. The current upper limit has been set at Rs 25,00o per consignment, beyond which an IE code will be necessary.
- Imports and Exports Through Nathula Port - Nathula port has a similar relaxation as the above, with the upper limit being set at Rs 1,00,000 rather than Rs 25,000.
- Government Departments – The state and central governmental departments are currently exempt from applying for any IEC registration online or offline, as they have already been issued one (IE Code: 0100000011 for central government and IE Code: 0100000029 for state government).
In all, there is a great deal of money to be made in the import-export business.
Given that the whole world is made accessible for traders and businesses, there is a vast market waiting to be tapped everywhere.
If one wishes to engage in such activities in India, getting an IE Code would be the best thing to do, as it is one of the main starting points for any and all activities involving international trade.