Import Export License -Meaning, Benefits & How To Apply

If you run a business in India and intend to expand it across the political boundaries of the country, then you need to get the Import Export Code license, also called the IEC.

The import-export code opens the door to international trade, without which your goods cannot travel outside India in most cases.

This guide will explain everything about the Import Export License Code (IEC) in simple words. By the end, you will know why you need it, how to apply for it and how it helps your business grow.

What Is An Import Export License(IEC Code)?

The Import Export Code (IEC) is a mandatory 10-digit business identification number issued by the Directorate General of Foreign Trade (DGFT) in India.

It is required for any business or individual involved in importing or exporting goods and services across borders, without which you cannot clear shipments through customs or receive foreign currency in your bank account.

Whenever you import or export goods, the IEC is required at every stage. Customs officials use it to verify shipments, and banks ask for it when international payments are processed.

It also helps the government track trade activities in a transparent and organized manner.

Without an import export license, your shipment can be stopped, and payments may not be cleared. That is why the IEC is often called the passport of international trade.

Just like you cannot travel abroad without a passport, you cannot trade globally without an IEC. It builds trust with overseas buyers and opens the door to international business opportunities.

Who Can Apply For The Import Export Code?

Now that you know what an Import export license is, let us see who can apply for it. The process of applying for an IEC has been kept simple to encourage more people to participate in global trade.

Hence, almost anyone can apply for it. You do not need to run a very big company. Even a single person can apply if they want to sell or buy internationally.

Here are some who can apply:

An Individual Person with a PAN Card

This means even freelancers or self-employed professionals can get an IEC. It gives them a chance to explore international markets independently.

A Partnership Firm

Both small and medium-sized partnerships can expand their business globally. The IEC will be issued in the name of the firm, not individual partners.

A Private Limited or Public Limited Company

Large businesses need it for smooth, large-scale transactions. It also strengthens their credibility with foreign buyers and suppliers.

A Trust or Society

Charitable organizations or societies can import or export goods for their activities. The import export license ensures legal recognition for their international dealings.

A Startup or Small Business

Even new ventures can expand outside India with this license. It removes unnecessary restrictions and opens up global opportunities early on.

How To Apply For An Import Export License Code?

The DGFT has made the process of applying for an IEC certificate online. You do not need to visit an office. This digital system saves time and effort by allowing you to apply for the code from anywhere. It also reduces errors through automated checks.

Before following the steps below, there are certain prerequisites that you need to take care of.

This includes choosing the right business type, getting your business registered, and having a business PAN card, GST and bank account ready

Here is the step-by-step process that you can then follow:

1. Go to the DGFT website.

2. Create an account with your email and mobile number.

3. Log in and select Apply for IEC.

4. Fill in your PAN and business details.

5. Upload documents like PAN, Aadhaar, and bank details.

6. Upload your photo.

7. Pay the fee online.

8. Submit and track status.

9. Receive the import export certificate via email once approved.

What Are The Requirements/Document List For An Import Export Certificate?

There are a few lists of documents that are required to apply for an Import Export License. They are as follows:

PAN Card

This is the most important, as IEC is linked to your PAN. Without PAN, you cannot apply. It acts as the basic identity of both individuals and businesses. Since IEC is linked permanently with PAN, no duplicate IEC can be issued.

Identity Proof

An Aadhaar card, voter ID, or passport can be used to confirm who you are. This ensures the authenticity of the applicant. It also helps DGFT verify the details before approving the certificate.

Business Registration Proof

If you are a company, LLP, or partnership firm, you must show your registration certificate. For individuals, this is not needed. This is to prove the legal existence of the business entity. It also ensures the IEC is issued in the correct firm or company name.

Bank Account Details

A cancelled cheque or bank certificate is needed to prove you have an active account for trade transactions. The account should be in the name of the applicant or business.

This is necessary because all export-import payments are routed only through this bank account.

Digital Photo

A clear passport-size photograph of the applicant is required. It is uploaded during the online IEC application. The photo acts as a visual identifier for the business applicant.

Active Mobile Number and Email

These are used for OTP verification and for receiving your IEC by email. The communication from DGFT is done entirely online, so valid contact details are compulsory. Without them, the certificate cannot be delivered.

What Is The Cost Of An Import Export License?

The DGFT charges a nominal fee of ₹500 to apply for an IEC certificate. However, many people use consultants or agencies that charge service fees.

By taking professional help, you also end up paying for document preparation, submission, and follow-up.

So the total cost for an IEC registration may be between a few hundred to a few thousand rupees, depending on how you apply.

This makes it affordable for both individuals and businesses of any size. Since the license is valid for a lifetime, it is a one-time cost with long-term benefits.

Is An Import Export Certificate Mandatory?

Yes, in most cases. If you want to send or receive goods or services across borders, you must have an import export license. It acts as the first step to enter international trade legally. Even digital service exports often need an IEC for smooth transactions.

Without it, your shipment cannot be cleared. Your foreign money cannot be received, and your trade papers will not be accepted. This can cause delays, financial losses, and even cancellation of orders.

That is why the IEC is treated as a must-have license for any global business activity.

Who Is Exempted From IEC?

Although having an import export license code is mandatory for cross-border trade, there are certain cases/situations in which it is not mandatory or exempted. This includes:

People or groups importing or exporting for personal use:

If the goods are not for business, like if they are personal gifts or small-scale foreign purchases, an IEC is not required. This keeps the process simple for individuals who are not traders.

Government departments:

Several government departments follow administrative approvals instead of getting an import export code. This exemption allows the quick functioning of government-related imports or exports.

Certain notified groups, like diplomats:

Diplomatic bodies enjoy special privileges under international agreements. They can move goods in or out of the country without going through the IEC procedure.

Trade with Nepal and Bhutan in Indian currency:

Because of the special trade arrangements of India with Nepal and Bhutan, business with these two neighbouring countries in rupees is simplified. If, in any case, foreign currency is involved, then IEC requirements will apply.

Benefits of the IEC License

Having an import export license has its own set of benefits.

Global Market Access

You can sell to buyers in many countries and not just in India. This allows your products and services to compete on an international stage.

By entering global markets, your business can earn in foreign currency and grow faster.

Easy Customs Clearance

Shipments pass smoothly because customs trusts businesses with a valid IEC. It reduces the chances of delays or goods getting stuck at ports.

Having an IEC ensures transparency and faster processing.

Banking Support

Banks release foreign currency payments only if you have an Import export license certificate.

This protects businesses from fraud and ensures payments come through legally. It also builds confidence between you and your overseas buyers.

Access To Government Schemes

You can get export incentives and subsidies announced by the government. Schemes like duty drawback, MEIS, or RoDTEP need an IEC to qualify.

This means your overall export costs come down, thus increasing profitability.

Gives Your Business A Professional Identity

Having an IEC makes your business look professional and trustworthy. It shows foreign buyers that you are registered and recognized.

This adds credibility and boosts long-term trade relationships.

Does An Import Export Certificate Expire?

No, it does not expire. Once you get it, you can use it for life. This makes it very convenient compared to licenses that need yearly renewals, thus saving time, money, and effort for businesses.

The only thing is that you must update the IEC if your business details change. You also need to confirm details once a year online on the DGFT website. This annual confirmation is simple and ensures your IEC stays active without extra cost.

Failure to do so will lead to your IEC getting deactivated until details are verified.

How To Modify Your Import Export Code?

If your address or partners change, you can update details online. All you need to do is log in to DGFT's website, select Manage IEC, update details, submit, and save.

This ensures your IEC information remains accurate and up to date with the authorities. Keeping your details up to date helps avoid issues during customs clearance or banking transactions.

The IEC itself does not require renewal as it is valid for a lifetime. However, you need to annually confirm or validate your IEC details on the DGFT website to keep it active.

Failure to do so may lead to temporary deactivation until confirmation is completed.

How To Cancel IEC?

If you close your business or stop trading, you can cancel your IEC. Again, it is done online. Submit a request for cancellation with a reason. DGFT will deactivate it.

Cancelling your IEC officially informs the authorities that you have ceased import-export activities, thus preventing any misuse of your IEC in the future.

Once cancelled, you cannot use the same IEC number for a new trading activity. If you restart your business later, you will need to apply for a fresh IEC.

Keeping the record clean helps maintain the integrity of the trade system.

Conclusion

The IEC license is thus the most important step if you want to start international trade. Without it, you cannot export or import in most cases. It is simple, cheap, and valid for life. Once you get it, you can trade globally, apply for government schemes, and expand your business.

Frequently Asked Questions

How to download iec certificate​?

Visit the DGFT website, navigate to the IEC profile management option, where you will get the option to print your IEC certificate.

Does the IEC expire?

The IEC is valid for a lifetime once issued. You just need to update it once a year to keep it active. 

How to update/renew iec code​?

The IEC doesn’t need to be renewed as it is valid for a lifetime. To update the IEC, visit the DGFT website, find the IEC profile management option and click on update/modify IEC.

How to verify iec certificate?

To verify your import export certificate, visit the DGFT website. In the service dropdown option, click on “View IEC related details”. Enter the IEC Code, the firm’s name, and fill in the captcha. The IEC status is displayed.

How to change the address in iec certificate?

Visit the DGFT website, navigate to “profile management” options and click on “update/modify IEC”. Start a fresh application, enter all the required details with documents and submit the application.

How much does it cost to get iec code?​

The costs involved in IEC include: registration charges(₹500), modification charges(₹200), duplicate IEC(₹200), consultation fees(optional) -(₹1500-₹3000), etc