IEC License - Meaning, Benefits & How To Apply
- ASHADHAN EXIM PVT LTD
- Sep 21
- 10 min read
Updated: Oct 4
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.
Simply put, IEC acts like a passport for your business in global trade. For example, if you sell fruits, spices, or any product within India, you can do so freely. But the moment you want to ship your goods abroad or get paid from a foreign buyer, customs and banks will ask for your IEC.
This guide will explain everything about IEC in simple words. We have answered the most asked questions about IEC license and by the end of this blog, you will know why you need it, how to apply for it ,how it helps your business grow and more.
We will cover:
What Is An IEC License?
An IEC license is a 10-digit number. It is given by the Directorate General of Foreign Trade, also known as DGFT. Think of it as a unique ID card for your business. This number never expires, and once obtained, it is valid for a lifetime. Every business that wants to trade across borders must have it, whether small or large.
Whenever you import or export goods, this number is used. Customs officers check it. Banks use it when money comes from another country. It helps the government keep track of trade activities in a transparent way. For your business, it builds trust with international buyers and sellers.
Without it, your trade may get blocked. That is why it is called the passport of business. Just like you cannot travel abroad without a passport, you cannot trade internationally without an IEC. It opens doors to global opportunities for your company.
Example: If you are exporting mangoes from Maharashtra to Dubai, your shipment papers will carry your IEC number. If you do not have the goods, they may get stuck at the port.
Who Can Apply For The IEC?
Almost anyone can apply. You do not need to run a very big company. Even a single person can apply if they want to sell or buy internationally. The process has been kept simple to encourage more people to take part in global trade. This way, India’s exporters and importers can grow faster.
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. IEC 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.
Are The IEC And PAN Numbers The Same?
No, they are not the same. PAN is for tax in India. IEC is for import and export. PAN tracks your income and financial records within the country. IEC, on the other hand, tracks your trade activities across borders.
They are connected because you need PAN to apply for IEC. But they are different in purpose. Your PAN acts as the basic identity proof for you or your business. Without PAN, you cannot even begin the process of getting an IEC.
Think of PAN as your school ID and IEC as your passport. Both identify you, but for different reasons. One lets you function smoothly inside India, while the other lets you step into international trade. Together, they complete your business identity.
Is An IEC Certificate Mandatory?
Yes, in most cases. If you want to send or receive goods or services across borders, you must have it. 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. Your trade papers will not be accepted. This can cause delays, financial losses, and even cancellation of orders. That is why IEC is treated as a must-have license for any global business activity.
Cases Where The Import Export Code Is Not Mandatory
If you are importing or exporting for personal use, not for business:
This means small, personal purchases from abroad are allowed without any license. But the moment goods are for resale or trade, IEC becomes compulsory.
If you are a government department or charity working under special rules:
Such organizations often get exemptions to make their work easier. Their imports or exports are usually regulated by other clearances instead of IEC.
If you are trading with Nepal or Bhutan in Indian Rupees only:
Since these neighbours use special trade agreements with India, IEC is not mandatory. However, if the trade involves foreign currency, an IEC will be required.
Example: If you buy a laptop for personal use from the US, you do not need an IEC. But if you import laptops to sell in India, you need it. The rule separates personal consumption from business activity. This ensures fair monitoring of international trade without burdening individuals.
Who Is Exempted From IEC?
People or groups importing or exporting for personal use:
If the goods are not for business, like 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:
They follow administrative approvals instead of getting an IEC. 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 special trade arrangements, business with these two neighbours in rupees is simplified. If foreign currency is involved, then IEC requirements apply.
Benefits of the IEC License
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 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 IEC. This protects businesses from fraud and ensures payments come through legally. It also builds confidence between you and your overseas buyers.
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, increasing profitability.
Professional Identity:
Having an IEC makes your business look professional and trustworthy. It shows foreign buyers that you are registered and recognised. This adds credibility and boosts long-term trade relationships.
Lifetime Validity:
You only apply once and use it forever. There are no renewal procedures or yearly compliance burdens. This makes it a one-time investment with lifelong benefits.
Example:
A farmer with mango orchards in Ratnagiri can get an IEC. He can then export mangoes to Europe. With IEC, he can also apply for a government subsidy on freight costs.
This opens global doors even for small producers. It proves that IEC is not just for big companies but equally useful for individuals and startups.
What Is The Cost Of An IEC Certificate?
The official fee is small. Currently, it is around a few hundred rupees. Many people use consultants or agencies that charge service fees. If you apply directly on the DGFT website, you only pay the government fee. But if you take professional help, you also pay for document preparation, submission, and follow-up.
So the total cost 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.
Does An IEC 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. It saves time, money, and effort for businesses.
The only thing is that you must update it if your 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. If you don’t update, your IEC may get deactivated until details are verified.
What Are The Requirements/Documents For An IEC Certificate?
To apply for an IEC, you need only a few things. The process is very simple.
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
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.
Example:
If you are an individual soap maker in Mumbai who wants to export handmade soaps, you just need your PAN, Aadhaar, bank account, email, and photo. That is all. This shows how simple the process is and how even small entrepreneurs can easily become global exporters.
Do I Need GST for IEC?
No, you do not. GST is for tax inside India. IEC is for trade outside India. They are separate. This means you can apply for IEC even if you are not registered under GST. Many small exporters and individual traders start global trade without having GST.
However, if your business turnover crosses the GST threshold, then GST registration becomes necessary for domestic compliance. IEC and GST are independent, but both may be required as your business grows.
How To Apply For The IEC?
The DGFT has made the process online. You do not need to visit an office. This digital system saves time and effort by allowing you to apply from anywhere. It also reduces errors through automated checks.
Here is the step-by-step:
Go to the DGFT website.
Create an account with your email and mobile number.
Log in and select Apply for IEC.
Fill in your PAN and business details.
Upload documents like PAN, Aadhaar, and bank details.
Upload your photo.
Pay the fee online.
Submit and track status.
Receive the IEC via email once approved.
How To Edit And Renew The IEC?
If your address or partners change, you can update details online. Log in to DGFT, 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 current helps avoid issues during customs clearance or banking transactions.
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 it. 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. This prevents 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.
How To Link IEC With GST?
You can link IEC with GST using the DGFT portal. This makes claiming government benefits easier. It also makes tax and trade records simple. Linking IEC with GST helps synchronize your export-import data with tax filings. This reduces paperwork and errors during audits or subsidy claims.
The process is done online by logging into your DGFT account and submitting your GSTIN details. Once linked, your IEC and GSTIN work together to streamline compliance with both trade and tax authorities.
Conclusion
The IEC license is 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. If you dream of making your business international, then apply for IEC today. It is your passport to the world of trade.
Comments