The import and export of products in India are controlled under the Foreign Trade (Development and Regulation) Act, 1992. Additionally, it helps the government create the appropriate rules for importing and exporting goods.
The import and export process typically entails several steps, including reviewing the import-export papers, paying taxes, checking the licence, and inspecting the products to be imported or exported.
In this article, we will discuss in detail the meaning and procedure of import and export, the documents required, the registration process and the benefits of registration of import-export license.
Meaning of Import?
Import means buying goods or services from abroad.
What is the procedure of Import?
Setting Market Goals:
Establishing market goals for price and terms
Product sourcing:
Finding potential suppliers
Sourcing distribution channels
Trade regulations:
Import rules and requirements, and determining if an import licence is necessary or not.
Copyright, trademark, and patent
Making Contact:
Contacting appropriate providers with inquiries.
Term and Quotation Agreement:
Evaluating the offers and prices from the provider
Expenses and terms of the sale
How to Pay for the Purchase:
Creating a working capital plan
Applications and types of bank finance, such as exporter credit and other bank facilities
Sales Contract:
Verifying the sales contract and the terms of the deal, such as the payment terms.
Preparing Payment and Insurance:
Preparing payments and insurance as stipulated in the sales contract (for example, if the payment term is a D/C, submit a D/C application to the bank issuing the D/C; if the trade term is FOB, organise a cover note with an insurance provider).
Preparing insurance and a cover letter as needed.
Acquiring Goods:
Getting a delivery notification and an arrival note
Receiving the exporter's export paperwork
Obtaining items from the designated shipper or forwarder
Customs clearance:
Setting up import declaration and customs clearance
Meaning of Export?
Export means selling goods or services to the residents of other countries.
What is the Procedure of export?
Conducting market research and establishing distribution goals:
Choosing target markets, exportation channels, and pricing and terms goals for foreign markets.
Trade Rules:
Export Rules and Conditions
Rules and restrictions for international imports
Copyright, trademark, and patent
Establishing Contacts:
Inquiries from potential foreign buyers
Checking the buyer's history with banks or ECIC
Quotation and Terms:
Providing quotes and offers to prospective customers
Costs, estimates, pro forma bills, and purchase conditions
Sales Contract:
Verifying the sales contract and the terms of the deal, such as the payment terms.
Contract Execution:
Goods production or procurement
labelling and packaging
Coordinating shipping
Making ready export documentation
If necessary, arrange insurance
Customs Clearance:
Organizing export declaration and, if required, applying for an export licence.
Receiving payment:
The exporter should provide the necessary documentation to the appropriate parties for payment, subject to the payment terms outlined in the sales contract.
How to apply for an import export license online?
The procedure to apply for import export license online is as follows:
Please go to the DGFT website.
The 'Services' tab will appear on the home page.
From the drop-down menu, choose 'IEC Profile Management'.
There will be a new page. On the page, select the "Apply for IEC" option.
Select "Register" from the menu. Click the "Sent OTP" button after entering the necessary information.
After entering the OTP, press the "Register" button.
You will receive a notice containing the temporary password after the OTP is successfully validated, which you can alter after you've logged into the DGFT website.
Enter your username and password to access the DGFT website after registering there.
Select "Apply for IEC" from the drop-down menu on the DGFT website.
Click the "Submit and Generate IEC Certificate" button when you have completed the application form (in ANF 2A format), uploaded the necessary documents, and made the required payment.
The DGFT will produce the IEC code. Once the IEC code is generated, you can print a copy of your certificate.
Documents Required for import and export license
Following are the documents required for import and export license:
PAN card, a bank document, or a voided check.
Address proof Aadhar card or other identity proof
Digital photograph
The most recent electricity/telephone bill, the rental/lease agreement, or the sale deed if the business location is self-owned.
Copies of partnership agreements (in case of a partnership)
A declaration of incorporation (in case of a private limited company, LLP)
Registration Copy of the Trust Deed or Certificate of the Society ( in case of a trust )
What are the benefits of import export licences?
The benefits of import export license registration is:
Market Expansion:
You can broaden the scope of your firm by registering for an import-export licence. You can import and export outside India to boost your chances of making money. Doing this will strengthen your company's reputation and expand your business relationships with other nations.
Simple Processing:
Within 10 to 15 days of applying, it is extremely simple to get the IEC code from the DGFT. To obtain an IEC code, no export or import documentation is required.
No Annual Compliance:
The import-export licence does not need to be renewed or reapplied after registration because it is valid for life. A perpetual licence is suitable as long as your business is in operation.
However, you must inform the DGFT in writing through a written application if you no longer desire to use the import export licence or run the business.
Lifetime Validity:
An IEC registration is a permanent lifetime registration. It is valid as long as the business is still operating or the registration is not cancelled or given up. As a result, updating, filing, and renewing the IEC registration won't be difficult.
