Import Export Code (IEC): Unlock Global Trade Effortlessly

Expanding your business beyond borders? The Import Export Code (IEC) is your ticket to seamless international trade. Whether you’re an entrepreneur stepping into global markets or an established trader managing cross-border supply chains, an IEC is essential for hassle-free imports and exports.

What is IEC and Why is it Important?

Think of the IEC as your business’s passport for international trade. Issued by the Directorate General of Foreign Trade (DGFT), this 10-character alpha-numeric code is mandatory for any entity engaged in import or export-unless specifically exempted.

According to Para 2.05 of the Foreign Trade Policy (FTP) 2023, the IEC is linked to an entity’s PAN, ensuring a unique identification process. No one can export or import goods without an IEC, except where exemptions apply. Even for services or technology exports, an IEC is necessary at the time of rendering services to claim benefits under the Foreign Trade Policy.

Who Doesn’t Need an IEC? (Exemptions)

While the IEC is generally mandatory for all importers and exporters, some categories get an exemption under Para 2.07 of the Handbook of Procedures (HBP) 2023. Here’s who gets a free pass:

➢ Government Entities Get a Green Light – Ministries and departments of the Central or State Government don’t need an IEC for their trade operations.

➢ Personal Imports & Exports – If you're importing or exporting goods purely for personal use (not related to business, manufacturing, or agriculture), you can skip the IEC requirement.

➢ Neighborhood Trade Without the Paperwork – If you're trading with Nepal, Bhutan, Myanmar (through Indo-Myanmar border areas), or China (through designated ports), you might not need an IEC-provided your consignment stays within these value limits i.e. CIF value of single consignment :

• Rs.25,000 for Nepal, Bhutan, and Myanmar (through Indo-Myanmar border areas).

• Rs.1,00,000 for China (Gunji and NamgayaShipkila ports).

• Rs.2,00,000 for China (Nathula port).

➢ Legal Exemptions– Specific importers and exporters covered under clause 3(1) (except sub-clauses (e) and (l)) and clause 3(2) (except sub-clauses (i) and (k)) of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993 are also exempt.

Permanent IEC Numbers for Non-Commercial Use – Certain non-commercial PSUs and specific categories of importers/exporters use designated permanent IEC numbers instead of obtaining a separate IEC.

Note: If you’re dealing in SCOMET items (Special Chemicals, Organisms, Materials, Equipment, and Technologies) listed in Appendix-3, Schedule 2 of ITC (HS), 2022, you’ll still need an IEC-unless you’re a government entity.

Technical Requirements for Filing an IEC

To apply for an Import Export Code (IEC), the following technical requirements must be met:

• Valid Digital Signature Token (DSC) – Required for authentication and secure online filing.

• Valid PAN – The Permanent Account Number (PAN) of the applicant is mandatory.

• Registered Mobile Number and Email ID – These must be valid and accessible for OTP verification and communication.

• Address Details of Branch Office (if applicable) – A valid address for any branch office must be provided.

• Active Bank Account in the Name of the IEC Holder – The applicant must have a functional bank account for financial transactions related to imports and exports.

• Aadhaar Card Linked with PAN – The Aadhaar details should match the PAN details to avoid discrepancies.

How to Apply for an IEC?

Getting your Import Export Code (IEC) is now easier than ever! The entire process is online, eliminating paperwork hassles and long processing times. Here’s a step-by-step guide to obtaining your IEC, as per Para 2.08 of the Handbook of Procedures (HBP) 2023:

1. Submit an Online Application

Head over to the DGFT portal (https://dgft.gov.in) and fill out the ANF-2A form with the required details along with required documents. A nominal application fee applies.

2. Instant IEC Generation

Once submitted, your IEC will be auto-generated, and you’ll receive confirmation via email and SMS. You can also log in to your DGFT dashboard to view and download your e-IEC. The IEC covers all branches / divisions / units / factories of the applicant.

3. Required Documents (Scanned copies to be uploaded)

❖ Proof of Firm's Bank Account- A cancelled cheque (with the entity’s pre-printed name) or a Bank Certificate in the prescribed format.

❖ Proof of Address- Address Proof of the business (matching the registered address on the application) can be any one of the following documents:

• Sale Deed, Rent agreement, lease deed, electricity bill, telephone land line bill, mobile, postpaid bill, MoU, Partnership deed.

• Other acceptable documents (for proprietorship only): 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 favor of the firm along with the address proof is to be submitted as a single PDF document.

4. Post-Verification Process

After IEC issuance, Regional Authorities (RAs) will conduct post-verification to ensure compliance with trade regulations.

With this seamless digital process, getting your IEC has never been faster or more convenient. So, if you're ready to expand your business globally, apply today and start trading without delays!

Keeping Your IEC Active & Compliant

1. Lifetime Validity: Once issued, the IEC remains valid permanently-unless it is suspended or cancelled.

2. Annual Updates: IEC holders must electronically update their details every year between April–June, even if there are no changes.

3. Deactivation Risk: Failing to update the IEC can lead to deactivation, which can be reversed upon compliance.

4. System Scrutiny: If an IEC is flagged for risk by the system, the holder must address the issue promptly to avoid deactivation.

Modifying, Surrendering, or Transferring an IEC

❖ When & How to Update IEC Details

Business changes over time, and so should your IEC information. Updates must be made within 30 days of any modifications, including:

• Changes in constitution of firm (partnership to private limited, etc.).

• Address, bank details, or any other relevant information.

• Updates must be done online, supported by valid documents and fees.

❖  Surrendering an IEC

Not using your IEC anymore? It can be voluntarily surrendered online, provided:

• All associated authorizations and trade obligations are settled.

• In cases of mergers or acquisitions, or amalgamations, IEC surrender depends on transferring all authorizations and obligations to the new entity’s IEC.

Once surrendered, Customs authorities are notified to prevent future use.

❖ Impact of Business Restructuring

• If a business undergoes a merger, acquisition, liquidation, or transfer, leading to a new PAN, a fresh IEC must be obtained within 30 days-unless an IEC is already assigned.
• Existing IECs can be linked to the new entity’s IEC for operational continuity.
• Any request for cancellation of an IEC or PAN modifications in numeric IECs must be submitted to the jurisdictional Regional Authority (RA).

❖ Transferring Authorizations to a New IEC

If an IEC holder has unredeemed authorizations, they can request via application to the original RA for their transfer to a new IEC. The RA approves such request after verifying the application based on supporting documents (including affidavits, where necessary).

IEC for Special Economic Zones (SEZs) and EOUs

No matter where your business operates-Domestic Tariff Area (DTA), Export-Oriented Unit (EOU), Electronic Hardware Technology Park (EHTP), Software Technology Park (STP), Bio-Technology Park (BTP), or Special Economic Zone (SEZ)-your IEC remains valid across all locations. This ensures that businesses in specialized trade zones can operate without disruption.

Conclusion: Get Your IEC & Expand Globally

An IEC is your gateway to global trade. Whether you're a startup exploring international markets or an established business scaling operations, obtaining and maintaining an IEC is essential. Don’t let missing paperwork slow you down-apply for your IEC today and take your business global!

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.