As an Indian exporter, navigating the complexities of international transactions and compliance can feel like solving a complex puzzle. Today, we'll explore a crucial piece of that puzzle: FIRC

FIRC full form is Foreign Inward Remittance Certificate. It is a document issued by banks as proof of receiving international payments. Over the years, regulations around FIRC have changed significantly, creating confusion and mystery around this important document. Let's clear the air and decode the what, who, and why of FIRC.

FIRC or Foreign Inward Remittance Certificate serves as a proof of foreign money transfer for exporters in India. Until 2016, <a href="https://rbidocs.rbi.org.in/rdocs/FEMAMASTER/PDFs/1061.PDF">AD (Authorised Dealer) Category I Banks</a> were authorised to issue FIRCs to exporters for receiving payments from foreign sources. This document was essential for exporters to obtain after each cross-border payment. It served not only as proof of payment receipt but also as a crucial document for claiming export-related incentives, such as tax exemptions on foreign currency payments received in India.

As we've covered, the full form of FIRC is Foreign Inward Remittance Certificate and for a long time it served as proof of export income from abroad. However, with changing regulations, the function of FIRC has also changed significantly. Let's take a look:

FIRA is often still referred to by its old name, FIRC. While both documents serve the same purpose, FIRC is technically only issued for returns on&nbsp;Foreign Direct Investment (FDI )or Foreign Institutional Investment (FII). For all other export collections, FIRA/BIRC is what you need.

For clarity, we'll use the term FIRC moving forward, but it refers to FIRA throughout.

Anyone receiving foreign payments needs FIRC.&nbsp; Beyond goods and service exporters engaging in international trade, many individuals and entities may receive international payments without realising it.&nbsp;

Overall, the following typically require a FIRC:

Beyond compliance, here’s why FIRC is crucial for exporters:

FIRCs are issued by AD Category I banks. You can contact your bank to get your FIRC after receiving your foreign payment. <a href="https://www.skydo.com/blog/how-to-get-firc-certificate-online">Alternatively, you can also use platforms like Skydo to get your FIRC instantly after every payment.&nbsp;</a>

Who Needs FIRC and Why It’s Important for Exporters?

FIRC (Foreign Inward Remittance Certificate) is essential for anyone receiving foreign payments, including:

Exporters, in particular, rely on FIRC for two key reasons:

FIRC is issued by Authorized Dealer (AD) Category I banks, and businesses can obtain it directly from their bank. However, it is usually a cumbersome process requiring multiple follow-ups and most banks charge around INR 500 to issue each FIRC.&nbsp;In contrast, platforms like Skydo offer a fast, hassle-free solution, providing an instant FIRC for free after every foreign payment—no manual requests, no extra costs.

This is a sample FIRC document. All crucial remittance details have been masked for security purposes. Now let’s break the content of a FIRC down: 

Receiving your export payment directly through your bank can make obtaining an FIRC a lengthy process. You need to submit a request to the bank, and the bank typically takes 7-15 days to provide the FIRC. You may also need to follow up multiple times, and banks often charge at least INR 400 to issue the FIRC, depending on the institution.

<a href="https://www.skydo.com/blog/how-to-get-firc-certificate-online">Getting a FIRC</a> might sound like a hassle, but with Skydo, it's a breeze. Our fully automated payment system along with built-in partnerships with banks, ensures effortless compliance with RBI guidelines, without needing any manual intervention.

When you receive an export payment through Skydo, we automatically generate the required FIRC for you at no extra cost. Just log into our user-friendly dashboard, and you'll find your FIRC ready to download, complete with all the details you need. 

In conversations around FIRC, there are a few more terms that get frequently mentioned, one of them being eFIRC. So what exactly is <a href="https://www.skydo.com/blog/efirc-firc-brc-essentials-differences">eFIRC?</a>

What is the difference between eBRC and FIRC?

Generally speaking, e-BRC applies mostly to goods and software exporters (under <a href="https://stpi.in/en/home?no_follow=true/">STPI</a>). If you are one of them, you can use this simple decision tree to understand which documents you will need:

Exporting goods and services is considered Zero-Rated Supply, meaning it is subject to 0% GST. However, to claim a GST refund for the input tax credit, exporters must provide the required documents including FIRC. These documents authenticate that the business is claiming a refund because it exported services and couldn't offset its input tax credit as it would in normal domestic business. Without FIRC, claiming a GST refund may not be possible

As we surge in cross-border transactions, ensuring compliance and safeguarding against illicit activities has become a pressing concern. However, at Skydo, we believe your focus should be on advancing your business, not on grappling with compliance challenges.

With Skydo, enjoy seamless international payments, delivered promptly and without any hidden fees. But that's just the beginning! Every time you receive a cross-border payment, an auto-generated FIRC is readily available for you to download, relieving you of compliance burdens so you can devote your energy to what truly matters: driving your business forward.

FIRC full form is Foreign Inward Remittance Certificate. Learn what FIRC is, its importance for exporters and freelancers, and how to obtain it easily

FIRC: Full form, meaning and RBI guidelines

Dive into the world of FIRC. Explore the full form, importance, and process of obtaining FIRC for your international transactions

Foreign Inward Remittance Certificate (FIRC): Full form, meaning and RBI guidelines

Prashanth

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Prashanth Kumar

Imagine this: you put a lot of effort, time, and creativity into a project for a client, only to get delayed or ignored when it comes to payment. Freelancers face this common and frustrating problem, especially when working with new or unreliable clients. A staggering<a href="https://www.chaserhq.com/blog/87-of-businesses-paid-late-insights-from-2022-late-payments-report"> 87% of businesses reported being paid late</a> in 2022.&nbsp;

Late payments can hurt your cash flow, motivation, and reputation as a freelancer. Then, how can you deal with this issue and ensure you get paid on time for your work?&nbsp;

This blog post shares some tips and strategies that can help you prevent and handle late payments and some communication strategies to use when dealing with the same.

How To Prevent Late Payments In The First Place?

Here are some tips to help you avoid payment delays and ensure timely payments from your clients.

Despite your best efforts, you may still get late payments often. Follow the steps below to handle the situation professionally and effectively.

Communication Strategies To Use When Dealing With Late Payments

Communication is key to managing and resolving late payment issues. Here are some ways to communicate with your clients effectively and professionally about payments.

If the client doesn’t resolve the late payment issue after following the steps above, you may need to escalate the matter and take more drastic measures. However, before you do so, you should consider the following factors.

Late payments are a common challenge for business owners and freelancers, but you can mitigate them with proper communication and preventive measures. To deal with late payments, start by preventing them with reliable clients and clear contracts.&nbsp;

If payments are late, evaluate the situation, resend invoices, and consider halting work. Finally, maintain open communication, offer incentives, and escalate the issue if necessary.

Q1. How do you tell a client they are late on payment?

Ans. By sending a friendly and polite reminder via email, phone, or text message, you can notify the client that they are late on their payment. Attach the invoice copy for reference, along with the invoice number, amount, and date. You should ask them to acknowledge receipt and inform you of the payment status.

Q2. How do I professionally ask for a late payment?

Ans. You can professionally ask for a late payment by following the communication strategies mentioned above, such as offering incentives, highlighting the due date, sending reminders, approaching the client with empathy and professionalism, and presenting solutions.&nbsp;&nbsp;

Q3. How do I assess the financial reliability of potential clients before engaging in a project?&nbsp;

Ans. To determine their financial stability and creditworthiness, consider using credit check services or financial analysis tools. You can also ask your network for referrals from freelancers or professionals.

Q4. How can technology and software help in managing and tracking payments efficiently?&nbsp;

Ans. Technology and software can enhance your ability to manage and track payments. For example, invoicing software can automate invoicing, send reminders, track payments, and generate reports.&nbsp;

Accounting software can help you manage your income, expenses, and cash flow. Payment gateways can facilitate online payments and provide secure and convenient payment options for your clients. Project management tools can help you track the progress of your projects and the associated payments.

Remember, dealing with late payments is a common challenge for many businesses and freelancers. However, with the right strategies and tools, you can ensure timely payments, maintain healthy client relationships, and improve your financial well-being.

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A McKinsey <a href="https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/purpose-not-platitudes-a-personal-challenge-for-top-executives">survey</a> states that employee engagement increases when a company’s purpose is aligned with its employees’ goals and they know how their actions contribute to the company’s purpose.&nbsp;

So, how do you align your employees with your business mission? Or let us rephrase - how do you align organizational goals with your team members' individual goals?

This blog explains various strategies for:

1. Improved team motivation and engagement

Teams develop a greater sense of purpose and are more driven to perform their best when aligning with the organization’s mission and goals. A <a href="https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx">study</a> shows that higher employee engagement increases business productivity by 18%.

When everyone understands the common objectives, they can collaborate more seamlessly, leading to improved synergy and innovation within the organization.

3. Clearer decision-making and problem-solving

With a shared understanding of the company's goals and mission, decision-makers can prioritize initiatives and tackle challenges to advance the overarching mission, leading to more transparent decision-making and problem-solving processes. It also increases <a href="https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx">business profitability</a> by 23%

Establish the core principles for the company's mission

"People don't buy what you do; they buy why you do it," says Simon Sinek in <a href="https://www.goodreads.com/book/show/7108725-start-with-why">Start with Why</a>. The team requires a purpose and motivation to align with a vision. They have to believe in the business mission to follow it.&nbsp;

Thus, it is necessary to establish core principles for a company's mission that inspire your team and serve as the driving force for its existence. It provides crucial answers to questions like why the organization exists, its mission, and how it intends to achieve its core business principles.

<a href="https://www.mckinsey.com/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20state%20of%20organizations%202023/the-state-of-organizations-2023.pdf">Decathlon</a> is a leading sports goods retailer. The CEO, Barbara Martin Coppola, explains the business mission is "to democratize sport so everyone can experience its wonders on their own terms." How does their team align with it? One reason is that they attract employees who are passionate about sports. However, the main reason is the entrepreneurship and empowerment culture within the company.&nbsp;

Its minimal hierarchical structure inspires people at all levels to perform better. This alignment fosters a cohesive and values-centric work environment and empowers the team to collectively drive their efforts toward shared objectives.

Some examples of business core principles to achieve a company's mission are:

Here is how you can set business core principles for your organization:

It takes meticulous preparation to match your team's mission with your business mission. Here are a few <a href="https://www.skydo.com/blog/implementing-effective-communication-to-boost-productivity?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">channels for communication</a>, pragmatic ideas, and efficient tactics for guiding your staff toward your business core principles.&nbsp;

A <a href="https://thoughtexchange.com/blog/5-ways-to-achieve-team-alignment-in-your-organization/">study</a> suggests that frontline workers are less likely to understand how they contribute to the business mission than the leaders. Team alignment requires cascading the mission from strategy to operations. It is also called the trickle-down effect.&nbsp;

Break down high-level organizational objectives into specific ones at lower levels (to ensure everyone understands how their efforts contribute). Here is an example of cascading goal setting. You can use a similar template to add goals for your organization.

You have now set clear goals for the team and conveyed them well. However, your team may not be able to achieve those goals properly. Why? Lack of productivity due to ineffective communication. 

<a href="https://www.grammarly.com/business/Grammarly_The_State_Of_Business_Communication.pdf">Grammarly's The State of Business Communication Report</a> reveals that poor team communication increases costs and reduces productivity. In fact, teams lose 7.47 hours per week on average due to ineffective communication.

The key is establishing a robust communication channel that instills team trust, improves collaboration, and increases productivity. Here is how you can improve internal business communication:&nbsp;

Learn more: <a href="https://www.skydo.com/blog/effective-time-management-techniques-for-business-owners">Effective Time Management Techniques for Business Owners</a>

One of the best ways to align your team with the organizational objectives is to set strategic goals for each employee that contribute to the business mission by using the objectives and key results (OKRs) model.

Here is an example of how to use the OKR framework for your team.

An increasing number of employees seek purpose, autonomy, and work flexibility beyond monetary benefits.

Here is how leaders can help their team members feel empowered at work.

<a href="https://www.michaelpage.co.in/talent-trends/the-great-x">82%</a> employees feel happier and more motivated when recognized. Performance recognition also improves employee retention. Therefore, prompt acknowledgment can increase team alignment. The following are some of the most effective methods of setting up an employee recognition and reward system:&nbsp;

Learn more: <a href="https://www.skydo.com/blog/recruitment-strategies-for-top-talent-startups?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">8 Recruitment Strategies for Top Talent for Startups</a>

Team alignment is the synchronized pursuit of a common goal among all employees, teams, and leadership within an organization to achieve success.

Alignment with the company's mission translates into heightened productivity and output as teams operate with greater efficiency and cohesion. This, in turn, contributes to improved employee morale, as team members derive a sense of purpose and pride from understanding how their contributions impact the company's success.&nbsp;

If you require a starting point or guidance on how to initiate this process effectively, consider consulting the following books:

Ans:&nbsp; Team alignment can be measured through regular communication, goal tracking, and feedback mechanisms. Assessing shared objectives, values, and collaborative efforts ensures cohesion.

Q2. How do you set team vision and mission?

Ans: Establishing a team vision and mission involves collaborative goal-setting, defining core values, and aligning objectives with organizational goals. Regularly communicate and reinforce the vision to ensure team cohesion and commitment.

Ans: &nbsp;Unifying a leadership team requires open communication, fostering trust, and aligning on common goals. Encourage transparency, active listening, and collective decision-making to strengthen team unity.

Top 6 Strategies for Team Alignment with Business Mission

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<a href="https://www.bbva.com/en/everything-need-know-psd2/">It all began in 2007 </a>when the European Union launched a directive that majorly streamlined cross-border transactions within the European Economic Area (EEA). The directive called the Payment Service Providers Directive (PSD), aimed to develop a single payment market in the EU and improve the current competition and transactional efficiency.&nbsp;

Before the Payment Service Providers Directive (PSD) was introduced in 2007, conducting cross-border transactions within the European Economic Area (EEA) was a complex and costly process.

You had to deal with multiple banks, various currencies, and high transaction fees, making it challenging to expand your business to international customers. The lack of a unified payment system created inefficiencies, making it difficult to compete with larger businesses.

However, with the implementation of the PSD, the process became much simpler. Now, you can use a single payment service provider to manage transactions in multiple EEA countries, reducing transaction costs and currency exchange hassles. This streamlined approach has opened up new opportunities for your small business to expand across borders, compete more effectively, and serve customers across the EEA with ease.

Although the directive was a huge success, the EU felt that there was room for more innovation.The EU amended PSD in 2009 to create the PSD1 framework, which was again amended in <a href="https://www.ecb.europa.eu/paym/intro/mip-online/2018/html/1803_revisedpsd.en.html">2013 to its current form of PSD2. </a>The current form, PSD2, is widely considered to have ushered in a new era of consumer-centric financial services in the EEA.&nbsp;

You decide to use a budgeting app that provides valuable insights into your spending habits. Using the PSD2 framework, you can now securely link this app to your bank account. This means the app can access your account data with your consent and provide you with more accurate financial advice and budgeting tools.

Consumers now enjoy increased choice, security, transparency, and convenience in their financial transactions.

Yes, PSD2 must sound intriguing to you, but a proper understanding of what PSD2 is is vital in the current scenario when most countries are looking to create a framework similar to PSD2 for international payments.

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The PSD2 (Payment Services Directive 2) is a directive released and managed by the European Union to regulate international <a href="https://www.skydo.com/blog/eefc-account-vs-payment-platforms?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">payment services</a> within the European Economic Area (EEA). The European Union introduced PSD2 to ensure healthy competition, innovation and secure payment process in the European payment industry. PSD2 builds upon the original Payment Services Directive (PSD) and was adopted in 2015, becoming effective on January 13, 2018.

Through the PSD2, the European Union has introduced the Strong Customer Authentication (SCA). SCA completes the transactions by including at least two of the three levels of authorisation: something they know, something they own, and something they are. The transactions require a password or a PIN, a mobile number for OTP and additional security in the form of facial recognition or fingerprint.&nbsp;

PSD2, along with increasing transactional security, has resulted in increased healthy competition by opening up payment services to fintech startups and prompted traditional banks to enhance their offerings. As a result, consumers now enjoy a more user-friendly and cost-effective financial experience.

With a broader range of payment services, consumers can <a href="https://www.skydo.com/blog/top-paypal-india-alternatives-for-international-payment">choose a payment service provider</a> with higher customer protection measures and lower transaction fees, further establishing the need for innovation to sustain.

How is PSD2 relevant to Stop Hidden Fees?

PSD2's relevance to stop hidden fees lies in its potential to address opaque pricing practices in international payments. Set to be incorporated into UK law, these regulations prohibit non-transparent pricing methods. Currently, banks and brokers often conceal costs within unfavourable exchange rates, catching customers off guard with undisclosed fees.&nbsp;

PSD2 emphasises the need for consumers to know the 'real costs and charges' associated with cross-border money transfers, echoing the initial Payment Services Directive (PSD). The crucial aspect is whether the government will uphold this commitment, considering past instances of non-compliance. PSD2 presents an opportunity to combat hidden fees and enhance transparency in financial transactions.

Open banking is a broader concept that refers to the practice of banks and other financial institutions opening up access to their customer’s financial data, with their consent, to third-party providers (TPPs) through secure APIs (Application Programming Interfaces). This data sharing allows TPPs to develop new financial products and services.&nbsp;

The concept of open banking started in 2007, with the EU introducing the PSD (Payment Service Providers Directive) to ensure a single payment market in the EU. However, in 2013, the EU proposed an amendment, giving rise to the PSD2. The amended directive introduced the concept of TPPs to give a much-needed push to the opening banking spectrum.&nbsp;

PSD2 serves as the legal framework within the EU that enables open banking practices. It sets the regulatory foundation for secure financial data sharing between banks and third-party providers. Under the PSD2 regulation, the banks are required to provide customers' account information (after their consent) to third-party service providers, allowing customers to:&nbsp;

With PSD2’s push to open banking, the practice allows customers to access a broader spectrum of financial services, including payment initiation, account aggregation and personal financial management. Now, the customer can choose from a host of third-party providers (TPPs) and applications to execute international payments effectively.&nbsp;

Several fintech companies have leveraged the regulatory framework provided by PSD2 to develop efficient and cost-effective <a href="https://www.skydo.com/blog/real-time-tracking-of-international-payments">international payment services.</a> These companies have utilised access to bank APIs and customer account data to create innovative solutions. Some examples include <a href="https://www.skydo.com/blog/top_5_wise_alternatives_for_international_payment">Wise</a>, <a href="https://www.skydo.com/blog/top-paypal-india-alternatives-for-international-payment">PayPal</a>, <a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Skydo</a>, TransferGo etc.&nbsp;

Here is the impact of PSD2 on international payments: 

The main motive behind amending PSD and PSD1 to create PSD2 or even introducing such a directive has always been targeted towards the end consumers making <a href="https://www.skydo.com/blog/cut-international-transaction-costs?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">international transactions</a>. With PSD2 and open banking, they have experienced several benefits in terms of competition, transparency, cost and security.&nbsp;

Global Implications and Future Trends&nbsp;

The introduction of PSD2 by the EU has been a motivating step for global economies as they look to revolutionise their payment industry. Since the EU introduced PSD2, financial experts, policymakers and regulators in other countries are working towards creating a similar framework to promote competition, innovation, and security in financial services. Currently, countries outside the EEA are exploring open banking and how they can leverage it to create a more interconnected global financial ecosystem.&nbsp;

PSD2 has also raised the bar for other countries to ensure better cybersecurity standards and ensure quick processing speed for international payments. Fintech companies that have leveraged PSD2 in EEA are expanding their business to offer other countries better payment solutions with lower transactional fees.&nbsp;

Countries such as Australia, Canada, and Singapore have already introduced or are considering open banking regulations. This chain reaction may continue and expand to countries like India, launching an official directive similar to PSD2.&nbsp;

The increased adaptation of advanced open technologies such as blockchain and digital currencies may play a vital role in the future expansion of PSD2 and open banking. Such technologies, along with international banking partnerships, will play a prominent role in streamlining international payments and cross-border transactions, further transforming the financial landscape.

International payments will only rise in volume as more individuals and businesses establish their global presence. The introduction of PSD2 by the EU and the resulting push to open banking and other customer-protecting measures have positively impacted cross-border transactions and have called for the launching of similar directives in other countries.PSD2’s influence is seen in the proliferation of open banking initiatives, enhanced cybersecurity measures, and improved consumer experiences worldwide. As the financial industry continues to evolve, the principles and trends set in motion by PSD2 will shape the future of banking and payment services on a global scale.

Ans: The PSD2 directive, or Payment Services Directive 2, is a European Union regulation designed to enhance and regulate electronic payment services. It aims to promote innovation, competition, and security in the financial industry by allowing third-party access to banking data through open banking APIs.

Ans: PSD2 in open banking refers to integrating Payment Services Directive 2 into the open banking framework. It mandates banks to provide secure access to customer account information to third-party providers, fostering competition and innovation in the financial sector.

Q3. What is PSD2 regulation and what is the impact?

Ans: PSD2 regulation is a set of rules governing payment services within the European Union. Its impact includes increased security measures, open banking initiatives, and enhanced competition as third-party providers gain access to customer data, fostering innovation in the financial sector.

Q4. What is the difference between open banking and PSD2?

Ans: Open banking is a broader concept, while PSD2 is a specific regulation within the European Union. PSD2 mandates open banking practices, requiring banks to share customer data securely with third-party providers. Open banking, in a global context, encompasses various initiatives that promote similar data-sharing practices for innovation and competition.

Q5. According to the PSD2 mandate, what is the maximum number of days to refund the disputed amount?

Ans: The PSD2 mandate stipulates that in case of a disputed transaction, the maximum number of days for a refund is 15 business days from the day the payment service provider receives the complaint.

Q6. How does PSD2 and open banking affect the financial industry?

Ans: PSD2 and open banking positively impact the financial industry by fostering innovation, competition, and improved security. These regulations encourage the development of new financial services and products, driven by collaboration between traditional banks and third-party providers, ultimately benefiting consumers with more choices and enhanced user experiences.

Ans: PSD2 came into effect on January 13, 2018, within the European Union. However, individual countries may have slightly different timelines for implementing specific aspects of the directive.

Ans: Yes, PSD2 is a regulation specific to the European Union. It aims to standardise and enhance payment services within EU member states.

Ans: PSD2 has a transformative impact on banking by promoting competition, innovation, and security. Banks are required to open up their customer data to third-party providers, fostering the development of new services and ensuring enhanced security measures for electronic payments.

Ans: PSD2 applies to all European Union member states. Therefore, the PSD2 countries include those within the EU, as the regulation is designed to create a standardised framework for electronic payment services across the entire union.

PSD2 and its Impact on International Payments

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Imagine you're trying to grow your export business, and suddenly you're overwhelmed with all these acronyms like EPC, SEPC, and FIEO. Meanwhile, you just want to know: will the RCMC registration certificate help your business, or is it just another compliance headache?

Whether you're exporting software, design services, or physical goods, an RCMC registration certificate unlocks genuine benefits. But it's not mandatory for everyone, and the decision depends on what you're actually trying to achieve.

This guide is actionable, non-technical, and tailored for real use cases. By the end, you’ll know whether you need RCMC registration, which council to choose, and how to avoid costly mistakes during the RCMC registration process. 

RCMC stands for Registration-Cum-Membership Certificate. Think of it as your official membership card to India's export ecosystem.

RCMC is issued by government-authorised bodies that promote exports in specific sectors. The <a href="https://www.dgft.gov.in/CP/">Director General of Foreign Trade (DGFT)</a> has authorised 35 organisations to issue RCMCs, and these fall into three main categories:

<a href="https://www.commerce.gov.in/useful-links/export-promotion-councils/">Export Promotion Councils (EPCs)</a>: These handle most product and service categories. For example, if you're exporting software or IT services, you'd get your RCMC from the <a href="https://www.escindia.in/">Electronics and Computer Software Export Promotion Council (ESC)</a>. It's the <a href="https://www.servicesepc.org/">Services Export Promotion Council (SEPC) </a>if you're in services like consulting or design.

Commodity Boards: These focus on traditional exports like spices, tea, and coffee. So if you're exporting cardamom or Darjeeling tea, you'd go to the respective commodity board.

Development Authorities: These handle specialised sectors like <a href="https://apeda.gov.in/">APEDA</a> for agricultural products or <a href="https://mpeda.gov.in/">MPEDA</a> for seafood exports.

The government has divided India's export ecosystem into 35 specialised departments, each responsible for promoting and regulating exports in its area. Your RCMC comes from whichever department covers what you export.

If an exporter deals in multiple products across various EPCs, FIEO can issue the RCMC. <a href="https://fieo.org/">FIEO (Federation of Indian Export Organisations) </a>can issue the RCMC. Think of FIEO as the "miscellaneous" category; it's designed for exporters who don't fit into the standard 35 specialised councils.

The RCMC is valid from the issuance date on the 1st of April of the licensing year and is valid for five years, concluding on the 31st of March. So you're not dealing with annual renewals; once you get it, you're set for five years.

For example, if you apply for RCMC in December 2024, your certificate will be valid from April 1, 2024, to March 31, 2029. Even though you applied in December, the validity starts at the beginning of that financial year (April 1st) and runs for a full five-year cycle.

If you apply late in a financial year (say, in February), you'll get a shorter first year but then a whole five-year period. It's tied to India's financial year calendar, not your application date.

RCMC is mandatory for some export schemes and benefits, but optional for others. You can technically export without it, but you'll miss out on government incentives, duty benefits, and access to trade promotion activities that could grow your business.

The short answer is: it depends on your goal.&nbsp;

You want to claim benefits under export promotion schemes

This is where RCMC becomes non-negotiable. Certain schemes require compulsory RCMC registration. 

For example, participating and claiming reimbursement under&nbsp;<a href="https://www.commerce.gov.in/international-trade/trade-promotion-programmes-and-schemes/trade-promotion-programme-focus-cis/market-access-initiative-mai-scheme/">Market Access Initiative (MAI)</a>&nbsp;requires RCMC.&nbsp;&nbsp;

Further, if you're using schemes like <a href="https://www.dgft.gov.in/CP/?opt=adnavce-authorisation">Advance Authorisation</a> (where you import raw materials duty-free for exports) or <a href="https://www.dgft.gov.in/CP/?opt=epcg">EPCG (Export Promotion Capital Goods)</a>, RCMC is mandatory.

You deal in products/services that fall under a specific Export Promotion Council

RCMC is compulsory for certain products. For example, Exporters of handicrafts and handloom products may need RCMC from the Handloom Export Promotion Council or the relevant authority in Jammu &amp; Kashmir.

Similarly, exporters of tea need RCMC from the Tea Board of India, and exporters of spices require an RCMC from the Spices Board of India. 

You want to participate in DGFT/Ministry-sponsored trade fairs, delegations, and buyer-seller meets

To qualify for MAI Scheme benefits like participating in shows abroad, exchange fairs, and business delegations, an exporter must hold an RCMC for at least one year.&nbsp;

You're exporting services under no specific scheme and aren't availing benefits

Suppose you're a freelance designer working with international clients through platforms like Upwork or a small software consultancy doing project work, and you're not claiming any government incentives. In that case, you can technically operate without RCMC. RCMC is not required for exporters who are not claiming any benefit under FTP and are voluntarily not seeking EPC/Board support.

You're just starting with occasional freelance projects

&nbsp;If you're testing the waters with small-scale service exports and haven't decided whether you want to scale this into a serious business, you should wait. But here's the thing, even freelancers often hit the limits of what they can do without RCMC faster than expected.

For schemes like RoDTEP, Duty Drawback, etc.&nbsp;

Last year, the DGFT clarified that <a href="https://economictimes.indiatimes.com/news/economy/foreign-trade/registration-cum-membership-certificate-not-mandatory-for-exporters-to-seek-scheme-benefits-dgft/articleshow/114054223.cms?from=mdr">RCMC registration is not required </a>to claim benefits under schemes like RoDTEP, Duty Drawback,&nbsp;RoSCTL

Which Export Promotion Council Should You Register With?

Once you've decided you need RCMC, the next crucial step is choosing the right Export Promotion Council, because your RCMC comes from them, not directly from the Indian government. Get this wrong, and you'll either face delays or end up with the wrong benefits entirely.

Many exporters struggle with this: staring at a list of 26 Export Promotion Councils and 9 Commodity Boards, wondering where they fit in. However, it's actually simpler than it looks once you understand the basic rule: choose based on what you export, not your company type.

For Service Exporters: If you're exporting services like consulting, design, marketing, or digital services, SEPC is your go-to. If you're developing software products (not just providing development services), you might fall under ESC instead.&nbsp;

For Product Exporters: If you're exporting physical goods, match your primary product to the relevant council. The councils are pretty specific, carpets go to CEPC, textiles go to AEPC, and engineering goods go to EEPC India.

The FIEO Option: FIEO (Federation of Indian Export Organisations) is the wise choice for many exporters. You need FIEO when:

Multi-product exporters often assume they need multiple RCMCs from different councils. Not necessarily true. You can get separate RCMCs from each relevant EPC or a consolidated RCMC from FIEO. The Government recognises FIEO as an Export Promotion Council specifically for this purposethey handle the "miscellaneous" category and multi-product scenarios.

Even if you pick the "right" council initially, you're not locked in forever. Your business evolves, your export focus changes, and you can always register with additional councils or <a href="https://www.skydo.com/blog/how-to-find-buyers-for-service-export-from-india">switch to FIEO</a> if that makes more sense.

Access to government subsidies under MAI and other schemes

Market Access Initiative (MAI) covers airfare, stall costs, and registration fees for international exhibitions. We're talking about reimbursements that can run into lakhs for a single trade fair. SEPC members get subsidised participation in international exhibitions and buyer-seller meets, where actual business happens.

Participation in international trade events at subsidised rates

<a href="https://www.epch.in/">EPCH</a> organises the Indian Handicrafts &amp; Gifts Fair with thousands of international buyers. Without RCMC, you're paying full price (if you can even get in). With it, you get subsidised stalls and priority access.

Getting an RCMC from export promotion councils like ESC or SEPC isn’t just a formality—it gets you listed in official directories that international buyers actually refer to. 

ESC’s 2000+ members from the Electronics and Computer Software/ITeS industry are part of searchable export databases. SEPC goes a step further by facilitating global market access through collaborations with Indian Embassies.
No RCMC, no listing. No listing, no visibility,&nbsp;

Easier to apply for export incentive schemes, trade finance, and certifications

RCMC is often a prerequisite for bigger benefits. Want to apply for the Interest Equalisation Scheme? You'll need RCMC. Looking at Export Promotion Capital Goods (EPCG) benefits? RCMC required. It's your gateway document.

EPCs don't just give you a certificate and disappear. They actively work on your behalf, lobbying for policy changes, organising events, providing market intelligence, and connecting you with buyers. SEPC members are eligible for visa facilitation for their international business visits, which can cut weeks off your travel planning.

Step-by-Step: How to Apply for RCMC in 2025

Since 2022, almost everything has happened through the <a href="https://www.dgft.gov.in/CP/">DGFT's common digital platform</a>, which means no more running between offices with a physical application form.

Step 1: Get an IEC code from DGFT website (mandatory)

You can't even start without this. <a href="https://www.skydo.com/blog/iec-code-apply-online">IEC (Import Export Code)</a> is your basic export license, a prerequisite for RCMC. If you don't have one, apply through the DGFT portal first.

Step 2: Identify the correct EPC for your sector

Use the table from the previous section. When in doubt, FIEO works for most multi-product or unclear scenarios. Remember: it's based on what you export, not your company structure.

Step 3: Prepare required documents

💡Pro tip: Most rejections happen because of incomplete documentation. Get your CA to certify your export data upfront, even if it's zero.