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Import Export Code (IEC): What You Need to Know

Import Export Code (IEC): What You Need to Know
rohit
Rohit10 February 2024

A successful import/export business ensures global expansion, which can result in good earnings. However, every importer or exporter must register for an IEC to execute import/export activities. 

If you want to start an import/export business, this blog will help you learn everything you need to know about the IEC.  

What is the IEC? 

The Import Export Code, also known as the IEC, is a mandatory licence for importers and exporters to carry out import and export activities in India. The IEC Code is a 10-digit code issued by the DGFT (Director General of Foreign Trade) to ensure seamless import-export activities. The IEC Code has lifetime validity post-issuance, and importers and exporters must renew the licence annually. The 10-digit code remains the same throughout the business cycle.

What is the IEC?

Why do you need an IEC?

The DGFT introduced the DGFT IEC Code to ensure import-exporters can avail various advantages. Here are some of the most common import/export activities where importers/exporters require the IEC registration.

Why do you need an IEC?
  • Effective Compliance: The IEC code ensures compliance with various regulations related to international trade. It adheres to legal requirements and regulations governing import/export activities, avoiding any potential legal issues or penalties.
  • Easy Processing: An IEC code registration simplifies documentation by serving as a common identifier for customs clearance, shipping, banking, etc.
  • Expansion: The DGFT IEC code ensures that importers/exporters can carry out activities globally without any limitations. 
  • Availing Incentives: Importers and exporters need an IEC certificate to avail of benefits and incentives offered by the Director General of Foreign Trade (DGFT). These incentives include participation in import-export promotion schemes and access to certain subsidies.
  • Customs Clearance: Customs authorities mandate the submission of import-export certificates for clearing imported or exported goods. 
  • Bank Transactions: Banks require the IEC code when an exporter receives funds in foreign currency into the bank account in exchange for the exports. When an importer sends money abroad or an exporter receives foreign currency, banks require the IEC for documentation purposes.
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