What is an export license?
Within the list of products that can be exported, the Government of India categorizes them into: a) Freely exportable, b) Restricted and c) Prohibited. The Indian Trade Clarification (ITC), which is based on the Harmonized System of Nomenclature (HSN) of coding, classifies export goods in India.
While prohibited goods cannot be exported, an export license is given to goods in restricted category, allowing Indian exporters to sell these products internationally. Once you have decided to export, you can check which category your products fall under and, accordingly, obtain a license if required. This license is issued after a careful review of facts provided in the export transaction1.
What is the purpose of an export license?
An export license permits an exporter to export goods across the world. If a product falls under the restricted category of ITC (Indian Trade Classification), then an exporter requires an export license. Schedule II of the ITC-HS code provides terms and regulations related to export policies. The Directorate General of Foreign Trade (DGFT) issues export licenses in India.
Documents required to obtain an export license
Below are some of the key documents required to obtain an export license:
• Profile of exporter and importer in ANF -1 form
• Application form for export license of restricted items in ANF-2N form
• Copy of purchase orders or import orders from the importer or a contract agreement between the exporter and importer
• Application fee receipt
• PAN card
• Identity and address proof
• Bank certificate
How to apply for an export license?
Here’s the step-by-step process to apply for an export license from DGFT2:
• Open the DGFT website and go to the Online ECOM Application section under services.
• Select ‘Restricted Item Import License or Restricted Export Item’.
• Fill the application online and add all the required details.
• Mail a copy of the application to firstname.lastname@example.org in a PDF format and attach mandatory documents.
The application is processed by the export cell. Post a screening, the exporter receives a deficiency letter in three working days. After submitting required documents or information, the EXIM facilitation committee (EFC) reviews the application and sends an authorization letter to the exporter. The exporter must then approach the jurisdictional regional authority (RA) of the DGFT with a copy of the permission letter, application, and the supporting documents. The RA then issues the export license.
Types of export licenses
Following are a few types of export licenses issued3:
Individual dual-use licenses
Dual use export licenses are required in situations that involve national security, foreign policy, short-supply, nuclear non-proliferation, missile technology, chemical and biological weapons, regional stability, crime control, etc. The license requirements depend on technical characteristics of the product, its destination, the end-use, and the end-user, among others.
Open General Export License (OGEL)
The Ministry of Defence launched OGEL for defense exports of specific components to selective countries. The application processing and grant of OEGL is taken care of by the Department of Defence Production and the process will vary for each case.
Brokering activities licenses
Brokering activities are defined as activities of persons and businesses negotiating or arranging transactions that may involve the transfer of military goods, including software, or technology.
What goods require an export license?
Some of the products that require an export license are3:
• Frozen silver pomfrets
• Cashew seeds and plants
• Seeds of all forestry species
• Rice bran
• Vintage Motorcycles, parts and components
• Artworks, antiques and culturally significant goods
Exporters are required to understand which department or agency has jurisdiction over a specific export item and obtain an export license accordingly, if their exporting goods fall under ‘restricted’ category. The Foreign Trade Policy (FTP) considers all goods as freely exportable except those that are restricted or prohibited and for those goods, the exporter needs the export license for exporting or importing.
Once you have obtained an export license and other export documents required depending on your product category and destination country, you can export from India without any hassles online via e-commerce.
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Published on June 30, 2022.