EXPORTS

Directorate General of Foreign Trade (DGFT)

Since its establishment, the Directorate General of Foreign Trade (DGFT) has been responsible for formulation and execution of the import and export policies in India. It works closely with the government and traders to enable smooth international trade.

What is DGFT?

DGFT is the licensing authority for exporters, importers and export and import businesses in India. It is an official body set up for the formulation and implementation of Foreign Trade Policy. With a motive to increase the nation’s economic growth, DGFT implements various policies and regulations, grants export licenses to exporters, introduces new and innovative trade incentives and develops good trade relations with other countries.

Roles & responsibilities of DGFT

DGFT has been set up for the execution of import and export policies in India. In addition to that, below are a few roles of DGFT:
implementation of Foreign Trade Policy

Formulation and implementation of Foreign Trade Policy

One of the key functions of DGFT is to plan and announce foreign trade procedures for exporters. Simple and user-friendly procedures are created to help exporters execute foreign trade seamlessly in the country.
IEC code

Issuance of IEC to importers and exporters

IEC, which stands for Import Export Code, is a 10-digit business identification number allotted to an importer or exporter by DGFT. It is only issued based on the Permanent Account Number (PAN) of a business.
HS code

Maintain the classification ITC-HS codes

In order to improve the foreign trade policy, DGFT maintains ITC HS code (the Internationally Harmonized System of Coding). This code helps businesses and entrepreneurs to select the respective product categories that they want to sell in foreign countries.
Export licenses

Export licenses to restricted items

There are some products that are restricted from being exported from India. To export goods under this category, an exporter must have an export license or permission from DGFT.

Products that require DGFT license

• Handmade woollen carpets and floor coverings
• Handicraft items
• Dairy produce, honey, edible products of animal origin
• Edible fruits and nuts and peels of fruits
• Cereals
• Oil seeds and fruits, straw and fodder
• Sugar and sugar confectionaries
• Preparation of fruits, vegetables and nuts
• Organic chemicals
• Pharmaceutical products
• Fertilizers
• Tea, coffee and spices
• Essential oils, perfumes, cosmetics and toiletry preparations
• Wood, wood pulp and wooden products
• Silk and its derivates
• Cotton, jute, and their derivates
• Musical instruments and musical accessories

Get support to obtain export documents & licenses

Whether it is registration, shipping or tax, different licences are required depending on the product category being exported, destination country and origin country – India.
Exports Compliance Dashboard

Licenses & certifications by DGFT

To make exports easier, DGFT has initiated paperless transactions for various documents. Some of the common licenses and certifications issued by DGFT are:

IEC

IEC must be obtained by all exporters and importers in India. A 10-digit code – it is valid for the entire lifetime of a business.
DGFT license

DGFT license

The DGFT license has a validity of 24 months for capital goods and 18 months for raw material components.
e-brc

e-BRC

Using the e-BRC platform, banks can electronically transmit foreign exchange realization from banks to the DGFT server.

Certificate of Origin

Certificate of Origin (COO) is an export document, which certifies that the products being exported have been manufactured and processed in that particular country.
EPCG license

EPCG license

The Export Promotion Capital Goods (EPCG) scheme allows the import of capital goods for pre-production, production and post-production at zero percent customs duty subject to an export obligation.

Launch of MSME Global Mart

To facilitate the growth of MSMEs (Micro, Small, and Medium Enterprises), the Government of India launched the MSME Global Mart — a B2B portal. This is a one-stop solution which provides marketing support to MSMEs and caters to their needs. It also provides value-added services and relevant information to support MSMEs that can enable them to compete better in the global market.
MSME Global Mart

Schemes by DGFT to promote exports

DGFT has introduced various schemes to boost India's exports with the objective of improving the infrastructural inefficiencies and bringing a change in the trading policies. Some of these schemes are:

MEIS

The Merchandise Exports from India Scheme (MEIS) scheme aims to provide rewards to exporters to offset infrastructural inefficiencies and associated costs of exporting goods from India.

RoSCTL scheme

The Rebate of State & Central Taxes and Levies (RoSCTL) scheme acts as a rebate for embedded state and central taxes on garments. It is an export incentive where credit scrips are used for payment of customs duties.

SEIS

The Service Export from India scheme was launched to encourage export of notified services from India. Under this scheme, an incentive of 3% to 7% of net foreign exchange earnings is provided to exporters of notified services.

RoDTEP scheme

To provide Indian exporters with incentives and benefits on taxes, the government launched the RoDTEP scheme. Under this scheme, exporters can avail a refund at the central, state, and local levels of duties and taxes paid during exports.

Advance Authorization scheme

The Advance Authorization scheme is a duty exemption program under which manufacturers can import raw materials duty-free to produce export products. DGFT has a limit on the number of inputs that are allowed for any given product.

Duty-free Import Authorization

Under this scheme, duty-free imports of inputs, fuel, energy sources and oil that are required for manufacturing export products are allowed. DFIA is issued on only particular products for which Standard Input Output Norms (SION) has been fixed.

Deemed Exports scheme

Deemed exports are goods manufactured in India and transported locally. In order to empower India’s domestic industry, The Deemed Exports scheme provides various rebates including duty-free inputs and exemptions on taxes or duties paid in India.

NIRVIK scheme

Niryat Rin Vikas Yojana (NIRVIK) scheme, launched under Export Credit Guarantee Corporation of India (ECGC), offers insurance coverage up to 90% of the total principal and interest. This scheme aims to assist small exporters by providing them with credit availability and lower policy premium.

GST refund for exporters

Under GST, exports are treated as zero-rated supply, which gives exporters eligibility to claim a refund of the GST paid on input (goods or raw material purchased to be utilized in the manufacturing of the final product, i.e. the output).

EOU scheme

The Export Oriented Units scheme aims to increase exports from India and foreign exchange. Under this scheme, exporters can even procure raw materials and capital goods through domestic sources or import without paying any duty on the purchase.
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Frequently Asked Questions

What is the full form of DGFT?
DGFT stands for Directorate General of Foreign Trade. It is responsible for exports and imports within or outside India. The headquarters is in New Delhi and has zonal offices in four places, namely Delhi, Mumbai, Kolkata and Chennai. The main duty of DGFT is to implement various policies and guidelines in order to promote the nation's exports.
What does DGFT grant to Indian exporters?
DGFT grants a 10-digit Importer Exporter Code to Indian exporters - a unique identification number that is required by every trader or manufacturer involved in international trade in India. Apart from that, DGFT also provides various schemes and benefits to Indian exporters.
What is an EPCG license of DGFT?
The Export Promotion Capital Goods (EPCG) scheme enables exporters to import capital goods that can be used to produce high-quality final products to be exported from India. Through the EPCG scheme, exporters can export goods like spare parts for pre-production, production and post-production at zero customs duty.
What is a DGFT certificate?
Every Export-Import (EXIM) organization and business must have a Digital Signature Certificate for transactions related to the DGFT website like IEC and other benefits. The DGFT website recognizes the registered DSCs, thus making all the documents signed using a DSC similar to that of the physically signed papers.
What is the difference between DGFT and Customs?
DGFT is a part of the Ministry of Commerce and Industry, whereas Customs is a part of the Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance. The customs department monitors entire import and export services and related taxes and duties.
What is the difference between the DGFT and the APEDA function?
DGFT plays an important role in Foreign Trade Policy. The Agricultural & Processed Food Products Export Development Authority (APEDA) is responsible for developing and promoting export of scheduled products. While DGFT works for overall import and export, APEDA provides financial assistance, information and guidelines for the development of scheduled products.
What purpose does the Directorate General of Foreign Trade (DGFT) serve?
DGFT helps exporters to develop trading relations with various nations. It is responsible to promote exports, thus improving the economic growth of the country. One of its key functions is to implement various trade policies.
Is a DGFT license compulsory for exports?
Yes. exporters intending to sell these goods need to obtain an export license from DGFT, which is known as the DGFT license. Under the EXIM Policy 2007 of India, a few restrictions have been imposed on the export of certain categories of products.
Why is the DGFT certificate required?
In order to start an export business, you need to meet a few requirements like the DGFT certificate. An exporter needs a DGFT certificate to run a seamless export business in India. Make sure you have the required documents needed in this process.
Sources:
1. https://www.dgft.gov.in/CP/
2. https://content.dgft.gov.in/Website/FTP%20Chapter%201%20as%20on%20June%2030%202019.pdf
3. https://cdn.s3waas.gov.in/s3555d6702c950ecb729a966504af0a635/uploads/2020/12/2020120965.pdf
4. https://content.dgft.gov.in/Website/DGFT%20-%20IEC%20Module%20User%20Help%20File.pdf
5. https://web.umang.gov.in/landing/department/msme-global-mart.html
6. https://www.eepcindia.org/MEIS/about-MEIS-scheme.aspx
7. https://content.dgft.gov.in/Website/dgftprod/64c14faa-53ac-4387-bcf3-d355fee40bc8/Schedule%202%20-%20Export%20Policy%20New.pdf
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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.

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