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Import & Export Compliance in India

Comprehensive Website Guide — 2026 Edition

Foreign Trade Policy 2023–28 Customs Act 1962 FEMA 1999 GST on Trade

🌐 India's Foreign Trade Framework — Overview

India's import and export compliance landscape is governed by the Foreign Trade Policy 2023–2028 (FTP 2023), with a national vision to grow total exports to USD 2 trillion by 2030. The framework covers goods, services, and digital trade, built on five pillars: ease of doing business, export promotion, import regulation, dispute prevention, and WTO compliance.

Governing Legislation:

▸ Foreign Trade (Development & Regulation) Act, 1992
▸ Customs Act, 1962 & Customs Tariff Act, 1975
▸ Foreign Exchange Management Act (FEMA), 1999
▸ Integrated Goods and Services Tax (IGST) Act, 2017
▸ Foreign Trade Policy 2023–2028 (effective 1 April 2023)
01

Regulatory Authorities & Their Roles

Authority Full Name Key Responsibilities
DGFT Directorate General of Foreign Trade FTP administration, IEC issuance, export/import authorizations, duty exemption schemes, SCOMET licensing
CBIC Central Board of Indirect Taxes & Customs Customs duty levy & collection, ICEGATE operations, border enforcement, anti-dumping duties
RBI / FEMA Reserve Bank of India Foreign exchange regulation, export proceeds realization (9-month rule), FIRC issuance, AD Bank oversight
FSSAI Food Safety & Standards Authority Food import clearance via FICS — integrated with ICEGATE Single Window
CDSCO Central Drugs Standards Control Org. Import/export NOC for pharmaceuticals, medical devices, biologicals, and cosmetics
BIS Bureau of Indian Standards Mandatory quality certification (BIS CRS / ISI Mark) for specified import categories
ECGC Export Credit Guarantee Corporation Export credit insurance — protection against buyer payment default and political risk
EXIM Bank Export-Import Bank of India Concessional export credit, buyer's credit, overseas investment finance for projects
02

Import Export Code (IEC): Your Trade Identity

The Import Export Code (IEC) is a mandatory 10-digit identification number issued by DGFT. Without a valid IEC, customs will not clear goods and banks will not process foreign exchange transactions. It is the primary compliance gate for all cross-border trade.

2.1 Who Needs an IEC?

  • • All entities engaged in commercial import or export of goods
  • • Service exporters receiving foreign exchange remittances
  • • E-commerce exporters shipping via courier or postal channels
  • • Businesses applying for EPCG, RoDTEP, or Advance Authorization benefits
  • • Deemed exporters supplying to EOUs, SEZ units, or govt projects

IEC Exemptions — NOT required for:

  • • Personal imports not connected with trade / manufacture (gifts up to ₹5 lakh via courier/post)
  • • Central / State Government Ministries and Departments
  • • Charitable organizations importing for notified humanitarian relief

2.2 IEC Registration — Step-by-Step

Step Action Notes
1Register on DGFT 2.0 Portal using PAN-linked email and Aadhaar / DSCPAN mandatory
2Fill IEC application (ANF 2A) — auto-linked to PAN and GST detailsDGFT 2.0 portal
3Upload KYC: GST certificate, PAN card, address proof, cancelled chequeScanned copies
4Pay application fee of ₹500 via net banking / UPI / credit cardOnline payment
5IEC issued instantly (most cases) as e-certificateLifetime validity
6Annual IEC update mandatory every April–JuneNon-negotiable

2.3 Post-IEC Ongoing Compliance

  • • Register AD (Authorised Dealer) Code at all ports through bank
  • • Register on ICEGATE for electronic filing of Bills and Shipping Bills
  • • File GSTR-1 for exports and claim ITC refund on IGST paid on imports
  • • Realize export proceeds within 9 months of shipment date (FEMA)
  • • Obtain FIRC from AD Bank for all export receipts
  • • Maintain all trade documents for minimum 5 years for audit
    • 03

    Import Compliance Framework

    All importable goods are classified under 8-digit ITC (HS) codes. The HS code determines duty rates, import policy status, licensing requirements, and applicable regulatory clearances. Correct classification is the single most critical import compliance step.

    3.1 Import Policy Categories

    Category Meaning Examples
    FREEImportable without any license or prior permissionCapital goods, raw materials, consumer goods
    RESTRICTEDRequires DGFT license / import authorizationGold/silver jewelry, chemicals, dual-use items
    CANALIZEDImport only through designated govt agenciesPetroleum products, fertilizers, certain grains
    PROHIBITEDCompletely banned from import into IndiaWildlife products, narcotics, hazardous chemicals

    📅 2026 Regulatory Alert — Studded Jewelry Import Restriction

    DGFT circular dated 16 March 2026 shifted specific studded gold & silver jewelry (ITC HS: 71131144 and 71131145) from 'Free' to 'Restricted' status until 30 June 2026. Importers must obtain DGFT authorization before clearance. Timeline: 15–30 working days.

    3.2 Customs Duty Structure on Imports

    Basic Customs Duty (BCD)

    Primary tariff at 8-digit HS level. Applies to all imports.

    IGST on Imports

    GST equivalent; fully recoverable as Input Tax Credit (ITC).

    Social Welfare Surcharge (SWS)

    10% levied on the BCD amount. Applies to most imports.

    Anti-Dumping Duty (ADD)

    Counters below-cost imports from specific countries.

    Safeguard / CVD

    Protects domestic industry from surges or foreign subsidies.

    Compensation Cess

    On luxury/demerit goods like automobiles and tobacco.

    3.3 Mandatory Import Documents

    • • Bill of Entry (BE) — Electronic filing on ICEGATE
    • • Commercial Invoice & Packing List
    • • Bill of Lading / Airway Bill / Lorry Receipt
    • • Bank payment proof / Wire transfer confirmation
    • • Certificate of Origin (CAROTAR 2020 compliance)
    • • Import License / DGFT Authorization (for Restricted)
    • • FSSAI / CDSCO / BIS / Phytosanitary certificates

    3.4 Risk-Based Assessment Channels

    GREEN

    Auto-clearance

    Same day / few hours

    YELLOW

    Document Scrutiny Only

    1–2 working days

    RED

    Physical Examination

    2–5 working days

    BLUE

    Post-clearance Audit

    Clearance same day

    04

    Export Compliance Framework

    Exporters must comply with documentation, quality certification, licensing, and FEMA-mandated foreign exchange realization requirements. The DGFT 2.0 portal provides a fully integrated digital interface for all export authorizations, scheme claims, and certificate management.

    4.1 Mandatory Export Documents

    • • Shipping Bill — Primary declaration filed on ICEGATE
    • • Commercial Invoice — FOB value, HS code, and origin
    • • Packing List — Item-wise weight and dimensions
    • • Bill of Lading / AWB — Proof of actual shipment
    • • Certificate of Origin — Issued by DGFT or EPCs
    • • Export License — For SCOMET or restricted items
    • • Quality / Health Certificate — For regulated goods
    • • Bank Realization Certificate (e-BRC) — Proof of forex receipt

    4.2 Export Clearance Procedure

    STEP 1

    File Shipping Bill on ICEGATE

    Requires IEC + GST registration

    STEP 2

    Issue Let Export Order (LEO)

    Post Customs examination at port/ICD

    STEP 3

    E-Seal & Loading

    Goods loaded after LEO; obtain B/L or AWB

    STEP 5

    Forex Realization

    Receive proceeds in 9 months; obtain e-BRC

    4.3 Quality & Product Certification for Exports

    BIS Certification

    Mandatory for items under Quality Control Orders

    CE Marking

    Required for European Union markets

    US FDA Registration

    For food, drug, and medical devices to USA

    Phytosanitary / Health

    For agricultural and animal product exports

    NABL Test Reports

    Preferred global quality benchmark

    ISO Standards

    Recognized quality (9001/22000) certifications

    05

    Export Promotion Schemes (FTP 2023–28)

    India's FTP 2023–2028 provides WTO-compliant export promotion schemes to reduce input costs and boost competitiveness. Exporters must declare scheme intent on the Shipping Bill at the time of export.

    Scheme What It Provides Key Condition
    RoDTEP Refunds embedded taxes (electricity, fuel, stamp duty) as e-scrips WTO-compliant; auto-posted to ICEGATE
    RoSCTL Rebate of state and central taxes for textile & apparel Sector-specific; extended through March 2026
    EPCG Scheme Import capital goods at ZERO customs duty and IGST Export Obligation = 6x CIF value over 6 years
    Advance Authorization Duty-free import of raw materials for export production AA valid 12 months; based on SION norms
    MOOWR Scheme Duty deferred in bonded facility; waived if goods exported Ideal for manufacturing-for-export businesses
    Star Export House 1-Star to 5-Star status grants self-certification & faster clearance Based on FOB export value milestones

    📅 2026 Relief — EPCG & Advance Authorization EO Extension

    DGFT Public Notice No. 51/2025-26 (6 March 2026): Export Obligation (EO) deadlines automatically extended to 31 August 2026 for authorizations originally expiring between 1 March and 31 May 2026, due to geopolitical shipping disruptions.

    06

    GST & FEMA Compliance

    6.1 & 6.2 GST on International Trade

    • • Imports: IGST paid is fully recoverable as Input Tax Credit (ITC)
    • • Exports: Zero-Rated Supplies under Section 16 of IGST Act
    • • LUT: Export without IGST payment via Letter of Undertaking (Form RFD-11)
    • • Refunds: Provisional 90% refund within 7 days of application

    6.3 FEMA Compliance for Trade

    Export Proceeds Realization Within 9 Months
    Permitted Instruments LC, Wire Transfer, RBI-approved
    e-BRC Mandatory for scheme benefit closure
    Non-Realization Penalty Up to 3x Forex Amount
    07

    Free Trade Agreements & Preferential Duties

    Agreement Partner / Region Key Benefit
    India–UAE CEPAUnited Arab EmiratesZero duty on 97% of tariff lines
    India–Australia ECTAAustraliaZero / reduced duty on many goods
    ASEAN–India FTA10 ASEAN NationsConcessional duty on goods and services
    India–UK FTAUnder Negotiation (2026)Targeting IT, pharma, and textiles
    🛡️

    CAROTAR 2020 — Rules of Origin Compliance

    To claim preferential FTA duty rates, importers must comply with CAROTAR 2020. This requires importers to exercise 'reasonable care' in verifying origin claims, maintain documentation, and submit a self-declaration at the time of import. Non-compliance results in denial of the preferential rate and recovery of duty difference with interest.

    08

    Special Economic Zones, EOUs & Bonded Manufacturing

    Zone / Scheme Key Features Trade Compliance Benefit
    SEZ (Special Economic Zone) Treated as foreign territory for customs; duty-free import for authorized operations. Full customs duty exemption on imports; GST-free domestic procurement.
    EOU (Export Oriented Unit) 100% export commitment; duty-free import of capital goods and raw materials. No customs duty / IGST on imports; up to 50% DTA sale allowed on duty payment.
    MOOWR (Bonded Manufacturing) Raw material and capital goods duty deferred in bonded warehouse. Duty waived on inputs used for exports; excellent cash-flow tool.
    Project Imports Scheme Equipment for eligible projects assessed under a single unified tariff rate. Simplifies multi-equipment clearances for large infrastructure projects.
    09

    Import-Export Compliance Calendar 2026

    APRIL–JUNE 2026

    Annual IEC Update

    Mandatory for all IEC holders; failure results in auto-deactivation on DGFT Portal.

    BY 31 AUGUST 2026

    Export Obligation Deadline

    Fulfill EO under EPCG / Advance Authorization for authorizations expiring Mar–May 2026.

    MONTHLY (BY 11TH & 20TH)

    GST Filings (GSTR-1 & 3B)

    Declare export turnover and claim ITC on import IGST via GSTN Portal.

    WITHIN 9 MONTHS

    Forex Realization

    Realize export proceeds and file e-BRC with AD Bank/DGFT.

    ANNUALLY (BY 31 MARCH)

    LUT Renewal

    Renew Letter of Undertaking for zero-rated exports on GSTN Portal.

    ONGOING

    Document Maintenance

    Maintain all trade records for minimum 5 years per statutory law.

    10

    Penalties & Consequences of Non-Compliance

    Non-compliance can result in financial penalties, seizure of goods, suspension of IEC, and in serious cases, criminal prosecution. Businesses must maintain rigorous documentation.

    Violation Penalty / Consequence Governing Law
    Import/Export without IECSeizure of goods; penalty up to 5x valueCustoms Act, 1962
    HS Code Mis-declarationConfiscation; 5x duty penalty; possible prosecutionCustoms Act Sec. 111/112
    Export Obligation DefaultRecovery of duty saved + 15% compound interestDGFT / FTP Policy
    Forex Non-realizationPenalty up to 3x forex amount; IEC suspensionFEMA 1999
    No Annual IEC UpdateAuto-deactivation of IEC; trade activity ceasesDGFT Policy

    How Assure Corporate Compliance & Tax Consulting Can Help

    Your End-to-End Import & Export Compliance Partner

    ✔ IEC Registration, Annual Update & Modification
    ✔ DGFT Schemes — EPCG, Advance Auth, RoDTEP, DFIA
    ✔ HS Code Classification & Customs Dispute Resolution
    ✔ Import Duty Optimization & FTA Benefit Planning
    ✔ Export Obligation Monitoring & Extension Filing
    ✔ GST Refund on Exports — LUT Filing & ITC Claims
    ✔ FEMA Compliance — e-BRC & FIRC Management
    ✔ SEZ / EOU / MOOWR Setup & Compliance
    ✔ Import Restriction Advisory — BIS, FSSAI, CDSCO
    ✔ Trade Policy Alerts & Regulatory Training
    Contact us today for a complimentary trade compliance consultation.

    Ready to get your compliance in order?

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