Shaping India's trade destiny, the DGFT crafts & enacts import/export policies, working hand-in-hand with government & traders.

What is DGFT?

Ever wondered who orchestrates the flow of goods into and out of India? Look no further than the Directorate General of Foreign Trade (DGFT). This key government body acts as the licensing authority for all import and export activities, playing a crucial role in boosting the nation's economic engine.

Imagine them as the architects of India's foreign trade policy, crafting regulations and implementing strategies to foster growth. They're busy equipping exporters with licenses, introducing innovative trade incentives, and even building bridges with other countries to create a smooth trading environment. So, whether you're a seasoned importer or an aspiring exporter, the DGFT plays a vital role in your journey.

Roles and responsibilities of DGFT

Directorate General of Foreign Trade (DGFT) sets the stage for import and export in India through the Foreign Trade Policy, but they do so much more! Here's a peek into their key roles:

Simplifying Exports with Smart Policy

At the heart of DGFT's mission lies the creation of user-friendly foreign trade policies specifically designed for exporters. They act as the map that guides your export journey, outlining clear procedures and making international trade in India a breeze. No more deciphering complex regulations – the DGFT ensures a smooth and stress-free exporting experience.

Your Exporting Gateway with the IEC Key

Think of the IEC (Importer Exporter Code) as your unique passport to the world of Indian trade. This 10-digit code, issued by the DGFT, acts as your business identification number for both importing and exporting activities. And just like a passport needs verification, the DGFT only grants an IEC after confirming your business details through your PAN (Permanent Account Number). So, before embarking on your trade journey, remember to secure your IEC – the essential key that unlocks international opportunities!

Decoding Exports with DGFT's ITC-HS Codes

The ITC-HS code, short for Internationally Harmonized System of Coding. This code essentially acts as a global product dictionary, helping you easily categorize your offerings for foreign markets. Whether you're a seasoned exporter or a budding entrepreneur, this system ensures clarity and simplifies the process of showcasing your products internationally.

Exporting licenses to restricted items

Not all products are created equal when it comes to exporting from India. Some require an extra level of care and attention, categorized as restricted items. To ensure responsible and controlled trade, the DGFT requires exporters to obtain a special export license or official permission before sending these specific goods overseas. Think of it as a safeguard to ensure smooth international trade while protecting certain products or materials.

Products that need DGFT license

• Handmade textiles: Showcasing India's craftsmanship, woollen carpets and floor coverings, alongside handicraft items, require permission
• Foodie delights: Dairy produce, honey, and animal-based edibles need a green light, as do fruits, nuts, and even their peels. Cereals, oilseeds, and fodder join the list for responsible export.
• Culinary creations: From sugar and confections to fruit and vegetable preparations, ensure you have the license to tantalize foreign taste buds.
• Scientific essentials: Organic chemicals, pharmaceuticals, and fertilizers require specific permissions.
• Global favorites: Tea, coffee, spices, essential oils, perfumes, and even cosmetics need to comply with regulation
• Wood and its products: Ensure responsible sourcing with a DGFT license for wood, wood pulp, and wooden items.
• Natural fibers: From silk and its derivatives to cotton and jute products, understand licensing requirements for these popular exports.
• Creative expressions: Don't forget about musical instruments and accessories when seeking approvals for global audiences.

DGFT’s Licenses and certifications

IEC: Your Export-Import Passport

The Importer Exporter Code (IEC) is a unique 10-digit alphanumeric code that serves as your business's identification number for import and export activities. It remains valid for the lifetime of your business, eliminating the need for renewal. Every exporter and importer in India must possess an IEC.

DGFT License: Permission for Specific Exports

A DGFT license is an authorization issued by the DGFT for exporting specific items that are subject to restrictions.  The validity period of a DGFT license varies depending on the type of goods being exported. Typically, it is 24 months for capital goods and 18 months for raw material components. his license is mandatory for exporting any item that falls under the restricted category as per DGFT regulations.

e-BRC: Streamlining Foreign Exchange Realization

The e-BRC (electronic Bank Realization Certificate) platform enables banks to electronically transmit foreign exchange realization data from banks to the DGFT server. This digital platform simplifies the process of foreign exchange realization reporting for exporters and ensures transparency and efficiency. All exporters who receive export proceeds through banks must utilize the e-BRC platform for reporting purposes.

Certificate of Origin: Assuring Product Provenance

A Certificate of Origin (COO) is an official document that certifies that the products being exported originate from a particular country. This document plays a vital role in trade agreements and can affect customs duties and other trade-related measures imposed by the importing country. The requirement for a COO may vary depending on the specific trade agreement between the exporting and importing countries. However, it is generally recommended for most export transactions.

EPCG License: Boosting Capital Goods Imports

The Export Promotion Capital Goods (EPCG) scheme allows duty-free import of capital goods for pre-production, production, and post-production activities, subject to an export obligation. This scheme incentivizes exporters to invest in modern machinery and equipment, enhancing their production capacity and competitiveness in the global market. Exporters who intend to import capital goods at zero customs duty under the EPCG scheme must obtain the necessary license from the DGFT.

DGFT: Supercharging Indian Exports with Strategic Schemes

The Directorate General of Foreign Trade (DGFT) isn't just about licenses and regulations – they're actively driving India's export engine! To tackle infrastructural challenges and modernize trade policies, they've implemented various schemes designed to give Indian exporters a competitive edge. Let's explore some of these powerful tools:

MEIS

The Merchandise Exports from India Scheme (MEIS) used to be a helpful tool for exporters. It provided rewards to compensate for challenges like lack of infrastructure, making exporting more competitive. While this scheme is currently withdrawn, there are other initiatives in place offering similar support.

RoSCTL

The Rebate of State & Central Taxes and Levies (RoSCTL) scheme acts like a superhero for garment exporters, saving them from the kryptonite of embedded taxes! It essentially provides a rebate on state and central taxes that are already included in the cost of their garments. This rebate comes in the form of credit scrips, which can be used to pay customs duties, making exports more competitive and profitable.

SEIS

Ever wondered how India encourages exporting services like IT, tourism, and consulting? Look no further than the Service Export from India Scheme (SEIS)! This program provides a reward of 3% to 7% of net foreign exchange earnings to exporters of specific services, giving them a financial boost and making Indian services more competitive globally.

RoDTEP

Taxes can sometimes feel like hidden costs that weigh down exporters. But the Rebate of State and Central Taxes and Levies (RoDTEP) scheme comes to the rescue! It allows exporters to claim refunds on various taxes and duties paid at central, state, and local levels for their exports.

Advance Authorization Scheme

Imagine importing ingredients for your export products without paying any customs duty! That's the magic of the Advance Authorization scheme. Manufacturers can leverage this program to bring in raw materials duty-free, as long as the final product is exported and adheres to the DGFT's specified input limits.

Duty-free Import Authorization

This scheme takes things a step further, covering not just raw materials but also fuel, energy sources, and oil crucial for export production. However, unlike Advance Authorization, it's only available for specific products with predetermined input-output norms defined by the Standard Input Output Norms (SION).

Deemed Exports Scheme

Not all exports cross borders! The Deemed Exports scheme incentivizes supplying goods within India by offering duty-free inputs and tax exemptions. Think of it as supporting domestic industry while reaping some of the benefits of exporting.

NIRVIK Scheme

Small exporters, rejoice! The NIRVIK (Niryat Rin Vikas Yojana) scheme offers credit insurance coverage (up to 90%) through the Export Credit Guarantee Corporation, making financing easier and more affordable. It's like a safety net for smaller players, encouraging them to take the leap into exporting.

GST Refunds for Exporters

Exporters, get your GST paid on inputs back! Under GST, exports are zero-rated, allowing you to claim a refund on the taxes you paid for raw materials used in your export products. This helps reduce costs and improve your bottom line.

EOU Scheme

Thinking big? The Export Oriented Units scheme creates special zones where exporters can enjoy duty-free benefits on both domestically sourced and imported raw materials and capital goods. It's like having a dedicated export haven to boost foreign exchange earnings.

The DGFT has been instrumental in helping India to increase its exports in recent years. In 2021-22, India's exports of goods and services reached a record high of $870 billion. The DGFT is committed to helping India achieve its ambitious export targets in the coming years. The DGFT stands as a one-stop shop for exporters, offering guidance, support, and resources throughout their journey. By understanding its functions and utilizing its services effectively, businesses can navigate the world of exports with greater ease and confidence. Remember, continuous learning, market research, and adaptation are key to sustained success. With the DGFT by your side, embrace the exciting world of global trade and contribute to India's economic growth and global standing!