Solutions to your immediate queries relating to business and investment activities in India. For more information, please visit the Ministry of Commerce and Industry and Federation of Indian Exports Organisation.

For the items mentioned as ‘Restricted’ in Schedule 1 of ITC (HS) Classification of Export & Import 2012, an application for grant of an Import Authorisation may be made to the concerned Regional Authority of DGFT in Aayaat Niryaat Form 2 B (ANF 2B) along with the documents prescribed therein, with two copies of the complete sets to DGFT (Hqrs) at Udyog Bhawan, New Delhi. The requests for such imports are considered by Inter-Ministerial Committees. (more)

ITC (HS) codes, better known as Indian Trade Classification (Harmonized System) Codes, have been adopted in India for import-export operations. Indian Customs uses Eight Digit ITC (HS) Codes to suit the national trade requirement.

If you want to know the HS Code, click on ‘ITC HS Based Policy’ on the DGFT website. In a new window, the ITC (HS) Query Form will open. Insert the name of the product in the description option to know the HS Code of your product. Similarly, if you are already aware of the HS Code, enter the ITC(HS) Code (e.g. 0324) option to know what the product is.

The scale of fee, mode of payment, the procedure for fee refund, and categories of persons exempted from payment of fees can be viewed in Appendix- 21B of Handbook of Procedures, Vol.1. This can be downloaded/viewed on DGFT website, in the download section. The minimum fee is Rs.200/- and the maximum is Rs.100,000, if paid manually (Rs.50,000 if paid electronically).

IEC is compulsory for imports. However, certain categories of importers are exempted from obtaining IEC. Details can be found here.

No authorisation shall be required for import of bona fide technical and trade samples of items restricted in ITC (HS) except vegetable seeds, bees, and new drugs. Samples of tea not exceeding US$30 (CIF) in one consignment shall be allowed, without authorisation, by any person connected with the Tea industry (value limits).

Any goods, import of which is governed through exclusive or special privileges granted to State Trading Enterprises (STEs), may be imported by STEs as per conditions specified in ITC (HS). However, DGFT may grant authorisation to any other person to import or export any of these goods under paragraph 2.11 of the Foreign Trade Policy.

The validity of an import authorisation shall be 18 months from the date of the issue of authorisation. RA concerned may revalidate import authorisation based on merits, for six months from the date of expiry of validity.

Where an authorisation expires during the month, such authorisation shall be deemed to be valid until the last day of the concerned month.

Import through a registered courier service is permitted, as per notification issued by the Department of Revenue. However, the import of such items shall be regulated in accordance with FTP.

Import of goods under a government-to-government agreement may be allowed without authorisation or CCP on the production of the necessary evidence to the satisfaction of Customs authorities.

Import of new / secondhand prototypes / secondhand samples may be allowed on payment of duty without an authorisation to an actual user (Industrial), engaged in production of or having industrial licence / letter of intent for research in item for which prototype is sought for product development or research, upon a self-declaration to that effect, to the satisfaction of customs authorities.

IEC Stands for IMPORTER EXPORTER CODE. Any bonafide person/company looking to enter import-export business requires IEC.

IEC is issued by Regional Offices of the Directorate General of Foreign Trade, established all over India.

Exports of certain specified goods through courier or Foreign P.O. using e-commerce, of FOB value up to Rs. 25,000/- per consignment, are entitled to rewards under MEIS.

Service providers of notified services located in India were rewarded at specified rates under Service Exports from India Scheme (SEIS), on earning of net free foreign exchange in the preceding financial year, for rendering such services. The scheme was valid up to March 31, 2020.

Under the Advance Authorisation Scheme, an exporter can import raw-materials and related inputs 100 per cent duty-free, for export production. The importer has to approach the regional authorities of DGFT for the issue of the authorisation. Minimum value addition at 15 per cent is fixed, as per the standard input-output norms. Advance authorisation is issued on an actual user basis, and goods imported under it cannot be sold. However, once the export obligation is fulfilled and the authorisation is redeemed, the manufactured products may be sold in domestic markets.

Yes, an advance authorisation can be issued to a Merchant Exporter tied to a supporting manufacturer.

Export Promotion Capital Goods (EPCG) Scheme allows the import of capital goods for pre-production, production, and post-production at Zero customs duty.

Domestic manufacturers are eligible for deemed export benefits like Advance Authorisation / DFIA, Deemed Export Drawback, and Refund of excise duty if an exemption is not available.

For a trade to be classified as Merchanting Trade, the following conditions should be satisfied:

  1. Goods acquired should not enter the Domestic Tariff Area
  2. The state of the goods should not undergo any transformation.

When goods have been exported on a consignment basis, the bank, while forwarding shipping documents to an overseas branch/correspondent, should instruct the latter to deliver the consignment only against trust receipt/undertaking to deliver sale proceeds by a specified date – within the period prescribed for realization of proceeds of the export.

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, in terms of which the definition of micro, small and medium enterprises was based on investment in plant & machinery (for manufacturing enterprises) and equipment (for service enterprises).

However, as per the Government of India notification dated 1 June 2020, an additional criteria of Annual Turnover has been included in the definition, while the investment caps have been significantly raised. Accordingly, the new definition of micro, small and medium enterprises, to be effective from 1 July 2020, is as follows:

  1.  A Micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed Rs. 10 million and turnover does not exceed Rs. 50 million
  2. A Small enterprise, where the investment in Plant and Machinery or Equipment does not exceed Rs. 100 million and turnover does not exceed Rs. 500 million
  3. A Medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed Rs. 500 million and turnover does not exceed Rs. 2.5 billion

The Ministry of MSME, the Government of India and the Small Industrial Development Bank of India (SIDBI) have set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitating the flow of credit to the MSE sector without the need for collaterals / third party guarantees.

The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.

The Credit Guarantee Scheme (CGS) seeks to reassure the lender that, in the event that an MSE unit, which availed collateral-free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the outstanding amount in default.

In the EDI System, CHA/Exporter has to submit the following documents at the Service Centre:

  • A declaration in the prescribed format
  • Copy of Export Invoice
  • Packing List
  • Drawback / DEEC / AR, etc. as applicable

The shipping bill is processed by the system on the basis of the declaration made by the exporter.

Generally, 5 per cent to 10 per cent of the goods are subject to examination.

Being satisfied upon examination of the documents/goods, the Customs Officer gives “Let Export Order” and once the LEO is given, the shipping bill is printed and the goods are loaded in the container.