How to Start

Export/Import Trade in India is regulated by the Directorate General of Foreign Trade (DGFT) and its regional offices. However, transactions in foreign exchange are governed under the Foreign Exchange Management Act, 1999, within which Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, were framed. These Regulations have been issued vide Notification No. FEMA 23/2000-RB dated May 3, 2000, and are amended from time to time. This section highlights the existing provisions governing export and import of goods and services that are subject to the Foreign Trade Policy 2015-20 and the Handbook of Procedure.

Establishing an Organization: To start an export business, first, a Sole Proprietary concern or a Partnership firm or Limited Liability Partnership (LLP) or a Company has to be set up. While a sole Proprietary business or a Partnership firm or an LLP can be set up easily without much expense and legal formalities, a Private Limited Company or a Public Limited Company are required to have the minimum prescribed members as shareholders and such Companies are required to be registered with the Registrar of Companies.

Name & Style of the Business: After finalising the business organization (Proprietorship, Partnership, etc.), it is essential to give a name to the business. A simple and attractive name with a good logo is advisable. The name has to be finalised before establishing the organisation. In the case of Pvt. Ltd. or Public Limited Company, the proposed name for the company has to be approved by the Registrar of Companies. The logo can be finalised after the establishment of the organisation.

Opening a Bank Account: A current account with a bank which is authorized to deal in Foreign Exchange should be opened to undertake transactions.

Obtaining Permanent Account Number (PAN): It is necessary for every exporter and importer to obtain a PAN from the Income Tax Department. (more)

Obtaining Importer-Exporter Code (IEC) Number: No export or import is allowed to any entity without an IEC number. After finalising the nature of the business organization, name, logo (not essential), and opening a current account in the Bank, an application in the prescribed ANF2A Format for obtaining IEC Code Number has to be filed online, and the prescribed documents viz. Bank Certificate / Pre-printed Cancelled Cheque and Address Proof of the firm are to be electronically uploaded along with the application. The applicant has to declare in the application whether there is an NRI interest in the firm/company or not while applying for the IEC number. In case there is an NRI interest/investment with repatriation benefits, RBI’s approval number with date should be attached to the application. A firm/company can obtain only one IEC for the firm /company against its PAN number. The firm/company should make a declaration that the firm/company has not applied for an IEC number in the name of its Regd. / Head office or any other branches/units/ divisions to any other licensing authority. (more)

As per the recent notification no. 58/2015-20 dated 12 February 2021 (, an IEC holder has to ensure that the details are updated electronically, every year during April to June. Even in case there are no changes in the IEC details, the same needs to be confirmed online, to avoid de-activation of the IEC.

Registration Cum Membership Certificate: Export Promotion Councils (EPCs) are responsible for the promotion of a particular group of products/ projects/services and are also eligible to function as Registering Authorities to issue Registration-cum-Membership Certificate (RCMC) to its members. In case an export product is not covered by any Export Promotion Council/Commodity Board etc., RCMC in respect thereof is to be obtained from the Federation of Indian Exporters Organization (FIEO). Further, in the case of multi-product exporters, not registered with any EPC, where the main line of business is yet to be settled, the exporter has an option to obtain RCMC from FIEO. Membership fees should be paid in the form of cheque or draft after ascertaining the amount from the concerned EPC/Commodity Board. The RCMC certificate is valid from 1st April of the licensing year in which it was issued and shall be valid for five years ending 31st March of the licensing year unless otherwise specified.

For more details, please refer Export Promotion Councils and Federation of Indian Export Organisations (FIEO)

Registration with Tax Authorities: Goods exported out of the country are eligible for exemption from GST. To get the benefit of tax exemption, it is important for an exporter to get registered with the concerned Tax Authorities.  

Act, Rules, Amendments, Notifications, etc. relating to GST Law issued by Central and/or State Governments may be accessed from the websites of Centre and States respectively, through the links provided here.

The amount representing the full export value of the goods exported shall be received through a Bank in the manner specified in the Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2000 in the following manner:

  1. Bank draft, pay order, bankers, or personal cheques.
  2. Foreign currency notes/foreign currency travelers’ cheques from the buyer during his visit to India.
  3. Payment out of funds held in the FCNR/NRE account maintained by the buyer.
  4. International Credit Cards of the buyer.
  5. Letter of Credit 

Note: When payment for goods sold to overseas buyers during their visits is received through international credit card, EDF (duplicate) should be released by the banks only on receipt of funds in their Nostro account, or if the bank concerned is not the Credit Card servicing bank, on the production of a certificate by the exporter from the Credit Card servicing bank in India to the effect that it has received the equivalent amount in foreign exchange. Banks may also receive payment for exports made out of India by debit to the credit card of an importer where the reimbursement from the card-issuing bank/ organization will be received in foreign exchange.

Within 21 days from the date of export, the exporter should lodge the copy of EDF/SDF together with related shipping documents and an extra copy of the invoice with the banks. In cases where exporters present documents pertaining to exports after the prescribed period of 21 days from date of export, banks may handle them without prior approval of the Reserve Bank, provided they are satisfied with the reasons for the delay.