Unit 1: Indian EXIM Framework and Registration
Introduction to Foreign Trade Policy (FTP)
The Foreign Trade Policy (FTP) is the Government of India’s framework that regulates and promotes India’s exports and imports to enhance global trade competitiveness and economic growth.
It is issued by the Ministry of Commerce & Industry, under the Directorate General of Foreign Trade (DGFT).
Latest FTP – 2023 (Effective from 1 April 2023)
Validity: Unlike earlier 5-year policies, FTP 2023 has no end date — it is a dynamic and open-ended policy, updated as per emerging trade needs.
Vision: To make India a $2 trillion export economy by 2030 by boosting goods, services, and e-commerce exports.
Objectives of FTP 2023
| Objective | Explanation |
|---|---|
| 1. Export Promotion | Boost exports of goods and services to increase India’s share in global trade. |
| 2. Ease of Doing Business | Simplify trade procedures and reduce paperwork using digital platforms. |
| 3. Atmanirbhar Bharat (Self-Reliance) | Strengthen domestic manufacturing and export capacity. |
| 4. MSME & Start-up Support | Empower small businesses through simplified schemes and incentives. |
| 5. Global Market Expansion | Help Indian exporters enter new markets through trade agreements. |
| 6. E-commerce Export Growth | Promote online exports with simplified regulations and logistics support. |
Key Features & Provisions of FTP 2023
| Feature | Description |
|---|---|
| Dynamic Policy Framework | No fixed duration — DGFT can update policy anytime based on market changes. |
| Paperless & Online Approvals | 100% online processing of export licenses, authorizations, and certificates. |
| Districts as Export Hubs (DEH) | Focus on developing every district as an export hub for specific products. |
| E-Commerce Export Promotion | Easier procedures for small exporters on platforms like Amazon, Flipkart, etc. |
| Towns of Export Excellence (TEE) | Recognition to towns specializing in specific products (e.g., Tiruppur – textiles). |
| Amnesty Scheme for Exporters | One-time relief for exporters to regularize past defaults under export obligations. |
| Advance Authorization & EPCG Simplified | Faster approvals for duty-free imports of inputs and machinery. |
| Status Holder Certification | Exporters achieving high export performance get recognition (e.g., One Star to Five Star Export Houses). |
| Merchanting Trade Inclusion | Enables Indian traders to trade goods between foreign countries without entering India. |
New Export Promotion Initiatives
| Initiative | Purpose |
|---|---|
| Special focus on Rupee Trade Settlement | To promote trade in INR instead of USD, especially with countries like Russia. |
| Integration with ICEGATE and e-commerce portals | Seamless data exchange between customs and DGFT. |
| Capacity Building for Exporters | Training programs through Export Promotion Councils (EPCs) and SEZs. |
| One District One Product (ODOP) | Promote unique local products from each district in international markets. |
Role of DGFT (Directorate General of Foreign Trade)
- Full Form: Directorate General of Foreign Trade
- Headquarters: New Delhi
- Governing Ministry: Ministry of Commerce & Industry, Government of India
Main Functions of DGFT
| Function | Explanation |
|---|---|
| 1. Policy Formulation | Prepares and implements the Foreign Trade Policy (FTP) and related notifications. |
| 2. Licensing & Authorization | Issues Importer-Exporter Code (IEC), Advance Authorization, EPCG, etc. |
| 3. Export Promotion Schemes | Manages RoDTEP, SEIS, MEIS (now phased out), and export incentives. |
| 4. Trade Facilitation | Simplifies documentation, ensures faster customs clearance, and reduces trade barriers. |
| 5. Data Management | Maintains export-import data and monitors trade performance through online portals. |
| 6. Coordination with EPCs & SEZs | Works with Export Promotion Councils and SEZ authorities for export development. |
| 7. Grievance Redressal | Handles trade-related complaints via the DGFT Helpdesk and Niryat Bandhu Scheme. |
Benefits to Exporters
- Simplified digital process (no physical submission)
- Reduced compliance burden
- Timely disbursement of export incentives
- Global visibility through DEH & TEE recognition
- Better access to finance and trade support schemes
Challenges Ahead
- Global trade slowdown due to geopolitical tensions
- High logistics and energy costs
- Need for skill upgradation among MSME exporters
- Currency fluctuation risks
- Ensuring digital inclusion in rural districts
Summary Table
| Aspect | FTP 2023 Key Highlights |
|---|---|
| Policy Type | Open-ended, dynamic |
| Goal | $2 trillion export economy by 2030 |
| Focus Areas | Ease of business, e-commerce, MSME exports, digitization |
| Core Institutions | DGFT, EPCs, SEZs |
| Key Schemes | DEH, ODOP, RoDTEP, EPCG, Amnesty Scheme |
In Summary
The Foreign Trade Policy 2023 represents India’s shift toward a digital, inclusive, and export-driven economy. With the DGFT leading trade facilitation and e-governance initiatives, the policy aims to make India a global manufacturing and export hub aligned with the vision of Atmanirbhar Bharat.
Export-Import Institutions and Procedures
1. Export-Import Bank of India (EXIM Bank)
The Export-Import Bank of India (EXIM Bank) was established in 1982 under the Export-Import Bank of India Act. It serves as the apex financial institution for financing and promoting foreign trade in India.
Functions of EXIM Bank:
- Provides financial assistance to exporters and importers.
- Offers term loans for export-oriented units and overseas investment.
- Supports export of projects, consultancy, and technical services.
- Offers buyer’s credit and supplier’s credit facilities.
- Facilitates export credit insurance and risk management.
- Promotes joint ventures abroad and technology exports.
Export Promotion Councils (EPCs)
EPCs are non-profit organizations set up by the Government of India to promote and develop exports of specific products or groups of products.
Functions of EPCs
- Organize trade fairs, exhibitions, and buyer-seller meets.
- Provide market intelligence and export-related information.
- Conduct training and workshops for exporters.
- Represent exporters’ interests to the government and WTO.
- Issue Registration-Cum-Membership Certificates (RCMC) to exporters.
Examples of EPCs
- APEDA – Agricultural and Processed Food Products Export Development Authority
- EEPC India – Engineering Export Promotion Council
- GJEPC – Gem and Jewellery Export Promotion Council
- TPCI – Trade Promotion Council of India
Special Economic Zones (SEZs)
SEZs are special areas created to promote exports by offering tax benefits, simplified procedures, and world-class infrastructure.
Objectives of SEZs
- Boost exports and foreign investment.
- Create employment opportunities.
- Promote technological advancement and economic growth.
Key Benefits
- 100% income tax exemption on export income for a specified period.
- Duty-free import of goods for development and production.
- Single-window clearance and simplified customs procedures.
- Repatriation of profits and foreign investment allowed.
Types of Exports and Imports
| Type | Explanation |
|---|---|
| Physical Export | Actual movement of goods outside India. |
| Deemed Export | Goods supplied within India that are treated as exports (e.g., to SEZs or EOUs). |
| Merchant Export | Export by a trader who purchases goods from a manufacturer. |
| Manufacturer Export | Export by the actual manufacturer of goods. |
| Direct Import | Import by the actual user for own use or resale. |
| Indirect Import | Import through intermediaries or agents. |
Import Export Code (IEC)
The Import Export Code (IEC) is a 10-digit registration number issued by the Directorate General of Foreign Trade (DGFT), mandatory for all importers and exporters in India.
Registration Process
- Visit the official DGFT website: https://www.dgft.gov.in
- Fill in the online IEC application (Form ANF-2A).
- Upload PAN card, bank details, and address proof.
- Pay the prescribed fee (₹500) online.
- The IEC is generated instantly in digital format.
Key Points:
- One IEC is valid for lifetime and across all branches.
- No export or import can be made without an IEC (except in specific government exemptions).
Summary Table
| Institution / Process | Objective / Function |
|---|---|
| EXIM Bank | Provides financial assistance and promotes international trade. |
| EPCs | Promote exports through research, fairs, and training. |
| SEZs | Encourage export production through incentives. |
| IEC | Mandatory registration for exporters and importers. |
Registration-Cum-Membership Certificate (RCMC)
The Registration-Cum-Membership Certificate (RCMC) is a mandatory document issued by an Export Promotion Council (EPC) or a Commodity Board to exporters in India.
It certifies that the exporter is registered with the council and is eligible to avail of benefits under the Foreign Trade Policy (FTP).
Purpose of RCMC:
- To avail export incentives and schemes such as RoDTEP, RoSCTL, MEIS, EPCG, etc.
- To establish credibility as a recognized exporter.
- To get support, guidance, and trade promotion assistance from EPCs.
- To participate in international trade fairs and export promotion programs.
Validity and Issuing Authority:
| Category | Issuing Authority |
|---|---|
| Agricultural Products | APEDA / Commodity Boards |
| Engineering Goods | EEPC India |
| Handicrafts | EPCH (Export Promotion Council for Handicrafts) |
| Textiles & Apparel | AEPC (Apparel Export Promotion Council) |
| Chemicals, Plastics | CHEMEXCIL, PLEXCONCIL |
| Multi-product Exporters | Federation of Indian Export Organisations (FIEO) |
Validity: RCMC is valid for 5 years from the date of issue.
Documents Required for RCMC
- PAN Card
- IEC (Import Export Code)
- GST Registration
- Company Incorporation/Partnership Deed
- Exporter’s Profile
- Fee (varies by council)
How to Apply (Online):
- Visit the respective EPC website or DGFT portal.
- Fill Form ANF-2C.
- Upload the required documents.
- Pay the prescribed registration fee.
- Receive the digital RCMC certificate via email.
Authorized Dealer Code (AD Code)
The Authorized Dealer (AD) Code is a 14-digit code issued by a bank that is authorized by the Reserve Bank of India (RBI) to deal in foreign exchange.
It links the exporter’s bank account with the Customs ICEGATE portal for online foreign trade transactions.
Purpose of AD Code
- Mandatory for customs clearance of export shipments.
- Enables electronic foreign currency transactions for exports/imports.
- Ensures export proceeds are tracked and remitted via RBI-approved channels.
- Required to generate shipping bills at customs ports.
How to Obtain AD Code:
- Open a current account with an Authorized Dealer Bank (e.g., SBI, HDFC, ICICI).
- Request the AD Code letter on bank letterhead.
- Submit it to the Customs office or upload on the ICEGATE portal.
- Customs will register it for your IEC number and port of shipment.
Key Points:
- Each port requires a separate AD Code registration.
- Without AD Code, shipping bills cannot be processed.
- It ensures foreign exchange compliance under FEMA and RBI rules.
Start-ups and MSME Support in India’s FTP (Foreign Trade Policy 2023–2028)
The Foreign Trade Policy (FTP) 2023–2028 focuses on “Export Promotion through Facilitation and Simplification”, especially supporting:
- Start-ups
- Micro, Small & Medium Enterprises (MSMEs)
- E-commerce exporters
MSME and Start-up Support Provisions:
| Scheme / Policy | Key Features & Benefits |
|---|---|
| E-commerce Export Promotion | Simplified procedures for MSMEs/start-ups to export via online platforms (Amazon, Flipkart, etc.). |
| Town of Export Excellence (TEE) | MSME clusters recognized for high export potential receive financial aid and training. |
| Remission of Duties and Taxes on Exported Products (RoDTEP) | Refunds embedded taxes not refunded under GST to MSME exporters. |
| Export Credit Guarantee Corporation (ECGC) | Provides insurance cover for exporters against payment risks. |
| NIRYAT Portal & DGFT Dashboard | Helps MSMEs track export data, trends, and schemes easily. |
| Simplified IEC & RCMC Registration | Online and paperless registration process via DGFT portal. |
| Start-up India Export Hub | Facilitates funding, mentorship, and market access to start-ups in export trade. |
| Interest Equalization Scheme | Offers 2–3% interest rate subsidy on pre and post-shipment credit for MSMEs. |
Objectives of MSME & Start-up Support in FTP
- Boost export contribution from MSME sectors.
- Encourage innovation and entrepreneurship in exports.
- Simplify export procedures and reduce compliance cost.
- Enhance India’s global competitiveness.
Summary Table
| Topic | Key Points |
|---|---|
| RCMC | Registration with Export Promotion Council; required for FTP benefits. |
| AD Code | Bank-issued code for customs and forex transactions. |
| MSME & Start-up Support | Export incentives, credit facilities, e-commerce facilitation, and simplified compliance. |