Import Export Compliance in India: IEC, DGFT Rules and Customs Paperwork
Import export compliance in India means holding a live Importer Exporter Code (IEC), following the Foreign Trade Policy and DGFT procedures, filing correct customs documents for every shipment, and settling the foreign exchange side through your bank.
The most common way a business breaks this chain is not fraud or a wrong HS code. It is missing the yearly IEC update between 1 April and 30 June, which deactivates the code and stops customs filings.
IEC Update Window
1 Apr – 30 Jun
Compliance Layers
DGFT, Customs, GST, RBI
Key Takeaways
Four layers apply to every trader: DGFT (permission), Customs (movement of goods), GST (tax treatment), and RBI/bank rules (payments).
An IEC is valid for life, but only if it is confirmed on the DGFT portal each year between 1 April and 30 June.
Restricted, prohibited, and SCOMET items need extra authorisation beyond the IEC.
Most compliance trouble comes from mismatched details across documents, not from the law being obscure.
A written compliance calendar prevents nearly every deadline-based problem.
The Legal Structure Behind It
Four bodies set the rules you actually deal with.
DGFT
The Directorate General of Foreign Trade administers the Foreign Trade (Development and Regulation) Act and publishes the Foreign Trade Policy (FTP 2023) and the Handbook of Procedures. It issues IECs and RCMCs and runs export promotion schemes. Its portal is dgft.gov.in.
Customs
Under CBIC, applies the Customs Act, 1962. It is the authority that clears or stops your cargo. Filings go through ICEGATE.
GST authorities
Decide how exports are taxed, usually as zero-rated supplies under a Letter of Undertaking or with IGST paid and refunded.
RBI and your authorised dealer bank
Govern how export proceeds come in and how import payments go out.
A compliance gap in any one of the four can hold up a shipment, even if the other three are clean.
IEC Registration and Maintenance
Who Needs an IEC
An IEC is the ten-digit identifier DGFT issues to anyone importing or exporting as a business. Certain categories are exempt, including government departments and some notified bodies, and exporters of services often do not need one. If you are unsure, check before filing. Our IEC registration service covers eligibility and application.
The government application fee is ₹500 according to the sources I checked. The code is valid for life, subject to the annual update below.
The Annual Update
Under Para 2.05 of the Foreign Trade Policy 2023, every IEC holder must electronically confirm or update their IEC details each year between 1 April and 30 June, even if nothing has changed. DGFT sends reminders and then deactivates IECs that were not updated. A trade body circular from September 2025 recorded a deactivation date of 16 September 2025 for non-compliant holders, which shows the enforcement is real, not theoretical.
What deactivation does in practice: customs clearance, shipping bill and bill of entry filing, and incentive claims all stop. Reactivation is possible by completing the overdue update, but you lose days at the worst time.
Practical Points
The straight annual update is free during the window, per the guidance I reviewed. Fees for modifications outside the window are reported inconsistently, so check the portal's fee screen.
Keep the DGFT login inside the business. Many firms lose access because the registered email belonged to an employee or an agent.
Update in April, not the last week of June.
Where your details have changed, such as address, partners, or bank account, correct them in the same session.
Foreign Trade Policy Compliance: What Sits on Top of the IEC
An IEC lets you trade. It does not authorise every product.
Restricted and prohibited goods
The ITC(HS) classification in the FTP marks some goods as free, some as restricted, and some as prohibited. Restricted items need a licence or authorisation before import or export. Check the exact HS code, not the product's common name. Two items that sound alike can fall into different categories.
SCOMET items
Dual-use goods, certain chemicals, software, and technology fall under SCOMET and need specific authorisation from DGFT before export. Exporters of chemicals, electronics, and engineering goods should check this list before quoting a buyer.
RCMC and export schemes
If you plan to claim scheme benefits, you will usually need a Registration-cum-Membership Certificate from an export promotion body. Food and agri exporters should read our APEDA registration guide. Multi-product exporters and service providers should look at FIEO registration.
Scheme names and rates change often. One recent example in the sources I reviewed is the Export Promotion Mission, reported as running from January 2026 and replacing an earlier interest scheme. Always confirm a scheme's current status in the latest DGFT notification before building it into pricing.
Customs Documentation Requirements
Customs documents are where a mistake costs money immediately, through demurrage, detention, or a held container.
| Stage |
Document |
What It Must Match |
| Export |
Shipping Bill |
Invoice, packing list, IEC, HS code |
| Export |
Commercial invoice and packing list |
Buyer details, quantity, value, terms of sale |
| Export |
Certificate of origin (where applicable) |
Origin rules of the trade agreement |
| Import |
Bill of Entry |
Invoice, bill of lading, HS code, duty computation |
| Import |
Bill of lading or airway bill |
Consignee name and IEC |
| Both |
GST documents |
Place of supply, LUT or IGST treatment |
Four Habits That Prevent Most Customs Trouble
1
Classify Carefully
The HS code drives duty rate, licensing, and scheme eligibility. Document the reasoning for borderline items.
2
Keep Values Consistent
The invoice, the contract, and the bank record should tell the same story. Undervaluation attracts scrutiny.
3
Use the Same Legal Name and Address Everywhere
IEC, GST, bank, invoice, and shipping documents should read identically.
4
Keep Records
Retain invoices, shipping documents, and correspondence in an organised, retrievable form, because audits and queries can arrive long after the cargo has moved.
Payments, Banks and the Foreign Exchange Side
An export is not complete until the proceeds come in. Your bank, as an authorised dealer, links your shipping bills to the payments received. An AD Code registered at the port connects your shipments to your bank account, so first-time exporters should arrange it before the first shipment.
RBI rules set the period within which export proceeds must be realised, and the framework has been revised over the years. Confirm the current time limit and reporting requirements with your bank rather than relying on an old figure. For imports, advance remittances and payment terms also have rules that your bank will check.
Common Compliance Pitfalls
These are the errors that most often stop shipments or void benefits:
Letting the IEC lapse in July
The top cause of sudden shipment stoppage.
Claiming a scheme without the right registration
An RCMC or scheme enrolment that was never completed.
HS code guesses
Wrong classification leads to wrong duty, wrong licence assumptions, or refused benefits.
Name and address mismatches
The silent cause of rejected filings.
Relying on a forwarder for everything
The IEC holder remains responsible for what is filed in their name.
Ignoring SCOMET
Exporters of technical goods discover it after the buyer's order is confirmed.
No calendar
Annual updates, renewals, and returns missed because no one owned the dates.
A Compliance Checklist You Can Actually Use
Tick these off before every shipping season:
IEC is active and updated for the current cycle.
DGFT login credentials, email, and mobile belong to the business.
Every product has a verified HS code, checked for restriction, prohibition, and SCOMET status.
RCMC held where a scheme or product requires it.
GST registration, and an LUT if you export without paying IGST.
AD Code registered with the port and linked to your bank.
Names, addresses, and bank details are identical across all records.
Shipping and customs documents reconcile with invoice and contract.
Export proceeds are tracked against the bank's reporting deadline.
Records are stored and a compliance calendar is maintained.
Frequently Asked Questions
Got questions? Find clear answers from our team:
For business imports and exports of goods, yes, apart from specific exempt categories. Service exporters often do not need one.
For life, as long as it is confirmed on the DGFT portal each year between 1 April and 30 June.
DGFT deactivates the IEC. Customs filings and incentive claims stop until you complete the overdue update and the code is reactivated.
The sources I reviewed describe it as free during the window. Check the portal's fee screen for any modification outside it.
Only if it is restricted, prohibited, or listed under SCOMET. Check the exact HS code in the ITC(HS) schedule.
It is a membership certificate from an export promotion body, generally needed to claim scheme benefits or certain authorisations.
A licensed customs broker can, but the IEC holder remains accountable for the declarations made.
Common reasons are an inactive IEC, HS code or value discrepancies, missing authorisation, or mismatched party details.
Yes, it is registered at the port so shipments can be linked to your bank for proceeds reporting.
Yes, by completing the pending update. Doing it in the window avoids the disruption.