What is the procedure of import and export in India?
April 04, 2022
In this article, we are going to discuss in detail the procedure of Import and Export in India.
The Foreign Trade (Development and Regulation) Act, 1992, of India regulates the import and export of goods. It also facilitates the government to make necessary regulations related to the import and export of goods.
The import and export procedure typically involves, checking the license, examining the goods to be imported or exported, paying taxes, verifying the import-export documentation, to name a few steps.
Getting into the details, let us now have a look towards the procedure in detail-
Import Procedure in India
Here are the steps outlining the Import procedure in India.
- 1. Getting the IEC
The most important thing you should do if you need to import something is to apply for an IEC number which is an Import Export Code number from your regional Directorate General of Foreign Trade (DGFT).
It is a registration process which takes about 10-12 days to complete.
Once you have the IEC, you can move on to the next step for the Import Procedure but this one is utterly important.
- 2. Check for Goods compliance
You can only import goods that are permitted to be imported under Section 11 of the Customs Act (1962), Foreign Trade (Development & Regulation) Act (1992), and the Foreign Trade Policy, 2015-20.
If what you are importing comes under this list, then good but if you are importing items that are restricted, then you will require special permission from the DGFT.
- 3. Check for the type of license required
You will be required either a general or a specific license or no license depending on the types of goods that need to be imported.
For that, you will need to identify the Indian Trading Clarification based on a Harmonized System of Coding or ITC (HS) classification specifically constructed to identify the category of goods.
- 4. File Bill of Entry for Import Declaration
Moving on further after obtaining the license, you need to fill the Bill of Entry to declare the Import process so for the authorities to continue the process smoothly.
- 5. Import Duty Rate
As the final step, you need to pay the Customs or Import Duty Rate for the successful clearance of Import as specified by the government of India.
This completes the process of the procedure of Import in India.
Let us now move to have a look at the Export Procedure in India.
Export procedure in India
Similar to the import procedure, the export procedure involves obtaining the license, customs clearance, bill entry and identification of goods as we have discussed above.
The briefing, Export procedure includes the following-
- 1. Receiving the Order
The first and foremost step in export is to receive the order from your customer. Once you have an order in hand, you can move on to the next steps.
- 2. Credition of License and Quota
The next step is to apply for an Export license and get credited with the export quota by the Government in order to send the goods out of the country.
- 3. Exchange Rate Fixation
Figuring out the exchange rate currency fixation between the trading country will help you in having a clear idea of the amount of exchange rate while exporting.
- 4. Completion of Formalities of Foreign Exchange
After having an idea of exchange rates, the next step is to have the formalities for foreign exchange to be completed on time.
- 5. Making Arrangements for Order Execution
After successfully clearing the above 4 steps, it’s time to have the setup ready for the goods to be exported.
You need to contact the cargo or ship port, or any freight forwarding company in order for your order to be transported.
- 6. Forwarding Agent Formalities’ Completion
It’s time now to have the export formalities completed of the forwarding agent who is also known as the Customs Agent.
The Customs Agent is responsible for the verification of documents, along with the involvement in checking the export so as to verify the goods.
- 7. Bill of Lading
This step involves the preparation along with the submission of the Bill of Lading to the shipper by the goods carrier.
The Bill of Lading contains information about the goods that need to be exported. In India, it is also known by the term “Let Export Order” to clarify that everything is verified and the goods are good to go.
- 8. Handing over the Documents to Bank
The final step completes with handing over all the legal and required documents, as stated by the bank to get the final closure by the bank.
And this completes the detailed step-by-step information on the export procedure.
We hope that this article must have helped you in knowing about the Import and Export Procedure in India and will prove beneficial to you.