Have you ever considered your products and thought, “These could be a hit worldwide!”? If you’re ready to turn that idea into reality, there’s one crucial thing you’ll need – an export license. This license is like your business’s passport to selling goods across borders.
Now, we know regulations can sound intimidating. Getting an export license in India is relatively straightforward. The government sets the rules through its Foreign Trade Policy, and the process is handled by a specific agency called the Director General of Foreign Trade (DGFT).
With a license, you can access government support, duty refunds, and a new world of customers. Let’s break the process and start the import/ export business.
Understanding the Basics of Export Licenses in India
Let’s get straight to the point: If you plan to ship certain products outside India, you’ll need an export license. It’s not optional; it’s the law. This license gives your business permission to participate in international trade.
The government wants to keep tabs on what’s leaving the country. This is due to national security, protecting valuable resources. But it’s not all about restrictions. An export license also opens the door to great benefits, specifically for businesses sending goods abroad.
India divides exportable goods into three categories:
Prohibited: These are the ‘no-go’ items. They include endangered wildlife products or culturally significant items. With very few exceptions, it’s best to assume you can’t export these.
Restricted: This is where things get interesting. Products like certain chemicals, live animals, or some agricultural items need special permits on top of your standard export license.
Canalised: These are the extra-special cases, only exportable by government agencies. Certain petroleum products, for example, fall into this category.
An export license can qualify your business for perks like refunds on duties you paid, special access to export promotion programs, and a leg up in the global market.
Determining the Need for an Export License
Access Global Markets
With an export license, you can take your handcrafted jewellery before the eyes of buyers in the global market. An export license removes geographical barriers, unlocking a vast world of potential new customers eager for the quality and innovation that Indian businesses offer.
Government Support
India actively encourages exporters with various support schemes. These include financial assistance for attending trade shows, subsidies to offset shipping costs, or expert guidance to help you succeed in a new market.
Duty Benefits
Exporting often means you could be eligible for refunds (called ‘drawbacks’) on duties you paid on your goods or materials. There are also exemptions to lower the tax burden for exporters, freeing up working capital.
Competitive Edge
Businesses that export are perceived as more robust and have higher quality standards. This gives you an edge when competing overseas and in your domestic market.
Business Growth
Expanding your reach internationally can skyrocket your sales. Exporting diversifies your customer base and exposes you to untapped demand, leading to significant and often rapid growth for your business.
Brand Recognition
Success abroad translates into solid brand value. Customers worldwide recognise your product or service, which means increased credibility and trust, fueling your expansion even further.
Preparing for the Export License Application
Successful export license applications depend on thorough preparation. Before starting the process, ensure you have the following prerequisites and that your documentation is well-organised.
Import Export Code (IEC): This code is your business’s unique identifier for international trade activities. A valid IEC can only be issued for an export license.
Official Business Registration: Your business must be formally registered under Indian law, whether you operate as a sole proprietorship, partnership, or incorporated company.
PAN and Current Bank Account: Your Permanent Account Number (PAN) is essential for tax and financial transactions, while a current bank account is necessary for domestic and international business activities.
Steps to Obtain an Export License
1: Product Classification & Business Registration
Determine the specific classification of your intended export product. Refer to government export control lists to identify items that may necessitate additional permits or licenses alongside a standard export license. Under Indian law, an export license can only be issued to a formally registered business entity, such as a sole proprietorship, partnership, or incorporated company.
2: Obtain an Import Export Code (IEC)
If you still need a valid Import Export Code, initiate the application process through the Directorate General of Foreign Trade’s official online portal. The IEC is the cornerstone of your export activities.
3: Document Preparation
Assemble the necessary documentation, which typically includes proof of business registration, PAN card, bank account details, and any product-specific certifications or permits that may be required. Create high-quality digital scans or photographs of all relevant documents. To avoid processing delays, you must ensure optimal clarity, resolution, and legibility.
4: Online Application
Visit DGFT’s online portal to complete the export license application form. Provide accurate details, including your business information and product descriptions, and upload the previously prepared digital copies of supporting documents.
5: Meticulous Review & Submission
Before submitting your application, allocate sufficient time for a thorough review. Verify the accuracy of all entered information and ensure correct file uploads. Attention to detail at this stage minimises the potential for rejections and delays.
6: Application Processing
The DGFT will review your submitted application. Be prepared for possible requests for additional information or clarification as needed. Note that obtaining an export license is not an instantaneous process. Familiarity with typical processing timelines will help manage your expectations.
7: License Issuance
You will typically receive your export license via email upon successful review and approval. Specific instructions for the final issuance of your license, which may involve presenting the electronic license and your IEC to a designated jurisdictional authority, will be provided.
Post-Application: What Happens Next?
Okay, you’ve hit ‘Submit’ on your export license application. Now, a bit of waiting is involved. While you’re excited, it’s natural to have questions about what happens next.
Behind the scenes, the DGFT and potentially other government agencies will diligently review your application and all the documents you provided. While standard processing usually takes around 30-45 days, it could be longer for certain goods. Also, feel free to ask for additional information or clarification. This is very common, especially when dealing with restricted items.
If all goes well, you’ll receive an official email notification when your export license is approved. This email will also explain how to actually get your license. Sometimes, it’s as simple as having the email, while in other cases, you might need to visit your local DGFT office. Often, you can track your application’s progress on the DGFT’s website for some peace of mind.
Conclusion
With proper preparation, obtaining an export license in India is transparent and manageable. It’s your key to unlocking global trade, government support, and the potential for unprecedented business growth.
For eCommerce businesses ready to export from India to international markets, NimbusPost offers a powerful all-in-one logistics platform. Our seamless shipping solutions streamline the complexities of cross-border freight transportation, enabling you to:
- Access multiple couriers for the best rates and shipping options
- Automate order processing and label generation
- Provide real-time tracking and updates for your international customers
- Hassle-free freight forwarding
- Manage customs documentation with ease
With NimbusPost as your logistics partner, you can focus on expanding your brand’s global reach while we handle the complexities of international shipping. Discover the benefits and start your export journey with confidence.
FAQs
How much does it cost to get an export license in India?
Getting an export license in India involves obtaining an IEC (Import Export Code). The government fee for this is ₹500. However, professional fees may also be charged by agencies assisting with the application process. These fees can vary but typically range around ₹1000. So, the total cost can be anywhere from ₹500 to ₹1500.
What are the types of export licenses?
There are several types of export licenses, each with its purpose and restrictions:
- Open Licenses: Allow exports without limits on quantity or value.
- Specific Licenses: Permit the export of only specified items, reducing mislabeling risks.
- Individual Validated License (IVL): This license authorises multiple exports of defense-related items to close allies over six months.
- Multilateral Validated License (MVL): Similar to IVL, but for exports to countries deemed “immediate threats.”
- General Licenses: Pre-approved authorisations for certain exports, streamlining the process.
- European Union General Export Authorisations (UGEAs): Valid throughout EU member states.
- Technology Licenses: These are required for exporting sensitive technologies with detailed information requirements.
- Warehouse Licenses (India): These are required explicitly for tea exporters in India.
Do I need a license to export from India?
In most cases, you won’t need a separate license to export from India, but you will need to register for an Import Export Code (IEC) with the Director General of Foreign Trade (DGFT). This IEC acts as a business license for international trade. However, there are exceptions. India regulates the export of certain items, placing them in either a “restricted” or “prohibited” category. You’ll need to obtain a special export license from the DGFT and the IEC for these items. So, before exporting from India, check if your product falls under any restrictions and plan accordingly.
