Import and Export Code (IEC) is a unique 10-digit code issued by the Directorate General of Foreign Trade (DGFT) to businesses that are involved in international trade. This code is mandatory for all businesses that engage in import and export activities. In this article, we will discuss the benefits of getting an Import and Export Code in India.
- Legal Requirement: An Import and Export Code is a legal requirement for businesses that wish to engage in international trade. Without an IEC, businesses cannot import or export goods from India. It is a unique identification number that helps in tracking the international trade activities of a business.
- Easy Access to Global Markets: An IEC makes it easier for businesses to access global markets. With an IEC, businesses can participate in global tenders and bid for international contracts. This code is recognized by banks and government agencies and is required to initiate international money transfers.
- Avail Export Benefits: Export-oriented businesses can avail various benefits offered by the government of India, such as the Merchandise Exports from India Scheme (MEIS), Export Promotion Capital Goods Scheme (EPCG), and Advance Authorization Scheme (AAS). However, to avail these benefits, businesses need to have a valid IEC.
- Helps in Obtaining Trade Licenses: Many state governments require businesses to have a valid IEC to obtain trade licenses. In addition, several government bodies, including customs, the Directorate General of Foreign Trade, and the Reserve Bank of India, require businesses to have a valid IEC to carry out international trade transactions.
- Facilitates International Transactions: An IEC makes it easier for businesses to carry out international transactions. It is a unique identification number that helps in identifying the business while dealing with foreign suppliers or customers. It is also required to initiate international money transfers and to clear customs for import and export activities.
- Simplifies the Import and Export Process: An IEC simplifies the import and export process for businesses. With an IEC, businesses can clear customs quickly and easily. It helps in avoiding delays and reducing the cost of doing business.
- Enhances Business Credibility: Having a valid IEC enhances the credibility of a business in the international market. It is a proof of the business’s legitimacy and compliance with government regulations. It helps in building trust with international partners and customers.
- Increases the Scope of Business: An IEC opens up new opportunities for businesses to expand their operations globally. It allows businesses to explore new markets and diversify their customer base. This can lead to increased revenue and profitability.
- Helps in Obtaining Funding: Many financial institutions require businesses to have a valid IEC to obtain loans for import and export activities. It is a proof of the business’s ability to engage in international trade and to generate revenue from it.
- Enables Participation in International Trade Fairs: Many international trade fairs require businesses to have a valid IEC to participate. These fairs provide an excellent opportunity for businesses to showcase their products and services to a global audience.
In conclusion, obtaining an Import and Export Code in India is a legal requirement for businesses that wish to engage in international trade. It has several benefits, including easy access to global markets, availing export benefits, simplifying the import and export process, enhancing business credibility, increasing the scope of business, and enabling participation in international trade fairs. Businesses in India should obtain a valid IEC to take advantage of these benefits and to expand their operations globally.