The Directorate General of Foreign Trade (DGFT) is an agency of the Ministry of Commerce and Industry in India that is responsible for promoting and regulating foreign trade. DGFT licenses and approvals are required for certain categories of goods that are imported or exported from India.
The DGFT issues different types of licenses and approvals, depending on the nature of the goods and the purpose of the import/export. Some of the common types of DGFT licenses and approvals are:
Importer-Exporter Code (IEC): An IEC is a 10-digit code that is mandatory for all businesses that are engaged in import or export of goods from India. The IEC is issued by the DGFT and is valid for the lifetime of the business.
Advance Authorization: This license allows an exporter to import raw materials, components, or intermediate goods duty-free, subject to certain conditions. The exporter must export the finished product within a specified period and fulfill the export obligation.
Export Promotion Capital Goods (EPCG) Scheme: This scheme allows an exporter to import capital goods, such as plant and machinery, at concessional rates of duty. The exporter must fulfill the export obligation within a specified period and comply with certain conditions.
Duty-Free Import Authorization (DFIA): This license allows an exporter to import inputs, fuel, oil, energy sources, or catalysts without payment of basic customs duty, subject to certain conditions. The exporter must fulfill the export obligation within a specified period.
Restricted Items Import License: This license is required for importing certain goods that are subject to restrictions or prohibited under the foreign trade policy.
The DGFT also issues various other licenses and approvals, such as Special Economic Zone (SEZ) approvals, Status Holder Certificates, and Registered Exporter System (REX) registrations.
In conclusion, DGFT licenses and approvals are essential for businesses that are engaged in import or export of goods from India. Compliance with the regulatory requirements and obtaining the necessary licenses and approvals ensures the smooth conduct of foreign trade and helps businesses to take advantage of the opportunities offered by the global market.