How to set up and run an export-import business in India — obtaining an import export code, the annual update that people forget, LUT for zero-rated exports, RCMC and export promotion schemes, and the documents behind every shipment.
Cross-border trade in India is administered by several bodies at once — the DGFT for the code and the schemes, Customs for the goods, GST for the tax treatment, and your bank as the authorised dealer for the money. This guide covers what each requires and the order to do it in.
The Import Export Code
The IEC is a ten-digit code issued by the Directorate General of Foreign Trade. It is required for any import into or export out of India.
- Applied for online on the DGFT portal.
- Issued quickly, usually within a few working days, with no physical inspection.
- Lifetime validity — but see the annual update below.
- The code is now the same as the entity's permanent account number.
- Not required for goods imported or exported for personal use unconnected with trade, and certain government imports.
The IEC must be updated every year even when nothing has changed. An IEC not updated between April and June is liable to be deactivated. This is the single most common trade compliance failure, and it is discovered at the worst time — when a shipment is held because the code is inactive. Reactivation is possible on updating, but the shipment waits.
What You Need
- PAN of the entity.
- Aadhaar or passport of the proprietor, partner or director.
- Bank account details with a cancelled cheque or a banker's certificate.
- Address proof of the business premises.
- Digital signature or Aadhaar-based authentication.
GST Treatment of Exports
Exports are zero-rated. There are two routes:
- Export under a letter of undertaking, without paying integrated tax, and claim a refund of the accumulated input tax credit. This is the route most exporters prefer, as it avoids blocking working capital.
- Export on payment of integrated tax, and claim a refund of the tax paid. Simpler administratively but ties up cash until the refund arrives.
The letter of undertaking must be furnished on the GST portal for each financial year, and should be filed before 1 April so that no export in the new year falls outside it.
A lapsed LUT does not merely inconvenience you. Exports made when no valid LUT is in force are not covered by the without-payment route, and integrated tax becomes payable on them. Renewing on 1 April every year is a two-minute task that avoids an expensive reconstruction later.
Registration-cum-Membership Certificate
An RCMC is issued by an Export Promotion Council or commodity board relevant to your product — for example APEDA for agricultural and processed food products, or the Federation of Indian Export Organisations as a general body. It is required to claim benefits under the Foreign Trade Policy. Choose the council that matches your product line, and renew before expiry.
Bank and Customs Registrations
- AD Code registration. Your bank issues an authorised dealer code, which must be registered at each port or airport you ship through. Without it a shipping bill cannot be filed at that port. Register at every port you intend to use, in advance.
- ICEGATE registration, for filing and tracking customs documents electronically.
- Bank realisation. Export proceeds must be realised within the period allowed under the foreign exchange rules, and the realisation is evidenced electronically. Outstanding shipping bills against unrealised proceeds are followed up by the bank and the DGFT.
Export Promotion Schemes
- Advance Authorisation — duty-free import of inputs physically incorporated into an export product, against an export obligation.
- EPCG — import of capital goods at zero duty, against an obligation to export a multiple of the duty saved within a specified period.
- RoDTEP — remission of duties and taxes on exported products, credited as transferable scrips, covering embedded taxes that no other mechanism refunds.
- Duty Drawback — refund of customs duty on imported inputs used in exports.
- Duty-Free Import Authorisation, an alternative to Advance Authorisation with different conditions.
Export obligations under EPCG and Advance Authorisation are enforceable commitments, not aspirations. Failing to meet the obligation within the period means paying the duty saved together with interest. Before taking a scheme, model the export volumes you would actually have to achieve, and track fulfilment from the first shipment rather than in the final year.
Documents Behind a Shipment
- Commercial invoice and packing list.
- Shipping bill for exports, or bill of entry for imports.
- Bill of lading or airway bill.
- Certificate of origin, preferential where a trade agreement applies.
- Letter of credit, where payment is on those terms.
- Insurance certificate.
- Any product-specific certification — phytosanitary, health, or a quality certificate.
Getting Started, in Order
- Obtain PAN and GST registration.
- Apply for the IEC.
- Obtain the AD code from your bank and register it at each port you will use.
- File the letter of undertaking on the GST portal for the current financial year.
- Obtain the RCMC from the relevant council, if you intend to claim scheme benefits.
- Register on ICEGATE.
- Classify your product correctly under the tariff — this determines duty, scheme eligibility and licensing, and getting it wrong distorts everything downstream.
- Diarise the annual IEC update and the LUT renewal.
Related Guides
- IEC & Export-Import Trade Checklist
- IEC & Trade Compliance Calendar 2026–27
- Import export code registration guide
Key Facts About IEC
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
Does an IEC need to be renewed?
It has lifetime validity but must be updated every year between April and June, even when no details have changed. An IEC that is not updated is liable to be deactivated, which stops shipments until it is reactivated.
What is a LUT and when must it be filed?
A letter of undertaking allows an exporter to export without paying integrated tax and to claim a refund of accumulated input tax credit. It must be furnished on the GST portal for each financial year, and should be filed before 1 April. Exports made without a valid LUT in force attract integrated tax.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
IEC: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.