Section 7 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 7 is the legal source of the Importer-exporter Code (IEC): no person may make an import or export except under a Code Number granted by the Director General or an authorised officer. A 2010 proviso narrows the requirement for services and technology. This article explains it as per the Act as enacted in 1992 read with the 2010 Amendment Act.
No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General, or the officer the Director General authorises, following the procedure the Director General specifies. For services or technology, the Code is needed only when the provider takes benefits under the foreign trade policy or deals with specified services or technologies. An import or export without it is a contravention that can attract a penalty under section 11.
The text of section 7
Section 7 is one sentence. It says: "No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officer authorised by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General."
Break it down:
| Element | What the text says |
|---|---|
| Who is bound | "No person": any individual, firm or company, not only a trader |
| What is prohibited | Making "any import or export" without a Code |
| Who grants the Code | The Director General, or an officer authorised by the Director General |
| How | In accordance with the procedure specified by the Director General |
"Import" and "export" are defined in section 2(e), and "Importer-exporter Code Number" in section 2(f) as the Code Number granted under section 7.
The Act does not lay down the procedure. It leaves that to the Director General, which is why the application form, documents and portal steps are found in the Policy and the Handbook of Procedures and not in the Act. For the practical side, see our guide to IEC registration through ANF 2A. If you need the Code itself, our IEC registration service can help you apply.
The 2010 proviso for services and technology
The 2010 Act added a proviso: "in case of import or export of services or technology, the Importer-exporter Code Number shall be necessary only when the service or technology provider is taking benefits under the foreign trade policy or is dealing with specified services or specified technologies".
Two conditions, either of which brings the requirement back:
- the provider takes benefits under the foreign trade policy; or
- the provider deals with specified services or specified technologies.
"Specified" has the meaning in section 2(l), which covers items restricted on nuclear, security, foreign policy or treaty grounds. There is no similar proviso for goods: every import or export of goods needs the Code, subject to what the Orders, Rules or Policy exempt. The 2010 Act was brought into force by notification; the date is not in the sources consulted.
Example: Neha Analytics LLP builds data models for a client abroad and takes no benefit under the foreign trade policy, and its work is not a specified service. On the text of the proviso the Code is not necessary for that service export. If it later applies for a benefit under the policy, the Code becomes necessary.
Consequence of acting without the Code
Section 7 itself states no penalty, but section 11(1) says no export or import shall be made except in accordance with the Act, the rules and orders and the foreign trade policy. Section 11(2) provides a penalty for making or abetting or attempting any import or export in contravention of the Act; the amount is explained in section 11. Rule 12 of the Foreign Trade (Regulation) Rules, 1993 requires the Code Number to be stated in the Bill of Entry or Shipping Bill, and as amended in 2015 makes a person using someone else's Code liable to a penalty under section 11(2); see rules 11 and 12.
Example: Imran Traders files a Bill of Entry for machine parts without holding a Code. The import is made without the Code that section 7 requires, and rule 12 expects a Code number on the Bill. The firm risks action under section 11.
The Code can also be suspended or cancelled under section 8; see section 8.
Background: the Policy on the Code
The Foreign Trade Policy 2023 deals with the Code in para 2.05. In the copy consulted, it describes the IEC as a 10-character alpha-numeric number allotted to an entity, made the same as the Permanent Account Number and issued separately by DGFT on an online application. It says no export or import of goods shall be made without an IEC unless specifically exempted, and that for services or technology the IEC is necessary on the date of rendering services for availing benefits under the Policy. Exempt categories are said to be in the Handbook of Procedures. Para 2.05(d) and (e) deal with yearly updating and de-activation. Because these are policy provisions, they can change; check the current Policy and Handbook.
Need help with an Importer-exporter Code?
If you are about to import or export and do not have a Code, or your details need updating, our IEC registration team can handle the application. Later amendments to the Act, the Policy and the Handbook of Procedures should be checked first.
Key takeaways
- Section 7 bars any import or export except under an Importer-exporter Code Number.
- The Director General, or an authorised officer, grants the Code under the procedure the Director General specifies.
- Since 2010 the Code is necessary for services or technology only when policy benefits are taken or specified items are dealt with.
- Acting without the Code risks action under section 11, and rule 12 requires the Code on the Bill of Entry or Shipping Bill.
- Using someone else's Code is a rule 12 violation that attracts a section 11(2) penalty.
Read next
- Section 8: suspension and cancellation of the Importer-exporter Code
- Rules 11 and 12: declarations of value, quality and the Code
- IEC registration under ANF 2A on the DGFT portal
- What is IEC? Meaning, example and uses
Disclaimer: Based on the Foreign Trade (Development and Regulation) Act, 1992 as enacted read with the Amendment Act of 2010, and on the Foreign Trade (Regulation) Rules, 1993 as notified read with the Amendment Rules of 2015, as consulted on 2 October 2026. Later amendments, the current Foreign Trade Policy and the Handbook of Procedures should be checked. This article is general information, not legal advice; check the official text before acting.