IEC Code stands for “Importer Exporter Code”. To import or export in India, IEC Code is mandatory. No person or entity shall make any Import or Export without IEC Code Number. IEC Code is a 10-digit unique code issued by Director General of Foreign Trade (DGFT), Ministry of Commerce, and Government of India to the Indian Companies.
An individual or a company who wants to do international business can get an IEC. Individuals can use either the name of their company or their name directly to apply for IEC.
Export Promotion Councils are Government-initiated authorities that promote and support export firms in developing their overseas trade and presence by providing technical and industry insights.
EPCs also promote government schemes.
As per the Foreign Trade Policy, an exporter is required to get a Registration-cum-Membership Certificate (RCMC) for availing various benefits under the Policy.
Getting an RCMC will provide various benefits like:
- Being part of a worldwide network
- Assistance in exportation
- Getexposure to other markets.
- Avail of government incentive
International trade presents a spectrum of risk, which causes uncertainty over the time payments between the exporter (seller) and importer (foreign buyer). Therefore, exporters want to receive payment as soon as possible, preferably as soon as an order is placed or before the goods are sent to the importer. Importers want to receive the goods as soon as possible but to delay payment as long as possible, preferably until after the goods are resold to generate enough income to pay the exporter.
With cash-in-advance payment terms, an exporter can avoid credit risk because payment is received before the ownership of the goods is transferred. Foreign buyers are also concerned that the goods may not be sent if payment is made in advance.
Letters of Credit
Letters of credit (LCs) are one of the most secure instruments available to international traders. An LC is a commitment by a bank on behalf of the buyer that payment will be made to the exporter, provided that the terms and conditions stated in the LC have been met, as verified through the presentation of all required documents. An LC also protects the buyer since no payment obligation arises until the goods have been shipped as promised.
A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of the payment for a sale to its bank (remitting bank), which sends the documents that its buyer needs to the importer’s bank (collecting bank), with instructions to release the documents to the buyer for payment. Funds are received from the importer and remitted to the exporter through the banks involved in the collection in exchange for those documents.
Incoterms are a set of internationally recognized and accepted rules covering the conditions of sale and establishing the rights and responsibilities of both buyer and seller in international trade. Since their inception, Incoterms have been periodically revised and updated to keep them relevant and to adapt them to changes in international trade.
- Commercial Invoice
- Packing List
- Leading & Airway Bill
- Shipping & Export Bill
- Certificate of Origin
- Inspection Certificate
- Insurance Certificate
The ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd.) is a company wholly owned by the Government of India. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. It Provides:
- Provides a range of credit risk insurance covers to exporters against loss in export of goods and services as well.
- Offers guarantees to banks and financial institutions to enable exporters to obtain better facilities from them.
- Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan and advances.