How does DGFT help in import and export?

Overview of how DGFT help in import and export

The Directorate General of Foreign Trade (DGFT) is an official body responsible for the regulation and formulation of guidelines for import and export. It is a government body in India under the Ministry of Commerce and Industry that is headquartered in New Delhi and is headed by the Director General of Foreign Trade. 

DGFT replaced the Chief Controller of Imports & Exports (CCI&E) during Post liberalization in 1991. With the formation of DGFT, the role of CCI&E came to an end, with this the Prohibition and Controller of Exports and Imports was replaced by the Promoter and Regulator of Exports and Imports. From the inception of DGFT, this government body has been involved in the promotion of foreign trade. It plays the important role of “facilitator”, overseeing the expansion of imports and exports. 

The DGFT grants authorizations to the exporters and monitors their corresponding obligations through their regional office networks. DGFT has 24 regional offices located in many different parts of India namely Ahmedabad, Chennai, Delhi, Hyderabad, Bengaluru, Coimbatore, Ernakulam, Indore, Guwahati, Jaipur, Jammu, Mumbai, Kolkata, Kanpur, Pune, Srinagar, Surat, etc. All these regional offices are certified, and they are in charge of facilitating the exporters in international trade. They help exporters and importers in taking decisions according to the WHO agreements, origin rules, and Anti-dumping issues. It helps in the import and export business in an international dynamic environment. 

India’s official body increases exports and imports with the help of many different necessary laws, DGFT issues licenses for the exporters and importers, introduces many different trade incentives, and helps in maintaining a good relationship with foreign countries. 

Read More: What are licenses needed for import-export business in India?

Role of DGFT in Import and Export 

DGFT plays an important role and helps in the import and export, mentioned below are some major roles that DGFT plays in Import and Export business. 

  • DGFT is responsible for implementing and framing foreign policy related to the trade and EXIM policy. 
  • It provides codes for the importers and exporters and implements procedures for foreign trade. 
  • It creates and classifies the ITC-HS Codes and also maintains them. 
  • For e-BRC updating it acts as a platform. 
  • It helps exporters at the time of restrictions, meaning it provides licenses for those items that are a part of restricted goods and services.
  • It promotes schemes for the welfare of the import and export business and also takes care of the implementation of these schemes. 
  • DGFT is a medium for the promotion of trade with foreign neighbors and it also controls the rates of DEPB.
  • It also helps in framing export infrastructure for the states.
  • For the promotion of export councils, it acts as a fund provider and also for state agencies, businesses, and trade associations. 
  • It categorizes goods on the basis of restricted and unrestricted goods, and awards exporters under Export Policy Schedule 2, regarding such categories of goods that can and cannot be freely exported.
  • Notifications, Circulars, and Notices regarding international trade are issued by the DGFT. 
  • It addresses different types of trade expenses and helps in the development of the market while providing financial assistance. 
  • It conducts research to analyze things for deeper understanding and also analyzes different types of trade policies. 
  • Providing amenities for potential growth and expansion of exports. 
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Implementing Different Policies for Exporters

The Directorate General of Foreign Trade develops policies like Exim Policy or Foreign Trade Policy. These policies are import and export guidelines for goods and services. EXIM policy comes under Section 5 of the Foreign Trade Act 1992, this policy is applicable for 5 years. The Government of India implemented this policy to encourage the exporters of the country. The objective of the policy is the expansion of exports and providing favorable conditions for the balance of payments position. 

Foreign Trade Procedures for Import and Export 

For importers and exporters, the DGFT implements and formulates Foreign Trade Procedures, these trade procedures are followed by importers and exporters for international trade and for implementing Foreign Trade Act and Foreign Trade Policy. 

The purpose of implementing Foreign Trade policy is to put forth simple procedures which are easy to grasp and user-friendly like EDI-compatible procedures which are easy, simple, and have efficient execution in the country. Till 2020 Foreign Trade Procedure 2015-2020 handbook was in effect. 

Read More: How to Select a Product for Export Business?

IEC code for Exporters and Importers

IEC a 10-digit registration code is important for the import-export business, and all the importers and exporters must need this code in order to operate the International business in India. DGFT is the issuing authority of this code, it helps exporters or importers in managing shipments and tracking their records. Now the IEC Code and the PAN have been brought together by the government of India and just one IEC is issued against one PAN. The import-export business needs this IEC Code for the smooth functioning of their International business. 

ITC HS Codes for Import and Export 

ITC HS is an 8-digit code that facilitates foreign code in India with the help of this International Harmonized System of Coding Indian exporters and importers can start their trading activity in the international market. This ITC HS code has two schedules, Schedule 1 deals with Import Activities, and the Second Schedule deals with export activities, it helps importers and exporters in international trading activity. DGFT is also responsible for altering like adding or changing commodities, removing codes or adding new codes, and much more. 

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e-BRC Platform for Exporters 

e-BRC is an exporters certificate that is issued by the banks in order to benefit the exporters of India. Bank Realization Certificate abbreviated as e-BRC helps exporters in claiming benefits that are provided by the government under different promotion schemes of Foreign Trade Policy. DGFTs came up with the concept of e-BRC to promote easy and paperless trade. This electronic module is for the exporters and the banks electronically transmit Foreign exchange realization to the exporter’s bank account directly. This way the exporters enjoy the government schemes without any paperwork. 

Restricted and Unrestricted goods for Import and Export

DGFT helps importers and exporters with restricted and unrestricted items. These goods and services come under Export Policy Schedule 2, where it is clearly mentioned which goods can and can not be exported or imported freely. DGFT formulated an Export and Import policy where it is listed which goods and services are prohibited and which ones can be freely exported. Exporters are free except few restricted items that come under prohibition or restriction and STE. 

Read More: What is the custom duty and import duty?

Licenses for Restricted Items for Exporters 

DGFT grants export licenses to the exporters for the items that are restricted hence paving the way for the export of restricted items. DGFT permits the export of restricted items that are restricted in the Export Policy with the help of a licence. This licence can be obtained by applying online via the official website, which is in charge of providing Export Licenses. 

Registering import export Issues and Complaints 

In order to maintain the quality of the international trading system a trade policy has been imposed under Chapter 8 of Foreign Trade Policy. This mechanism helps in the quality of trade service in India and is framed to resolve complaints regarding trade. DGFT takes care of this mechanism and resolves trade disputes that are related to Foreign Trade. It addresses the complaints regarding exporters of India, the foreign customers can file their complaints via this platform against any Indian exporter. It also addresses the complaints of Indian importers against foreign suppliers. Any issue related to trade or any complaint or dispute can be filed on this platform via the online website. 

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Conclusion 

India is growing very fast in terms of international trade, its export and import business is consistently expanding at International form. India has created International trade relations with different countries with the help of import-export business. The government of India is planning and executing different schemes for the welfare of this import-export business. But in this world Indian importers and exporters don’t know the foreign countries personally so that is the time when DGFT acts as a bridge for the Indian import and export business and foreign nations, the Directorate General of Foreign Trade plays an important role in helping Indian importers and exporters in coming in contact with that of foreign buys and sellers. 

FAQ’s

What is DGFT? 

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