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Foreign Trade(Regulation)Rules, 1993, which inter alia, provide for grant of special licence, application for grant of licence, fee, conditions for licences, refusal of licence, amendment of licence, suspension of a licence, cancellation of licence, declaration as to the value and quality of imported goods, declaration as to the Importer- Exporter Code number, utilisation of imported goods, provisions regarding making, signing of any declaration/statement or documents, power to enter the premises and inspect, search and seizure of goods, documents, things and conveyance, settlement, confiscation and redemption and confiscation of conveyance. Foreign Trade (Exemption from Application of Rules in Certain Cases) Order 1993 Notifications under Foreign Trade (Development & Regulation) Act 1992.

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Import Export Policy

The present import policy and procedures in respect of various commodities/category of importers, are, inter alia, contained in the following publications issued by the Ministry of Commerce and revised from time to time:

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Notifications and Circulars

The Import - Export Policy and Procedure books issued by the Government are amended/clarified/ explained by the Ministry of Commerce from time to time. The types of Notifications/Clarifications/Instructions issued by the Ministry for this purpose are:

1.Public Notices.
2.Notifications
3.Policy Circulars

Select the commodity/Product you wish to import :

Be aware of the import potential and the commercial viability of the commodity/product.

Check whether the items of your interest fall in the Restricted list of ITC(HS) Classifications of Exports & Imports items.

Prohibited items are not permitted to be imported at all. List of Prohibited items of import are detailed below:

Tallow, Fat or Oils rendered, unrendered or otherwise of any animal origin, animal rennet and wild animals including their parts and products and ivory any part and products, including ivory.

For import of items appearing in Restricted list you need secure import licence. Third category of items comes under the Canalised list of items. Import of items included in Canalised list are permitted to be imported through Canalising Agencies.

Thus items not appearing in Prohibited list, Restricted list and or in Canalised list can be imported Freely without any import licence. A large number of Consumer goods are freely importable without licence.

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Registration with Regional Licencing Authority and obtaining IEC Code

Registration with Regional Licensing Authority: Registration with Regional Licensing Authority is a pre-requisite for import of goods. The Customs will not allow clearance of goods unless:

The importer has obtained IE Code Number from Regional Licensing Authority. However, no such registration is necessary for persons importing goods from/ to Nepal provided Value of a single Consignment does not exceed Rs. 25000/=

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Obtaining IEC Code Number

An application for grant of IEC Code Number should be made in the prescribed proforma given at Appendix 3.I. The application duly signed by the applicant should be supported by the following documents:

Bank Receipt (in duplicate)/demand draft for payment of the fee of Rs.1000/- Certificate from the Banker of the applicant firm as per Annexure1 to the form. Two copies of passport size photographs of the applicant duly attested by the banker of the applicant. A copy of Permanent Account Number issued by Income Tax Authorities, if PAN has not been allotted, a copy of the letter of legal authority may be furnished. If there is any non-resident interest in the firm and NRI investment is to be made with repatriable benefits, full particulars thereof along with a photocopy of RBI's approval. If there is NRI investment without repatriation benefit, a simple declaration indicating whether it is held with the general/specific permission of the RBI on the letter head of the firm should be furnished. In case of specific approval, a copy may also be furnished.Declaration by the applicant that the proprietors/partners/directors of the applicant firm/company, as the case may be, are not associated as proprietor/partners/directors with any other firm/company the IEC No. is allotted with a condition that be can export only with the prior approval of the RBI.

The IEC No. is likely to be granted within 3 days of the receipt of the complete application and requisite documents.

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How to fill up IEC application:

Application form should be made in the prescribed form in duplicate along with the above enclosures, mentioned against serial 1 to 8 of above paragraph, also in duplicate. The form should be neatly typed/handwritten in bold capital letters only. Each copy of the application form should be signed in ink by the authorised person. Items of information relevant to applicant should only be filled and remaining items may be marked not applicable. Modification of particulars of the applicant should also be furnished on this form by filling the relevant items. However, in case an IE Code holder no longer wishes to operate under the allotted code number, the matter should be brought under the notice of the Regional Licensing Authority to make the Code number inoperative.

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Import Policy:

For items not mentioned as Prohibited, Restricted or Canalised List for import in ITC(HS) Classification of Export and Import items; import of such items are freely permitted. There is no need to obtain any license or permission for importing such goods. The ITC(HS) Classification of Export and Import items contains 99 chapters and in each chapter there are column heading covering Exim Code, items description, policy and nature or restriction. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule.Procedure to be followed for grant of import license:

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Licence Application Fees

Fees for Licence Application:

By way of deposit in an authorized branch of Central Bank of India indicating the Head of Accounts 1453 Foreign Trade and Export Promotion - Minor Head 102, Import Licence Application Fee. The Bank receipt must show the name of the department viz. "Director General of Foreign Trade". The bank receipt should be drawn in favour of Pay & Accounts Officer concerned. Such fees can also be deposited with Indian Missions abroad. Or, Crossed DD on a scheduled bank for the requisite amount should be made in favour of the concerned licensing authority.

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Validity of Licence

Besides import licence for import of restricted items there are other variety of licences and such licences have different period of validity. Export Promotion Capital Goods Licence validity 24 months

Customs Clearance Permit " 12 months

DEPB " 12 months

Advance License/Special Imprest Licence

For Project/Turnkey Project "18 months or co-terminus with the contracted duration of the Project For the cases where the license expires before the last day of the month, the license shall be deemed to be valid until the last day of that month.

Revalidation of License: License revalidation can be done on merits but not beyond 12 months by the concerned licensing authority for a period of six months at a time reckoned from the date of expiry of the validity period.

Last date for filling applications: the last date for receipt of applications for grant of licenses is 28th February of the licensing year unless otherwise specified.

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Conditions of Licence

Licensing conditionalities: The license for import is taken into consideration provided: the goods covered by the license shall not be disposed of except in accordance with the provisions of the EXIM Policy, 1997-2002 or in the manner specified by the licensing authority in the license; the applicant for a license shall execute a bond for complying with the terms and conditions of the license. It shall be deemed to be a condition of every license for import that - no person shall transfer or acquire by transfer any license issued by the licensing authority except in accordance with the provisions of the Policy; the goods for the import of which a license is granted shall be the property of the licensee at the time of import of which a license is granted shall be the property of the licensee at the time of import and up to the time of clearance through the Customs; the goods for the import of which a licensee is granted shall be new goods, unless otherwise stated in the license; the goods covered by the license for import shall not be exported without the written permission of the DGFT; Disposal period for import application: Provided the application is complete in all respects along with prescribed documents, the applicant-importer can expect the disposal in:

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IEC No. - 3 working days

Duty free license where input-output norms are notified - 5 working days

Duty free license where input-output norms are notified but cases are to be placed before ALC -15 working days
Duty free license where input-output norms are not notified, EPCG licenses/export licenses/export.
licenses/specific import licenses - 15 working days
Revalidation of license and extension of export obligation period by RLA - 5 working days
Acceptance of Bank Guarantee/Legal undertaking - 3 working days
Redemption of Bank Guarantee/Legal undertaking/Endorsement of Transferability - 10 working days
Issuance/renewal of Export House/Trading House/Star Trading House/Super Star Trading House - 15 working days
Amendment of any category of license - 5 working days SIL - 7 working days Fixation of Standard input-output norms - 45 working days

DEPB - 5 working days
All licenses falling under Chapter 8 - 5 working days
Miscellaneous - 15 working days
Fixation of deemed exports drawback rate - 45 working days

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Imports under Special Scheme for Exporters

The Govt. of India has framed the certain schemes to promote exports. Export Promotion Capital Goods Schemes:

Capital goods including jigs, fixtures, dies and moulds may be imnported at a concessional rate of customs duty as per table given below. Subject to an export obligation to be fulfilled over a period of time. In addition spares up to 20 per cent of the cost insurance and freight (CIF) value of the capital goods may also be imported under the scheme. Under this scheme Customs duty is 5% if the export obligation is 5 times the CIF value of the capital goods or 4 times the CIF value of capital goods on NEF basis. The period of fulfillment of the export obligation is 8 years reckoned from the date of issuance of licence. Period from the date of issue of licence Proportion of total export obligation

Block of 1st and 2nd year nil
Block of 3rd and 4th year 15%
Block of 5th and 6th year 35%
Block of 7th and 8th year 50%

The licence holder under EPCG scheme shall fulfill the export obligation over the specified period in the following proportions:

An application for grant of license under this scheme should be made to the licensing authority concerned in the form given in Appendix 10 A of the Handbook of Procedures, 1997-2002 along with documents prescribed therein. Before clearance of goods through customs, the importer has to execute a bond supported by a bank guarantee with the Customs Authority in the prescribed manner. The license holder will also have to submit progress report of the export/supplies made and services provided, duly certified by a Charted Accountant/Cost and Works Accountant to the Licensing Authority. The report should be submitted in the prescribed form 10C of the Handbook of Procedures, 1997-2002. For Customs duty exemption exemption in respect of imports under EPCG scheme, the Ministry of Finance has issued Notification No. 28/97-Cus. & 29/97-Cus., both dated 1st April, 1997

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Duty Exemption Scheme:

According to the EXIM Policy 1997-2000, duty free import of inputs is permitted under the following schemes: Advance License - granted to merchant exporter or manufacturer exporter for the import of inputs required for the manufacture of goods without payment of basic customs duty. However, such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import. Reference: Notification No. 30/97-Customs both dated 1.4.97. Annual Advance License - Manufacturer exporter with export performance of Rs. 1 crore in the preceding year and registered with excise authorities, except for products which are not excisable for which no such registration is required, shall be entitled for Annual Advance License. Export House, Trading House, Star Trading Houses and Super Star Trading Houses Holding the certificate as merchant exporter where they agree to the endorsement of the name(s) of the supporting manufacturer on the relevant annual advance license shall also be entitled for the annual advance license. This license and/or material imported thereunder shall not be transferable even after completion of export obligation. Such annual advance license shall be issued with positive value addition without stipulation of minimum value addition. The entitlement under this scheme shall be up to 125% of the average FOB value of export in the preceding licensing year. Imports against this is exempted from payment of Additional customs duty, Special Additional Duty, Anti Dumping Duty, Safeguard duty, if any, in addition to Basic customs duty and surcharge thereon. Advance Intermediate License: This license is granted to a manufacturer exporter for the import of inputs required in the manufacture of goods to be supplied to the ultimate exporter holding an Advance License/Special Imprest License. Special Imprest License: This license is granted for the duty free import of inputs required in the manufacture of goods to be supplied to the ultimate exporter holding an Advance License/Special Imprest License. Such Special Imprest License is granted for the Duty Free import of inputs required in the manufacture of goods to be supplied to the EoUs/units in EPZs/STP/EHTP, holders of license under the EPCG scheme, projects financed by multilateral/bilateral agencies/funds as notified by the Dept. of Economic Affairs, MoF, Fertilizer Plants if the supply is made under the procedure of International Competitive Bidding, supply of goods to refineries and proejcts/purposes for which MpF permits import of such goods on zero customs duty.

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Selecting the Overseas Supplier

Imports can be made from any country of the world except Fiji and Iraq. The information regarding overseas supplier can generally be obtained from the following sources: Trade Directories and Yellow Pages, like Singapore yellow pages, Japan yellow pages, USA yellow pages etc. available from leading booksellers in India including. Consulate Generals and Trade Representatives of various countries in India and abroad. Friends and relatives in foreign countries. International Trade Fairs and Exhibitions for which you may contact:

International Trade Promotion Organisation(ITPO),
Pragati Maidan, New Delhi.
Chamber of Commerce.
Directorate of Industries, etc.
Indenting Agents of Foreign Suppliers.

The advertisement in foreign papers may also be useful.

Similar informations are also available in our Import-Export database.

Capability and Creditworthiness of Overseas Supplier

Successful completion of an import transaction will mainly depend upon the capability of the overseas supplier to fulfil his contract.The credit worthiness of the overseas supplier, his capacity to fulfil that contract, etc. should, therefore, be properly verified beforeentering into a contract with him. Confidential reports about the supplier may be obtained through the banks and Indian embassies abroad. Reputed overseas suppliers normally have their Indenting Agents with offices in India and contract can also be finalised through them for smoother operations. The importer can also take the assistance of Credit Information Agencies for specific commercial information on overseas suppliers. They may also contact Trade Information Centres of the country concerned.

Correct address of these agencies can be obtained from the overseas countries trade representatives posted in India.

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Role of Overseas Suppliers' Agents in India

Some overseas suppliers have appointed their agents in India. These agents procure orders from the Indian parties and arrange for the supply of goods from their principal abroad. It is advisable to import through such agents as they can be readily contacted in case of any difficulty with regard to quality of goods, payment and documentation, etc.

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Finalising the Terms of Import

This is an important subject and should be handled with extreme care and caution. It is advisable that before finalising the terms of Import Order, you should call for the samples or catalogue and other relevant literatures and the specification of the items to be imported. Import of samples of goods is exempt from import duties under 'Geneva' Convention of 7th November, 1952. Samples are subject to re-export and other conditions as specified in the Geneva Convention. Besides, vide Customs Notification No. 154/94 dated 13.07.1994, commercial samples brought into India as personal baggage by bona fide commercial travellers and businessmen or imported into Into India by post or by air are exempt from the customs duty. Similarly, vide Notification No. 154/94 dated 13.07.1994, prototype of engineering goods when imported into India as samples for executing or for use in connection with-export orders are exempt from customs duty. Likewise, the Central Government has exempted bona fide commercial samples and prototype of engineering goods when imported into India by post or by air or by courier service by manufacturers of export goods. Once you are satisfied with the samples and the creditworthiness of the overseas supplier, you can proceed to finalise the term of the contract to be entered into. For this purpose, the Import Contract should be carefully and comprehensively drafted incorporating therein precise terms, all relevant conditions of the trade deal. There should not be any ambiguity regarding the exact specifications of the goods and terms of the purchase including import price, mode of payment, type of packaging, port of shipment, delivery schedule, etc. The different aspects of an import contract are enumerated as under some of which may be relevant and other may not be: