The Importer-Exporter Code (IEC) is a unique identification number that every business in India must obtain to carry out cross-border trade. It is a legal requirement under the Foreign Trade (Development & Regulation) Act, 1992, and its framework is further detailed in the Foreign Trade Policy (FTP) 2023 and the Handbook of Procedures (HBP) 2023. The IEC is issued by the Directorate General of Foreign Trade (DGFT) and serves as the foundational document for import and export transactions. Without an IEC, no importer or exporter can clear goods through customs, receive foreign currency payments, or access export incentives.

Over the years, IEC has been aligned with the PAN and GSTIN system, ensuring a single identity for businesses across taxation, customs, and banking platforms. This harmonisation reduces duplication and increases efficiency in trade compliance. Thus, IEC is not just a statutory requirement but also a crucial facilitator of global trade.

In this article, CA Manish Mishra talks about Import Export Code (IEC) Registration: Process and Guidelines.

Legal Basis of IEC Registration

Statutory Authority – FTDR Act, 1992

The foundation of IEC registration lies in the Foreign Trade (Development & Regulation) Act, 1992 (FTDR Act). This law empowers the Central Government to regulate India’s import and export activities. Under this Act, the Directorate General of Foreign Trade (DGFT) has been designated as the statutory authority for issuing, amending, suspending, or cancelling IECs. DGFT also has enforcement powers to ensure that only compliant businesses are allowed to participate in cross-border trade. Thus, IEC is not merely an administrative requirement but a statutory mandate backed by legislation.

Foreign Trade Policy (FTP) 2023 – Para 2.05

The FTP 2023 operationalises the FTDR Act and provides detailed trade rules. Para 2.05 specifically establishes a PAN-based IEC system, ensuring that:

• Each business entity can hold only one IEC linked to its Permanent Account Number (PAN).

• The same IEC remains valid across all business locations or branches in India.

• IEC details must be updated annually between April and June, failing which the IEC is automatically deactivated.

• Once updated, IECs can be re-activated online, making compliance both mandatory and convenient.

This PAN-based approach harmonises IEC with tax (GSTIN) and customs systems, preventing duplication and maintaining a uniform business identity across government databases.

Handbook of Procedures (HBP) 2023 – Chapter 2

The HBP 2023 complements the FTP by laying out the procedural aspects of IEC:

• Application Process: IEC applications must be filed online through Form ANF-2A on the DGFT portal, supported by PAN, bank details, and proof of business address.

• Modification Rules: Any change in constitution, address, bank details, or ownership must be updated within 30 days. In cases of mergers or acquisitions where a new PAN is generated, a fresh IEC must be obtained.

• Surrender of IEC: Businesses that close operations or restructure can voluntarily surrender their IEC, which is then updated across DGFT and customs systems.

• Reactivation: IECs deactivated for non-updation can be reactivated once details are filed online, ensuring continuity of trade operations.

Notifications, Public Notices, and Trade Notices by DGFT

To keep the IEC framework dynamic, DGFT regularly issues subordinate instruments:

• Notifications: Carry legal force and amend the provisions of the FTP.

• Public Notices: Clarify or amend the procedural requirements of the HBP.

• Trade Notices: Provide operational guidance, such as timelines for annual updation, lists of IECs due for deactivation, and applicable fee structures.

Typically, DGFT allows a nil fee for IEC updation if done within April–June, while late updation may attract a nominal charge. These notices also remind businesses about compliance obligations and ensure smooth enforcement of trade policy.

Importance of IEC

Mandatory for Trade

The Importer-Exporter Code (IEC) is the legal entry point for cross-border trade in India. Without an IEC, no individual or business can legally import goods into the country or export products and services abroad. Customs authorities require IEC at the time of clearance of goods, while banks need it to process international remittances related to trade. The only exceptions are certain exempted categories, such as government departments, personal imports not connected with trade, or specified low-value border transactions. For all other businesses, IEC is non-negotiable and compulsory to operate in the global marketplace.

PAN-Based Identity

Under FTP 2023, Para 2.05, the IEC is now strictly PAN-based, meaning it is automatically linked to the entity’s Permanent Account Number. This ensures that every business can have only one IEC, eliminating duplication and fraudulent multiple registrations. By aligning with GSTIN (Goods and Services Tax Identification Number), the system creates a single identity across tax, trade, and customs frameworks. This integration promotes transparency, ensures accountability, and makes compliance monitoring more effective for both businesses and regulators.

Single Registration Across India

Another significant advantage of IEC is that it is valid for the entire entity across India, irrespective of the number of branches, factories, or offices. Once an IEC is issued, the same code can be used for imports and exports from any location of the business. This “single registration” approach reduces compliance burden, avoids the need for branch-specific codes, and enables companies to expand their operations seamlessly across states. Whether a business has one unit or multiple branches nationwide, a single IEC serves as the umbrella identifier for all trade activities.

Integration with Trade and Banking Systems

IEC is not just a standalone number it is integrated into multiple systems that regulate and facilitate foreign trade. At Customs (ICEGATE portal), IEC is required for filing shipping bills and bills of entry, which are essential for clearance of goods. In the banking system, IEC is linked to the Export Data Processing and Monitoring System (EDPMS) and the Import Data Processing and Monitoring System (IDPMS), through which the Reserve Bank of India tracks foreign exchange inflows and outflows. Additionally, IEC is the gateway for accessing DGFT’s export promotion and incentive schemes, such as duty credit scrips or benefits under the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. Without an active IEC, businesses cannot avail these benefits or process international trade transactions.

Exemptions from IEC Requirement (HBP Para 2.07)

Government Departments

IEC is generally mandatory for businesses, but Central and State Government Ministries or Departments are exempt. For example, if the Ministry of Defence imports specialized equipment or if a State Government imports relief material, they do not require an IEC. This exemption recognizes that government agencies operate under sovereign authority, and their imports/exports are conducted for public interest rather than for profit.

Non-Commercial Use

Imports and exports undertaken for personal purposes and not connected with trade, manufacturing, or agriculture are exempt from IEC. For instance, an individual importing household items for personal use or sending personal gifts abroad does not need an IEC. The key condition here is that the activity must be non-commercial any transaction intended for resale, business, or production automatically requires IEC registration.

Border Trade

Certain low-value trade transactions conducted with India’s neighboring countries Nepal, Bhutan, Myanmar, and China through specified land customs stations are exempt from IEC, provided they fall within prescribed CIF (Cost, Insurance, and Freight) value limits. This exemption facilitates small-scale, cross-border trade for local communities in border regions, ensuring smoother movement of essential goods without the burden of full trade compliance. However, this exemption is strictly regulated and available only through notified border routes and subject to value thresholds.

Permanent IECs for Administrative Purposes

In some cases, permanent IEC numbers are assigned by DGFT to certain categories for administrative convenience. These are not tied to a business PAN but serve as placeholders for specific non-commercial or government-linked activities. For example, codes like “AMDCG0111E” are allocated to Government Departments or other designated entities for operational ease in customs and DGFT systems. These IECs are not transferable and are not used for ordinary trade activities.

Important Note – Exclusion for SCOMET Items

It is an important to note that these exemptions do not apply to SCOMET items (Special Chemicals, Organisms, Materials, Equipment, and Technologies). SCOMET items are classified as sensitive exports because of their potential dual-use (civilian and military). Any person or entity dealing with SCOMET products must obtain an IEC and follow export control regulations, regardless of whether they otherwise qualify for an exemption. This ensures strict oversight of sensitive and strategic goods.

Step-by-Step Process of IEC Registration

Step 1: Pre-Application Preparation

Before filing for an IEC, the applicant must ensure certain basic requirements are in place. A valid Permanent Account Number (PAN) is compulsory, as the IEC is directly linked to the PAN of the individual, company, LLP, or partnership firm. The applicant also needs to have an active bank account in the name of the business entity, supported by either a cancelled cheque with pre-printed details or a bank certificate. Additionally, a valid proof of address such as a utility bill, rent agreement, or ownership document is required. Preparing these documents in advance helps avoid delays or rejections at the time of filing.

Step 2: Filing ANF-2A on the DGFT Portal

The IEC application is filed online through the DGFT portal (https://www.dgft.gov.in) using the prescribed Application Form ANF-2A. The applicant must log in with credentials, fill in the required details, and attach scanned copies of supporting documents. To authenticate the application, a Digital Signature Certificate (DSC) or Aadhaar-based e-signature is mandatory. Once the application is complete, the prescribed fee (as per DGFT’s schedule) must be paid online through net banking, credit/debit card, or other available modes. This ensures secure and paperless processing.

Step 3: Processing by DGFT

After submission, the application undergoes online verification. The system checks the details entered against PAN, bank, and address records. If necessary, the DGFT Regional Authority (RA) may conduct post-verification of the documents to confirm authenticity. Once the verification is complete and no discrepancies are found, the DGFT generates the e-IEC (electronic Importer-Exporter Code). The applicant receives an intimation of approval through email and SMS, confirming that the IEC has been successfully issued.

Step 4: Downloading the IEC Certificate

After approval, the IEC certificate is available for download from the applicant’s dashboard on the DGFT portal. Although the IEC number is the same as the applicant’s PAN, filing the application is mandatory for its activation in the DGFT and customs systems. Without completing this process, the PAN will not function as an IEC for trade purposes. The issued e-IEC is valid for the lifetime of the entity, subject to annual updation, and can be used immediately for customs clearance, international banking transactions, and availing DGFT incentives.

Validity and Renewal

Permanent Validity

Once an Importer-Exporter Code (IEC) is issued, it carries lifetime validity unless it is specifically cancelled or surrendered. This means businesses are not required to reapply for a new IEC every few years, unlike certain other licenses. The code remains valid across the lifetime of the entity and can be used for all import and export transactions, as long as it complies with DGFT regulations. This feature significantly reduces the compliance burden for businesses by eliminating the need for frequent renewals.

Annual Updation Requirement – FTP 2023, Para 2.05(e)

Although the IEC has permanent validity, the Foreign Trade Policy (FTP) 2023, Para 2.05(e) introduced a crucial requirement: every IEC holder must update or confirm their IEC details once every year, between April and June. This update can include changes to business name, address, ownership, or bank details. Even if there are no changes, a “No Change” confirmation must still be submitted.

Failure to update the IEC within the prescribed window results in automatic deactivation of the code. A deactivated IEC cannot be used for customs clearance, foreign remittances, or claiming DGFT incentives, which can disrupt trade operations. However, the system is designed for convenience: once the IEC holder submits the necessary updates through the DGFT portal, the IEC is automatically re-activated without the need for manual intervention.

Modification and Surrender

Modification Rules

The Importer-Exporter Code (IEC) is not a static registration; it must always reflect the current details of the business. Under the Handbook of Procedures (HBP) 2023, Chapter 2, businesses are required to update their IEC promptly whenever there is a change.

• 30-Day Rule: Any modification in business name, registered address, constitution (like partnership to company or proprietorship to LLP), or bank account details must be updated with the Directorate General of Foreign Trade (DGFT) within 30 days of such change. This ensures that the IEC profile remains accurate in all linked systems such as customs, banks, and DGFT’s incentive platforms. Non-compliance can cause mismatches, resulting in delays in customs clearance or foreign remittance processing.

• Corporate Restructuring: When a business undergoes merger, demerger, or acquisition and as a result, a new PAN is generated, the old IEC cannot be carried forward. Instead, the entity must apply for a new IEC aligned with the new PAN. Unutilised authorisations, benefits, or licenses linked to the old IEC may be transferred to the new IEC after DGFT’s approval, ensuring business continuity.

Surrender of IEC

There are circumstances where a business may no longer require an IEC for instance, if it closes down operations, discontinues foreign trade activities, or merges into another entity. In such cases, the IEC can be voluntarily surrendered.

The surrender request must be filed online through the DGFT portal. Once the Regional Authority (RA) of DGFT approves the surrender, the IEC is cancelled in DGFT’s system, and this information is electronically updated with Indian Customs. This ensures that the surrendered IEC cannot be used for future imports, exports, or any trade-related transactions.

Legal Remedies and Penalties

Suspension or Cancellation by DGFT

The Directorate General of Foreign Trade (DGFT) has the statutory power under the Foreign Trade (Development & Regulation) Act, 1992 to suspend or cancel an Importer-Exporter Code (IEC) if the holder is found violating provisions of the Foreign Trade Policy (FTP) or misusing authorisations. This can happen in cases of fraudulent documentation, misuse of export incentives, or engaging in restricted/prohibited trade. Suspension or cancellation renders the IEC invalid, preventing the entity from carrying out any further imports or exports until compliance is restored.

Compliance Failure – Deactivation and Penalties

Even without fraudulent intent, compliance failures can attract penalties. As per FTP 2023, Para 2.05(e), IEC holders must update or confirm their details annually between April and June. If this is not done, the IEC is automatically deactivated. Similarly, failure to update changes in name, address, constitution, or bank details within 30 days also attracts action. Providing false or misleading information during registration or modification can further expose the business to fines, penalties, or even blacklisting under DGFT rules.

Impact on Business Continuity

A deactivated or suspended IEC has direct operational consequences. Without an active IEC, a business cannot:

• Clear goods through Customs (ICEGATE) for import or export.

• Process foreign remittances through banks (EDPMS/IDPMS systems).

• Claim benefits under DGFT’s export incentive schemes such as RoDTEP, EPCG, or duty credit scrips.

This means that non-compliance not only attracts legal penalties but also disrupts the very ability of a business to operate in global trade. Timely compliance with annual updation, accurate reporting, and prompt modifications are therefore essential to maintain uninterrupted trade operations.

Integration with Other Systems

Customs (ICEGATE)

The Indian Customs Electronic Gateway (ICEGATE) is the official portal for filing import and export documents such as shipping bills and bills of entry. An active IEC is mandatory for these filings because it serves as the primary identifier of the importer or exporter in customs records. Without a valid IEC, the customs system will not process consignments, effectively blocking import or export activities. This integration ensures that only authorised and legally compliant businesses are permitted to transact in international trade.

Banks (EDPMS/IDPMS)

The Reserve Bank of India (RBI) monitors all foreign exchange inflows and outflows through the Export Data Processing and Monitoring System (EDPMS) and the Import Data Processing and Monitoring System (IDPMS). In these systems, banks use the IEC linked with the business’s PAN to validate and report international remittances. This linkage ensures that payments received for exports or made for imports are tracked, reducing the risk of money laundering and ensuring compliance with FEMA (Foreign Exchange Management Act) regulations. A mismatch or inactive IEC can cause banks to block or delay cross-border payments.

GST Integration

With the introduction of PAN-based IEC under FTP 2023, IEC is automatically aligned with the Goods and Services Tax Identification Number (GSTIN). This one-to-one mapping between IEC, PAN, and GSTIN creates a single trade identity across taxation, customs, and DGFT systems. Such integration ensures accurate monitoring of tax compliance, prevents duplication of registrations, and simplifies audits. It also provides consistency when claiming input tax credits or DGFT export incentives, as the IEC-GSTIN linkage establishes the legal and financial identity of the business in all official systems.

Recent Updates and Clarifications

FTP 2023 – Effective from April 1, 2023

The Foreign Trade Policy (FTP) 2023 reaffirmed the government’s commitment to simplify trade compliance through digital systems. It reiterated that the Importer-Exporter Code (IEC) is PAN-based, ensuring one IEC per entity, and introduced the requirement of annual updation between April and June each year. It also placed strong emphasis on digital governance, making IEC applications, modifications, and updates fully online through the DGFT portal, thus eliminating manual paperwork and reducing processing time.

DGFT Trade Notices (2021–2025) – Phased Deactivation Drives

The Directorate General of Foreign Trade (DGFT) has issued multiple Trade Notices between 2021 and 2025 to enforce compliance. These notices announced phased deactivation drives for IECs that were not updated annually as required under FTP. DGFT also published lists of IECs slated for deactivation, giving businesses an opportunity to update details before final action. This step ensured that the IEC database remains current, preventing misuse and improving reliability for customs, banks, and regulatory systems.

Fee Updates for Annual Updation

To encourage timely compliance, DGFT structured the fee system for IEC updates:

• Nil fee if the IEC is updated during the April–June window each year.

• Prescribed nominal fee for updation done after the window closes.

This dual structure incentivises businesses to meet deadlines while ensuring there is still a pathway to reactivate IECs if they lapse.

Ease of Doing Business – Auto Reactivation

A major facilitation measure introduced by DGFT is automatic re-activation of deactivated IECs. Once an IEC holder files the required update on the DGFT portal, the IEC is re-activated without the need for manual scrutiny by Regional Authorities. This measure not only reduces bureaucratic delays but also ensures business continuity, allowing exporters and importers to resume operations quickly after compliance.

Practical Compliance Tips

Mark Annual Update Window (April–June)

Every IEC holder must confirm or update their details annually between April and June as mandated under FTP 2023, Para 2.05(e). Missing this deadline leads to automatic deactivation of the IEC, which can halt imports, exports, and access to DGFT benefits. Businesses should add this window to their internal compliance calendar and set reminders to avoid last-minute issues.

Ensure PAN, Aadhaar, GSTIN, and DSC are Active

Before filing updates or modifications, it is important to ensure that all linked identifiers are valid and active. The PAN is the foundation of IEC, Aadhaar is used for e-sign verification, GSTIN ensures alignment with tax systems, and a Digital Signature Certificate (DSC) may be required for authenticating online filings. Expired or inactive credentials often cause rejections or delays in processing.

File Modifications Promptly Within 30 Days

As per the Handbook of Procedures (HBP) 2023, any change in business details such as name, address, constitution, directors/partners, or bank details must be updated in the IEC profile within 30 days. Prompt filing ensures that customs, banks, and DGFT systems reflect accurate information, preventing mismatches that can block shipments or remittances.

Verify IEC Details Through “View IEC Related Details”

DGFT provides a facility called “View IEC Related Details” on its portal. IEC holders should use this tool periodically to check their registration profile and confirm that all details are up to date. This acts as a quick compliance audit and helps identify errors or outdated information before they cause operational disruptions.

Monitor DGFT Notices for Policy Updates

DGFT frequently issues Notifications, Public Notices, and Trade Notices related to IEC compliance, deactivation drives, or fee structures. Businesses must regularly monitor these updates, either directly from DGFT’s website or through compliance advisors. Staying informed ensures timely action, prevents lapses, and allows businesses to take advantage of facilitation measures such as auto re-activation or fee waivers.

Conclusion

The Importer-Exporter Code (IEC) acts as a gateway for Indian businesses to participate in global trade. Mandated under the Foreign Trade (Development & Regulation) Act, 1992 and streamlined through the Foreign Trade Policy (FTP) 2023 and Handbook of Procedures (HBP) 2023, it integrates operations across DGFT, Customs, banks, and GST systems. An active IEC enables smooth customs clearance, foreign remittance processing, and eligibility for DGFT incentives. Though it has lifetime validity, businesses must update it annually between April–June and promptly modify any changes in business details to prevent deactivation or penalties.

With the government’s focus on digital trade facilitation, IEC compliance is now simpler through online applications, automatic reactivation, and transparent integration with other regulatory systems. Keeping IEC updated is not just about legal compliance it ensures operational continuity, safeguards credibility, and enhances competitiveness in international markets.

Frequently Asked Questions (FAQs)

Q1. What is an Import Export Code (IEC)?

Ans. An Import Export Code (IEC) is a unique business identification number issued by the DGFT that is mandatory for undertaking imports and exports in India.

Q2. Who needs an IEC?

Ans. Any person or entity engaged in importing or exporting goods or services must obtain an IEC, unless specifically exempted under HBP Para 2.07.

Q3. Is IEC based on PAN?

Ans. Yes. Under FTP 2023, IEC is PAN-based. Each entity can hold only one IEC linked to its PAN, valid across all branches and locations in India.

Q4. How do I apply for an IEC?

Ans. IEC is applied online through the DGFT portal by submitting Form ANF-2A, PAN details, bank proof, address proof, and paying the prescribed fee.

Q5. How long is an IEC valid?

Ans. IEC has lifetime validity but requires annual updation between April–June each year, failing which it will be automatically deactivated.

Q6. What happens if I don’t update my IEC annually?

Ans. If not updated, IEC is deactivated automatically, halting customs clearance, bank transactions, and access to DGFT benefits. It can be reactivated once updated.

Q7. Can IEC details be modified?

Ans. Yes. Any change in business name, constitution, address, or bank details must be updated within 30 days on the DGFT portal.

Q8. Can IEC be surrendered?

Ans. Yes. IEC can be voluntarily surrendered if a business closes operations or ceases to trade internationally. DGFT then updates customs records electronically.

Q9. Are there any exemptions from IEC requirement?

Ans. Yes. Exemptions apply to government departments, personal non-commercial imports/exports, and low-value border trade with neighboring countries. However, these do not apply to SCOMET items.

Q10. Why is IEC important?

Ans. IEC integrates with Customs (ICEGATE), banks (EDPMS/IDPMS), and GST systems, ensuring smooth cross-border trade, regulatory compliance, and eligibility for incentives.