Manufacturing units in India are no longer limited to domestic markets. Whether you manufacture textiles, electronics, machinery, food products, or chemicals, entering the export or import market opens new doors for growth, better profit margins, and stronger brand recognition. But before stepping into cross-border trade, there’s one essential license you need: the Importer-Exporter Code (IEC).

Let’s break it down in simple, human language so you understand exactly what IEC is, why manufacturing businesses need it, how to get it, and what legal provisions back it.

What is the Importer-Exporter Code (IEC)?

The IEC is a 10-digit identification number issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, under the Foreign Trade (Development and Regulation) Act, 1992.

Think of it as your passport for doing international trade from India. Whether you are importing raw materials or machinery for your factory or exporting finished goods to global buyers, you need this number. Without it, you simply cannot clear goods through Indian customs or receive international payments via the banking system.

Even better, once issued, an IEC has lifetime validity — no need for renewal unless you make specific updates to your details.

Why Do Manufacturing Units Need IEC?

For manufacturing units, especially those looking to scale operations, IEC is non-negotiable. Here’s why:

• Import of Raw Materials: If you manufacture products that depend on imported raw materials, parts, or machinery, you need an IEC to legally import them.
• Export of Finished Goods: Want to sell your products globally? To export, you must have an IEC — buyers and customs officials will request it.
• Global Supply Chains: IEC allows you to be part of international supply chains, work with overseas vendors, and access new technologies and inputs.
• Access to Government Benefits: Many government export incentives, like the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, require a valid IEC to claim benefits.

In short, without an IEC, your manufacturing unit is confined to the domestic market. With it, the world becomes your marketplace.

Legal Provisions Governing IEC

Let’s connect this to the law. The IEC is governed under:

• Foreign Trade (Development and Regulation) Act, 1992

• Foreign Trade (Regulation) Rules, 1993

The DGFT operates under the powers granted by this Act to issue IEC and regulate imports and exports.

According to Section 7 of the Foreign Trade (Development and Regulation) Act, 1992,

“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.”

This makes it mandatory. No exceptions.

Moreover, as per Rule 12 of the Foreign Trade (Regulation) Rules, 1993, the application for IEC must be made in the prescribed format (now digital via DGFT portal).

How to Apply for IEC (Step by Step for Manufacturers)

Here’s a straightforward stepwise guide for your manufacturing business to get the IEC.

- Prepare Your Documents:

• PAN card of the entity (company/LLP/partnership/proprietor).

• Address proof (utility bill, rent agreement, etc.).

• Bank details (cancelled cheque or bank certificate).

• Digital signature (Class 2 or 3 DSC) or Aadhaar e-sign.

- Visit the DGFT Portal :

Register yourself or your business and log in.

- File the Application (ANF-2A Form):

This is the official online form for IEC. Upload all required documents.

- Pay the Fee:

The application fee is usually ₹500.

- Verification and Approval:

If all details are in order, you’ll receive the IEC within 1-2 working days by email.

Key Points for Manufacturers to Remember

• IEC is entity-specific, not product-specific. You can export/import any permissible item under the same IEC.
• You must update your IEC if there’s a change in the business name, address, or other critical details.
• Though IEC has lifetime validity, you are now required to confirm/update it annually (even if no changes) to avoid deactivation.
• IEC is linked to the business’s PAN, so one entity can have only one IEC.

Benefits of IEC for Manufacturers

For manufacturing units, IEC is not just a legal requirement but a strategic asset.

• Market Expansion: Tap into international markets and reach global customers.

• Better Inputs: Access advanced raw materials, technologies, and machinery not available domestically.

• Cost Advantages: Import duty benefits under Free Trade Agreements (FTAs) when applicable.

• Export Incentives: Qualify for government schemes like MEIS (earlier), SEIS, or RoDTEP.

Without IEC, your manufacturing business misses out on these advantages, staying locked in a smaller market with limited growth.

Penalties for Not Having IEC

As per Section 11 of the Foreign Trade (Development and Regulation) Act,

Contraventions of export or import policy, including importing/exporting without an IEC, can attract penalties, including monetary fines and seizure of goods.

While you might manage some informal small-value shipments, serious international trade cannot legally happen without IEC.

Common Questions (FAQs) on IEC for Manufacturing Units

- Is IEC mandatory even if I only import raw materials and do not export?

Yes! Whether you’re importing or exporting, IEC is required. If your manufacturing process depends on imported inputs, you must have an IEC.

- Can a single IEC cover multiple manufacturing units under the same company?

Yes. IEC is linked to the entity (based on PAN), not to individual factories or branches. So, a company with multiple plants can operate under a single IEC.

- What if I make only local sales — do I need IEC?

No. IEC is needed only when you are involved in cross-border transactions. If you sell only within India, you don’t need an IEC.

- How long does it take to get an IEC?

Usually 1-2 working days after applying online on the DGFT portal, assuming all documents and details are correct.

- Is there any renewal fee for IEC?

No. IEC has lifetime validity. But you must ensure annual confirmation or updating of details (no fee unless you make changes).

- Can a manufacturing startup apply for IEC?

Absolutely! In fact, it’s better to get your IEC early if you plan to import equipment or raw materials or start exporting soon.

- Is GST registration mandatory for IEC?

While IEC itself doesn’t require GST, most manufacturing units are GST-registered, and the GSTIN is linked to the IEC application for consistency.

- What are the key sections of law governing IEC?

The most relevant are:

• Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (requirement of IEC).

• Rule 12 of the Foreign Trade (Regulation) Rules, 1993 (application rules).

• Section 11 for penalties.

Final Thoughts: IEC as a Growth Catalyst for Manufacturers

For manufacturing units, the Importer-Exporter Code is far more than just a compliance formality. It’s a ticket to global opportunities. It empowers you to connect with international buyers and suppliers, access better technology, and bring your Made in India” products to the world stage.

At the same time, getting your IEC is straightforward, affordable, and quick if you follow the correct process. Remember, once you have it, you open a new dimension for your business — one where borders no longer limit your ambitions.

If you’re a manufacturer who hasn’t yet applied for IEC, now’s the time. Don’t leave international opportunities on the table. Get registered, stay compliant, and watch your manufacturing business grow beyond domestic horizons!