Role of DGFT in India's export trade

Directorate General of Foreign Trade (DGFT) is the regulator of export and import in India. India's export landscape is thriving, boasting $439 billion in trade for April-February 2020-21. To bridge the gap between Indian exporters and global buyers, the Directorate General of Foreign Trade (DGFT) plays a crucial role.

Established under the Ministry of Commerce and Industry, the DGFT acts as the architect of India's Foreign Trade Policy, shaping incentives, regulations, and procedures for export success. DGFT maintains and develop exports and trade relationships with different countries, thus, assisting sellers in easy exports. It also issues export licenses and introduces trade incentives.

DGFT has four zonal offices in New Delhi, Mumbai, Kolkata and Chennai headed by Zonal Joint Director General of Foreign Trade. There are 35 Regional Authorities all over the country.

Whether you're a seasoned seller eyeing global expansion or a budding entrepreneur with an export dream, understanding the DGFT's services and it's role in export trade will form the foundation to expanding globally.

Services offered by DGFT to promote exports and assist Indian businesses are:

  • DGFT Helpdesk Service: Providing guidance and support for your export journey.
  • IEC and profile management: Facilitating easy application and management of your Importer-Exporter Code (IEC).
  • Duty Free Import Authorization (DFIA): Enabling duty-free import of machinery and equipment for export production.
  • Online E-com application: Simplifying online applications for various export schemes.
  • Export Promotion Capital Goods (EPCG) scheme: Offering duty concessions on imported capital goods for specified export sectors.
  • Merchandise or Service exports scheme and policy: Providing tailored regulations and incentives for different export categories.
  • Import-Export Management system: Streamlining trade procedures and data management.

What is a DGFT Digital Signature Certificate?

To ensure authenticity and document security, the DGFT mandates the use of a Digital Signature Certificate (DSC) for online submissions. The DSC provides a high level of security for your online transactions by ensuring absolute privacy of the information exchanged. With the help of DSC, the process of IEC issuance and modification is strengthened and has become more convenient and secure.

DSC allows the export-import organization to file or apply for any document on the DGFT website easily with complete authenticity. To get license issuance, DSC is an important part of the process. It should be of Class-2 or Class-3 only issued by agencies certified by the Controller of Certifying Authorities (CCA) in India. It can be obtained by any seller whose business has an IEC and other related documents for verification.

How does DGFT regulate exports from India?

1. Foreign Trade Procedures:

The Directorate General of Foreign Trade (DGFT) plays a crucial role in shaping India's export landscape. They plan and announce foreign trade procedures, ensuring clarity and ease of execution for exporters.

2. IEC Issuance:

Application for Importer-Exporter Code (IEC) has become hassle-free for aspiring exporters. Streamlined online application makes obtaining the crucial 10-digit IEC code effortless. The IEC is issued to assist in tracking and managing shipments of exporters and importers.

Also read: How to apply for an IEC

3. EXIM Policy/Foreign Trade Policy:

To maintain stable trade relations and ensure smooth flow of exports and imports, a defined set of rules is crucial. The EXIM policy or Foreign Trade Policy provides that set of instructions to supervise export businesses. India addresses this need through its 5-year Foreign Trade Policy, developed by the DGFT and implemented by the government under the 1992 Foreign Trade Act.

4. ITC (Indian Trade Clarification) HS Codes:

To foster growth in international trade, India aligns with the global Harmonized System of Coding (HS) through its ITC HS Codes. These codes serve as a common language for classifying products accurately, ensuring smooth import and export operations. In India, the ITC HS Codes are divided into two schedules - Schedule 1 is for imports, while Schedule 2 is for exports. The DGFT has the power to add and make changes in description of commodities and adding new codes within India.

5. Export Licenses:

The DGFT regulates exports for certain products, requiring licenses for restricted items like horses and specific petroleum oils. While most categories like textiles, home accessories, handicrafts, and leather goods enjoy free export, obtaining licenses for restricted items is straightforward through the DGFT website.

6. Trade Promotion:

DGFT plays a dual role: regulating exports and actively supporting them. Its tailored schemes like Advance Authorization and Duty-Free Imports empower sellers, while "Ease of Doing Business" initiatives simplify procedures through digitization. Regular notifications and circulars ensure exporters stay informed.

7. Quality Complaints and Trade Issues:

The DGFT acts as a one-stop shop for resolving export trade issues. It addresses exporter concerns, including feedback, suggestions, and mediating disputes between Indian exporters and foreign buyers, as well as Indian importers and foreign suppliers. This commitment to resolving issues helps maintain smooth export operations.

With a comprehensive understanding of the DGFT's role and services, you can confidently navigate India's export landscape and embark on a successful global trade journey.

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