What is an export license?
The India Trade Clarification (ITC), which is based on the Harmonized System of Nomenclature (HSN) coding, classifies goods in India for import and export purposes. The eight-digit code used by Indian Customs is also based on ITC-SH. An export license is required to export goods classified as “restricted goods” in this ITC-SH list.
The Foreign Trade Policy (FTP) considers that all goods can be exported freely, except those that are restricted or prohibited. For prohibited goods, no export license is issued, while restricted goods can be exported by companies that have obtained an export license. Some items that generally require an export license are live birds and animals, endangered plant and animal species, sandalwood, sand and soil, silkworms and silk cocoons, etc.
Appendix II of the ITC-HS Code contains rules and regulations related to export guidelines. The 97 chapters of Plan II for Export Policy of the ITC-SA Code contain detailed guidelines for the export of various products. The General Directorate of Foreign Trade (DGFT) is the governing body that modifies these guidelines.
In these chapters, the classification of the product export directive is given in the different chapters. For example, Chapter 50 of the ITC-HS of Annex II of the Export Directive says “Silk”. Contains items that match the description: pure breeds of silkworms, silkworm seeds, and silkworm cocoons. The silk export policy is “restricted” and therefore the export of silk from India is only allowed with an export license.
Export license request and documentation process
Procedure to request an export license or an export license for items subject to restrictions in the DGFT
- The online application process can be done on the DGFT website.
- On the home page, the applicant must go to the “Services” section, wherein in the “ECOM Online Application” section, he must select the option “License to import restricted articles/articles for restricted export”.
- The application must be submitted online and a copy of the application must be sent to email@example.com (in PDF format).
Documents to attach to the export license application
- “Profile of exporter and importer” in form ANF-1 and application form for an export license for restricted items in form ANF-2N
- Copy of the import order of the foreign buyer or the contractual agreement between the two.
- Proof of online payment of registration fees.
- PAN card copy
- Copy of proof of identity
- Proof of address
- Bank certificate / canceled check
- NOC – in the case of a rental property
Once the application has been received by the DGFT, the standard procedure at the end is as follows
- The mail containing the application and the receipts are processed by the export unit.
- The request will be checked in advance and sent to the appropriate ministry/department within three business days if everything is in order.
- If an anomaly is found in the application, an anomaly letter will be sent to the exporter within three business days.
- The requesting exporter must respond within three days of receiving the insufficiency letter and provide the necessary information/documents.
- On the other hand, the officials in question are expected to provide their notification of compliance/comments/opinion on the request as soon as possible and within 30 days after receiving the request from the DGFT if they are transmitted to the ministry/department. .
- Once the DGFT has received the response from the corresponding ministry/department, all requests pending approval are sent to the EXIM Facilitation Committee (CEF), which meets once a month.
- After approval by the EFC, the export unit at DGFT headquarters creates an approval letter and sends it to the exporter. Another copy is made available to the competent regional authority (RA) of the DGFT, which instructs it to issue the export license.
- As soon as the exporter has received authorization, they should contact the RA with a copy of the authorization letter, application, and supporting documents.
- The RA must issue the export license to the exporter within three business days. Ideally, therefore, the entire process should be completed in 30-45 days.
Administrative ministries and departments may request certain documents during application processing and before submitting your MOC/comment/recommendation. These documents vary from item to item and must be submitted with the application.
The import license or permit/certificate/authorization, as it can also be called, is usually valid for a period determined by the RA. The license may also be subject to conditions such as quantity and description of the items, added value, minimum export/import price, and export obligation. Therefore, the export is carried out in accordance with the provisions of the export license issued against them or a public announcement of the DGFT concerning them.