How do IEC Impact Import-Export Businesses?

In the age of cut-throat competition, one needs to think fast in doing anything. Every business wants to improve and move beyond the borders to expand and in doing so needs to follow a lot of steps. A business needs to get approval and apply for import-export codes to conduct business outside one’s own borders.

With the number of cases of illegal goods entering the shores of India, the government has decided to prevent the occurrence again. To prevent the entry of illegal goods there has been a move to remove IEC for businesses that have not updated their IEC details since 2005.

What is IEC?

Import-Export code is a 10 digit code that is issued by the DGFT (Director General of Foreign Trade). The 10-digit IEC code has a validity of lifetime. Without the IEC code, it is not possible for an individual to conduct their Import-Export business. Read More

This is so because without the IEC code one will not be able to import or export goods needed for the businesses. Predominantly importers merchants cannot import goods without the Import-Export Code and similarly, the exporter merchant cannot avail benefits from DGFT for the export scheme, etc. without IEC. The same law has been applied to the import of military goods as a result of which the Draft SOP for Import Authorisation has been declared by the government. It helps dictate the import and export of goods for military purposes.

Why is IEC Important?

IEC forms an integral part of any import-Export business. It is a certificate that shows that one has permission to conduct a certain trade outside one’s borders. Without IEC one will not be able to sell or bring in raw materials for business purposes.

With the latest case of drugs being caught at Adani Port, the government has arrested a few people for trading in drugs worth 21,000 Crores. The drugs were brought under the name of Semi-processed Talc. The investigation is underway and a decision to suspend all licenses not updated before 2005 is declared. It is to prevent the operation of fraudulent companies. Read More

How does Import Export Code help businesses?

IEC code has become the bread and butter of every business that deals with the Import and export of products. In order to facilitate any business related to import and export one has to have an IEC certificate. It allows for a smoother flow of businesses.

The latest amendment in the issue of the IEC certificate has allowed for proper tracking of business related to the import and export of goods and services. It aims to curb the unethical practices that are often illegal and conducted while evading the law. This change in the policy will help keep proper track of the businesses and their impact on the economy.

Conclusion

The Suspension of IEC for certain companies under certain conditions is aimed at the prevention of fraudulent means of import and export. It is aimed at providing transparency to the matter and helping regulate the import and export of the nation. It will help keep track of the progress and revenue of the businesses.