Export essentials
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Two years into running her export business, a friend of mine almost lost a shipment worth Rs 4 lakh. Not because the buyer defaulted, not because of a logistics delay, but because her IEC had been deactivated. She had no idea an Import Export Code needed to be updated every year. Her bank flagged the payment, customs held the shipment, and she spent three panicked days on calls with DGFT support trying to reactivate a code she thought would work forever.
If you export from India, DGFT is not something you can afford to be vague about. DGFT (Directorate General of Foreign Trade) is the government body under the Ministry of Commerce and Industry that issues your IEC, administers India's Foreign Trade Policy, and runs the schemes and compliance rules that decide whether your shipments clear and your payments land smoothly. For exporters, DGFT is not a one-time registration. It is an ongoing compliance relationship that touches your IEC, your export incentives, and how easily your international payments get processed.
This guide breaks down what DGFT does, how IEC registration works, the exporter schemes worth knowing, and where DGFT stops and your bank or RBI takes over.
TL;DR
DGFT (Directorate General of Foreign Trade) is the government authority that issues IEC codes, sets India's Foreign Trade Policy, and administers export incentive schemes.
Every exporter needs an IEC, a 10-digit PAN-based code, to legally export goods or services from India.
IEC is valid for a lifetime but must be updated online every year between April and June, or it gets deactivated.
DGFT handles trade policy and licensing. RBI regulates foreign exchange. Your AD Bank (or an RBI-licensed platform like Infinity) handles the actual payment processing.
DGFT registration status directly affects whether your export payments get processed smoothly on the banking side.
What is DGFT and what does it do?
DGFT stands for Directorate General of Foreign Trade. It is a government body functioning under India's Ministry of Commerce and Industry, responsible for framing and implementing the country's Foreign Trade Policy.
For exporters, DGFT's role covers three main things. It issues the IEC (Import Export Code), which is mandatory for any import or export activity. It administers export promotion schemes that give exporters incentives or duty benefits. And it runs the digital infrastructure (the DGFT portal at dgft.gov.in) where exporters register, apply for licenses, and file their annual compliance updates.
In short, DGFT is the government's gatekeeper for who is allowed to trade internationally and under what conditions.
DGFT and IEC (Import Export Code)
You cannot legally export goods or services from India without an IEC. It is a 10-digit code generated against your business PAN, which means only one IEC can be issued per PAN, and since GST rollout, your IEC number is effectively the same as your PAN.
Once issued, an IEC is valid for the lifetime of the business. It does not expire on its own. But there is a catch that trips up a lot of first-time exporters: DGFT requires every IEC holder to electronically confirm their details every year between April and June, even if nothing has changed. Skip this window and DGFT deactivates the code automatically. A deactivated IEC means customs will not clear your shipments and banks will flag related payments, until you complete the updation and get it reactivated.
How to register for an IEC on the DGFT portal
Go to the DGFT portal (dgft.gov.in) and create a login using your PAN and business details.
Fill out the online IEC application form (ANF 2A) with your business type, whether proprietorship, partnership, LLP, private limited company, trust, HUF, or society.
Upload the required documents: PAN card, a cancelled cheque or bank certificate, and address proof of your business.
Authenticate the application using Aadhaar e-sign or a Digital Signature Certificate (Class 2 or Class 3).
Pay the government fee (Rs 500 for a fresh IEC) online via net banking, UPI, or card.
Once approved, download your e-IEC certificate. The whole process is fully online and usually takes a few days.
Click here, to read more about registering for an IEC in India.
How to update your IEC annually
Log in to the DGFT portal between April 1 and June 30.
Review your existing IEC details (PAN, bank account, address).
If nothing has changed, confirm the details as-is. If something has changed, update it.
Authenticate using Aadhaar e-sign or DSC.
Submit. The confirmation is usually instant and there is no fee for this annual update.
Missing this window is one of the most common and most avoidable compliance mistakes exporters make, since the fix (once deactivated) always takes longer than the update itself would have.
Key DGFT schemes exporters should know
DGFT does not just issue codes, it also runs incentive schemes designed to make Indian exports more competitive. You do not need to master all of these on day one, but knowing they exist helps you spot opportunities as your export volumes grow.
RoDTEP (Remission of Duties and Taxes on Exported Products) | Refunds embedded duties and taxes on exported goods that are not already refunded under other schemes |
Advance Authorisation | Allows duty-free import of inputs that go into making an export product |
EPCG (Export Promotion Capital Goods) | Allows import of capital goods at reduced or zero duty, provided you meet an export obligation |
If your export volumes are growing, it is worth checking with a trade consultant whether any of these apply to your business, since the savings can be meaningful.
DGFT vs RBI vs AD Bank: who does what
This is where a lot of exporters get confused, because all three sit somewhere in the payment chain but do very different jobs.
DGFT | Issues your IEC, sets trade policy, administers export schemes and licensing |
RBI | Regulates foreign exchange under FEMA, sets the rules for how cross-border payments can be received and reported |
AD Bank / AD-1 licensed platform | The actual entity that processes your incoming payment, generates FIRA or FIRC, and reports the transaction to RBI |
DGFT decides whether you are allowed to trade. RBI decides how the money can legally move. Your bank or payment platform moves it and provides the paperwork.
How DGFT registration and export payments are connected
An active IEC is not only a customs requirement. It also decides whether your export payment gets processed without friction.
When a payment comes in against an export, your bank or AD-1 licensed platform checks your IEC status and the purpose code before it can process the transaction and issue your FIRA (Foreign Inward Remittance Advice). If your IEC is deactivated because the annual update was missed, that payment can sit unprocessed even after the buyer has already sent the money.
This is why IEC compliance and payment compliance cannot be treated as two separate problems. One blocks the other.
How Infinity helps exporters stay compliant on the payment side
Infinity is an AD-1 certified, RBI-regulated platform built for Indian exporters. Once your IEC and payment details are in order, Infinity handles the rest of the compliance and processing chain:
Auto-generates FIRA for every transaction, so you are not chasing paperwork after the fact
Purpose code finder tool, so you do not have to guess which code applies to a given export payment
0.5% all-inclusive fee, with no separate FX markup or GST
24-hour settlement on payments
Dedicated account manager to flag IEC or documentation issues before they turn into a stuck payment
Supports 50+ currencies and 160+ countries
Dedicated mobile app to track payments on the go
Keeping your IEC updated on DGFT's side and using a platform built for export compliance on the payment side is what keeps the whole chain, from shipment to funds in your account, moving without last-minute surprises.
Common DGFT compliance mistakes exporters make
Missing the annual IEC updation window.
DGFT requires every IEC holder to confirm their details online between April and June, even with no changes. Miss it and the IEC gets automatically deactivated. Fix: set a recurring reminder for April 1, do not wait for a DGFT notice.
Assuming IEC is a one-time registration.
IEC is lifetime-valid, but that does not mean it is maintenance-free. This is the single biggest misconception among first-time exporters. Fix: treat IEC like a subscription that needs yearly confirmation, not a certificate you file away.
Using the wrong purpose code on a payment.
Every export payment needs a purpose code that matches what was actually exported. Get it wrong and your bank can hold or query the transaction. Fix: confirm the correct code before the payment is initiated, not after your bank flags it.
Letting IEC and bank KYC details go out of sync.
If your business address or bank details change but only get updated in one place (DGFT or your bank, not both), it creates a mismatch that can delay payment processing. Fix: update both systems together whenever your business details change.
Ignoring scheme eligibility.
Many exporters never check whether they qualify for RoDTEP or similar schemes and leave duty refunds unclaimed simply because nobody looked. Fix: review scheme eligibility once your export volumes become consistent, not just at setup.
Contacting the wrong authority when something goes wrong.
DGFT and RBI handle different problems. Exporters often call their bank about an IEC issue or DGFT about a payment issue, and lose time in the wrong queue. Fix: know the split (DGFT for IEC and licensing, your bank or AD-1 platform for payment issues) before you need it.
FAQs
What is DGFT full form?
DGFT stands for Directorate General of Foreign Trade, the government body under the Ministry of Commerce and Industry that administers India's Foreign Trade Policy.
What does DGFT do?
DGFT issues IEC codes, frames and implements Foreign Trade Policy, and runs export promotion schemes like RoDTEP, Advance Authorisation, and EPCG.
Is IEC mandatory for exporters?
Yes. You cannot legally export goods or services from India without a valid IEC issued by DGFT.
How to apply for IEC code on the DGFT portal?
Register on dgft.gov.in, fill the ANF 2A form, upload PAN, bank certificate, and address proof, authenticate via Aadhaar e-sign or DSC, and pay the Rs 500 government fee.
What is the validity of IEC code?
IEC is valid for the lifetime of the business, but it must be electronically updated every year between April and June or it gets deactivated.
What is the difference between DGFT and RBI?
DGFT handles trade policy, IEC issuance, and export licensing. RBI regulates foreign exchange under FEMA and governs how cross-border payments are received and reported.
Do I need DGFT registration to receive export payments?
Yes. Your bank or AD-1 licensed platform needs your active IEC and correct purpose code to process an export payment and issue your FIRA.
What is the RoDTEP scheme under DGFT?
RoDTEP is a DGFT-administered scheme that refunds embedded duties and taxes on exported products that are not covered by other refund mechanisms.
