The most basic and most crucial thing to keep in mind when going for import export licensing is the IMPORT EXPORT CODE. It is required by a person for exporting or importing goods. It is a 10-digit code which is issued by the Directorate General of Foreign Trade (DGFT) which is same as the PAN of the entity. All businesses which are engaged in Import and Export of goods require registering Import Export Code.

The governing parties to the Import Export procedures in India are Foreign Trade act, 1992 and India’s Export Import policy.


In Import Policy, the goods are classified based on three different categories, by the Indian trader classification through harmonized systems.

  • Prohibited goods – As the name gives away, these goods are completely proscribed in all the import channels around the country. Various examples for the same are wild animals, tallow fat and oils, unprocessed ivory and more.


  • Canalized Goods – Canalized goods are this kind of goods that can be imported but certain trade and transportation limitations or rules are imposed on them. The list of canalized goods is present under ITC (HS). For importing these kinds of goods there are agencies made explicitly for Canalized goods. Some of the main items under the same are petroleum products, bulk agricultural products and pharmaceutical products.



  • Restricted goods – Restricted goods are not entirely omitted from the process, but is attained after obtaining the certain signed and cleared documents for the process to continue further. And import license must be procured by relevant authorities. And such goods must be disposed in accordance to the rules specified in the documents.
  • Licenses needs to be obtained from DGFT for import these category products.  Further, one may apply for advance authorization, duty drawback, MEIS and SEIS scrips



Preliminary formalities such as trade enquiries, getting proforma invoice and obtaining import license.

Placing the order, by stating the indent clearly, and providing with a letter of credit.

Then getting the documents of title, by firstly, receiving the advice note, making necessary payments and receiving the documents of title.

Lastly, clearing of goods by getting the delivery order and making the payment of custom duties.

Import documents in import trade

  • Import license
  • Indent letter
  • Letter of credit
  • Bill of entry
  • Bill of sight

And the documents that are needed to be submitted by the importers are invoice, packaging list, bill of lading, delivery order, copy of license attested and insurance policy.

In Export policy as well, the goods are classified under three different categories by the Indian trade classification by harmonized systems.

  • Restricted goods – the exporter firstly needs to attain an explicit export permission from the relevant agency allowing him to continue is procedures. The license obtained from the same source, is the walkway for the processing of the goods to be exported.


  • Prohibited goods – Prohibited items are those items that no rule or permission can be granted to move forward. They are permanently denied access to be exported by any cause. Majority of these items include wild animals or articles related to them due to risk of any sorts of infections.



  • State trading enterprise – there are some exclusively classified goods who can be exported only via the designated state trading enterprises. The conditions that these goads have to follow are listed under the EXIM policy.



Exporter has to submit shipping bill for export by sea or air and bill of export for export by road. Relevant documents that are, copies of packaging list, invoices, export contract, letter of credit are also to be submitted.

Relevant documents required:

  • Four copies of commercial invoice
  • Four copies of packaging list
  • Certificate of origin
  • Insurance policy
  • Letter of credit
  • Declaration of value
  • GR/SDF for prescribed by RBI in duplicate

Bill of lading

As a document of title, it is a certificate of ownership that allows a holder or consignee to claim the merchandise described. As a receipt of goods, it is issued by the carrier to the shipper for goods entrusted you the carrier’s care for transportation. As a contract of carriage, the bill of lading defines the contract terms between the shipper and his carrier.

FREE ON BOARD – Seller Buyer risk cost.

Free on board means the seller fulfills its obligation to deliver when the goods have passed over the ships rail at the named port of shipment. The buyer has to bear all costs and risks of loss of or damage to the goods from that point.

Free on board requires the seller to clear the goods for export.

Free on board can only be used for sea or inland waterway transport.


Cost and freight mean the seller must pay the costs and freight necessary to bring the goods to the named port of destination. The risk of loss or of damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ships rail in the port of shipment.

If the buyer does not ensure the shipment and if the goods are damaged, you may run the risk of not being paid.

This rule applies to all types of shipments including fragile items, diet plans, furniture and all other varieties of products. Exporting rules are important for the health and fitness of goods when they are shipped and the wellness for the companies involved.

Cost and freight require the seller to clear the goods for export. cost and freight can only be used for sea or inland waterway transport.


Cost, insurance and freight means the seller has the same obligations as under CFR – cost and freight and the seller also has to procure marine insurance against the buyer’s risk of loss of or damage to the goods during the carriage.

The seller contracts for insurance and pays the insurance premium. The seller is only required to obtain insurance on minimum coverage.

All these steps are very crucial to pay attention to. With all complete, clear and permitted documents, the procedure becomes easier to successfully end.


For further assistance in obtaining the licenses from DGFT, please contact us at

Leave A Comment