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After reading this write-up, you will:

1. Learn about the procedure for import and export

2. Learn to identify whether particular products require a license for import or export

3.Learn how to find out the import or export duty payable on specific goods

4. How to obtain an importer-exporter code

5. Relevance of warehousing in foreign trade

6. Learn about incentives for exporters


(This chapter has been written for informative purposes to give students a basic idea of customs procedures. Customs law is extremely detailed and procedural. The objective of this chapter is to introduce you to the broader framework and enable you to develop a conceptual understanding of how import and export processes work at a practical level. For a more detailed understanding, readers are encouraged to read the Customs Law Manual from

and the Foreign Trade Policy from http://pib.nic.in/archieve/ForeignTradePolicy/ForeignTradePolicy.pdf)


Taking your product or services to the international market can help businesses expand. Visualizing an import-export operation itself can be difficult for an uninitiated person, and to make his job more difficult, international trade has its own set of commercial jargon and legal procedures which can be quite complex. An understanding of the operational aspects of import and export can help an entrepreneur in strategic planning for a business. 

 This document is relevant for:
1.Startups which contemplate exporting ‘products’ to foreign markets
2. Businesses which are contemplating to import inputs, machinery, completed products or any goods from foreign suppliers
3. Businesses which are already involved in import-export.

For a business which contemplates or is already involved in import or export business, having a brief understanding of the legal framework is helpful, because an entrepreneur can then locate the specific provisions for import/ export duty or any relaxations provided by the government that may be applicable to his product. Broadly speaking, these categories of laws are relevant for an exporter:


i) General law applicable to foreign trade: The Foreign Trade (Development and Regulation), 1992 (FTDRA) is the principal law governing foreign trade in the country. Significant amendments have been made to the FTDRA in 2010. In addition, the Central Government also formulates a Foreign Trade Policy (FTP) every 5 years which contains more detailed provisions for governing foreign trade. The Foreign Trade Policy of 2009-14 is currently in force. (The new Foreign Trade Policy of 2014-19 has not been introduced as of 30 July 2014.)


ii) Product specific laws: Besides the FTDRA, special laws such as Tea Act, 1953, the Coffee Act, 1942, the Rubber Act, 1947, Tobacco Board Act, 1975, Drugs and Cosmetics Act also govern exports of specific products, such as tea, coffee, rubber, medicines, etc. For example, if an entity intends to export tea, in addition to complying with the FTDRA and FTP, it will also have to obtain an export license and pay an export cess, as per provisions of the Tea Act.


iii) Customs law: Customs duty (import and export duty) is governed by the Customs Act, 1962 and the Customs Tariff Act, 1975. Different types of customs duties that can be imposed under law are explained later in this write-up.


iv) Foreign exchange regulations: As international trade involves payment or receipt of foreign currency, foreign exchange regulations are also applicable. Foreign exchange regulations issues such as receipt of inward remittance for exports, bank guarantees, exports against part payments, etc.


v) Import/ Export of services: Customs law and foreign trade policy are largely applicable to international trade in goods. Provisions governing transactions in services are less detailed. The FTP provides for registration of service providers with relevant export promotion councils. However, taxation and foreign issues are more important in import-export of services. Some of the essential principles for import-export of services are listed below:


a. Export of services is exempt from service tax.

b. Exporters of services can also avail of a special scheme (called the Served from India Scheme) which entitles them to import professional equipment and capital goods without payment of duty.

c. An importer of services is liable to pay service tax on behalf of the foreign service provider under Indian service tax laws (detailed legal provisions are discussed in the chapter on tax)


Before you engage in import-export business, you will have to obtain certain preliminary registrations discussed below.

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