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Setting Up of Business, Industrial and Labour Laws · Various Initial Registrations and Licenses

Import Export Code and Other Business Licences

Updated 11 October 2026 · Fact-checked

An Import Export Code (IEC) is a 10-character identification number issued by the DGFT. You need it to import or export goods and services, with limited exceptions. Other licences depend on the activity: FSSAI for food, trade licence from the local body, BIS for notified products, and trademark registration for brand protection.

Understand Import Export Code and Other Licenses

Starting a business needs more than incorporation. Each activity attracts its own registration or licence. The law asks one question: does this activity affect trade, health, safety or public interest? If yes, a regulator wants to know about it first.

The Import Export Code (IEC) is the identity of a person who trades across borders. It is issued by the Directorate General of Foreign Trade (DGFT) under the Foreign Trade (Development and Regulation) Act, 1992. It is a 10-character number linked to PAN. It is applied for online on the DGFT portal. It is issued to a PAN holder, whether an individual, firm, company, LLP or trust. It is valid for life, but you must update the details every year. Banks, customs and ports use it for clearing goods and remitting foreign exchange.

Some exceptions exist. Import or export for personal use, or by certain government bodies, does not need an IEC. Exporters of services generally need it only when they claim benefits under the Foreign Trade Policy. Treat these as exceptions and state them with care.

FSSAI registration or licence is needed for any food business under the Food Safety and Standards Act, 2006. The category depends on turnover and activity. Small operators take a basic registration. Medium businesses take a State licence. Large ones, importers and certain categories take a Central licence. Check the current turnover limits in your study material before quoting numbers.

A trade licence is issued by the local municipal authority. It permits a trade that may affect public health, safety or the environment. A shop and establishment registration is different. It comes from the State labour department under the State Act and regulates working conditions of staff. BIS certification is required for products notified under compulsory certification, and the product carries the ISI mark. A trademark is registered with the Registrar of Trade Marks under the Trade Marks Act, 1999. It protects a brand, but it does not give permission to trade.

Key rules to remember

IEC basics
IEC = 10-character code, issued by DGFT, linked to PAN, valid for life
Apply online. Details must be confirmed or updated every year. Name the exceptions such as personal use.
Who needs IEC
Import or export of goods (and service benefits under the Foreign Trade Policy) → IEC required
Do not say it is needed for every business. Domestic traders do not need it.
FSSAI tiers
Basic registration → State licence → Central licence (rising with turnover and activity)
Match tier to the facts. Check the current limits in your study material.
Trade licence vs shop registration
Trade licence = municipal body, public health and safety. Shop registration = State labour department, working conditions
Two separate registrations. One does not replace the other.
Trademark
Trade Marks Act, 1999 → Registrar of Trade Marks → registration of a mark
Gives exclusive right to the mark. It is not a licence to start business.

How to solve Import Export Code and Other Licenses questions

Most questions give a business scenario and ask which registrations or licences are needed. Use the same method each time.

  1. 1Identify the business activity: trading goods, food, manufacturing, import or export, a brand, or services.
  2. 2List the regulator for each activity: DGFT for cross-border trade, FSSAI for food, municipal body for trade licence, BIS for notified products, Registrar for trademarks.
  3. 3Write the provision: name the authority, the law and what it requires, in plain words.
  4. 4Apply it to the facts: turnover, location, product type, whether goods cross a border.
  5. 5Pick the right tier or type, such as the FSSAI category, and give a reason.
  6. 6Mention any exception, for example personal use of imports.
  7. 7Close with a clear conclusion that lists the registrations needed.

Quickest way: Activity-to-regulator map

When to use it: Use this when a short question asks which licence a business needs and you have little time.

  1. Underline the activity words in the question: import, export, food, product, brand, shop.
  2. Write the matching regulator beside each word: DGFT, FSSAI, municipal body, BIS, Trade Marks Registry.
  3. Add one line of law for each. Keep it to the authority and the purpose.
  4. State the conclusion in one sentence that lists every licence needed.

Common mistakes in Import Export Code and Other Licenses

  • Saying IEC is needed by every business.

    Students remember IEC as a general business registration.

    Fix: Link IEC only to import or export. Add the personal-use exception.

  • Treating trade licence and shop registration as the same thing.

    Both are local and both involve a shop.

    Fix: Trade licence is about public health and safety from the municipal body. Shop registration is about employee working conditions under the State Act.

  • Thinking trademark registration permits you to trade.

    The word registration sounds like a licence.

    Fix: A trademark protects a brand name or logo. It is not permission to carry on a business.

  • Choosing the wrong FSSAI category.

    Students ignore turnover and the type of activity such as import.

    Fix: Read the facts for turnover, scale and activity. Then pick basic, State or Central.

  • Writing that IEC must be renewed every few years.

    Confusion with licences that have an expiry date.

    Fix: IEC is valid for life. Only the annual update or confirmation of details is needed.

Worked examples

Example 1

Aarav Traders, a partnership firm in Surat, wants to export handloom textiles to the UAE. State what registration it needs before shipping and explain how it is obtained.

Show the solution
  1. Provision: a person who exports goods needs an Import Export Code from the DGFT under the Foreign Trade (Development and Regulation) Act, 1992.
  2. Facts: the firm will export goods across the border. A partnership firm can hold a PAN, and the IEC is linked to PAN.
  3. Procedure: the firm applies online on the DGFT portal using its PAN and its bank details. A 10-character IEC is issued.
  4. Validity: the IEC is valid for life, but the firm must update its details every year.
  5. Use: customs and the bank will ask for the IEC to clear the shipment and receive the foreign exchange.

Answer: Aarav Traders must obtain an IEC from the DGFT before exporting. It applies online with its PAN. The code is valid for life, subject to annual updating of details.

Example 2

Meera plans a bakery and cafe in Pune selling her own baked goods and hot food to customers, and she will employ five staff. Which licences and registrations does she need?

Show the solution
  1. Food: under the Food Safety and Standards Act, 2006, any food business needs FSSAI registration or licence. A small bakery generally falls in the basic registration or State licence tier, depending on turnover.
  2. Local body: the cafe involves preparing and serving food, so it needs a trade licence from the municipal authority for public health and safety.
  3. Staff: with employees, she must register under the State shop and establishment law, which regulates working conditions.
  4. Brand: if she wants to protect her cafe name, she may apply for a trademark with the Registrar under the Trade Marks Act, 1999. This is optional.
  5. IEC: she does not need an IEC, because she is not importing or exporting.

Answer: Meera needs an FSSAI registration or licence of the right tier, a municipal trade licence and a shop and establishment registration. A trademark is advisable but optional. No IEC is needed.

Exam tips

  • Write the regulator and the Act for every licence. ICSI answers reward the provision first, then the facts, then the conclusion.
  • Use a short list when a question asks which licences are required. Add one line of reason for each.
  • Keep trade licence and shop registration apart. Examiners often test this difference.
  • Do not quote FSSAI turnover figures unless you are sure of the current numbers. Name the tier and explain the basis.
  • Always state that IEC is not needed for purely domestic business.

Practice questions from Various Initial Registrations and Licenses

Import Export Code and Other Licenses in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Import Export Code and Other Licenses: frequently asked questions

How do I get an Import Export Code?

You apply online on the DGFT portal using the PAN of the person or entity. After verification, a 10-character IEC is issued. It is valid for life, but you must update your details every year.

Is IEC compulsory for service exporters?

Generally not. A service exporter needs an IEC mainly when claiming benefits under the Foreign Trade Policy. For goods, an IEC is needed for import or export, with limited exceptions such as personal use.

What are the types of FSSAI licence?

There are three tiers: basic registration, State licence and Central licence. The tier depends on the scale of turnover and the type of food activity. Check current limits in your study material.

What is the difference between a trade licence and a shop act licence?

A trade licence comes from the municipal body and controls trades that affect health, safety or the environment. Shop and establishment registration comes from the State labour department and regulates employee working conditions. A business may need both.

Does trademark registration allow me to start a business?

No. It gives you the exclusive right to use your mark for the registered goods or services. You still need the licences and registrations for the business activity itself.