DGFT and IEC Policy With Respect To India

INDIAN INSTITUTE OF FOREIGN TRADE
DGFT and IEC
EPCs and RCMC-
and their role in export promotion
S.P.ROY

Directorate General of Foreign Trade
• DGFT is an attached office of the M/o Commerce and Industry, at New Delhi.
• From inception till 1991, DGFT was essentially involved in promotion of foreign trade
through regulation. After that , in line with the liberalization and globalization, DGFT has
since donned the role of “facilitator”.
• The shift has been from prohibition & control to promotion and facilitation of
exports/imports. It accordingly implements the FTP for promoting India’s exports.
• DGFT is assisted by the Regional Authorities (RAs) who are listed in Appendix 1 of
Appendices and Aayat Niryat For.ms of FTP(2015-20).
• RAs resolve issues of Importers/exporters relating to IEC, besides issuing licenses,
invalidation letters, advance release orders & monitoring the corresponding obligations.
• It monitors scrips, issued under various schemes of FTP, and decides admissibility of
drawbacks etc.
• They provide facilitation to exporters/importers with regard to developments in
International Trade i.e. WTO agreements, Rules of Origin/antidumping issues etc.

Importer Exporter Code (IEC)
• An IEC is a 10-character alpha-numeric number allotted to a person that is mandatory for
undertaking any export/import activities.
• To maintain unique identity of a firm/company/LLP etc. IEC is PAN, registered & separately
issued by DGFT, based on an application by the firm. Only one IEC is possible against a PAN.
• No export or import is possible without an IEC, unless specifically exempted. For services
exports, IEC shall be necessary only when the service provider is taking benefits under the FTP.
• Exempt categories and corresponding permanent IEC numbers are listed in Para 2.07 of HBP
• Application for IEC: ANF 2A format has to be filled online on dgft.gov.in and submitted with:
• Application fee of Rs 500/- to be paid online, along with Scanned copies of :
• Cancelled cheque bearing entity’s pre-printed name or Bank certificate;
• Address proof of the applicant entity as detailed in the application.
• IEC is system generated and applicant is informed through e-mail and sms . Applicant can also
view/print e-IEC after complete submission of form.

IEC- various issues related to it
<
• Validity of IEC: An IEC allotted is permanently valid, unless suspended or cancelled by DGFT. It
covers all divisions / units / factories of the applicant.
• Surrender of IEC: If an IEC holder does not wish to operate allotted IEC, he may surrender it to
the RA.
• Modification in IEC: Modifications in IECs / e-IEC’s can be online, by paying online fee of Rs
200/- & uploading documents substantiating the changes sought, besides uploading a signed
copy of the application.
• Modification application has to be signed by Proprietor or Managing/Designated Partner or
Director /Company Secretary in case of companies or Chief Executive/ Managing Trustee / Karta
before uploading the application.
• Application for modification may be made for change in name, address, constitution, ownership
in Proprietorship firms, change in nature of the firm e.g. from proprietorship to partnership etc.
• Request for (i) Cancellation of existing numeric IEC and (ii) PAN change in existing numeric IECs
has to be made to the concerned jurisdictional Regional Authority.

Export promotion and EPCs
• While market forces determine the flow of trade; export promotion activities are
used as tool to influence that flow.
• Accordingly, the Foreign Trade Policy 2015-20 has introduced several measures for
facilitating trade and improving ease of doing business by reducing the number of
mandatory documents required for export
• At the same time , Government incentivizes the export of items through its various
schemes. However, to provide guidance and assistance to the exporter on the ground
level, GoI has setup several institutions, one of which is Export promotion
council(EPC)
• Export promotion activities through EPCs began as early as the 1950s, with EPCs
like Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) being
established in 1954 and Plastics Export Promotion Council being set up in 1955.
• As on date there are 37 EPCs, Commodity Boards and Export Development
Authorities (Export Promotion Organizations) as of date.
•

FUNCTIONS / ROLES OF EPCs
• Each Council is responsible for promotion of a particular group of products/ projects/services as
given in Appendix 2T of AANF
• One of the main roles of an EPC is to project India’s image overseas as a reliable supplier of high
quality goods and services.
• EPCs encourage & monitor observance of international standards & specifications by exporters
• They are also to keep the exporters abreast of the trends and opportunities in international
markets for goods and services.
• EPCs organize seminars, conferences to guide its members and organise trade fairs, exhibitions
and buyer-seller meets in India and overseas to promote exports
• EPCs also function as Registering Authorities to issue Registration-cum-Membership Certificate
(RCMC) to its members.
• Through an EPC, exporter is able to smoothen the documentation procedure for availing
incentives from the government.
• EPCs do not provide financial or other type of direct assistance. The members have to pay an
annual subscription fee for the services rendered to them by the council.

Criteria for EPCs as Registering
Authorities
• Export Promotion Councils (EPCs) are organizations of exporters, and registered as
non-profit organizations under the Companies Act/ Societies Registration Act.
• EPCs are funded by their members, except for grants for exhibitions and trade fairs
where the funding comes from the GoI or the sponsoring state government
• In order to make EPCs truly democratic and participative in nature and for better
governance and transparency, criteria for them to function as Registering Authority
are as under:
• e-Voting: Electronic Voting would be mandatory for election to the posts of Vice
Chairman/Vice President & Executive Committee members with a view to ensuring
wider participation
• Tenure of Elected Heads: Tenure of an elected head shall not be for more than two
years. The election of Chairman/President of the EPC shall be via Vice
Chairman/Vice President route.
• Directions of the Central Government: EPCs acting as Registering Authorities
shall abide by all directions of Central Govt. in respect of promotion and
development of international trade

Registering-cum-Membership- Certificate (RCMC)
• RCMC is mandatory document for anyone applying for an Authorisation to import/export ‘
Restricted items in ITC (HS) Or any other benefit or concession under the FTP
• RCMC can be obtained by merchant exporters/manufacturer exporters from the
EPC/Commodity Board according to his main line of business
• If the product line does not fall under any EPC, then apply for RCMC from FIEO. Also in
cases of multi-product exporters, not registered with any EPC, exporter can obtain RCMC
from FIEO.
• In case of multi-product exporters with their head office/ registered office in north-eastern
states, RCMC may be obtained from Shellac and Forest Products Export Promotional
Council (except for the product looked after by APEDA, Spices Board and Tea board).
• In case of exporters of handicrafts and handloom products from the J&K, Director,
Handicrafts, Government of J&K is authorized to issue RCMC.
• An exporter may, on application given in ANF 2C, register and become a member of EPC .
• On being admitted applicant shall be granted RCMC, in format given in Appendix 2R .
• Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board shall be
treated as RCMC for the purposes under this Policy.

Procedure for Issue of RCMC & its Validity
• An application for registration may be made to the concerned Registering Authority in
the form given in the prescribed Aayaat and Niryaat form, along with:
(i) a self certified copy of the IEC number
(ii) and bank certificate in support of the applicant’s Financial soundness.
• If the application for registration is granted, the concerned registering authority issues
the RCMC indicating the status of the applicant as Merchant Exporter or manufacturer
Exporter.
• In case an exporter desires to get registration as a manufacturer exporter, he is required
to furnish evidence in that effect.
• Validity of RCMC: The RCMC shall be deemed to be valid from 1st April of the licensing
year to in which it was issued and shall be valid for 5 years ending 31st march of the
licensing year, unless otherwise specified
• Importer-Exporter profile:

Responsibility of the RCMC holder
• Intimation Regarding Change in Constitution of Business :
(a) In case of change in ownership, constitution, name or address of an exporter, it
shall be obligatory on the part of RCMC holder to intimate such change to registering
authority within a period of one month from date of such change.
(b) Exporter shall furnish quarterly return /details of his exports of different
commodities to concerned registering authority.
• De- Registration : Registering authority may de-register an RCMC holder for a specified
period for violation of conditions of registration. RCMC holder shall be given a show cause
notice, to make a representation against the proposed de-registration. Upon de–
registration, concerned EPC shall intimate the same to all RAs
• Appeal Against De-registration Person aggrieved by a decision of registering authority
in respect of any matter connected with issue of RCMC, may prefer an appeal to DGFT
within 45 days against said decision and decision of appellate authority shall be final.

Functions of EPCs-i
• Information hub: inform & interpret export policies and export assistance
schemes of Govt. to the exporter.
• Offering guidance to member on various matters like utilization of GSP,
export finance, insurance of goods and joint ventures aboard.
• Assistance Provider to exporters in export promotional activities such as
external publicity, participation in fairs & exhibitions.
• Collector of information & data from exporters & informing Govt. of the
difficulties/problems faced by exporters/ manufacturers.
• Sending trade delegations & study teams to other countries for promoting
export of new/specific products and diversifying to new products/markets.
• Circulating reports of new products & new markets to its members.
• Creating consciousness amongst exporters through seminars, discussions
about new rules/regulations about specific products.

Functions of EPCs-ii
• Promoting exclusive exhibitions & trade fairs of specific products
• Opening offices abroad to help exporters in consolidating e existing exports and diversifying to
new products.
• Co-operation with EIC on quality control and pre shipment inspection of export goods.
• Settling disputes amongst members or /and other bodies through peaceful negotiations.
• Concessions: To assist members in getting freight and other concessions for shipping conferences.
• Issuing certificate of origin to exporters certifying the origin of goods and helping them with
R.o.O .
• EPCs have diversified and ventured into areas like infrastructure development, skill development,
international collaboration, design development, domestic market development, etc., to name a few
for expanding trade
• EPCs are also actively coordinating with the government for better implementation of its flagship
programmes like Make in India, Skill India, Digital India, etc.

EPCs under Commerce and Industry
• Engineering Export Promotion Council
• Project Exports Promotion Council of India
• Basic Chemicals, Pharmaceuticals and Cosmetics Export
Promotion Council
• Chemicals and Allied Products Export Promotion Council
• Council for Leather Exports Promotion
• Sports Goods Export Promotion Council
• Gem and Jewellery Export Promotion Council
• Shellac Export Promotion Council
• Cashew Export Promotion Council
• Plastics Export Promotion Council
• Export Promotion Council for EOUs, SEZ Units
• Pharmaceutical Export Promotion Council
EPCs Under Textile Industry
• Apparel Export Promotion Council
• Carpet Export Promotion Council
• Cotton Textile Export Promotion Council
• Export Promotion Council for Handicrafts
• Handloom Export Promotion Council
• The Indian Silk Export Promotion Council
• Synthetic & Rayon Textile Export Promotion
Council
• Wool & Woolens Export Promotion Council
• Powerloom Development & Export Promotion
Council
EPC

EPC
Commodity Boards
• Rubber Board
• Coffee Board
• Tea Board
• Tobacco Board
• Spices Board
• Central Silk Board under the Ministry
of Textiles
• Coir Board under Ministry of Agro &
Rural Industries
• All India Handlooms and Handicrafts
Boards under Ministry of Textiles
Autonomous bodies of EPC- Export
Development Authorities
• Marine Products Export Development Authority
• Agricultural and Processed Food Products Export
Development Authority
• National Agricultural Cooperative Federation of
India Ltd. (NAFED)

Meeting new challenges being faced by
EPCs
• As an EPC, what is your biggest challenge?
• MAR: Generally, the biggest challenge for an EPC is penetrating
new and potential markets. Today, EU and US together account
for about 68% of exports of Indian leather industry. Of course,
we have succeeded in our market diversification efforts to
some extent, with penetration in markets like Russia, Japan,
Canada, Australia, Korea, UAE, Saudi Arabia, South Africa, etc.
But still our share in these markets is less than 2%. CLE has been
organising marketing events in most of these potential markets
and the efforts will show results in the long run.
(M. Rafeeque Ahmed, the then Chairman, Council for Leather
Exports (CLE)

What does AEPC do?
• AEPC in its effort to help the exporters undertakes export
promotion, skill development, training and strategy
planning for providing a thrust to the Apparel sector. Under the
‘Garment Product Development & Export Promotion’, the Council
has identified six products wherein the exports from India are
very low compared to the world's exports in these product lines
and they are promoting these items.
• AEPC is conducting workshops on utilising and improving
market access with FTA countries, and are planning
workshops in clusters to understand the existing status. We are
also organising many seminars on the potential for doing
business in Latin America, Africa and Russia
• Ashok G. Rajani, Chairman, Apparel Export Promotion Council
(AEPC) (source : The Dollar Business July,2016)

Snippet's of conversation of TDB with EPCs
• What is Chemexcil doing to help Indian exporters?
• BRG: Under the brand “CAPINDIA”, Chemexcil along with other three
EPCs – Plexconcil, Capexil and Shefexil – recently organised a
big international exhibition in India which not only helped members
to demonstrate their manufacturing competence to global customers,
but also helped them to network with cross functional global buyers.
This event also had a reverse buyer-seller meet to promote direct
exports. We are now planning to make this an annual event. We are
also offering support to exporters to help them understand statutory
compliance in export destinations, such as REACH – a regulation of
European Union, by organising capacity building initiatives
and seminars on topics such as FTAs, handling of dangerous goods
and their transportation, etc.
• B. R. Gaikwad, Chairman, CHEMEXCIL

• What steps have been taken by TEPC to help exporters?
• RKB: TEPC organises various events to showcase Indian capabilities. Indo-Africa ICT Expo in Kenya is
one such event where TEPC takes Indian telecom equipment & services players along with software
industry leaders to Kenya to sell their products in emerging markets of Africa.. TEPC organised it in
September 2015 for the first time. Now it is being organised again in September 2016.
• Further, in a recent buyer-seller meet, which was organised in New Delhi, TEPC invited over 80 buyers
from 27 countries to India and arranged their interactions with Indian telecom players. Going forward,
TEPC is now planning a buyer-seller meet in Bangalore in August 2016 and in February 2017 in Delhi.
• TEPC also participates in exhibitions like Gitex in Dubai, CommunicAsia in Singapore, AfricaCom in
Cape Town, and Nigeria Com in Nigeria.
• TEPC foresees multifold increase in exports in the next five years, provided incentives and support are
given, including preferential market access to indigenous manufacturers who are starting from the
designing stage in the country.
• Domestic mobile phone manufacturers like Micromax, Lava, Intex, Videocon and MNCs like Samsung have
started manufacturing mobile phones within the country. Other global vendors like Foxconn, Apple, and
Lenovo have also announced their plans to manufacture mobile phones in India. However, these will be
'manufactured' in India, and not 'designed' in India.
• We are trying to ensure that the Indian industry adopts a ‘consortium’ approach in bidding for
infrastructure projects in developing nations while tapping announced Indian government’s aid proposals.
• Rakesh K. Bhatnagar, DG, Telecom Equipment & Services Export Promotion Council (TEPC)

• What is EEPC doing to promote Indian engineering products
overseas?
• BS: We have already exceeded the limits in our traditional
countries such as US and EU, so it’s time to look for new markets.
However, it is difficult for an individual exporter to go to a brand
new market on its own. So, EEPC researches different
countries and their demand patterns to see what India can
offer, keeping in mind the price range.
• We also take various Indian groups to different countries.
• This has been helpful and we have done over 33 such
collaborations all over the world.
• Bhaskar Sarkar, Executive Director, Engineering Export Promotion
Council (EEPC)

• What steps are being taken by CEPC to help exporters?
• KRW: We have helped many small exporters become bigger players, both in terms of value
and reach.
• We offer them a platform to attend trade exhibition, whereby we give them all help ranging
from setting up stalls to logistics-related help.
• We discuss and negotiate with buyers on their behalf.
• We are the implementing agency of many government sponsored schemes relating to skills
development and training.
• We also conduct many seminars and buyer-seller meets. 15 years ago, we had only 2 or 3
events in one year, but now we have 20 events a year. We have literally become an event
managing institution. Each year, we take around 300 companies to Domotex (Germany)
where they get to know the latest designs, new ranges, and technical know-how. In India too,
we organise two events per year, in March and October.
• Kuldeep Raj Wattal, Chairman, Carpet Export Promotion Council (CEPC)

• What does Spice Board do to help exporters?
• AJ: MDA Scheme has been implemented to provide
assistance to exporters and manufactures to upgrade their
processing and storage facilities to assure safety and quality
of spices.
• We have created a platform, i.e. World Spice Congress, for
interaction between importers and exporters and are
organising buyer-seller meets in international and national
fairs.
• Dr. A. Jayathilak, Chairman, Spices Board of India

• What does EPCES do to help SEZs and EOUs?
• PCN: There was a proposal that the income tax benefits to SEZs and EOUs should expire in
2017, and any units operating thereafter should not be given the income tax benefits, but we
were able to move up till 2020.
• We have been suggesting new rules to strengthen ease of doing business.
• Whenever there are questions raised by SEZ units and developers, we have been answering
them.
• I, as Chairman, advise them as and when they need my help.
• The EPC has been trying to arrange open houses to benefit the units so that their grievances
are mitigated.
• As far as EOUs are concerned, we have given 33 recommendations, which have not been
implemented yet. Now, we are taking up this matter with the Ministry of Commerce. Any good
manufactured from SEZs and sold in India should not be subjected to full Customs duty. It
should be at FTA rates.
• P. C. Nambiar, Chairman, Export Promotion Council for EOUs and SEZs (EPCES)

• How closely are you working with the Ministry of Commerce, DGFT and CBEC?
• AS: FIEO’s job is to supplement the efforts of the government in facilitating trade.
• The MoC has taken an initiative to involve states in export promotion, but unless all
the states participate proactively in the decision, it is difficult for the government to
reach the country’s set export target.
• So far, the Commerce Secretary has visited over 10 states where we have organised
interaction with exporters. With state governments, we are also working on
strategising exports on the basis of their export products and the potential export
basket.
• We are also working with the MoC on extending FTA outreach across the country.
• We are roping in DGFT to sensitise exporters under the Niryat Bandhu Scheme,
where we handhold new entrepreneurs. The DGFT has been able to address many
problems of the export sector. Earlier exporters had to fill 35 applications; now they
have to fill just one form.
• Ajay Sahai, Director General & CEO, Federation of Indian Export Organisations (FIEO)

• What is Texprocil doing to help exporters?
Texprocil is undertaking extensive market development
programme in existing as well as new markets, undertaking
study reports on value added textiles, ensuring
competitiveness of Indian textiles, cost benchmarking, and
organising B2B programmes in important markets to reach
out to a large number of importers worldwide.
R. K. Dalmia, Chairman, The Cotton Textiles Export Promotion
Council (TEXPROCIL)

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