DGFT forms the backbone of the international trade framework of the country. Set up in 1991, when the Indian economy was opened to the world, DGFT functions under the Ministry of Commerce and Industry. Over the years, the institution has transformed gradually from being a regulatory authority to an export and import facilitator in tune with the changing needs of India’s integration into the global trading system.
Let’s delve deep into the roles, responsibilities, and major contributions that DGFT has given to the trade dynamics of India.
Key Responsibilities of DGFT
The DGFT works under the following mission and vision statement, which revolves around an implementation of India’s F.T.P., ensuring an Easy and Smooth trading environment. Following are some of the major roles:
1. Formulation and implementation of Foreign Trade Policy (FTP)
DGFT frames and executes the FTP, which provides guidelines and incentives to the exporters and importers. The policy is made in such a way that while it promotes trade, it balances with economic development. The update of the same policy changes periodically according to the shift in global and domestic trade.
2. Issuance of Importer Exporter Code (IEC)
Importer Exporter Code is a 10-digit unique identification required for an establishment to export or import commodities from/into India. The IEC has also been envisioned as a key enabler in the connectivity of exporters/importers with the digital platforms of DGFT to facilitate regulatory compliance.
3. ITC-HS Code Maintenance
ITC-HS stands for Indian Trade Classification-Harmonized System, codes maintained by DGFT, which are used for classification purposes for any kind of trade taking place. This will, in return, help them with an appropriate product category and further compliance with various regulations issued relating to the foreign trade of the country.
4. Issuance of Export Licenses
DGFT regulates the export of restricted items by the issue of export licenses. In respect of goods under the special category, exporters have to obtain approval from DGFT for ensuring that exports are not against national interests and obligations arising out of international agreements.
Licenses and Certifications Issued by DGFT
DGFT promotes trade through the issuance of different types of licenses and certifications:
- Importer Exporter Code: IEC – This is a code, which is mandatory for the exporter/ importer having lifetime validity in terms of business.
- Certificate of Origin (COO): This is a certificate that states products being exported are manufactured or processed within India. This is normally a mandate to avail of trade benefits against various trade agreements in place.
- 3. eBRC: This is mainly used by banks through which the bank sends foreign exchange realization data electronically to the DGFT. Even this has a paperless process and ease in documentation.
- EPCG License : It is issued for importing capital goods at zero customs duty upon meeting the export obligation.
DGFT Schemes and Services
The DGFT has implemented various schemes and services pertaining to ease of trade and export promotion. Here is a quick rundown of the current schemes by DGFT:
1. Advance Authorization / DFIA:
- Allows duty-free import of inputs for export products.
- Exporters must fulfill export obligations based on norms.
2. EPCG (Export Promotion Capital Goods Scheme) :
- Allows the import of capital goods at reduced customs duty for modernization of the production facilities.
3. SEIS (Services Exports from India Scheme):
- Incentivizes services exporters on their net foreign exchange earning through duty credit scrip.
4. RoSCTL: Rebate of State & Central Taxes and Levies:
- Gives rebate to the taxes that are embedded in the exporting of garments and made ups.
5. RoDTEP – Remission of Duties and Taxes on Exported Products:
- Repays such taxes levied at different levels to make the Indian exports competitive.
6.Transport & Marketing Assistance(TMA):
- Assists exporters of agricultural and allied products by subsidising transport and marketing costs.
7. Deemed Export:
- It covers those transactions in which the goods supplied stay within India but are still exportable by nature, and provide for refund of duties and exemptions.
8. Certificate Management:
- Allows exporters to administer the digital certificate needed in support of business trade.
9. Pre-Shipment Inspection:
- Compulsory for exports of certain kinds of commodities with the aspect of ensuring quality and attaining international standards.
10. e-Sanchit Portal:
- Digital document repository for enabling paperless trade facilitation.
11. SCOMET Licensing:
- Licensing for Special Chemicals, Organisms, Materials, Equipment, and Technologies due to their requirements as a controlled export item.
12. Export Management System:
- Simplifies the export procedure, documentations, and monitoring processes.
13.Quality Complaints & Trade Disputes
- Provides a platform for quality and trade-related issues.
Recent Initiatives by DGFT
1. Quality Control Measures
DGFT has issued Quality Control Orders, better known as QCOs, which ensure that the imported products maintain the requirements of a certain quality standards. This helps in enhancing consumer safety and also actively supports the Make in India initiative.
2. Trade Facilitation Schemes
Schemes such as the Merchandise Exports from India Scheme and the Services Exports from India Scheme give incentives to the exporters in the form of financial benefits, including duty credits.
3. Exporters’ Capacity Building
Under the Niryat Bandhu Scheme, DGFT imparts training and conducts workshops for updating SMEs on the export-import procedures.
4. Stakeholder Consultations
DGFT is very active in reaching out to the problems of industry stakeholders so that the policy is inclusive and pragmatic.
How to Link IEC with DGFT
Exporters are required to link their IEC with DGFT for smooth operations. The process involves:
- Login to DGFT website.
- Click on “Link IEC” and enter your 10-digit number for IEC.
- Verification of the given details through Aadhaar or DSC.
- Service access for the same, to be done: modification in IEC details, printing of certificates, and application to schemes.
Challenges and the Way Forward
Challenges:
- Global Trade Dynamics: The rapid changes in global international trade policies make it imperative that changes in India’s FTP be carried out concurrently.
- Compliance with Environmental Standards: Exporters face challenges in meeting global sustainability requirements.
- Digital access: Smaller exporters in the more backward regions will certainly face inconvenience in accessing digital platforms of the DGFT.
Way Forward:
- Updates in Policy: The DGFT should be more proactive and regularly update the FTP, matching the rhythm of various international trade agreements.
- SME support-Increasing training programs and simplifying documentation would help to empower the small exporter.
- Improved Access to Technology: Investment in building the infrastructure that supports access to DGFT’s electronic services.
Endnote
The DGFT, therefore, stands tall in the domain of sculpting the country’s foreign trade landscape. Streamlining processes, digitizing platforms, and integrating these seamlessly with stakeholder partners allow DGFT to power and enable business interests toward optimal performance in world commerce. As India pursues aggressive trade goals, innovation with inclusivity is poised to remain key areas that the DGFT can concentrate on to facilitate India’s emergence toward strong, sustained economic performance.