Do You Need DGFT Licensing & Foreign Trade Policy Advisory? A Practical Starting Point
India's Foreign Trade Policy is one of the most detailed and incentive-rich trade regulatory frameworks in Asia — but also one where a single procedural error can forfeit crores of rupees in legitimate duty exemptions or trigger DGFT proceedings under the FTDR Act 1992. PNPC Global has advised exporters and importers on DGFT licensing, FTP interpretation, Export Promotion schemes, and DGFT compliance since the framework existed in its current form. We do not simply file forms.
What You're Really Buying
The Directorate General of Foreign Trade (DGFT) is the principal regulatory authority under the Ministry of Commerce and Industry, Government of India, responsible for formulating and implementing the Foreign Trade Policy (FTP). The FTP — currently FTP 2023 notified on 1 April 2023 — is a comprehensive framework that governs India's international trade: it sets the rules for import and export licensing, specifies the conditions for duty exemption and remission schemes, defines the incentive architecture for exporters, prescribes compliance requirements, and delineates the consequences of default. DGFT operates through its headquarters in New Delhi and a network of Regional Authorities (RAs) across India's major trade cities.
For the full scope, current process and what PNPC includes, see the dedicated DGFT Licensing & Foreign Trade Policy Advisory service page.
Is This Relevant to Your Business?
- You are an Indian manufacturer-exporter or merchant exporter looking to import inputs, raw materials, or capital goods duty-free under the Advance Authorisation or EPCG schemes — and need expert guidance on which scheme fits your production and export pattern
- You have received a DGFT Show Cause Notice, a deficiency letter, or a query from the Regional Authority on a licence application and need a practising CA to respond and manage the proceedings
- You want a comprehensive review of your current FTP benefit utilisation — whether you are claiming all schemes you are eligible for, whether your SION norms are optimal, whether your IEC and RCMC are current, and whether there are gaps in your export benefit stack
- You are setting up a new export business or entering a new export market and need FTP structuring advice — which schemes to enroll in from the outset, which EPCs to register with, what the compliance calendar looks like, and how to structure import sourcing to maximize duty benefit
Before You Assume You Need This
- You are purely a domestic business with no international trade activities and no plans to export or import — DGFT regulation does not apply to purely domestic supply chains
- You are a service exporter with no physical goods movement and your export benefits are entirely within the GST refund mechanism (IGST refund or LUT route) — while DGFT's Service Exports from India Scheme (SEIS) had relevant application, FTP 2023 has restructured service export benefits and you may need GST advisory rather than DGFT-specific advisory
- Your export volumes are too small for the compliance cost of AA or EPCG to make economic sense — if annual imports used in export production are below a threshold where the duty saving is material, Duty Drawback (a simpler post-export refund) may be the more practical instrument
Questions We're Actually Asked
What is the DGFT and what is its role in India's foreign trade?
The Directorate General of Foreign Trade (DGFT) is the apex regulatory authority under India's Ministry of Commerce and Industry responsible for formulating and implementing the Foreign Trade Policy (FTP). DGFT's mandate covers: issuing the IEC (Importer Exporter Code) to all importers and exporters; administering export incentive schemes (Advance Authorisation, EPCG, RoDTEP, DFIA, and others); maintaining the prohibited/restricted/canalized goods list; regulating trade with specific countries (SCOMET items — Dual-Use items); and conducting proceedings under the FTDR Act 1992 for policy violations. DGFT operates through its headquarters in New Delhi and approximately 23 Regional Authorities across India's major cities including Chennai, Mumbai, Delhi, Kolkata, Bangalore, and Hyderabad.
What is the Foreign Trade Policy — and how often does it change?
The Foreign Trade Policy (FTP) is a comprehensive policy document notified by the Ministry of Commerce and Industry that governs India's import and export trade. The current FTP 2023 was notified on 1 April 2023 and replaced FTP 2015-20 (which had been extended multiple times). The FTP 2023 is described as a 'living document' — it does not have a fixed 5-year term but will be updated continuously through amendments, trade notices, public notices, and circulars as trade conditions evolve. The FTP is supplemented by the Handbook of Procedures (HBP) which specifies procedural requirements, ANF formats, SION norms, and the operational details of each scheme. The HBP is updated more frequently than the FTP itself — DGFT issues public notices amending specific HBP chapters and SION annexures throughout the year.
Is an IEC mandatory for all importers and exporters in India?
Yes — the Importer Exporter Code (IEC) is mandatory for any person importing or exporting goods (and certain services) from India. It is a 10-digit number issued by DGFT on the basis of the PAN of the applicant entity. Without a valid IEC, Customs will not clear imports or exports, and DGFT licensing is not accessible. From April 2021, IEC holders are required to electronically update or confirm their IEC details (or opt for deactivation) through the DGFT portal in the annual update window (typically April to June each year). Failure to complete the annual update results in the IEC being automatically deactivated — and an inactive IEC blocks all trade operations until it is reactivated by completing the update.
Working With PNPC Global
Speak with a PNPC Chartered Accountant who works on DGFT licensing every week — not someone who has read the policy but someone who files the applications, tracks the obligations, and argues the redemptions. We will assess your current FTP position, identify what you may be missing, and give you a realistic view of the compliance commitment before any engagement is agreed.
PNPC Global has advised Chennai, Bangalore and Hyderabad businesses since 1986. Explore the full Registrations & Licences practice for related services, or go straight to the DGFT Licensing & Foreign Trade Policy Advisory page for specifics.
This is a general explainer, not a substitute for checking today's rules with PNPC or the relevant authority — figures and deadlines move, so none are quoted here as fixed.