The Directorate General of Foreign Trade (DGFT) is a body under Ministry of Commerce and Industry of the Government of India. It is headed by the Director General of Foreign Trade. Till 1991 this office was known as Chief Controller of Imports & Exports (CCI&E). Post liberalization in 1991, DGFT was formed to replace CCI&E and the role of this office changed from Prohibitor and Controller of Exports and Imports to Facilitator, Promotor and Regulator of Exports and Imports. Keeping in mind the country’s objective of increasing exports, it implements necessary laws, issues export licenses, introduces trade incentives and develops trade relations with other nations.
Important Roles and Functions of DGFT
- Implement EXIM Policy/Foreign Trade Policy
- Implement Foreign Trade Procedures
- Issue IEC Code to Exporters and Importers
- Document and Mantain Classifications of ITC-HS Codes
- Platform for updating eBRC
- Inform about Goods which can or cannot be exported freely under Export Policy Schedule 2
- Grant Export Licenses for Restricted Items
- Promote Trade
- Control DEPB Rates
- Regulate Transit of Goods
Implement EXIM Policy/Foreign Trade Policy
Exim Policy or Foreign Trade Policy is a set of guidelines and instructions related to import and export of goods developed by the Directorate General of Foreign Trade. The Government of India announces the EXIM Policy which is applicable for a period of 5 years under Section 5 of the Foreign Trade Act 1992. The objective of the policy is to encourage exporters in the country, thereby increasing exports and maintaining favourable balance of payments position. Currently Foreign Trade Policy 2015-2020 is in effect and will remain applicable till 31st March 2020.
Implement Foreign Trade Procedures
DGFT formulates and announces Foreign Trade Procedures which are to be followed by an exporter or importer for the purpose of implementing provisions of Foreign Trade Act and Foreign Trade Policy. The objective is to lay down simple EDI compatible procedures which are easy to understand and user friendly for efficient execution of foreign trade in the country. Parallel to the current Foreign Trade Policy, the Handbook of Foreign Trade Procedure 2015-2020 is in effect at present.
Issue IEC Code to Exporters and Importers
IEC Code is a must for all import and export businesses in India. It is a unique 10 digit registration code issued by DGFT. This code helps in tracking and managing shipments of an exporter or importer. The IEC Code is now integrated with PAN, and only one IEC can be issued against one PAN. An exporter or importer can apply for IEC Code or e-IEC online on DGFT’s website.
Document and Maintain Classifications of ITC HS Codes
ITC HS Codes are based on International Harmonized System of Coding and were adopted in India for facilitating foreign trade. The Indian customs uses 8 digit ITC HS Code in trading activities. The ITC HS Codes are divided into two schedules wherein, Schedule 1 is for Import Activities and Schedule 2 is for export activities. Any changes, or addition such as changes in description of commodities, removing defunct codes, adding new codes etc. are carried out by DGFT.
Platform for updating and viewing eBRC
eBRC or Bank Realization Certificate is issued by Banks to exporters so that they may claim benefits under various export promotion schemes under the Foreign Trade Policy. To promote paperless trade DGFT's eBRC module for exports allow Banks to electronically transmit Foreign exchange realization directly to the exporter's account.
An exporter can follow the following steps for viewing his eBRC:-
- Go to DGFT's website and select "View and Print your eBRC"
- To access the eBRC details you have to enter your IEC Code and IFSC Code of the bank whose eBRC you want to view or where your drawback amount or forex has been realised. Once you have filled these details click on "Show Details".
- A list of all eBRCs uploaded by that bank will be shown
- You can download each eBRC by clicking on print.
It is advisable to print 4 copies of each eBRCs as they might not be available later on due to constant server updations.
*This is what an eBRC looks like. *
Inform about Goods which can or cannot be exported freely under Export Policy Schedule 2
In accordance with Schedule 2 – Export Policy formulated by DGFT all goods other than those listed in export licensing schedule along with its appendices are freely exportable. Exports are free except when they are regulated by way of any “Prohibition”, “Restriction” and “STE”.
Grant Export Licenses for Restricted Items
All items which are defined as restricted in the Export Policy, are permitted for exports subject to license granted by DGFT. The license for these items can be applied online on the website.
DGFT has played a crucial role in launching several export promotion schemes such as MEIS, SEIS, Advance Authorization Scheme, Duty Free Import Authorization Scheme, Export Promotion of Capital Goods Scheme (EPCG), Export Oriented Units (EOU) Scheme, Deemed Exports etc. These schemes have been implemented under Foreign Trade Policy and the procedure to apply for them has been outlined under Foreign Trade Procedure.
Apart from this, this body also undertakes implementing “Ease of Doing Business” for exporters and importers by simplifying and digitizing export-import procedures to promote foreign trade.
Also Read: Deemed exports inder SG
Facilitate Application for MEIS
As a part of “ease of doing business” measure, DGFT facilitates claiming rewards under MEIS to exporters with the help of an online application system. The MEIS application is to be filed online using Digital Signature with the concerned RA in Form ANF 3A. The relevant shipping bills and e- BRC are to be linked in the application. If the exports are made from EDI ports then hard copies of these documents are not required to be submitted to the respective RA.
Control DEPB Rates
Duty Entitlement Passbook Scheme (DEPB) is an export incentive scheme which is regulated by DGFT. Under this scheme the exporter is incentivized on the customs duty paid on import of goods such as raw materials which will be further exported. The exporter is entitled to apply for credit which is a fixed percentage of FOB value of the goods exported. The DEPB rates are decided and notified by the DGFT.
Address Quality Complaints and Trade Issues
In order to instil confidence in the quality of trade services provided by India, under Chapter 8 of Foreign Trade Policy a mechanism has been defined to resolve complaints or trade disputes relating to Foreign Trade by DGFT. It takes care of complaints received from foreign buyers for indian exporters as well as complaints of Indian importers against foreign suppliers through this platform. Any quality complaints or trade disputes relating to foreign trade can be filed online on it’s website.
Regulate Transit of Goods
DGFT regulates transit of goods from or to India in accordance with the bilateral treaties in effect between India and other countries.
Director General of DGFT
Directorate General of Foreign Trade is headed by the Director General who is appointed by the Central Government. To be eligible for this position, the candidate should be a member of Indian Administrative Service (IAS) with a public service of 30 or more years. The Director General advises the Central Government in formulation of Foreign Trade Policy or EXIM Policy and its execution. Some of the primary responsibilities of the DG at present are:-
- Formulation of foreign trade policy
- Formulation of hand book of procedures for Foreign Trade policy
- ITC (HS) classifications of Import and Export items
His office is located at Gate No. 2 of Udyog Bhavan, New Delhi. Mr Alok Chaturvedi is the current Director General since July 2017.
DGFT has two types of offices known as Regional Authority (RA) and Zonal Offices. The zonal offices of DGFT are at Kolkata, Delhi, Chennai and Mumbai. The zonal offices are headed by The Additional Director General of Foreign Trade, whereas the Regional Offices are headed by Joint Director General, Deputy Director General and Assistant Director-General. The Director General sits at Udyog Bhawan in New Delhi.
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