What is an Export License: Meaning, Documents & How to Apply
TL;DR - Summary
- Who needs an export licence? - Beyond an IEC, you need an export licence to ship goods that fall under restricted categories or controlled goods.
- How many types of export licences are there? - The type depends on the goods you are exporting, and you must obtain the specific licence that applies to your product category.
- How do you apply for an export licence? - Apply through the DGFT portal and submit your application with all the required documents properly attached.
- Is professional assistance required? - You can save money by applying yourself, but expert guidance can make the process smoother and reduce filing errors.
What Is an Export License?
An export license is an official government permission required to ship certain categories of goods to specific countries. To export items or products that are considered ‘restricted’ as per the foreign trade policy, you must obtain this license from the Directorate General of Foreign Trade (DGFT).
The Indian government requires export licences for certain goods. This is to protect national security, preserve cultural and environmental resources, and comply with international trade obligations. This system also helps authorities monitor the movement of sensitive or regulated products across borders and prevents their misuse.
For products of the freely exportable category, an exporter does not need an export license. Exporting such goods needs only an IEC, i.e. a universal 10-digit alphanumeric code.
⚠️ COMMON MISCONCEPTION
First-time exporters think that an IEC and the export license are the same thing and may apply for the wrong one or skip the export licensing process entirely.
What Are the Types of Export Licenses?
There are different types of export licences in India. Based on the nature of the goods, their end use, and the applicable export regulations, different licenses apply. The main types of export licences include:
Individual Licenses
Unlike an IEC, which every exporter must obtain, an exporter needs an Individual Licence only for certain products. For example, an exporter may require an Individual Licence to export a restricted chemical or controlled technology to a specific buyer in another country.
Open General Export License (OGEL)
It is a specialised license to export defence-related equipment to overseas countries that are eligible to receive such shipments. OGEL allows exporters to make multiple exports of specified items without requiring a separate licence for each shipment. However, as an exporter, you must satisfy the eligibility, reporting, and other requirements. Managed by the Department of Defence Production
SCOMET License
SCOMET stands for Special Chemicals, Organisms, Materials, Equipment and Technologies. Exporters need this license to export special chemicals, organisms, etc., that fall under the dual-use item category, that is, when it could qualify for both military and civil use. These include cryptographic software and even nuclear materials. Its approval considers factors like the destination country, end user, intended use of the product, etc.
Depending on the category of item you are exporting, you may need to submit technical specifications and end-use certificates.
Restricted Export License
As its name implies, exporters need this to export items listed as restricted. Such a category includes exporting live animals, silkworms, sandalwood, etc. You get this license only after the relevant authority reviews the export request and its compliance. Approval may be subject to restrictions on quantity, destination country, validity period and other factors.
What Documents Are Required for an Export License?
Document requirements vary by licence type. The DGFT issues export licences and requires basic business documents for the application process. However, specialised authorisations such as SCOMET and OGEL may require additional information, end-use certificates, and NOC:
Here’s a quick look at what you’ll need:
Business Registration
To export goods that require a licence, you must register your business as a private limited company, a partnership firm or a Limited Liability Partnership (LLP). You will need to submit proof of this registration.
Exporter and Importer Profiles
You must complete the application for a license to export restricted items by submitting the ANF-2N and ANF-1 forms. Here, the ANF-1 captures the business and exporter details. While ANF-2N is the application form to seek authorisation for exporting any restricted goods. Both forms are prescribed and issued by the DGFT as part of the export licensing process.
GST Registration and PAN
You must also have a valid GST registration certificate and number to apply for this license. This 15-digit alphanumeric code serves as your digital identity as a business and helps keep track of your export and other business activities. Also, attach your business’s PAN card copy.
Payment Evidence
While applying for an export license, you must also attach the receipt of the fee you paid online for it. This fee typically varies by licence type, and exporters pay it online through the DGFT portal during the application process. For example, applications for restricted items or SCOMET export authorisations generally attract a fee of ₹1,000 per application.
Other Documents
To export restricted goods, attach an end-use or end-user certificate with the documents. This certificate confirms who will receive the goods and how they will use them. It helps authorities ensure they are not diverted for unauthorised purposes. You must attach an NOC from the owner if your business operates from a rental property.
How to Apply for an Export License on the DGFT Portal?
To apply for an export license, you need to visit the DGFT web portal and complete the application process online by following the steps below.
However, these steps are for the ‘Restricted Exports’ category and they vary from other types of export license or authorisation you are applying for.
Step 1: Log in to the DGFT portal.
Step 2: Go to Services → Export Management System → Restricted Exports.
Step 3: Select ‘Apply for Restricted Exports’ and click ‘Start Fresh Application’ or continue a saved draft if available.
Step 4: Enter the basic export/authorisation details as required by the system. Once done, keep clicking on the ‘Save & Next’ button to reach the other details page.
Step 5: Attach all mandatory documents (as per item/category requirements) in the prescribed format.
Step 6: Once you have uploaded the documents, click on the ‘Save & Next’ button to reach the declaration page. Select the terms and conditions check box to accept them.
Step 7: A draft of the application will be created and you will reach the ‘Application Summary’ screen. Click on the ‘Print Summary’ button.
Step 8: Proceed to make payment for the application.
Step 9: After successful payment, you will be redirected to the DGFT portal, where the receipt is displayed and can be downloaded or printed. A confirmation is also sent via email and SMS acknowledging the file submission.
How Much Does an Export License Cost in India?
The cost of an export license in India is not fixed and depends on the type of license you apply for and how you choose to complete the process.
Here’s a breakdown to help you understand the overall expenses involved:
Actual Export License Costs With Types
- Basic IEC Registration: As it is mandatory for an exporter, you must apply for it, and the application fee is around ₹500.
- License for SCOMET or Restricted Items: Here, application fees may vary, and it usually starts from ₹1,000 for such special licenses.
- Digital Signature Certificate (DSC): It may not always be applicable, but if required, it usually starts from ₹1,500.
Cost Comparison Between DIY Application and Hiring a CA
- A DIY application may cost around ₹500 with potential notary and documentation costs.
- Hiring a Chartered Accountant (CA) for these services typically costs around ₹2,000 to ₹5,000.
- Application for this license through a consultancy firm typically costs between ₹5,000 and ₹15,000.
Comparison Between the Channels of Export License Application
| Method | Price Range | Level of Hassle |
|---|---|---|
| DIY | Around ₹500 | High |
| CA | ₹2,000 to ₹5,000 | Low |
| Consultancy | ₹5,000 to ₹15,000 | Minimal |
✅ PRO TIP
For straightforward restricted cargoes, handling the DGFT process yourself lowers costs. For SCOMET items, consulting a compliance expert is usually worth the spend.
What Goods Require an Export License?
Several categories of regulated goods need an export licence. These include SCOMET items, defence-related products, wildlife derivatives, antiquities, and more:
| Export Licence | Goods Covered |
|---|---|
| SCOMET Export Licence | Dual-use technologies, chemicals, pharmaceuticals, organisms, and other items listed under Schedule 2 of ITC (HS). |
| License for defence-related items | Arms, ammunition, and military-grade equipment, nuclear materials, and associated technology. |
| Permit to export wildlife | Wildlife and biologicals that were derived from endangered species. |
| License to export antiquities | Items that are over 100-years-old require a permit from the Archaeological Survey of India (ASI). |
| License to export other goods | Vintage motorcycle components and parts, and culturally significant goods and artworks, require an export license. |
Note: Most general merchandise, software and IT services qualify as freely exportable and require only a valid IEC.
What is the Validity of an Export License?
The export licence validity varies by type. For example, an IEC has lifetime validity, but is subject to annual updates. Advance Authorisation and DFIA generally have a validity of 12 to 24 months. EPCG has a 6-year export obligation period. While a SCOMET export licence may be issued for a specific consignment or for up to 24 months.
Note that the DGFT allows exporters to reapply for a licence to export within 6 months and up to 12 months from the expiry of its validity.
As an exporter, you must apply before expiry through the DGFT portal, providing justification and the required documents. The authority approves an extension based on compliance. However, the IEC registration has lifetime validity.
How Does Skydo Help After You Get Your Export License?
As you get your export license, you can move to AD bank registration, invoicing, and receiving international payments. However, exporters often lose 3 to 5% per transaction due to bank, forex markups and other charges.
Platforms like Skydo offer competitive forex rates with transparent pricing. You pay $19 for transactions up to $2,000, $29 for transfers between $2,001 and $10,000, and 0.3% for amounts above $10,000. GST is charged additionally.
Skydo also provides compliance documentation and an instant FIRA while simplifying the payment workflow. This allows exporters to focus on business instead of paperwork.
For exporters looking to simplify cross-border payments and compliance, Skydo offers transparent fees and a streamlined payment experience!
Is an export license mandatory for service exporters and IT freelancers?
No, service exporters and IT freelancers do not typically need an export license for their services. Here, only a valid IEC is mandatory.
How long does it take to get an IEC from the DGFT portal?
What is the difference between an IEC and an export license?
