How to Start an Import Export Business in India (2026 Step-by-Step Guide)

Starting an import export business in India: what it really takes

The barrier to entry is lower than most people expect. An import export business in India needs surprisingly few registrations — a business entity, PAN, GST, a current account, the import export code (IEC) from DGFT, an AD Code and an ICEGATE login cover almost all merchandise traders. The sequence below is current as of mid-2026 and reflects the DGFT’s online processes.

What is not cheap is working capital. The registrations run to a few thousand rupees, but sourcing goods, samples, freight and the first order are where the real money goes. Plan for that, and the registration part of the journey takes about two to three weeks.

Step 1 — Choose your business entity and register it

• Sole proprietorship: simplest and cheapest start — you operate under your own PAN, with GST, Udyam and shops-and-establishment registration as business proof.
• Partnership: needs a deed and registration with the state Registrar of Firms — an unregistered firm cannot sue.
• LLP: files FiLLiP on mca.gov.in; limited liability and looks credible to overseas buyers.
• Private limited company: files SPICe+ on mca.gov.in (MCA fee is nil up to ₹15 lakh authorised capital, state stamp duty extra); the most credible structure for large buyers.

Step 2 — PAN, GST and the current account

You need a PAN in the business name — the IEC is PAN-based, so nothing works without it. Then register for GST: without it an importer pays IGST at customs and an exporter cannot claim input tax credit or use a Letter of Undertaking (LUT) for exports. GST registration is free on the GST portal, and a simplified 3-day auto-approval scheme has been live since 1 November 2025.

Finally, open a current account with a bank authorised to deal in foreign exchange. This is the account your IEC application references and through which all export receipts and import payments flow.

Step 3 — Get the import export code (IEC) from DGFT

The IEC is the single most important registration. It is a 10-digit PAN-based code issued online by DGFT, mandatory for any import or export of goods. Customs, banks and export councils will not process a transaction without it.

• Entity types: proprietorship, partnership, LLP, company, trust, HUF or society — each applies on its own PAN.
• Bank details are validated through PFMS, and DGFT may physically verify the registered address after issuance.
• One IEC per PAN — it covers all your branches, divisions and units.

The annual IEC update trap (miss it and you stop trading)

Step 4 — Register the AD Code and ICEGATE

Before your first shipping bill, register your bank’s authorised-dealer (AD) Code on ICEGATE port-wise — a free, online registration since 2022 using a letter from your bank. Then create your ICEGATE login: it is where shipping bills, bills of entry, e-Sanchit document uploads and IGST refund tracking all happen.

Step 5 — GST LUT, RCMC and Udyam

• LUT (Form RFD-11): exports are zero-rated; the LUT lets you ship without paying IGST. Refiled every financial year.
• RCMC: needed only if you claim Foreign Trade Policy benefits beyond RoDTEP (advance authorisation, EPCG, interest equalisation). RoDTEP itself does not require an RCMC — pure traders can skip it initially. FIEO membership runs roughly ₹6,000–7,500; APEDA about ₹5,900 for five years. ⚠️
• Udyam registration: free and lifetime, not legally compulsory but practically essential — priority-sector lending, delayed-payment protection under the MSMED Act and cheaper fees.

Step 6 — Research the product and the market

Import-export data is your best friend. Use DGFT trade statistics, the Ministry of Commerce’s data, Trade Map and customs data to see which products are moving, to which countries, at what prices. Look for consistent demand, manageable competition and margins that survive freight and duty. Then check your buyer’s country for financing coverage before you negotiate terms.

Step 7 — Find suppliers and buyers, and fix payment terms

For exports, build a network of domestic manufacturers or wholesalers who can deliver quality on time. For imports, verify overseas suppliers on B2B platforms and trade fairs before bulk orders — request samples first. In every negotiation fix the payment terms (advance, letter of credit, or DP/DA), Incoterms, delivery dates and minimum order quantities.

Step 8 — Financing and insurance for your first order

The registrations are done — now the working capital. Options for a new exporter include packing credit to fund production against a confirmed order, invoice discounting and factoring after shipment, and LC discounting where the deal runs on a letter of credit. Insure the risk you cannot afford with an ECGC policy, which also strengthens your bank financing.

• Before shipment: packing credit funds raw material and production.
• After shipment: invoice discounting or factoring converts the invoice into cash.
• Under an LC: LC discounting pays you before maturity.
• Risk: ECGC cover protects against buyer default and political risk.

Step 9 — Documents, shipping and customs

The core documents are the commercial invoice, packing list, bill of lading or airway bill, certificate of origin and the shipping bill filed on ICEGATE. A customs house agent (CHA) or freight forwarder can handle clearance and freight — most new exporters use one until the process is routine. Keep the paperwork clean: a missing certificate or mismatched invoice is how cargo ends up stuck at the port.

Step 10 — Payment, realisation and compliance

After shipment, present the documents to your bank within 21 days so payment can be collected under the LC or collection terms. Export proceeds must be realised within the RBI timeline (nine months for exporters), through banking channels only, and evidenced by an e-BRC — without it you cannot claim RoDTEP or duty drawback. Imports must be paid within six months. Reconcile every receipt against the shipping bill in the EDPMS/IDPMS system.

What it costs to start (indicative)

Common mistakes new import-export businesses make

• Skipping the April–June IEC update and losing the code on 1 July.
• Using open account terms with an unvetted buyer on the first order.
• Selling without checking the buyer country’s financing coverage first.
• Shipping without the LUT filed, blocking zero-rated exports.
• Missing the RBI realisation timeline and losing incentive eligibility.
• Letting a CHA or freight forwarder handle documents without understanding them yourself.

Frequently asked questions