When you export from India, you operate within a structured trade framework. The Directorate General of Foreign Trade (DGFT) sits at the centre of this framework, shaping how goods and services move across borders. Its role has steadily evolved. From being a largely regulatory authority, it has transitioned into a facilitation-focused body, especially after India’s economic reforms in the 1990s.
DGFT functions under the Ministry of Commerce and Industry. It administers foreign trade regulations and implements the Foreign Trade Policy with the objective of expanding India’s exports.
Whether you are a manufacturer, merchant exporter, SaaS provider, or freelancer, DGFT remains your primary interface for securing an Importer-Exporter Code (IEC), licences, and export incentives. Continue reading this guide to understand everything you need to know about its functions, services and role in exports.
Key Takeaways
- DGFT is the primary authority responsible for regulating and facilitating India’s foreign trade.
- Every exporter must interact with DGFT for essentials such as IEC registration, licences, and authorisations.
- The Foreign Trade Policy issued by DGFT shapes eligibility for incentives and sets the compliance framework for exporters.
- Accurate ITC-HS classification under DGFT rules directly affects duties, restrictions, and incentive claims.
- Exports of restricted or SCOMET items require prior approval from DGFT to ensure regulatory and security compliance.
- DGFT’s fully digital systems, including mandatory DSC usage, have reduced paperwork but increased the need for accurate filings.
What Is DGFT (Directorate General of Foreign Trade)?
The Directorate General of Foreign Trade, commonly known as DGFT, is the central authority that manages India’s foreign trade framework. It acts as the operational arm of the government for turning export policy into day-to-day compliance and benefits for businesses like yours.
At an organisational level, DGFT works through a clearly defined structure:
- It is an attached office under the Ministry of Commerce and Industry, Government of India.
- The department is headed by the Director General of Foreign Trade, with its headquarters in New Delhi.
- DGFT operates through 24+ Regional Authorities (RAs) across the country, including major zonal offices in Mumbai, Delhi, Chennai, and Kolkata, ensuring local access for exporters.
- Its core mission is to implement the Foreign Trade Policy (FTP) and support India’s long-term goal of increasing its share in global trade.
Pro Tip: Before you apply for any DGFT licence or incentive, identify your nearest Regional Authority (RA) and understand its jurisdiction. Many approvals, clarifications, and policy interpretations still route through your mapped RA, even in a digital system. Knowing this early can save you time, follow-ups, and avoidable rejections later.
5 Key Functions of DGFT in Indian Exports
The DGFT’s influence goes well beyond issuing licences. Its functions span policy design, compliance, and daily operational approvals. Together, they cover the entire lifecycle of an export business—from setting up to scaling overseas.
Implementing the Foreign Trade Policy
- Drafts and notifies the five-year Foreign Trade Policy, like FTP 2023.
- Updates procedures and handbooks to reflect global trade changes.
- Pushes digitisation to reduce paperwork and approval timelines.
- Aligns policies with the government’s ease-of-doing-business goals.
Issuance of Importer-Exporter Code
- Issues the 10-digit, PAN-linked IEC required for imports and exports.
- Acts as the sole authority for IEC registration, updates, and cancellations.
- Enables Customs clearance; shipments cannot move without a valid IEC.
- Applies equally to goods exporters, SaaS firms, and freelancers.
Management of ITC-HS Codes
- Maintains India’s ITC-HS product classification system.
- Assigns codes to new or evolving products.
- Resolves classification disputes raised by exporters.
- Ensures correct duties, restrictions, and incentives apply.
Regulating Restricted and SCOMET Items
- Identifies exports that need prior approval despite most being “free”.
- Administers the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) framework for dual-use and sensitive items.
- Issues licences after technical and security reviews.
- Balances export growth with national security obligations.
Administering Export Promotion Schemes
- Implements schemes like RoDTEP to refund embedded taxes.
- Manages EPCG for duty-free capital goods imports.
- Oversees Advance Authorisation for duty-free inputs.
- Fixes and updates Standard Input Output Norms (SION) for incentives.
Essential Services Offered by DGFT to Exporters
Beyond its regulatory functions, the DGFT now plays a facilitative role. The focus has shifted from approvals alone to exporter support. Today, DGFT prioritises speed, clarity, and digital access, making trade compliance easier across business stages.
Online E-Governance Platform
- Directorate General of Foreign Trade operates a 24×7 online portal for export-related applications.
- Enables paperless filing for licences, authorisations, and scrip transfers.
- Provides a central dashboard to track application status and approvals.
- Reduces physical visits and turnaround time through end-to-end digitisation.
Niryat Bandhu Scheme (Mentoring)
- Niryat Bandhu is a handholding initiative for new and early-stage exporters.
- Offers training programmes, workshops, and one-to-one counselling.
- Focuses on practical topics such as documentation, incentives, and compliance.
- Designed mainly for MSMEs, startups, and first-time exporters.
Dispute Resolution and Grievance Redressal
- Provides structured mechanisms to address trade disputes and quality complaints.
- Offers helpdesk and chatbot support for quick query resolution.
- Refers complex policy interpretation issues to expert committees.
- Strengthens overall trade facilitation by reducing uncertainty and delays.
DGFT vs. Customs vs. RBI: The Triad of Trade
Every export transaction in India runs through three authorities. Each plays a distinct role, yet their work connects closely. For new exporters, mixing up these roles is a common and costly mistake. Understanding who does what helps you stay compliant and avoid delays.
DGFT vs. Customs: Policy vs. Enforcement
- DGFT decides which goods or services India allows for export. It frames policy and issues licences or authorisations where required.
- Customs applies these policies at ports, airports, and land borders. It physically verifies shipments and documents before clearance.
- DGFT grants permission for export under the Foreign Trade Policy. Customs checks that the exporter complies with those permissions.
- For example, DGFT may permit onion exports under certain conditions. Customs then inspects the cargo to confirm the shipment matches the declaration.
DGFT vs. RBI: Trade vs. Finance
- DGFT governs the movement of goods and services outside India. It focuses on permissions, incentives, and trade compliance.
- RBI regulates how export proceeds enter India under FEMA rules. It sets timelines and conditions for realising foreign exchange.
- RBI export guidelines require exporters to receive payments through authorised banking channels. Banks issue Bank Realisation Certificate (BRC) or Foreign Inward Remittance Certificate (FIRC) based on these rules.
- DGFT incentives depend on proof of export realisation. This proof must align with RBI-regulated banking and forex norms.
How Their Roles Differ at a Glance
| Authority | Parent Ministry | Primary Role | Key Document they Deal With |
| Directorate General of Foreign Trade (DGFT) | Commerce & Industry | Trade policy and licensing | DGFT issue License, IEC |
| Indian Customs | Ministry of Finance | Border control and duty enforcement | Shipping Bill filed for export clearance |
| Reserve Bank of India (RBI) | Ministry of Finance | Foreign exchange regulation | BRC / FIRC |
Pro Tip: Always map your export process in the same order these authorities operate. Start with DGFT for permissions and eligibility, move to Customs for shipment clearance, and close the loop with RBI-compliant payment realisation through your bank. When you align documents and timelines across all three, you reduce follow-ups, avoid rejected incentives, and keep your exports moving without disruption.
The Role of Digital Signature Certificates (DSC) in DGFT
All services offered by the Directorate General of Foreign Trade are delivered through its online portal. To ensure that applications, declarations, and approvals remain secure and legally valid, the DGFT mandates the use of a digital signature for every authorised user. As a result, a digital signature is mandatory for key tasks such as IEC applications, licence filings, and post-approval modifications.
Why Is DSC Mandatory?
- A DSC helps DGFT verify that documents uploaded on the portal are genuine and submitted by an authorised person, ensuring authenticity and non-repudiation.
- It replaces physical signatures and paperwork, enabling exporters to complete the entire process online without manual submissions.
- It allows secure access to the DGFT portal, protecting sensitive business and trade data from unauthorised use.
Which DSC Type Is Required?
- DGFT requires a Class 3 DSC, which offers the highest level of verification for online transactions.
- The certificate must be issued by a Certifying Authority licensed by the Controller of Certifying Authorities.
- This DSC functions as the official digital identity of the authorised signatory for your IEC application and other DGFT filings.
Simplify DGFT Compliance with Razorpay MoneySaver Export Account
To make DGFT compliance and international receivables easier, Razorpay’s MoneySaver Export Account offers a practical way to receive global payments. It helps you collect export proceeds without the delays, high charges, and complexity of traditional banking routes.
Here is how it helps:
Easy International Payments via Local Virtual Accounts
With the Razorpay MoneySaver Export Account, you get a virtual account that accepts payments from abroad via methods like SWIFT, ACH, SEPA, BACS or Fedwire. This allows your clients to pay you through familiar local bank-transfer options in their own countries, while you receive the funds directly in India without needing a foreign bank account or any physical presence abroad.
Lower Transfer Costs and Faster Settlements
Compared to other cross-border payment methods, Razorpay MoneySaver typically offers lower costs for international bank transfers. You avoid the high SWIFT or intermediary bank fees often associated with traditional transfers, and in many cases, you can save up to 75% compared to traditional banks. Settlements also happen faster, allowing you to access your international earnings without long delays. This is especially valuable if you work with clients who make regular payments from different countries.
Zero Forex Markup and Transparent Fees
Razorpay does not apply any forex markup on international transfers made through the MoneySaver Export Account. You receive funds at the live exchange rate, without hidden conversion charges. This transparency helps you understand exactly how much you will receive in INR, making it easier to manage margins, plan cash flow, and price your services or products accurately.
Built-in Compliance and Auto-Generated FIRC for Exports
Razorpay also simplifies compliance by generating essential documents like the digital Foreign Inward Remittance Certificate. Since FIRC is required for export documentation and financial reporting in India, having it available automatically reduces administrative work and lowers the risk of missing important regulatory steps.
One Unified Dashboard
The MoneySaver Export Account integrates with the Razorpay dashboard, giving you a single place to manage your global payments. It keeps your international transfers organised and easier to review, especially when dealing with multiple clients or currencies. This unified setup reduces manual work and helps you stay on top of your cross-border finances more efficiently.
Start collecting export payments globally
Collect payments via SWIFT, ACH, SEPA and more using virtual accounts, settle faster at live FX with zero markup, and manage every receipt in one dashboard for clean DGFT-ready records.
Conclusion
The DGFT plays a critical role in India’s export ecosystem by moving beyond regulation and acting as a facilitator for businesses at every stage of their export journey. From policy implementation to digital services and incentive schemes, its systems directly affect how smoothly you can operate and scale overseas.
Staying updated with DGFT notifications and scheme changes helps you avoid compliance gaps and make timely use of available benefits. As exports become more digital and policy-driven, using DGFT’s online tools and support programmes is no longer optional—it is essential. Long-term success comes from aligning trade requirements issued by DGFT with timely payment realisation through banks, ensuring both policy compliance and financial certainty work together.
FAQs
1. What is the full form of DGFT and its main purpose?
DGFT stands for the Directorate General of Foreign Trade. Its main purpose is to frame and implement India’s Foreign Trade Policy and support export growth.
2. Is an IEC code mandatory for all exports?
Yes, an Importer-Exporter Code is mandatory for most import and export activities. It acts as a basic business identifier for Customs and banking transactions.
3. How does DGFT differ from Customs?
DGFT sets trade policy and issues licences or authorisations. Customs enforces these rules at the border and handles export clearance and duties.
4. Can I apply for DGFT licences online?
Yes, DGFT processes IEC, licences, and incentive applications online through its portal. You need a valid Digital Signature Certificate to submit applications.
5. What is the Niryat Bandhu Scheme?
The Niryat Bandhu Scheme is a DGFT initiative focused on mentoring new exporters. It supports MSMEs and first-time entrepreneurs through training and guidance on foreign trade.
