IEC Code Verification: Step-by-Step Guide

Obtaining an Importer Exporter Code (IEC) is a fundamental compliance requirement for legally engaging in international business. This article walks you through everything you need to know about IEC, how to obtain it, and integration with new-age platforms like Xflow to make your transactions faster and more secure. 

The IEC is a unique ten-digit registration number issued by the Directorate General of Foreign Trade (DGFT), Government of India. Without this registration, importers cannot clear customs, and exporters cannot ship goods or receive payments from foreign clients. While obtaining the IEC was previously considered a one-time registration, the shift towards digital integration and the need for a stronger compliance framework have further prompted changes. The DGFT has now mandated that all IEC holders must update their business details between 1st April and 30th June every year. If they fail to do so, it will result in automatic deactivation of the code.

IEC (Importer Exporter Code) verification is important because it ensures the legitimacy and compliance of businesses involved in cross-border trade.

IEC code verification confirms that a business is legally registered to import or export from India. It helps ensure compliance with RBI and customs rules, prevents fraud, and makes international payments more secure and transparent.

In short, IEC verification builds trust, ensures compliance, and protects both parties in a cross-border transaction.

India has set a target of $ 2 trillion in exports by 2030, evenly split between merchandise and services. To achieve this target, the government has intensified its focus on ensuring that only verified businesses can access the global market and its associated benefits. Here are some of the key benefits the IEC code brings with it: 

Scheme benefits:

IEC is mandatory to claim benefits under schemes like the Service Exports from India Scheme (SEIS), Merchandise Export from India Scheme (MEIS), government-introduced export schemes, tax rebates, and exemptions that have been created to promote cross-border trade in services. 

Seamless customs clearance:

An active IEC code is crucial for seamless customs clearance in India. ICEGATE uses this code to track the import and export of consignments. If the code is invalid or incorrect, shipments could be held up or even denied clearance. Consider the case of an exporter from Mumbai experiencing shipment delay due to an inactive IEC. During the customs clearance, the IEC code status was found to be inactive. It halted shipment and resulted in prolonged warehousing, and the exporter had to incur additional costs and penalties. 

Improved Supply Chain:

With the IEC code linked to PAN, the export or import process becomes more efficient and not only saves time but also increases the overall efficiency of the supply chain integration.

Building Trust:

Trust is a key factor in building long-term relationships. By having compliances in check, one can demonstrate commitment to secure trade practices and encourage professionalism and transparency at the importer's and exporter’s end. 

After you've applied for or verified your IEC code, the next step is to check its status and understand what it actually means.

You’ll typically see one of the following labels when you check your IEC status on DGFT or ICEGATE:

• Active
• Inactive
• Suspended
• Cancelled
• Under Scrutiny

Each of these indicates how ready you are to start trading internationally. Sometimes, there might be certain actions you can take to expedite the application depending on the current status. 

Here’s a table that breaks down what these IEC statuses mean, why they occur, and what you can or need to do next. 

The process of applying for an IEC is fairly straightforward and does not have too many steps. Here is how you can do it:  

Step 1: Visit the DGFT Website: https://www.dgft.gov.in. 

Step 2: Create an account if you do not have one already.

Step 3: Click on "Register" and provide details such as your name, email ID, mobile number, and PAN. 

Step 4: You can log in using your credentials, go to IEC Profile Management within the Services tab, and choose “Apply for IEC”.

Step 5: Once on the page, you will be required to fill out Form ANF 2A. The form will need you to fill out business information and upload certain documents such as the name and address of the business, PAN, bank account details (along with a cancelled cheque), address proof, email ID, and mobile number. 

Step 6: You will be required to pay the application fee on the portal and use Aadhar-based OTP or DSC to apply.

Step 7: The details will be reviewed, and if everything is okay, you will receive approval within 1–2 working days.

While applying for an IEC is a one-time procedure, verification of the IEC needs to happen on an annual basis. According to DGFT Circular 04/2025 (dated April 1, 2025), 1, all IEC holders, including service between 1st April to 30th June each year. The failure to comply with the annual verification requirement will directly lead to deactivation effective 1st July 2025 without a separate notice. Here is how you can do it: 

DGFT Verification Steps:

• Visit the DGFT website.
• Navigate to the IEC profile management from the home page.
• Click on the IEC status.
• Log in to the account, enter the IEC code number in the provided field, and submit.
• After validation, the IEC code details are displayed, including status, such as Active/Inactive/Suspended/Cancelled.

This process ensures the IEC is active for consistent and smooth exports or imports.

List of Types of Different Statuses of IEC Code Verification

Now that you have applied for your IEC Code or verified it, you might want to check the status. Here are the steps to check the status of your application online: 

ICEGATE Verification Steps:

• Access the ICEGATE portal.
• Navigate to the verification services and check on the IEC code/BIN number.
• Input the details on the port location and the captcha code on the screen.
• Click on the IEC code button to display the status.

While checking through the portal, here are the different messages that can show up: 

• Active: An active IEC code is valid for all types of export or import transactions, customs clearance, and access to benefits without any hindrance.
• Inactive: The IEC code inactive status means your IEC has not been updated during the specified period for the April to June window; failure to update results in deactivation and restricts all import-export operations.
• Suspended: A suspended IEC code denotes temporarily halted due to a compliance issue or any legal matters.
• Cancelled: A cancelled IEC indicates that the code has been revoked either by the authorities or voluntarily by the holder, due to reasons such as fraud, business closure, or mergers. Once an IEC code is cancelled, it can no longer be used for any international trade activities.
• Under Scrutiny: An IEC code marked as "under scrutiny" typically indicates discrepancies in PAN or GSTIN details. Trade activities remain restricted until the verification process is completed. 

Regular monitoring and updating of IEC status ensures uninterrupted trade operations and compliance with regulators.

While the application and verification process in itself is quite straightforward, here are some issues that might come up along with how you can resolve them:

Failing to update or verify the IEC code leads to significant disruptions in international trade operations. The potential consequences are:

Banking and financial transactions: 

• Payment Delay or Freezes: The IEC code is inactive, resulting in cash flow disruption.
• Trade finance rejection: Pre and post-shipment credit applications are denied due to inactive IEC status.
• Letter of Credit: The Letter of Credit process is hindered; credibility and reliability are affected in international business operations.

Customs and regulatory compliance:

• Customs Clearance Delays: An Unverified IEC results in goods being held at the port.
• Regulatory Compliance: Non-compliance may attract scrutiny from customs authorities.

Legal implications:

• Penalties and fines: Operation without a valid IEC code results in monetary penalties as per the foreign trade policy.
• Suspension of Trade Activities: Persistent non-compliance leads to the suspension of import-export business.
• Legal Proceedings: A business may face legal actions for violating trade laws.

Once your IEC is verified, the next step is to ensure smooth and compliant international transactions. That is where Xflow comes in. 

• RBI & FEMA-compliant fund transfers
• Automatically generates FIRA (Foreign Inward Remittance Advice)
• Transparent and competitive FX rates, access to mid-market foreign exchange without hidden SWIFT charges or hidden spreads.
• Supports more than 140+ countries across USD, EUR, GBP, and AED, in compliance with local regulations.
• One-click integration with accounting tools like Zoho Books and Tally for real-time synchronization.
• Real-time tracking of funds and Forex conversions.

In a regulated trade environment, IEC verification is your business passport to global markets. Whether you are an IT service provider or a manufacturing firm exporting garments to Europe, maintaining a verified IEC is essential. An unverified IEC can block your exports, delay remittances, or even freeze operations if left unattended.

Start by obtaining your IEC code from the DGFT, and ensure it is verified through ICEGATE. To streamline operations and stay compliant, integrating with Xflow is the next step.