Export Glossary

A duty-free import licence for inputs used in manufacturing export goods, issued by DGFT under FTP. Covers basic customs duty, CVD, anti-dumping duty on inputs. Export obligation must be fulfilled within 18 months. Inputs imported under AA cannot be sold domestically. Applied online on DGFT portal.

Issued by the exporter's bank confirming realisation of export proceeds against a shipping bill. Required to close export obligations under Advance Authorisation, EPCG, and for DGFT/Customs purposes. Now generated online via the bank's EDPMS (Export Data Processing & Monitoring System) portal.

A payment term where the exporter's bank releases shipping documents to the importer's bank only when the importer pays. The importer needs the BoL to clear goods at destination. More risk than LC (no bank guarantee), but exporter retains title to goods until payment.

A payment term where documents (and title to goods) are released to the importer upon acceptance of a time draft (promise to pay on a future date — typically 30/60/90 days). Significant credit risk for the exporter — ECGC cover recommended for new buyers.

Duty Drawback — a refund (cash to bank account) of customs duties paid on inputs used in manufacturing export goods. Two types: All Industry Rate (AIR) — fixed percentage of FOB value by product; Brand Rate — actual duty paid, for products not covered by AIR. Filed through the Shipping Bill. Claimed via CBIC.

Export Promotion Capital Goods Scheme — allows import of capital goods at zero customs duty, subject to an export obligation (6x CIF value over 6 years). Helps manufacturers upgrade technology without upfront duty burden. Managed by DGFT.

Export Credit Guarantee Corporation of India — a government-owned insurer providing export credit insurance. Protects exporters against non-payment risk (buyer insolvency, political risk, protracted default). Also provides guarantees to banks for export credit. Key products: ECIB (Export Credit Insurance for Banks), Specific Shipment Policy.

A certificate issued by the exporter's bank confirming receipt of foreign exchange. Proof that export proceeds have been received. Required for GST refund claims, SEIS claims, and as evidence of foreign currency earnings.

Foreign currency received in India by an exporter in payment for export of goods or services. Must be realised within the prescribed time limit under FEMA (9 months for most goods, 15 months for project exports, 12 months for software/services). Realised proceeds reported to RBI via EDPMS.

A bank guarantee issued by the importer's bank promising payment to the exporter upon presentation of compliant shipping documents. The safest payment method for the exporter — payment is from the bank, not the buyer. Types: Sight LC (immediate payment), Usance/Time LC (deferred payment). FEMA compliant.

Merchandise Exports from India Scheme — the predecessor to RoDTEP. Provided duty credit scrips as % of FOB value. Discontinued/replaced by RoDTEP from January 2021 due to WTO compliance concerns. Pending MEIS claims from before 2021 are still being processed.

Pre-shipment export credit provided by banks to finance production/procurement of export goods — available in Indian rupees or foreign currency (PCFC). Repaid when export proceeds are realised. Eligible for interest subvention under the Interest Equalisation Scheme.

Export working capital credit given in USD/EUR/GBP at LIBOR/SOFR-linked rates, typically much lower than rupee rates. Used to fund procurement/production before export. Repaid from export proceeds. Natural hedge for exporters with imported inputs.

Remission of Duties and Taxes on Exported Products — a WTO-compliant export incentive scheme that refunds embedded duties and taxes (central, state, local levies) not otherwise rebated. Replaced MEIS from Jan 2021. Benefit is a duty credit scrip (% of FOB value) credited to ICEGATE e-scrip ledger. Rates vary by HS code.

An export status conferred by DGFT based on export performance over the previous three years: One Star ($3M FOB), Two Star ($25M), Three Star ($100M), Four Star ($500M), Five Star ($2B). Benefits include priority customs clearance, self-certification of COO, lower bank guarantees for EPCG/AA, and eligibility for certain government incentives.

Short-term credit to fund the operating cycle of export production. Includes Pre-Shipment Credit (Packing Credit) and Post-Shipment Credit. Eligible for Interest Equalisation Scheme (interest subvention). Foreign currency working capital (PCFC) at lower SOFR-linked rates is popular for import-intensive exporters.