Is AD Code Mandatory for Export from India?

Yes, AD Code Registration is mandatory for exporting goods from India. If you’re exploring export business ideas or planning to start import export business, understanding the importance of the AD code is crucial. Let’s see why the AD Code is mandatory for export from India.

What is an AD Code?

The AD Code(Authorised Dealer) is a 14 digit number and issued by a bank that is authorised by the RBI to deal in foreign exchange.

Thus, the AD Code is directly linked with the export bank account and is important to file shipping bills with Indian customs authorities.

If you don’t have AD Code Registration, customs will not be clearing your goods for export.

Why is AD Code Mandatory for your business?

The AD Code is mandatory for your business for multiple reasons such as:

Customs Clearance:

AD Code must be mentioned on the shipping bill. Without a shipping bill, you can’t legally export from India.

Regulation and Compliance:

Getting AD Code Registration means you are compliant with the foreign exchange management act(FEMA).

Receiving Payments:

The AD Code is used by banks to recognize foreign currency payments. therefore, if you receive payments from overseas clients, banks will use AD Code to correctly credit the amount in your account.

Facilitate Trade Operations:

Beyond compliance, the AD code promotes seamless international trade by expediting foreign exchange transactions. In addition, enabling enterprises to take advantage of government incentives. Some of the important government schemes are the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS).

Furthermore, learn more about it at: Export Incentives in India: Types & benefits

FAQs

How can I acquire an AD code?

To have an AD Code Registration, go to a designated authorised bank with your import export certificate (IEC), business registration and KYC documents. However, you can also take assistance from E-StartupIndia experts to get AD Code Registration Online.

Is there any expiry date for AD codes?

No, AD codes do not expire. However, if you change your bank, relocation or any other activity that concerns your business then you will need to update its AD Code Registration with customs so that it remains compliant.

How do I modify my custom ad code?

In order to change your custom ad code, get in touch with either your present or new authorized bank and correct all details before undertaking new ad code registration at customs. This is important in ensuring compliance while streamlining one’s export operations.

Is it possible to have two AD Codes?

Yes, your business can have more than one AD account in different banks. It is necessary for every individual account to be registered using a unique AD Code so that transactions can be managed properly particularly if you are dealing with various export business concepts.