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HTS Explained: What Is the Harmonised Tariff Schedule?

HTS Explained: What Is the Harmonised Tariff Schedule?

From the outside, global trade may appear simple and smooth, but there are several rules governing every product that crosses borders and is transported from one country to another. One of the key frameworks that governs imports in the United States of America is the HTS, or its full form, Harmonised Tariff Schedule. As per the United States International Trade Commission, HTS is based on the Harmonised tariff System, which is essentially the global system of nomenclature applied to almost all world trade in goods. Since it directly impacts businesses, consumers, and global supply chains, importers and exporters have to understand what it is and its significance. In this article, we will break down what the HTS code is, why it matters and its structure.What is HTS?HTS, also known as the Harmonised Tariff System, is the U.S. system used for classifying imported goods. It is primarily based on the Harmonised System Code (HS), which has been developed meticulously by the World Customs Organisation (WCO). HTS is used in more than 200 countries and territories. While the HS tariff number provides the first six digits of classification, the United States extends it to a 10-digit number, known as the HTS code, for more specific categorisation.To put it simply, HTS is a universal language used in international trade and commerce. Customs authorities will not have a standardised way to determine the duty amount or tax that is to be applied to different goods without HTS.Every HTS code begins with the HS tariff number, which is the internationally recognised 6-digit sequence. The U.S. then adds four additional digits for greater precision.For example:HS Code (6 digits): 6403.59 → Footwear with outer soles of rubberHTS Code (10 digits): 6403.59.9080 → Specifically, footwear covering the ankleStructure of an HTS CodeTo a layman, the HTS code can look like some random numbers, but every digit in the HTS code has a very specific meaning. The structure is designed to move from broad categories to highly specific details, ensuring accurate classification of goods for customs and trade purposes.1. First two digits – Chapter (general category of goods)2. Next two digits – Heading (subcategory)3. Next two digits – Subheading (finer details, international level)4. Last four digits – U.S. national subdivisions for greater accuracyHTS vs HS: What is the Difference?It is quite common to get confused between HS tariff numbers and HTS codes. Both codes are used to classify products in international commerce; however, they are not the same. The HS is the global standard, while the HTS is the U.S. extension of it. Here's a side-by-side comparison to make the difference clear.FeatureHS (Harmonized System)HTS (Harmonized Tariff Schedule)DefinitionAn international system for classifying goods, maintained by the World Customs Organization (WCO).The U.S. adaptation of the HS, extended for domestic tariff and statistical purposes.Digits6 digits10 digitsCoverageUsed globally by more than 200 countries and economies.Used only in the United States.PurposeProvides a standardised global classification of products.Determines U.S. import duties, tariffs, and trade data.AuthorityWorld Customs Organization (WCO).The U.S. International Trade Commission (USITC) maintains it; U.S. Customs and Border Protection (CBP) enforces it.Level of DetailGeneral classification up to 6 digits.More detailed classification up to 10 digits, specific to U.S. trade requirements.ExampleHS Code: 6403.59 → Footwear with outer soles of rubber.HTS Code: 6403.59.9080 → Footwear covering the ankle, other.Who Manages the HTS?The United States International Trade Commission is responsible for maintaining and publishing the Harmonised Tariff Schedule in the United States. Additionally, U.S. Customs and Border Protection ensures that it is used and followed during import inspections as well as duty assessments.Why HTS Codes Matter in Global Trade?The HTS, or Harmonised Tariff Schedule, is not just bureaucratic. It has both financial and operational implications. Let us look at why HTS is important in the global trade landscape:Determination of Import DutiesHTS codes determine the duty rate applicable to imported goods. If the HTS code is misclassified, it can result in unnecessarily higher tariffs and, in some cases, even penalties. Compliance in Trade and SecurityCustoms authorities highly rely on the HTS code to screen the shipments for compliance, fraud prevention and even security checks. Using the correct code helps avoid audits, seizures, or reputational damage.Global Standardisation with Local PrecisionConsidering that the HTS codes are based on the Harmonised System code, they allow for global consistency while providing the ability to add detailed classification to the U.S. Leads to Efficient Supply ChainUsing correct HTS codes prevents delays at ports, as the customs clearance is much more streamlined. It is beneficial, as delays in clearance can cost companies millions of dollars every year in lost efficiency and storage charges.Trade Agreements QualificationFTAs, or Free Trade Agreements, also rely on accurate product classification. With an incorrect HTS code, it is possible to miss out on duty-free benefits that have a direct impact on the profit margins.Data and Market InsightsHTS codes also feed into government trade statistics, which businesses and policymakers use to analyse import trends, track global demand, and forecast supply chain risks.Challenges in Using HTS CodesHTS codes are not always simple to use. Businesses and importers frequently encounter common hurdles that can lead to financial losses. Some challenges in using HTS codes are:HTS codes are revised annually, making it easy to fall behind.Some products may not fit neatly into one category.Determining the correct HTS code often requires a detailed analysis of the product.Errors can lead to higher duties, penalties, or shipment delays.Many businesses rely on customs brokers to avoid mistakes and incur additional costs.The extra digits beyond the HS can differ from one country to another.WareIQ Makes It Simple to Understand and Use the HTS CodeWareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.Our solution offers the following capabilities:Multi-carrier engine enabling fast deliveries across 24,000+ pin codesControl Tower & automated workflows to minimise NDRs & RTOsSame/Next-day delivery courier optionsSeamless Integration with your WMS, ERPs and StorefrontsShipping Badges to display precise Estimated Delivery Dates (EDD)Custom-branded tracking pages, as well as notifications, to enhance customer experienceConclusionEach shipment or consignment that gets transported from one country to another tells a story when it comes to global trade, and the HTS code serves as its identifier. HTS codes are not just random numbers; they help determine tariffs, influence the supply chain, and aid in shaping the compliance strategy. Knowing and understanding the correct HTS code is crucial for importers, as it will lead to faster clearance, better cost control, and, mainly, improved access to international markets. Mastering the harmonised tariff schedule is no longer optional; it is a necessity for staying ahead in cross-border business.FAQs About HTS What does HTS stand for in trade?HTS stands for Harmonised Tariff Schedule, the official system used by the United States to classify imported goods. It assigns a unique 10-digit code to each product, which determines the amount of duty or tariff applied to it.How often are HTS codes updated?HTS codes get updated at least once a year, but at times, it can be more frequent, to reflect changes in trade laws, tariff negotiations, or the introduction of new product categories into the market.Do HTS codes impact free trade agreement eligibility?Yes. Many FTAs require goods to be classified under specific HTS codes to qualify for preferential duty rates. An incorrect code could mean missing out on reduced or zero tariffs.Are HTS codes the same as tariff numbers?Yes, HTS codes are often referred to as U.S. tariff numbers since they are used to determine the tariffs or duties applied to imported goods.

November 13, 2025

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ASN Full Form: What Is an Advanced Shipping Notice?

ASN Full Form: What Is an Advanced Shipping Notice?

As an e-commerce business, there is a lot to plan, including warehouse staff, inventory forecasts, and dock scheduling. All these aspects can go haywire when the seller tells you, "Your shipment is on the way." There are no further details for you to plan further action. In contrast, when you get an ASN, you receive an early, data-rich alert of what's coming, when, and how it's packaged. The full form for ASN is Advanced Shipping Notice. It has been found that getting ASN can help reduce receiving costs by almost 40%. This proves that ASN in logistics can be a powerful tool.Today, we will explain the ASN full form, the role of ASN in supply chain and logistics, and provide practical tips for its implementation.What is ASN? (ASN Full Form and Definition)Let us first begin with the ASN full form:ASN stands for Advanced or Advanced Shipping Notice and is also represented as EDI 856 in the supply chain systems of the ANSI X12 transaction set version for "Ship Notice / Manifest".What is an Advanced Shipping Notice?ASN, or Advanced Shipping Notice, is a digital message or document sent by the supplier, shipper, or a third-party logistics (3PL) provider. It is sent to the buyer or the consignee before the physical arrival of the goods occurs.The sole purpose is to provide detailed information about an impending shipment to the buyer/recipient so that they can prepare accordingly. Key features of an ASN include:It is "advance", meaning the notice is given before delivery, enabling planning. If the shipment arrives before ASN, much of its benefit is lost.It contains shipment metadata (dates, carrier, IDs), packaging and contents breakdown, quantities, weights, and other logistical details.It often integrates with the ERP, WMS, or SCM systems of the receiver, allowing receiving operations to be automated or streamlined.It is usually transmitted electronically (via EDI, XML, or API) to reduce manual work and errors.ASN works as a proactive communication tool that bridges the gap between shipment dispatch and delivery.Components of an ASN: What Must It Include?Not all ASNs need to be identical. However, it needs to align with the trading partner and, as per industry standards. However, certain elements are always needed. Here is the breakdown of ASN components:Component / FieldPurpose / What It ContainsShipment header infoShipment ID, date/time, carrier, Bill of Lading or PRO number, origin & destination address, mode of transportPurchase Order referenceThe PO number or reference that this shipment is fulfillingItem/line-level detailsSKU or part number, description, quantities shipped, units of measure, lot/serial numbers if applicablePackaging hierarchyHow items are packed (whether it is cartons or pallets), carton ID, weight, dimensions, and palletization structureExpected delivery/scheduling infoEstimated arrival date/time, any delivery window constraintsLogistics & carrier detailsCarrier name, routing instructions, tracking numbers, shipping methodReturnable containers / packagingInfo on reusable packaging or returnable containers, if relevantCumulative / previous receipt infoIn some systems (e.g., Oracle), cumulative quantities already received vs. what is incomingBilling or invoice fields (optional)Some ASNs include invoice or tax details, so that when they’re accepted, invoice creation can be automatedWho Uses Advanced Shipping Notice?As ASN is used across different industries, some of the common use cases are:E-Commerce & Retail: Retail chains need suppliers to send across ASN so that the distribution centres or stores can align receiving schedules and avoid shipment surprises.Third-Party Logistics (3PLs): 3PL or Third-Party Logistics providers send or integrate ASNs on behalf of their clients to coordinate inbound and outbound loads.Drop-ship / Direct-to-consumer: In drop-ship models, retailers expect suppliers or marketplaces to send ASNs so that the retailer and customer can track the shipment.Cross-border / Import / Export: For global trade, ASNs may include customs, compliance, and traceability data to help receivers prepare for import clearance.Manufacturing / Just-in-Time (JIT): Manufacturers rely on ASN to ensure that parts arrive just-in-time, thereby minimising inventory holding.Why Is ASN Important in Supply Chain & Logistics?Using ASN is beneficial for both suppliers and buyers. Let us look at how ASN is important in supply chain and logistics:Better Visibility and PlanningWith ASN, buyers can gain better visibility into the contents of incoming shipments. It contains information about the items, the number of items and how those items are packaged. Being aware of such details allows warehouses or DC teams to reserve dock space, schedule receiving windows, allocate storage and also plan labour. ASN helps buyers to be proactive rather than reactive. Minimum Error and Faster ProcessingThe Advanced Shipment Notice has the complete breakdown of shipment contents and barcoding/palletisation details. Hence, receivers can match what arrives with the ASN, scan pallets and containers and reconcile discrepancies automatically. It will help reduce human errors and save time on manual data entry and verification. Inventory Accuracy and ForecastingSince the incoming goods are pre-notified, systems can reflect "in-transit inventory" accurately. It will assist in allocating and reserving goods before they actually land. It will lead to improved inventory accuracy and also prevent bottlenecks, such as stockouts and overstock.Improved Supplier Collaboration & AccountabilityThe primary objective of ASN in logistics is to strengthen the communication pipeline between the buyer and supplier. An error or mismatch between the ASN and the actual receipt can lead the buyer to trigger an application advice or a corrective notice back to the supplier. Compliance & Trading Partner RequirementsMajor logistics networks and retailers mandate ASN or EDI 856. It is a precondition for accepting shipments. If a supplier fails to send an ASN, they may face penalties or have their receipts refused. Best Practices to Maximise ASN BenefitsTo make the most of the ASN in supply chain or ASN in logistics, it is necessary to follow better practices, such as:Use a commonly accepted EDI standard (X12 856, EDIFACT DESADV) and make sure both parties adhere to it.Begin with a core set of ASN fields (shipment ID, PO reference, packing breakdown, and quantities) and gradually expand optional fields (such as traceability, container reuse, etc.).The buyer's system should validate incoming ASNs immediately, flag any errors, and provide feedback to suppliers before the shipment's arrival.Ensure your Warehouse Management System or ERP can ingest ASN and automate it into your receiving workflows. For instance, Oracle supports the use of validated ASNs to automatically create receipts.Monitor real-time compliance by tracking the percentage of shipments with valid ASNs, average error rates, and exceptions handled, among other key metrics.Some advanced operations use ASN data to pre-stage inventory, cross-dock, or route items directly to outbound lanes, bypassing full put-awayUtilise analytics on ASN vs. receipt mismatches to identify systemic issues with suppliers or packaging and make improvements over time.International Trade Terms Simplified With WareIQWareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.Our solution offers the following capabilities:Multi-carrier engine enabling fast deliveries across 24,000+ pin codesControl Tower & automated workflows to minimise NDRs & RTOsSame/Next-day delivery courier optionsSeamless Integration with your WMS, ERPs and StorefrontsShipping Badges to display precise Estimated Delivery Dates (EDD)Custom-branded tracking pages and notifications to enhance customer experienceConclusionTo conclude, the full form of ASN, Advanced Shipping Notice, is not just like other paperwork needed in international trade. It is foresight in action. ASN provides a clear view of what is arriving and when, making it quite useful for the retail and e-commerce industry. It turns uncertainty into preparedness, making supply chains smarter, faster, and far more reliable.FAQs About ASN - Advance Shipping NoticeWhy is an Advance Shipping Notice important in supply chain management?An Advance Shipping Notice is important because it provides buyers with visibility into incoming shipments, enabling them to plan labour, dock schedules, and inventory management.What information does an ASN typically include?An ASN usually includes shipment details such as purchase order number, carrier information, packaging hierarchy, item descriptions, quantities, weights, and expected delivery dates.Who is responsible for sending an ASN?The supplier, manufacturer, or logistics provider responsible for shipping the goods is usually the one who generates and sends the ASN to the buyer.Can ASN improve warehouse efficiency?Yes, ASN improves warehouse efficiency by allowing teams to pre-plan receiving, allocate storage space, and match items against expected shipments quickly.

November 12, 2025

CFR Full Form and Its Importance in International Trade (Cost and Freight)

CFR Full Form and Its Importance in International Trade (Cost and Freight)

Every industry has its own shorthand and abbreviations used to simplify work. International trade is no exception. If you have ever come across CFR in a shipping contract and wondered what it means, you are not alone. CFR, the full form being Cost and Freight, may seem like simple terms, but there is much to consider when it comes to global trade.About 11 billion tonnes of goods get transported by sea, according to UNCTAD. This volume makes maritime trade the lifeblood of international commerce. In this massive ecosystem, even a small misinterpretation of terms like 'CFR shipping' or 'what is CFR in shipping' can cost companies millions in freight cost overruns, insurance gaps, or delayed deliveries.In this article, we will break down the CFR's full form in the context of export, its meaning, and its significance in detail.What Is CFR? (CFR Full Form & Meaning in Shipping)CFR Full FormCFR's full form is Cost and Freight; CFR is an Incoterms full form, where Incoterms are essentially International Commercial Terms, which are published by the (ICC) International Chamber of Commerce. Under CFR, a seller is responsible for arranging and paying for the transportation of goods via sea. The consignment will be sent to the buyer's preferred port of destination. What Is Freight Cost, and What Is Its Role under CFR?Freight cost is at the core when it comes to CFR (Cost and Freight). In simple terms, freight cost refers to the charges imposed by a carrier for transporting goods from the origin to the destination.It typically covers fuel, vessel operations, port handling, canal/lock fees, etc. However, in the CFR shipping arrangement, the seller covers the freight cost up to the port of destination. Thus, freight cost is a significant component of the total price paid by the buyer.Why is Freight Cost Important in CFR?As the seller pays the freight cost, it is necessary for the seller to carefully estimate and include it in the selling price. If it is not included in the selling price, unexpected cost escalations can erode margins. From the buyer's perspective, even though freight is "paid", they face risks during transit. Hence, buyers may still opt to insure the goods from loading to unloading. As the buyer does not have to source the freight; the freight cost under CFR makes the offer much more attractive. However, the buyer must also manage downstream costs. It is therefore essential to understand the meaning of freight cost and to incorporate it correctly, as this matters to both buyers and sellers.CFR Shipping Terms: Key ObligationsSmooth international trade occurs when there is clarity about who pays for what and when. Under CFR shipping terms, these obligations are clearly divided between the seller and buyer. Knowing and understanding the roles will help to prevent costly disputes and will facilitate smoother trade operations. Here is the breakdown:Seller's Obligations under CFRWhile the seller covers the initial freight cost, the risk will shift once the goods get loaded into the vessel. Here are the obligations that have to be fulfilled by the seller:Export Packaging and DocumentationIt is the seller's responsibility to package the goods safely for international transport. Another necessity is to provide key documents such as the commercial invoice, bill of lading and packing list.Customs Clearance in the Exporting CountryThe seller also has to obtain a licence, permits and complete export customs clearance formalities.Inland Transport to Port of OriginThe seller must also arrange and pay for the movement of goods from the factory or warehouse to the loading port.Loading CostsThe handling and loading costs of goods from the port of origin are to be borne by the seller.Freight Cost PaymentA core part of the CFR shipping terms is that the seller books and pays the sea freight to the destination port.Shipment ProofThe seller must provide evidence (usually via a bill of lading or onboard certificate) that goods were loaded and shipped.Buyer's Obligations under CFRThe buyer's responsibilities under CFR shipping terms begin the moment the cargo is loaded on the vessel at the origin port. Here are the buyer's obligations:Insurance CoverageAccording to the CFR shipping terms, the buyer is required to take out marine insurance for the goods, which will help protect against loss or damage during transit.Risk Assumption at LoadingOnce the goods are on board at the port of origin, the buyer bears the risk, even though the seller still pays the freight charges.Cost of UnloadingThe unloading charges have to be borne by the buyer. Other charges include terminal handling fees and other port-related expenses.Import Customs ClearanceHandling import documentation, paying duties, VAT, and other taxes at the destination country are roles that have to be handled by the buyer.Inland TransportationThe cost of transporting the goods from the destination port to the final warehouse must be covered by the buyer. Communication & Documentation ComplianceThe buyer must ensure the timely receipt and handling of documents provided by the seller (such as the bill of lading) to facilitate the smooth collection of the shipment.Importance of CFR in International TradeSince a large portion of the goods is moved by sea, having clear CFR shipping terms leads to smooth transactions. One such essential term that importers and exporters must be aware of is the CFR full form in the context of export and import, along with the CFR shipping terms. Here is why CFR is essential in international trade:CFR shipping ensures the seller pays the freight cost up to the destination port, while the buyer handles insurance, unloading, and import duties. This transparency reduces disputes over hidden costs.By specifying that risk transfers when goods are loaded at the origin port, CFR shipping terms clearly define liability, enabling both parties to plan their insurance and risk coverage strategies effectively.As one of the official Incoterms, the CFR full form creates a universal standard recognised worldwide, making cross-border contracts easier to negotiate and enforce.Offering goods under CFR shipping can make sellers more attractive, as they simplify logistics for buyers and present all-in-one pricing (including freight cost).Since sellers manage the sea freight, buyers don't need to negotiate shipping themselves, saving time, especially in markets where sellers have stronger carrier networks.CFR allows buyers to choose their own insurance provider, rather than relying on the seller's coverage, giving them more control over risk protection.Suggested - ASN Full Form: What Is an Advanced Shipping Notice?Get Clarity Over CFR and Other Trade-related Terms With WareIQ's AssistanceWareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.Our solution offers the following capabilities:Multi-carrier engine enabling fast deliveries across 24,000+ pin codesControl Tower & automated workflows to minimise NDRs & RTOsSame/Next-day delivery courier optionsSeamless Integration with your WMS, ERPs and StorefrontsShipping Badges to display precise Estimated Delivery Dates (EDD)Custom-branded tracking pages and notifications to enhance customer experienceConclusionThe shipping industry is growing steadily and is becoming increasingly complex, too, with new systems being incorporated. With rising freight costs, changing customs procedures, and increasing trade volumes, it is crucial to understand the CFR full form and its associated shipping terms. For sellers, it offers a way to stay competitive by managing freight on behalf of buyers. For buyers, it can provide cost transparency while maintaining control over insurance and post-arrival logistics. Knowing and understanding the CFR meaning and application is more than a legal requirement; it provides protection against risk, acts as a driver of trust, and, importantly, is a cornerstone for smooth international commerce.FAQs About CFR Full FormWhat is the full form of CFR in shipping?CFR stands for Cost and Freight, an Incoterm where the seller pays for shipping the goods to the buyer's destination port, but the risk will get transferred when the goods are loaded onto the vessel.Is CFR recognised globally?Yes, CFR is an official Incoterm which is published by the International Chamber of Commerce. It is widely used in international trade contracts.Can CFR terms be used for hazardous or oversized cargo?Yes, CFR can be applied, but additional planning is required. Sellers may need to coordinate specialised freight carriers or obtain permits, and buyers should consider insurance coverage due to higher risk. Proper documentation becomes even more critical in such cases.What documentation is critical for buyers to claim goods under CFR?Documents that a buyer must receive are:Bill of lading (a proof that goods were loaded on the vessel)Commercial invoiceExport clearance certificatesPacking listAll these documents facilitate smooth customs clearance while ensuring the timely receipt of goods at the destination port.

November 11, 2025

Dead Stock: Meaning, Causes, and How to Deal With It

Dead Stock: Meaning, Causes, and How to Deal With It

Inventory is rightly called the backbone of a business, but what if the inventory stops moving? This is what businesses refer to as dead stock. Dead stock can be referred to as products that are not being sold or are sitting idle in warehouses or on shelves. It drains resources instead of generating revenue. According to reports, even well-run companies often report that about 20 to 30% of their inventory is dead or obsolete. This ties up capital that could be invested in faster-moving, profitable products. Hence, businesses must understand the dead stock meaning, its causes, and the strategies that can be adopted to reduce dead stock levels. Understanding the Dead Stock MeaningDead stock, also known as dead inventory or obsolete stock, refers to products or stock that fail to sell and are most unlikely to sell in the future. Unlike returned stock, dead stock has never been sold to a customer.Some examples include seasonal items, outdated tech products, or products with an expired expiration date. Maintaining a dead stock register is a crucial task in inventory management, enabling businesses to track unsellable inventory.Proper dead stock analysis enables companies to distinguish between slow-moving items and truly obsolete stock, thereby improving decision-making and resource allocation.Why Must Businesses Know About Dead Stock?Dead stock is more than just inventory that remains unsold; it is a profit killer that can have a significant effect on a business's revenue. Understanding why dead stock matters helps businesses take proactive measures to minimise losses. Here is why dead stock matters:Ties Up CapitalThe items that are not sold represent money that you have spent, but it is not generating revenue. This frozen capital could otherwise be used to stock high-demand items, invest in marketing, or expand operations.Increases Storage CostsTo store products, businesses have to spend money. Any item that remains in the warehouse incurs associated costs, which include warehouse rent, insurance, utilities, and labour. Dead stock will, over time, increase expenses while not generating any revenue, which will have a negative impact on profit margins. Operational InefficiencyManaging excess inventory can take valuable time as well as resources. Staff will be stuck in tracking, moving, and monitoring dead stock, thereby diverting attention from more important operations.Obsolescence RiskIn most cases, any product that remains unsold for an extended period creates a risk of being outdated, damaged stock, or even expired stock. For example, in the fashion and electronics industries, items can lose relevance quickly, rendering inventory worthless.Opportunity CostDead stock occupies the shelf space in a warehouse that could have been used to house a fast-moving or revenue-generating item. This limits your ability to respond to market demand and maximise sales opportunities.What Are the Common Causes of Dead Stock?There is no single cause for a stock item to become dead stock. From misjudgement to overstocking, here are some of the most common causes of dead stock.1. Misaligned Market FitIf businesses store items that do not match a customer's preferences, they will remain unsold for months. Here is why it can happen:Incorrect timing or seasonality (e.g., winter jackets in spring).Features or designs that don't appeal to target customers.Pricing not aligned with perceived value.2. Overstocking & Excess OrdersFrom the fear of being understocked, businesses can unknowingly overstock items that will ultimately end up as dead stock. Here is why it can happen:Overestimating customer demand.Fear of stockouts leading to bulk purchases.Lack of real-time sales data to guide orders.3. Sales CannibalisationWhen new products are introduced to the market, businesses may end up storing excess inventory, which can overshadow their existing offerings. Here is why it can happen:Launching similar products without differentiation.Poor analysis of product overlap.Promotions favouring new items over existing stock.4. Defective, Damaged, or Low-Quality ProductsAt times, there are damaged stocks that do not meet quality standards, leading to the accumulation of dead stock. Even expired stock amplifies the volume of dead stock. Here is why stocks are in the damaged category:Packaging defects or mishandling during shippingManufacturing flawsCustomer rejection due to poor quality5. Changing Consumer Trends or TechnologyCustomer preferences are dynamic and can change with new fashion trends or seasonal shifts, resulting in old and outdated inventory becoming dead stock. Here is why it can happen:New technology replaces older models, making them outdated (e.g., electronics).Fashion trends keep changing faster than stock turnover.Customers preferring an updated look, design or features of a product.6. Supplier LimitationsRigid supplier policies can force overstocking and contribute to dead stock.When a supplier has minimum order limitations. The limitations are more than what is actually needed.Long lead times are preventing flexible ordering.Inability to return or exchange unsold items.7. Expired Stock or Seasonal ItemsOne of the causes of dead stock is the accumulation of inventory which is seasonal or near expiration. For example:Perishable goods have near expiry dates.Holiday-themed items remain unsold after the season.Limited-edition products eventually lose relevance over time.8. Manual Inventory ErrorsReliance on spreadsheets and manual tracking can lead to errors in stock management.Miscalculating the order quantities.Not being able to track slow-moving items.Human errors in recording sales and stock levels.How to Deal With Dead Stock: Proven StrategiesTo save money, free up warehouse space, and create profit opportunities, businesses must actively manage dead stock. Here are proven strategies:Offering deep discounts encourages the sale of slow-moving items, freeing up warehouse space for more profitable inventory.Pairing dead stock with popular items or offering them as gifts increases customer interest and reduces unsold inventoryDonate items to charitable organisations or recycle them responsibly. This approach may offer tax benefits and enhance brand reputation.Automated systems like inventory management software provide real-time data, track product performance, and prevent overstocking, minimising the risk of dead stock accumulation.Have periodic reviews of the inventory to identify slow-moving products, plan timely markdowns, and adjust purchasing strategies accordingly.Better Inventory Management With WareIQ to Avoid Dead StockWareIQ is a Y-Combinator-backed eCommerce full-stack platform offering multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade)Our solution offers:Pan-India network of Seller Flex & FAssured compliant across 12+ cities operated by WareIQ, and shipping partners for last-mile delivery across 27000+ pin codesMulti-Channel Fulfilment Platform with plug-and-play integrations across marketplaces (Amazon, Flipkart, Myntra, Nykaa, etc.), D2C platforms (Shopify, Magento, WooCommerce, etc.), WMS, and ERPs, to support fulfilment across distributors, flagship stores and eCommerce channels with analytics capabilities to assess operational performanceInventory LogIQ: AI-led multi-channel inventory planning solution to minimise stockouts and automate replenishmentLeverage the tech-enabled returns QC solution to capture, centrally store, and auto-index HD media evidence of damaged or missing returned products and eliminate marketplace claims rejections.A host of seller enablement and support – dedicated account manager, APOB/PPOB registrations, GST registration, NDR & COD verification, etc.ConclusionDead stock is not just inventory that is not being sold due to several reasons; it is a hidden cost that drains resources, reduces operational efficiency, and, more importantly, ties up capital, thus impacting profit margins. Proactively analysing inventory, staying tuned to market trends, and leveraging technology not only minimises dead stock but also transforms inventory management into a competitive advantage. Considering how fast-paced the retail industry is, managing dead stock effectively is not just a good practice but an essential task for sustaining profitability, improving cash flow, and ensuring that every product in your warehouse contributes to growth.FAQs About Dead StockWhy is it important to identify dead stock?Identifying dead stock helps businesses minimise financial losses, free up storage space, and improve inventory turnover by focusing on products that generate revenue.What is a dead stock register, and why is it used?A dead stock register is a systematic record of all unsellable inventory. It helps track, monitor, and plan strategies for the disposal, sale, or donation of surplus or obsolete items.What is dead stock analysis, and why is it important?Dead stock analysis involves reviewing inventory to identify unsellable or slow-moving items. It enables businesses to make informed decisions on clearance, disposal, or purchase planning.Does technology play any role in managing dead stock?Yes, technology like inventory management software can give real-time tracking, sales data analysis, and alerts for slow-moving items, helping prevent dead stock accumulation.

November 10, 2025

Step-by-Step Guide to the Customs Clearance Procedure in India

Step-by-Step Guide to the Customs Clearance Procedure in India

For businesses, one of the most dreaded statuses is "Held at Customs". It can make you quite anxious in such situations. Every day the shipment is held back, businesses suffer heavy losses due to lost sales, increasing storage charges, and damaged client relationships. As per the World Bank's Logistics Performance Index 2023, India has ranked 38th globally, with efficient customs clearance being one of the key performance indicators which influences trade competitiveness.It is therefore necessary for businesses to understand customs clearance procedures, irrespective of whether you are an importer, exporter, or a business dealing with imported or exported goods. In this article, we provide a step-by-step guide to the customs clearance process in India, as well as discuss other key aspects, including the role of customs clearance agents, customs clearance documents, charges, and best practices.What is Customs Clearance?Customs clearance is a process by which goods (imported or exported) are checked, documented, and cleared by government authorities. It ensures:Duties and taxes are correctly assessed and collected.The goods comply with trade, safety, environmental, and other regulations.Illegal, misdeclared, or restricted items are prevented from entering or leaving.The customs clearance guidelines are governed by the Customs Act, 1962. Moreover, they are administered by the CBIC (Central Board of Indirect Taxes and Customs).The customs clearance procedure involves a sequential set of steps, from the arrival of goods to their release. Which Are the Key Stakeholders in the Customs Clearance Process?Several parties are involved in the customs clearance procedure. Before we begin to follow the steps, it is necessary to know the key stakeholders, such as:Importer / Exporter: The party owning or commissioning the goods.Carrier / Shipping Line / Airline: Responsible for filing the manifest (IGM/EGM) and bringing the goods to port.Customs House Agent (CHA) / Customs Clearance Agent: Licensed intermediary who handles paperwork, liaison, and formalities on behalf of the importer/exporter.Customs Authority: The government entity (under the Central Board of Indirect Taxes & Customs) that inspects, evaluates, and clears goods.Custodian / Warehouse / Port Authority: Handles physical custody until clearance is obtained.Step-by-Step Guide to the Customs Clearance Procedure in IndiaNavigating customs clearance can be quite confusing; therefore, it is essential to understand the step-by-step customs clearance procedure. It can help save time, reduce costs, and mainly prevent delays. Below is a detailed stepwise path for import customs clearance. (Export clearance follows a parallel route with shipping bills and drawback mechanisms.)Step 1: Prerequisite — IEC, Registration & Compliance1. Obtain Import-Exporter Code (IEC)Before initiating imports or exports, you must acquire an electronic IEC from the Directorate General of Foreign Trade (DGFT). It is mandatory for customs clearance.2. Registration with ICEGATE / Customs EDIYou (or your CHA) need to register on India's ICEGATE portal for e-filing Bills of Entry, Shipping Bills, and other declarations.3. Check Regulatory Permits / LicencesSuppose the goods fall under a restricted or regulated category (such as drugs, hazardous chemicals, or defence goods). In such cases, it is important to gain permits from the governing authorities, such as the Drug Controller or the DGFT.4. KYC / Importer Identity DocumentsMandatory documents include:Proof of identityProof of addressCompany RegistrationPAN.Step 2: Arrival & Manifest Filing (IGM / EGM)1. Call of Vessel / Arrival NotificationThe carrier (ship, airline, or freight forwarder) is responsible for notifying Customs about the arrival of the vessel or aircraft at the destination Customs station.2. Filing of Import General Manifest (IGM)The IGM is a declaration listing all the goods on board. It must be submitted electronically before or shortly after arrival. Filing an IGM is a legal requirement under Section 30 of the Customs Act. Without a correct IGM, goods cannot be legally unloaded for customs processing.3. Goods Landed in Custody of CustodianUpon verification of the manifest once the vessel has arrived, the goods are then offloaded and placed under the custody of an approved custodian or warehouse until further customs clearance steps are completed.Step 3: Bill of Entry Filing & Declaration (Self-Assessment)1. File Bill of Entry (BoE) / Cargo DeclarationThe Bill of Entry has to be filed by the importer or the DHA for warehousing or home consumption in the prescribed form. Under the EDI system, the BoE is submitted electronically; no physical documents are required at the time of filing (but originals must later be produced at examination).The bill of entry contains all the necessary details, including the goods' description, value, HSN classification, tariff details, and details of origin.The importer must certify the correctness of the information. Any misdeclaration can lead to penalties.2. Noting / Registration of BoEOnce the BoE is registered or noted, it confirms that the goods are manifested as the IGM. In the EDI environment, much of this is automated. 3. Self-Assessment & Duty CalculationNext, the importer or the CHA calculates the applicable duties, such as:Basic Customs dutyIGSTAnti-dumpingSafeguardCessThe system then processes the calculation and assigns duties.The customs assessing officer verifies the classification, valuation, and eligibility of exemptions or notifications. In case of doubts, the office may seek clarification or even order a customs inspection.Step 4: Examination, Assessment & Out-of-Charge1. Physical Examination / SamplingDepending on the risk assessment, some consignments must be cleared via a "second check". If a first check (pre-assessment) is ordered, the goods are examined before final duty assessment.Examination involves verification of quantity, description, and valuation, along with checking compliance with necessary rules and regulations. Samples may be taken for further testing.2. Final Assessment & ConfirmationOnce the examination is complete, the assessing officer will then move on to finalise the classification, valuation, and duty. The BoE is confirmed, and duties are calculated while also including any applicable surcharges, IGST, or other charges. 3. Payment of Duty and Other ChargesIn the next step, the importer will deposit the due amount into the designated bank account or submit a treasury challan. Then the BoE is endorsed and cleared.4. Clearance Certificate/Out-of-Charge OrderOnce the duties are paid and all cheques are cleared, Customs will issue an "Out-of-Charge" or Let-Out" order. This will allow the goods to leave the customs premises. 5. Cargo ReleaseAs the final step, the CHA or the importer can take the delivery from the custody or the port warehouse. If goods are in a bonded warehouse, an ex-bond Bill of Entry is filed to remove the goods upon payment of duty at the time of removal.Role & Responsibilities of a Customs Clearance Agent (CHA)To complete the customs clearance process successfully, a customs clearance agent plays a crucial role. Here are the customs clearance agent's responsibilities:Preparing and filing declarations (BoE, Shipping Bill) via EDI.Making sure that classification, valuation and documentation are accurate.Liaising with customs officers, responding to queries, and securing examination orders.Ensuring the physical inspection or sampling is done successfully.Obtaining clearance orders.Coordinating duty payments.Movement of cargo from customs custody after clearance.Advising on regulatory compliance, classification, and tariff benefits.Managing amendments, appeals, and rectifications.Seamless Customs Clearance Assistance From WareIQWareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.Our solution offers the following capabilities:Multi-carrier engine enabling fast deliveries across 24,000+ pin codesControl Tower & automated workflows to minimise NDRs & RTOsSame/Next-day delivery courier optionsSeamless Integration with your WMS, ERPs and StorefrontsShipping Badges to display precise Estimated Delivery Dates (EDD)Custom-branded tracking pages and notifications to enhance customer experienceConclusionMore often than not, customs clearance seems like a challenge considering the vast list of steps and documentation, but it does not necessarily have to be. If businesses understand the customs clearance procedure, they can make sure that the goods move seamlessly across borders. It is necessary to file in advance, follow regulatory updates and monitor duty requirements. Following the step-by-step guide can transform a complex bureaucratic process into a smooth, predictable, and cost-efficient part of your business.FAQs About the Step-by-Step Guide For Customs Clearance ProcedureWho is the responsible party for customs clearance?The importer or exporter is legally responsible for ensuring that goods are accurately declared and all duties are paid. A licensed customs clearance agent (CHA) can be appointed to manage documentation, liaison, and procedural compliance on their behalf.What are the necessary documents required for customs clearance?Essential documents include the commercial invoice, packing list, Airway Bill or Bill of Lading, Import Export Code (IEC), certificate of origin, applicable permits or licences, insurance certificate, and any testing or compliance reports.What is a customs clearance certificate?A customs clearance certificate is an authorisation issued by customs confirming that duties are paid, inspections (if any) are complete, and goods are cleared for delivery or further transportation.Can I clear customs without a customs clearance agent?Yes, importers and exporters can clear customs themselves if they understand the procedures and regulatory requirements. However, using a CHA is highly recommended to avoid errors, delays, and penalties, especially for complex shipments.

November 07, 2025

Drone Logistics: The Future of Last-Mile Delivery

Drone Logistics: The Future of Last-Mile Delivery

From Delhi's busy markets to Kochi's coastal hubs, India's e-commerce boom has increased the need for quick and easy supplies. Traditional methods have trouble with traffic and getting to places far away, but drone operations are a game-changer. Drone transport is changing how things get to customers by making last-mile delivery quick and environmentally friendly. A study from 2024 says that the Indian drone market will grow at a 20.4% CAGR, going from USD 1,581.5 million in 2024 and expected to reach USD 4,835.9 million by 2030. This technology will change the way logistics are done.This blog talks about drone logistics, how they work, and how they could help Indian companies. Getting to know the drone delivery companies in India can help you find new business possibilities, whether you are shipping electronics or medicines.What Is Drone Logistics?Unmanned aerial vehicles (UAVs) are used in drone logistics to move goods, mostly for last-mile delivery, inventory control, or surveillance. In last-mile delivery, drones bring goods straight to customers, skipping traffic and cutting costs. For instance, an online store in Gurgaon can use drones to send electronics to the regions of Delhi in less than 30 minutes. Drones can also check warehouse stock or keep an eye on transportation centres, which makes things run more smoothly. A 2024 FarEye study says that drones can cut delivery costs by up to 70% compared to vans. This makes them perfect for India's cities and countryside. This technology makes things easier, which gives Indian companies an edge in the fast-growing e-commerce market. How Do the Logistics of Drones Work?With the help of AI and navigation systems, drone travel for last-mile delivery is a simple process. Here are the main steps:Step 1: Place an OrderSomeone makes a purchase online. For example, someone in Chennai gets medicines through an online store.Step 2: Get the Package ReadyAt a fulfilment centre, the seller prepares the box and makes sure it doesn't go over the drone's weight limit, which is usually less than 2 kg. The order from Chennai is packed up and put on a drone.Step 3: Send the DroneThe drone, which has GPS and AI, is sent out from a hub nearby. It flies straight to the customer, skipping traffic in a neighbourhood of Chennai.Step 4: Carry Out the DeliveryPrecision landing helps the drone get the package to a certain place, like a deck or drop zone. In twenty minutes, the customer gets the medicine.Step 5: Bring the Drone BackThe drone goes back to the hub to be charged or to make the next delivery, which quickly completes the cycle.Imagine ordering a pizza in Mumbai. Instead of a delivery person stuck in traffic, a drone flies it to your doorstep in 15 minutes, like a high-tech kite. A Kochi retailer can similarly deliver essentials to rural Kerala, showcasing drone logistics in action.Benefits of Drone LogisticsWhat does drone transport offer Indian businesses? It boosts speed, cuts costs, and enhances sustainability. Below are key benefits, presented clearly for all stakeholders.Faster Deliveries: Drones bypass traffic, delivering in urban areas like Bangalore in under 30 minutes, 50% faster than vans, per a 2024 Skye Air study.Cost Efficiency: Operating costs are up to 70% lower than trucks, with minimal fuel and labour, saving ₹500 per delivery, per FarEye 2024.Remote Access: Drones reach rural or disaster-hit areas, like Assam’s flood-prone regions, improving service for 20% of India’s population.Environmental Benefits: Drones use 94% less energy per package than vehicles, reducing carbon emissions, and are vital for eco-conscious brands.Contactless Delivery: Drones ensure safe, no-contact delivery, which is critical post-COVID, enhancing customer trust in cities like Delhi.Scalability: Drone fleets scale easily, meeting e-commerce growth, unlike traditional fleets, per a 2024 TechEagle report.Top 5 Drone Delivery Companies in IndiaIndia’s drone sector is thriving, with innovators leading the charge in last-mile delivery. These companies are transforming e-commerce by delivering goods swiftly and sustainably, from bustling cities to remote villages. Below are the top 5 drone delivery companies in India, shaping the future of drone logistics with cutting-edge technology and Directorate General of Civil Aviation (DGCA)-backed trials.1. TechEagleFounded in 2017 by IIT Kanpur alumni in Gurgaon, TechEagle pioneers drone-based logistics for healthcare and e-commerce. Its zero-emission drones cover long distances, delivering essentials to urban Delhi and rural Uttar Pradesh. The company’s focus on scalability and sustainability makes it a frontrunner, with trials in Telangana since 2021. TechEagle’s AI-driven navigation ensures precision, reducing delivery times by 40%, per a 2024 report.2. Skye Air Mobility Based in Delhi, Skye Air specialises in AI-powered drone transport for e-commerce, healthcare, and agriculture. Its drones navigate complex terrains, enabling deliveries in Mumbai’s crowded suburbs or Rajasthan’s arid regions. The company’s robust ecosystem, backed by DGCA approvals, supports same-day delivery, boosting efficiency by 30%. Skye Air’s commitment to innovation positions it as a key player in India’s drone revolution.3. Throttle Aerospace Systems Operating from Bangalore, Throttle Aerospace offers autonomous drones tailored for logistics in dense urban markets. Its focus on safety and precision ensures reliable deliveries, even in high-traffic areas like Bengaluru’s tech hubs. The company integrates drones with existing logistics chains, enhancing last-mile efficiency. Throttle’s solutions are ideal for SMEs seeking cost-effective delivery options, per a 2024 industry analysis.4. Redwing Labs Headquartered in Bangalore, Redwing Labs partners with e-commerce and healthcare firms to deliver scalable drone transport solutions. Its drones, tested in government initiatives across Rajasthan, excel in reaching remote areas. Redwing’s modular approach allows businesses to integrate drones seamlessly, cutting delivery costs by 25%. The company’s focus on rural outreach makes it vital for India’s diverse logistics needs.5. Zipline India A global leader, Zipline expanded to India, focusing on medical and e-commerce deliveries in remote regions like Arunachal Pradesh. Its long-range drones, capable of navigating challenging terrains, deliver critical supplies in under 30 minutes. Zipline’s advanced technology, backed by international expertise, supports India’s healthcare logistics. Its 2024 trials in Karnataka highlight its potential to transform rural delivery.These firms, supported by DGCA approvals since 2021, are making drone logistics viable through trials in Telangana, Karnataka, and beyond. Their innovations are setting the stage for a new era of last-mile delivery in India, bridging urban-rural divides.Challenges in Drone LogisticsDespite its potential, drone transport faces hurdles in India:Regulatory Restrictions: DGCA rules limit airspace access, requiring licences and altitude caps, delaying urban rollout, per a 2024 FICCI report.Battery Life: Limited range (20 to 30 km) restricts deliveries, with payload and weather reducing efficiency.Weather Dependency: Monsoons or winds disrupt flights, affecting 30% of operations, per Skye Air 2024.High Costs: Initial investments in drones and infrastructure (₹10 lakh per hub) challenge SMEs.Privacy Concerns: Public resistance to drone surveillance, reported by 40% of urban consumers, slows adoption.Strategies to Implement Drone LogisticsTo leverage drone logistics, Indian businesses can adopt these practices:Partner with Drone Firms: Collaborate with TechEagle or Skye Air for cost-effective trials, reducing setup costs by 50%.Optimise Routes: Use AI tools like FarEye for real-time tracking, cutting delivery times by 20%.Focus on Lightweight Goods: Prioritise small packages (under 2 kg), ideal for 80% of e-commerce orders.Secure Approvals: Work with DGCA for permits, ensuring compliance in cities like Delhi.Build Infrastructure: Invest in landing zones at fulfilment centres, as Zipline does in Maharashtra.Future of Drone Logistics in IndiaThe future of drone transport is bright, with India’s government easing DGCA rules and launching the Drone Shakti scheme in 2022. By 2030, drone logistics could handle 10% of last-mile deliveries, per a NITI Aayog 2024 forecast. Urban hubs in Bangalore and rural outreach in Odisha will drive growth. Drone delivery companies in India are testing heavy-duty drones for larger loads, potentially reducing costs to ₹30 per parcel by 2030, down from ₹500 in 2024.Enhance Your Delivery with WareIQ’s SolutionsTo harness drone transport, integrate with robust logistics. WareIQ, a Y Combinator-backed e-commerce fulfilment platform, empowers Indian businesses to adopt drone logistics seamlessly. Whether you are a spice trader in Kochi or an electronics seller in Surat, WareIQ optimises your delivery.WareIQ offers:Nationwide Network: 12+ city fulfilment centres align with drone hubs, speeding deliveries.AI-Driven Planning: Inventory LogIQ forecasts demand, optimising drone schedules.Seamless Integration: Connect with Amazon or Shopify, streamlining drone-compatible orders.Real-Time Tracking: Monitor drone deliveries, ensuring 99% accuracy.Compliance Support: Navigate DGCA rules for smooth operations.With WareIQ, embrace drone logistics to enhance efficiency and grow globally.ConclusionDrone logistics is transforming last-mile delivery in India, offering speed, sustainability, and access to remote areas. By understanding its mechanics and benefits, businesses can leverage drone transport to meet e-commerce demands. Despite challenges like regulations and costs, drone delivery companies in India are paving the way. Whether delivering medicines in Chennai or gadgets in Gurgaon, this technology is the future of logistics.Partner with WareIQ, adopt AI tools, and secure approvals to unlock drone logistics’ potential. In India’s dynamic e-commerce landscape, drones are your key to fast, cost-effective delivery.Frequently Asked QuestionsWhat is drone logistics?Drone logistics uses unmanned aerial vehicles for last-mile delivery, inventory management, or surveillance, offering fast, cost-effective transport, per FarEye 2024.Is drone delivery available in India?Yes, drone delivery is available in India through trials by TechEagle, Skye Air, and Zipline, approved by DGCA in states like Telangana since 2021.Which company is best for drones in India?TechEagle and Skye Air lead for e-commerce and healthcare deliveries, with scalable, AI-powered solutions, per a 2024 industry report.

November 06, 2025

Top 4 Inventory Valuation Methods Explained with Examples

Top 4 Inventory Valuation Methods Explained with Examples

Inventory valuation is essential for accounting and financial reporting purposes. The method by which a business values its inventory can impact several other key aspects, including cost of goods sold (COGS), gross profit, applicable taxes, and the balance sheet. According to accounting standards, having the correct method and applying it consistently is crucial. In this article, we will examine the top four inventory valuation methods, accompanied by relevant examples.What Does It Mean By Inventory Valuation?Inventory valuation is essentially the accounting process of assigning a monetary value to a company's assets, including its stock. In simple terms, inventory valuation determines how much your inventory is worth at a given point in time. On the balance sheet, inventory is recorded as a current asset.On an income statement, the cost of inventory sold during a period is recorded as Cost of Goods Sold (COGS), which impacts gross profit.Why Inventory Valuation Methods Matter?Inventory valuation has several benefits, such as:Inventory is often one of the most significant current assets on a company's balance sheet. Misvaluing inventory can distort both profit and financial ratios.With inflation (or deflation), different methods produce very different values for ending inventory and COGS, thus affecting net income.Standards (GAAP, IFRS) require the disclosure of the method used and consistency. If there is a change in the inventory valuation methods, it must often be disclosed and sometimes applied retrospectively.To assess the financial stability of a business for loan approval, it is based on the company's balance sheet and the valuation of its inventory.Inventory valuation can also impact the tax a business pays.Correct inventory valuation can provide essential data that helps inform strategic decision-making for future purchases and effective inventory management.What Are the Various Methods of Inventory Valuation?Inventory valuation can be performed using different recognised methods, which will ultimately affect the Cost of Goods Sold (COGS), ending inventory value, and overall financial reporting in various ways. Here are 10 methods of inventory valuation that are widely used:1. FIFO (First-In, First-Out): Assumes the oldest inventory is sold first, so the ending inventory reflects the most recent costs.2. LIFO (Last-In, First-Out): Most recently purchased items are sold first; the ending inventory reflects the oldest costs. Allowed under US GAAP, prohibited under IFRS.3. Weighted Average Cost / Average Cost Method: This method uses a weighted average of all the inventory costs, no matter if it is ending inventory or COGS.4. Specific Identification Method: Tracks the actual cost of each item sold, ideal for high-value or unique goods.5. Retail Inventory Method: Estimates inventory value using a cost-to-retail ratio, standard for retailers.6. Lower of Cost or Market (LCM): In this method, the inventory is recorded at the lower of historical cost or market value to prevent overstatement.7. Net Realisable Value (NRV): Here, inventory is valued at the estimated price minus costs to complete and sell.8. Replacement Cost Method: This method values inventory at the cost to replace it; it is majorly used for insurance or risk assessment.9. Standard Cost Method: The method uses predetermined standard costs for inventory, comparing actual costs to standards to record variances.10. Gross Profit Method: This method estimates ending inventory based on historical gross profit percentages, often for interim financial reporting.The Top Methods of Inventory Valuation: Examples IncludedBusinesses rely on various inventory valuation methods to determine key aspects, such as the cost of goods sold and the ending inventory value. Amongst the different inventory valuation methods, here are the top four that are mainly used by businesses:1. FIFO ((First-In, First-Out)Under the FIFO method of inventory valuation, older inventory is first sold out before new inventory is procured. Eventually, the ending inventory signifies the most recent purchase costs. This method aligns closely with the physical flow of goods such as food, perishable items, or cosmetics.In times of inflation, the FIFO method of inventory valuation results in a lower cost of goods sold because older and cheaper inventory is sold first, leading to higher profits. However, this also means a higher taxable income compared to other methods, such as LIFO.Let us understand this with an example:DateUnits PurchasedCost per UnitJan 1100$10Feb 15200$12May 1100$15These are the purchase inventory at different time periods.If the company sells 250 units, then, as per the FIFO method of inventory valuation:The first 100 units sold are from the Jan 1 batch at $10 each = 100 x $10 = $1,000The following 150 units sold are from the Feb 15 batch at $12 each = 150 x $12 = $1,800Hence, the COGS = $2,800.Whereas, the ending inventory is:Remaining 50 units from Feb 15 batch = 50 x $12 = $600100 units from May 1 batch = 100 × $15 = $1,500So, the ending inventory = $2,100.2. LIFO (Last-In, First-Out)In the LIFO method of inventory valuation, it is assumed that the most recently acquired items are sold first, leaving the older inventory on the balance sheet. This method is mainly used in environments with rising prices, as it assigns the latest, higher costs to the Cost of Goods Sold (COGS).While it may reduce tax liability, LIFO can make the balance sheet inventory appear understated, as older, lower-cost items remain in inventory.Let us understand this with an example:DateUnits PurchasedCost per UnitJan 1100$10Feb 15200$12May 1100$15These are the purchase inventory at different time periods.If the company sells 250 units, then, as per the LIFO method of inventory valuation:The first 100 units sold are from the May 1 batch at $15 each = 100 x $15 = $1,500The following 150 units sold are from the Feb 15 batch at $12 each = 150 x $12 = $1,800So, the COGS = $3,300Whereas, the ending inventory is:Remaining 50 units from Feb 15 batch = 50 × $12 = $600100 units from Jan 1 batch → 100 × $10 = $1,000Thus, the ending inventory stands at $1,600.3. Weighted Average Cost Method (Average Cost Method)In the average cost method of inventory valuation, the average cost of all inventory available for sale during a period is applied to both COGS and the ending inventory. This method smooths out price fluctuations over time, making it particularly useful for businesses with large volumes of homogeneous items where individual tracking is impractical.Contrary to FIFO or LIFO, there is no specific flow of goods. It helps simplify accounting and also reduces the impact of sudden price changes. Let us understand this with an example:DateUnits PurchasedCost per UnitJan 1100$10Feb 15200$12May 1100$15These are the purchase inventory at different time periods.Total units available = 400Total cost = 100×10 + 200×12 + 100×15 = $4,900Weighted average cost per unit = $4,900 ÷ 400 = $12.25If the company sells 250 units, then, as per the average cost method of inventory valuation:COGS = 250 × $12.25 = $3,062.50Ending Inventory = 150 × $12.25 = $1,837.504. Specific Identification MethodThe specific Identification method of inventory valuation assigns the actual cost of every specific item sold to the Cost of Goods Sold (COGS). It is therefore the best inventory valuation method. This approach is ideal for high-value, unique, or easily distinguishable items, such as cars, jewellery, or artwork, where tracking individual units is feasible. This method provides highly accurate profit reporting. However, the drawback is its administrative burden, making it impractical for businesses with large volumes of identical items.Let us understand this with an example:ItemCost PricePhone A$500Phone B$700Phone C$600This is the stock of 3 phones in the inventory.If the store sells Phone A and Phone C:COGS = $500 + $600 = $1,100Ending Inventory = Phone B = $700Which is the Best Inventory Valuation Method?The choice of the best inventory valuation method for your business will depend on several factors, such as:The nature of the inventory.The cost volatility.Tax environmentRegulatory environmentAdministrative capacityFinancial presentation goalsFor many businesses, a combination of FIFO or the Weighted Average method works. However, if there are exceptional items, then a specific identification method becomes more relevant.Get an Accurate Evaluation of Your Inventory With Various Tools From WareIQWareIQ is a Y-Combinator-backed eCommerce full-stack platform offering multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade)Our solution offers:Pan-India network of Seller Flex & FAssured compliant across 12+ cities operated by WareIQ, and shipping partners for last-mile delivery across 27000+ pin codesMulti-Channel Fulfilment Platform with plug-and-play integrations across marketplaces (Amazon, Flipkart, Myntra, Nykaa, etc.), D2C platforms (Shopify, Magento, WooCommerce, etc.), WMS, and ERPs, to support fulfilment across distributors, flagship stores and eCommerce channels with analytics capabilities to assess operational performanceInventory LogIQ: AI-led multi-channel inventory planning solution to minimise stockouts and automate replenishmentLeverage the Tech-enabled returns QC solution to capture, centrally store, and auto-index HD media evidence of damaged or missing returned products and eliminate marketplace claims rejections.A host of seller enablement and support - dedicated account manager, APOB/PPOB registrations, GST registration, NDR & COD verification, etc.ConclusionInventory valuation is not just another accounting task; it is a strategic decision that will have an impact on various aspects of a business, such as profits, taxes, and financial reporting. The top inventory valuation methods include FIFO, LIFO, Weighted Average and Specific Identification. Each method has unique advantages tailored to your business's specific requirements. The correct method can help to optimise profits, manage costs, and gain a competitive edge.Suggested - 7 Inventory Management Techniques: Exploring FIFO, FEFO, and LIFO MethodsFAQs About Inventory Valuation MethodWhich method is best for perishable goods?FIFO is the most suitable option, as it ensures that older items are sold first.Can a company change its method of inventory valuation?Yes, but changes must be disclosed and justified in financial statements.Which method is most accurate for determining the value of high-value items?Specific Identification, because it tracks actual costs per item.How often should inventory valuation be reviewed?Regularly, at least annually, or whenever significant cost changes occur, to ensure accurate reporting.

November 05, 2025

What Is a Parcel Management System and Why Do You Need One?

What Is a Parcel Management System and Why Do You Need One?

The e-commerce logistics market in India is rising at a quick rate. In fact, by 2027, the e-commerce logistics market in India is expected to reach USD 11.48 billion. With this growth, billions of parcels are expected to be shipped annually across different regions. Still, a report suggests that approximately 20-30% of the parcels fall into the 'return to origin' category due to delays or misrouting.This is where a Parcel Management System steps in. A Parcel Management System (PMS) provides the centralised visibility and control businesses need to navigate this complexity, reduce costs, and deliver superior customer experience in an increasingly competitive market.Today, we will explore what a Parcel Management System is and why it is essential to have one available.What is a Parcel Management System (Introduction)?A Parcel Management System (PMS) is a digital platform used to streamline, track, and optimise the end-to-end process of shipping parcels. It helps simplify the handling of incoming and outgoing parcels. Instead of juggling multiple courier dashboards, spreadsheets, and emails, businesses can use a PMS to manage all parcel-related operations from a single interface.A PMS helps in:Booking of shipments with multiple carriers,Tracking the parcel status in real time,Parcel management, auditing, and consulting help identify hidden costs by auditing invoices.Managing return-to-origin (RTO) casesAnalysing shipping data to optimise future decisions.In simpler terms, whether you're an e-commerce brand, a 3PL provider, or even a retail store handling online orders, a Parcel Management System acts as the backbone of efficient parcel shipping management.Features of the Parcel Management SystemA Parcel Management System or PMS, is not only about tracking deliveries. It is a complete logistics optimisation tool. Utilising the right PMS can help businesses reduce costs, minimise errors, and improve customer satisfaction. Here are some of the key features of PMS:Centralised Dashboard: A PMS provides a single dashboard where you can book shipments, monitor statuses, manage returns, and generate reports in real-time.Real-Time Parcel Tracking: A PMS integrates with carriers to provide end-to-end tracking with live status updates and automated notifications for both businesses and customers.Multi-Carrier Integration: A PMS enables you to connect with multiple carriers simultaneously. This enables more thoughtful decision-making; you can choose carriers based on cost, speed, or region.Automated Shipping Labels & Documentation: From generating AWBs (Air Waybills) to customs documents for international shipping, a PMS automates the paperwork, reducing manual errors and saving time.Invoice Auditing & Cost Management: A PMS includes parcel management auditing and consulting features that verify courier invoices, flag discrepancies, and ensure you only pay for what's accurate.RTO & Returns Management: With a Parcel Management Software, businesses can track, analyse, and reduce RTO rates by identifying patterns and addressing customer issues proactively.Data Analytics & Reporting: Modern PMS solutions feature analytics dashboards that display shipping costs, delivery performance, RTO trends, and cost management in graphical representations, facilitating better decision-making.Scalability & Small Parcel Management: A PMS seamlessly adapts to your scale, irrespective of the volume. Some platforms even offer specialised small parcel management tools for SMEs and growing businesses.Customer Communication Tools: Modern PMS solutions can seamlessly integrate automated SMS, WhatsApp, or email notifications. This ensures that customers are always informed about their order status, reducing support calls and thereby improving overall satisfaction.Security & Compliance: With parcel data involving addresses, payments, and customer information, PMS platforms ensure data security, GDPR compliance, and secure integrations with carriers.10 Reasons Why You Should Get A Parcel Management SystemConsidering today's logistics industry, managing parcels manually can be highly chaotic and time-consuming. Many e-commerce sellers face challenges like rising shipping costs, return-to-origin (RTO) losses, courier delays, and eventually unsatisfied customers; hence, having a parcel shipping management system has become essential.Here are the parcel management benefits:1. Centralise Your End-to-End Parcel Management ProcessManage all shipments from a single, unified dashboard for enhanced control and visibility.Businesses can avoid juggling multiple courier portals and emails.It will help with bookings, deliveries, and returns in one place.It will considerably reduce errors caused by manual coordination.2. Save Cost With Smart Auditing Businesses can reduce unnecessary expenses by verifying invoices and comparing rates to ensure they are accurate and competitive.Detects hidden courier surcharges or incorrect weights.Compare carrier rates before shipping to choose the most cost-effective option.Leverage parcel management, auditing, and consulting to identify cost leakages.3. Tracking in Real-time and TransparencyProvide customers with visibility and proactive updates. It can help to:Offer end-to-end parcel tracking across carriers.Send automated SMS/email notifications with live status.Build customer trust with accurate delivery timelines.4. Reduce Return-to-Origin (RTO) LossesA Parcel Management System helps to lower one of the biggest concerns for sellers, RTO. A PMS essentially:Will flag high-risk shipments (COD orders, unverifiable addresses).Help to analyse RTO patterns to prevent repeat issues.Manage returns smoothly to minimise financial impact.5. Scale Up SeamlesslyGrow effortlessly without operational bottlenecks, as a PMS can:Supports small parcel management for startups/SMEs.Scales up to handle thousands of parcels daily.Adapts to seasonal spikes and business expansion.6. Get Data-Driven Insights Now, businesses can turn logistics data into actionable business intelligence, as a PMS allows:Access to cost management in the parcel industry graphs for visibility.Monitoring of KPIs like courier performance and cost per shipment.Forecasting demand and optimising carrier selection.7. Better EfficiencyIt is now possible to save time and improve efficiency by automating routine shipping tasks:Generate shipping labels, invoices, and manifests instantly with PMS.Automating courier bill reconciliation.Automation of tasks will free up staff to focus on core business growth.8. Enhanced Compliance and SecurityParcel Management System can help to protect customer data while staying compliant with regulations:Secure integrations with carriers and payment systems.Compliance with GDPR, PCI DSS, and regional data laws.Build customer trust by ensuring the safe handling of parcel data.9. Improving the Customer ExperienceBusinesses can now ensure customer satisfaction by delivering a seamless post-purchase journey to foster loyalty. A Parcel Management Software will help to:Provide accurate delivery ETAs and proactive updates.Helps in the simplification of return handling for customers.Reduce "Where is my order?" support calls.10. Gain Competitive Edge Businesses can outpace competitors who are still managing the parcel manually, as PMS helps to:Deliver faster and more reliably.Lower shipping costs while improving customer satisfaction.Strengthen your market position with efficient logistics.A Parcel Management System doesn't just improve shipping; it helps in boosting the overall efficiency, reduces costs, and enhances customer loyalty, all of which drive long-term growth.Simply Your Parcel Management With Smart Solutions from WareIQWareIQ is a Y-Combinator-backed eCommerce full-stack platform offering multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade)Our solution offers:Pan-India network of Seller Flex & FAssured compliant across 12+ cities operated by WareIQ, and shipping partners for last-mile delivery across 27000+ pin codesMulti-Channel Fulfilment Platform with plug-and-play integrations across marketplaces (Amazon, Flipkart, Myntra, Nykaa, etc.), D2C platforms (Shopify, Magento, WooCommerce, etc.), WMS, and ERPs, to support fulfilment across distributors, flagship stores and eCommerce channels with analytics capabilities to assess operational performanceInventory LogIQ: AI-led multi-channel inventory planning solution to minimise stockouts and automate replenishmentLeverage Tech-enabled returns QC solution to capture, centrally store, and auto-index HD media evidence of damaged or missing returned products and eliminate marketplace claims rejections.A host of seller enablement and support - dedicated account manager, APOB/PPOB registrations, GST registration, NDR & COD verification, etc.ConclusionParcel handling is not just a back-office task for businesses; it has become a critical business driver. Billions of parcels are shipped each year, and customers expect to receive even better service. Hence, there is no room for delays, hidden costs, and, more importantly, missed deliveries. A Parcel Management System (PMS) solves these challenges by centralising operations, automating routine tasks, reducing costs, and delivering the visibility both businesses and customers need.Whether you run a small enterprise which handles a handful of parcels or a multinational brand handling thousands, the benefits of having a PMS are indeed undeniable. A PMS is a strategic investment that can help your business to stay competitive, agile, and profitable in a parcel-driven economy.FAQS About Parcel Management SystemWhat is a Parcel Management System?Parcel Management System is a software solution that centralises parcel shipping, tracking, auditing, and returns in one platform.Who needs a Parcel Management System?E-commerce brands, retailers, 3PL providers, and any business shipping parcels regularly.What are the main benefits of using a Parcel Management System?The primary benefits include savings, faster deliveries, real-time tracking, reduced RTOs, and improved customer satisfaction.What features should I look for in a Parcel Management System?Multi-carrier integration, auditing tools, analytics, automation, and scalability are essential features for effective management.

November 04, 2025

Transportation Charges GST Rate: What You Must Know

Transportation Charges GST Rate: What You Must Know

Did you know that about 70% to 75% of India's GST revenue for the year 2023-24 came from the 18% slab? Moreover, approximately 13% to 15% of India's Goods and Services Tax (GST) revenue was collected from the 28% slab. This means that a significant amount of revenue is generated from GST on transportation, and, yes, your trucking bill is a substantial contributor to this number. As the Goods and Services Tax (GST) came into effect, significant changes have been made to the taxation system for transportation, particularly for businesses. This has led to an increased need to understand the details of transportation charges GST rates. Let's look at what you must know about transportation and GST rates.What is the GST Rate on Transportation Charges?Depending on the mode of transportation, such as rail, road, air, or water, a specific GST rate applies. The rate will vary further according to the type of service provided under each mode of transportation.GST Rate on Road Transport ServicesThe GST rate is fixed for any road transportation services, firstly, based on the mode of transport and secondly, on the nature of the service. Public modes of transportation, including buses, metros, and trains, are generally exempt from GST. This ensures that public transportation is both easily accessible and affordable for passengers.When it comes to the GST rate, which will be applicable on taxis and cabs, a 5% GST is levied. Operators can opt to pay 12% GST if they intend to claim an input tax credit (ITC).Here is a table that explains the different GST rates for road services:Mode of TransportGST Rate Public Transport (for passengers)0%Transportation via metered rickshaw, e-rickshaw or cab0%Buses (Non-AC)0%Buses (AC)5%Radio taxis or similar transportation options5%Rentals (cars, buses, and coaches)18%GST on Rail Transportation ServicesEvery rail ticket that is issued contains a fixed amount of GST that is decided based on the mode and the service. However, this GST rate is subject to periodic changes.Here are the GST rates which are applicable for rail transportation services:Mode of TransportGST Rate Sleeper and general class tickets5%AC and First Class tickets5%Metro tickets or tokens12%GST on Air Transportation ServicesTransportation via air is also subject to GST rates. The GST rate will change based on the mode of transport and the service availed. Although the GST rate remains standard for all airlines, there can be certain changes.Here are the GST rates which are applicable for air transportation services:Mode of TransportGST Rate Economy class air tickets5%Chartered flight tickets for pilgrimage5%Rental services of aircraft or chartered flights (with or without operator12%Business-class air tickets12%GST on Water Transportation ServicesGST is also applicable for transportation via inland waterways. However, there is no provision for Input Tax Credit (ITC).Here are the GST rates which are applicable for water transportation services:Mode of TransportGST Rate General passenger boats5%Ferry services on rivers or canals5%Cargo transport (renting or hiring vessels)18%GST on Road Transportation Service: GTA Goods Transport Agency (GTA) is a business entity that specialises in providing transportation services exclusively for goods. It plays an important role in the logistics sector; therefore, under GST, there are compliance requirements for GTA as well. The GST rate applicable to a GTA will vary depending on factors such as the type of goods being transported and the total value of the consignment. Here is the GST on goods that are transported via GTA:SituationGST Rate If the GTA does not claim the Input Tax Credit (ITC)5%If the GTA does claim the Input Tax Credit (ITC)12%Forward Charge vs. Reverse Charge Option For GTAGoods Transport Agencies (GTAs) can choose to pay GST themselves under the forward charge rate for the transportation charges system. In this case, they charge either 5% GST without claiming an input tax credit (ITC) or 12% GST with ITC after submitting a yearly declaration.If the GTA doesn't choose this option and goes with 5% GST without ITC, then the reverse charge rate on transportation under the GST system applies. That means the person or business receiving the service must pay the GST, not the GTA.GST on Transportation: Exemptions There are various cases where exemptions are provided on the transportation GST rates, and they are listed below:Any kind of transportation services offered by public transport operators, such as buses, local trains, and metros, are exempt from GST.If transportation services are provided for passenger goods, specified essential commodities, or passengers via Indian Railways, they are exempt from GST.If any mode of transportation transports commodities such as milk, food grains and agricultural produce via road, rail or vessel, it is exempted from GST.When educational or academic institutions provide transportation services for students, staff, or faculty, they are exempt from GST.If passengers are transported via aircraft from airports located in regions such as the Northeastern regions, the Andaman and Nicobar Islands, Himachal Pradesh and Lakshadweep, they are exempt from GST.List of Goods Which are Exempted from GSTGST does not apply to specific transport services, especially those involving essential goods and activities. These exemptions are granted for the following categories:Transport of goods for unregistered individuals or through non-GTA (Goods Transport Agency) services.Movement of agricultural produce and eco-friendly inputs like organic manure.Distribution of registered newspapers and periodicals.Delivery of essential food products, including rice, flour, pulses, milk, salt, and other staples.Shipment of relief materials meant for victims of natural or man-made calamities.Transportation of military and defence-related items.Household goods moved during personal relocations.Freight services where the total charge does not exceed ₹1,500.Also check - Difference Between Transportation and LogisticsTransport Charges HSN Code and GST RateThe Harmonised System of Nomenclature (HSN code) is a classification system useful for taxation purposes. The transportation charges, HSN code, and GST rate are interrelated. Under the GST regime in India, the GST rate and the HSN code differ from one mode of transportation to another. Here is the list of HSN codes applicable to different modes of transportation:Mode of TransportationHSN CodeRoad Transportation996511Rail Transport996512Air Transport996513Water Transport996514Pipeline Transport996515Better Transportation With Shipping Solutions From WareIQWareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.Our solution offers the following capabilities:Multi-carrier engine enabling fast deliveries across 24,000+ pin codesControl Tower & automated workflows to minimise NDR & RTOsSame/Next-day delivery courier optionsSeamless Integration with your WMS, ERPs and StorefrontsShipping Badges to display precise Estimated Delivery Dates (EDD)Custom-branded tracking pages and notifications to enhance customer experience.ConclusionThe GST rate on transportation charges might be confusing, but businesses need to understand it to make more informed and cost-effective decisions. Usually, the GST ranges from 0% to 18%. The GST slab will depend on the type of service, mode of transport, and whether or not you claim the ITC. However, some services, such as public transport, agricultural goods, and materials, are exempt from GST. This allows access to such services while also being affordable. On the other hand, premium services and freight movements will also be subject to increased GST rates. When it comes to good transport agencies (GTA), they are allowed to choose between the forward charge GST rate for transporters or the GST rate on transport under reverse charge as per their preference.Suggested - Top 10 Transport Companies in IndiaFAQs About Transportation Charges GST RateAre all transportation services subject to GST?No, not all services are subject to GST. Essential and public services, such as railways or non-AC buses, as well as the transportation of basic goods, are exempt from GST.What GST rates apply to GTA?GTAs can select between 5% without ITC and 12% with ITC. It depends on the chosen tax scheme and tax declaration.Is GST applicable to cab services, such as Uber?Radio taxis and AC taxis will attract 5% GST.Does transporting household goods attract GST?No, the transportation of personal household goods is exempted from GST.

November 03, 2025

How to Get an Export License in India Easily

How to Get an Export License in India Easily

An export license in India refers to the Import Export Code (IEC), a mandatory identification number issued by the Directorate General of Foreign Trade (DGFT). Without an IEC, neither a business nor an individual can export or import goods legally, unless specifically exempted.For service exports, IEC is not required unless the service provider wishes to claim benefits under the Foreign Trade Policy. This makes IEC crucial mainly for goods trade and policy-linked advantages.Since the introduction of GST, the IEC is equivalent to the Permanent Account Number (PAN) of the firm. However, the Directorate General of Foreign Trade (DGFT) still issues an IEC separately upon receipt of an application.Any business entity, including proprietorships, partnerships, LLPs, private or public limited companies, trusts, HUFs, and societies, can apply for an IEC. In this guide, you will learn about the prerequisites for an IEC, the step-by-step process of applying for an export license in India, the required documents, costs, and more.Pre-Requisites for Applying for IEC: Export License RequirementsTo obtain an Import Export Code (IEC), the applicant firm must fulfil certain prerequisites. IEC can be obtained by a proprietorship, partnership, LLP, private or public limited company, trust, HUF, or society.The firm must have a valid PAN, a bank account in its name, and a proper registered address. The Directorate General of Foreign Trade (DGFT) may physically verify the address after issuing the IEC.Before starting the application, it is essential to have your PAN, bank details, and firm details ready.How to Apply for an Export License in India: Step-by-Step ProcessStep 1: Apply for IECTo begin, apply for an Import Export Code (IEC). A PAN, bank account, and valid firm address are mandatory. The DGFT may physically verify the address after issuance. Keep PAN, bank, and firm details ready before applying.Step 2: Link Your Profile to IECIf you already have an IEC, link it to your user profile on the DGFT portal. A digital signature token will be required for this step.Step 3: View IEC ProfileThe IEC profile stores details of your firm as registered with DGFT. Along with the IEC number, it includes RCMC, industrial registration details, status holder details, and past export performance.Step 4. Print IEC CertificateDownload and print your IEC certificate. It contains the firm’s name, address, IEC number, date of issue, and branch details. New certificates also feature a QR code for online verification.Step 5: Update or Modify IECIf any firm details change, please modify them online through the IEC. The system allows for auto-approved updates, ensuring a quick processing time.Step 6: Surrender IECIf you no longer wish to use the IEC, submit an online surrender request. The IEC will be suspended from transactions, but can be reactivated later by revoking the suspension.Step 7: Request Removal from DELIf your IEC appears in the Denied Entity List (DEL), you can apply online for its removal and regain eligibility for DGFT benefits and schemes.Step 8: Revoke Suspension or CancellationIf the IEC has been suspended or cancelled, submit an online request to revoke the suspension or cancellation and resume transactions.Step 9. Manage Users Linked to IECMultiple users can be linked to one IEC. You can add primary or secondary users and assign them permissions to access DGFT schemes.Step 10. Request for Merger/DemergerIf your IEC has been merged or demerged with another entity, please update the system accordingly. Multiple entities can be linked together under this process.Documents Required for IEC RegistrationHere are the documents required for IEC Registration:Valid Digital Signatures TokenValid PAN Valid Mobile Number and Email IDValid Address Details of the Branch OfficeValid Bank Account in the name of the IEC HolderValid Aadhar Card matching the details with the PAN CardAlso check - Types of Export Incentive Schemes & Benefits for Indian BusinessesExport License Cost in IndiaThe primary cost of obtaining an export license in India is the government fee for the Import-Export Code (IEC). Currently, the fee is ₹500, which is a one-time payment. The IEC is valid for a lifetime and does not require renewal.Export-Import Performance: India’s Data BankHS CodeCommodity2024-2025 (IN Cr)% Share% Growth09Coffee, Tea, Mate and Spices45,433.671.226815.8117Sugars and Sugar Confectionery21,182.410.5720-22.2833Essential Oils, Resinoids, Perfumery, Cosmetic or Toilet Preparations22,862.510.6173-6.8052Cotton53,602.901.4474-4.5358Special Woven Fabrics, Tufted Fabrics, Lace, Tapestries, Trimmings, etc.3,107.360.08394.2857Carpets and Other Textile Floor Coverings17,743.680.479114.2595Toys, Games and Sports Requisites; Parts and Accessories Thereof4,820.530.130211.34Source: TradestatExport Management SystemThe Directorate General of Foreign Trade (DGFT), under the FTDR Act, notifies restrictions, quotas, or conditions on specific categories of exports from India. In such cases, exporters must obtain a license or registration before exporting.The Export Management System provides modules for applying for export licenses, quotas, and registrations. These include licenses for restricted items, SCOMET items, and licenses issued under agreements such as the Indo-US Memorandum of Understanding or Indo-EU arrangements.Restricted ExportsCertain items are restricted for export and require prior approval from DGFT. Exporters must apply for an export license through the system before shipping such goods.SCOMET ExportsExports of Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) listed in Appendix 3 of Schedule 2 of ITC(HS) require a license. Exporters must submit a request online to obtain this approval.Registration Certificate (RC) for ExportFor certain products, exporters are required to obtain a Registration Certificate (RC) prior to exporting. For example, exports involving the USA’s unilateral export crime control items or regional security items require an RC.Suggested read - Import Export Code RegistrationHow WareIQ Supports Exporters in IndiaWareIQ goes beyond fulfillment to help Indian exporters streamline operations, stay compliant, and scale globally. Here’s how:Pan-India Fulfillment Network: WareIQ’s 12+ city hubs and last-mile delivery coverage across 27,000+ pin codes ensure faster domestic distribution before export dispatch.Seamless Multi-Channel Integrations: Plug-and-play integrations with Amazon, Flipkart, Nykaa, Shopify, Magento, WooCommerce, WMS, and ERPs simplify order management across domestic and international channels.Export-Ready Inventory Management: With Inventory LogIQ (AI-driven planning), exporters can avoid stockouts, automate replenishment, and maintain optimal inventory across markets.Returns & Compliance Support: A tech-enabled returns QC solution captures and stores HD media proof, reducing disputes and marketplace claim rejections—key for exporters shipping to strict compliance markets.End-to-End Seller Enablement: Services such as APOB/PPOB registrations, GST compliance, COD/NDR verification, and dedicated account managers empower exporters to focus on business growth, while WareIQ handles the backend.Suggested read - How to Export from India: A Complete Beginner’s GuideFAQsIs an IEC required for exporting samples from India?Yes, IEC is mandatory even for exporting product samples, unless exempted by DGFT.How long does it take to get an export license in India?The IEC is usually issued within 5-15 working days of a successful online application.Do exporters need separate IECs for each branch or business line?No, one IEC is valid for the entire firm and all its branches or units.Can an individual apply for an IEC without being associated with a registered company?Yes, individuals can apply for an IEC using their personal PAN and bank account details if they plan to export or import goods.What happens if an exporter fails to update IEC details?Failure to update the IEC may lead to deactivation, and exporters will be unable to process shipments until it is reactivated.

October 31, 2025