Registration of Irrevocable Commercial Letter of Credit (ICLC) for Wheat Export
Registration of Irrevocable Commercial Letter of Credit (ICLC) for Wheat Export
India has banned wheat exports with immediate effect as part of measures to control rising domestic prices, according to a DGFT Notification No. 06/2015-2020 dated May 13, 2022. DGFT also announced that the export shipments for which irrevocable letters of credit (LoC) have been issued on or before May 13, 2022, will be allowed.
Now DGFT informed that in order to facilitate registration of Irrevocable Commercial Letter of Credit (ICLC) which has been opened on or before 13th May 2022, DGF T has initiated an online submission module for registration of ICLC.
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Irrevocable Commercial Letter of Credit (ICLC)
A Letter of Credit (LC) is a document that guarantees the buyer’s payment to the sellers. It is issued by a bank and ensures timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer. A letter of credit is issued against a pledge of securities or cash. Banks typically collect a fee, ie, a percentage of the size/amount of the letter of credit
An Irrevocable Commercial Letter of Credit (ICLC) is a credit, the terms, and conditions of which can neither be amended nor canceled. Hence, the opening bank is bound by the commitments given in the LC.
Government Allows Some Relaxation in Wheat Export Ban
- The government has announced some relaxation on the wheat exports ban. It has been decided that wherever wheat consignments have been handed over to customs for examination and have been registered into their systems on or prior to May 13th such consignments would be allowed to be exported.
- The Centre has also allowed a wheat consignment headed for Egypt, which was already under loading at the Kandla port.
Procedure for Registration of Irrevocable Commercial Letter of Credit (ICLC) for Wheat Export
The exporters can apply for the registration certificate by navigating to the official website of DGFT.
- Access the official website of the Directorate General of Foreign Trade. From the home page, click on the Service option and select Export management System from the drop-down menu.
- By clicking on the Registration Certificate for Exports, a window for user registration/login will display.
- To apply for the Registration Certification proceed with the registration process. Provide the Registration Details and Select Register User as “Exporter/Importer”.
- Furnish the OTPs received on email and mobile number, Upon Successful validation of the OTP; you can receive a notification containing the temporary password which you need to change upon the first login.
- After login, the applicant can apply for the Registration Certificate for the wheat export.
Note: No manual submission of application is allowed for registration of ICLC.
Regional Authorities under DGFT have already been instructed vide Trade Notice dated 14th May 2022 to process such applicants complete in all respect preferably within 24 hours of receiving the application.
The official notification of DGFT pertaining to the Registration of Irrevocable Commercial Letter of Credit (ICLC) for Wheat Export is as follows:
Registration of Irrevocable Commercial Letter of Credit (ICLC) for Wheat Export