You're on a call with a freight forwarder. He says — "We'll do LCL on FOB terms, BL will be telex released, and you'll need to submit the AWB copy to the LC opening bank before the expiry date." You smile. You nod. Inside — you have no idea what just happened. This article fixes that. Here are 60 essential export terms explained in plain English. Read it once and you'll never feel lost in an export conversation again.
Section 1 — Registration and Identity Terms
1. IEC — Import Export Code
A 10-digit unique identification number issued by DGFT to any person or business wanting to export or import from India. Mandatory for all exporters. One-time registration, no renewal, costs ₹500. Without IEC you cannot legally export.
Example: Your IEC might look like — 0516XXXXX1
→ Full guide: How to get your IEC code online
2. DGFT — Directorate General of Foreign Trade
The government body under the Ministry of Commerce that regulates India's export-import policy. They issue IEC, manage export schemes like RoDTEP and Advance Authorisation, and set the rules of the game for Indian exporters.
3. RCMC — Registration Cum Membership Certificate
A certificate issued by Export Promotion Councils to registered exporters. Required to avail benefits under government export schemes. Different EPCs issue RCMC for different product categories — APEDA for agricultural products, GJEPC for gems and jewellery, etc.
4. EPC — Export Promotion Council
Government-supported industry bodies that promote exports of specific product categories. Examples:
- APEDA — agricultural and processed food
- FIEO — Federation of Indian Export Organisations (umbrella body)
- GJEPC — gems and jewellery
- CLE — Council for Leather Exports
- EEPC — engineering products
- HEPC — handloom products
EPCs help exporters find buyers, attend trade fairs, get RCMC, and access government schemes.
5. FIEO — Federation of Indian Export Organisations
The apex body of Indian exporters. Works with the government to represent exporter interests, organise buyer-seller meets, and promote Indian exports globally.
6. LUT — Letter of Undertaking
A declaration filed on the GST portal at the start of every financial year. By filing LUT, you commit to the government that you will export goods and services without collecting GST. This allows you to export without paying GST upfront and then claiming a refund. Every GST-registered exporter must file LUT before exporting.
→ Full guide: How to file LUT on the GST portal
Section 2 — Documents You'll Use Every Day
7. Proforma Invoice (PI)
Your preliminary quote to the buyer. Not a final billing document — more like a formal offer that shows product details, price, payment terms, and delivery terms. Buyer uses PI to arrange payment or open an LC.
8. Commercial Invoice
The final, official invoice raised after shipment. The actual billing document. Customs, banks, and the buyer all use this. Must match exactly with the Packing List, Shipping Bill, and LC terms (if LC is involved).
9. Packing List
A detailed document listing every carton or package in the shipment — what's inside, dimensions, gross weight, net weight, and marks. Customs and the buyer use this to physically verify the shipment. Every box must match the packing list exactly.
10. Shipping Bill
The most important export document filed with Indian Customs. Submitted electronically through ICEGATE by your CHA. It's your formal request to Customs to permit export of goods. Contains product details, HS Code, value, quantity, port details, and your claim for incentives like Duty Drawback or RoDTEP.
11. Bill of Lading (BL or BOL)
Issued by the shipping line after your goods are loaded on the vessel. Three critical functions:
- Proof that goods have been shipped
- Contract of carriage between you and the shipping line
- Title document — whoever holds the original BL owns the goods
Original BL is sent to the buyer (or their bank). Buyer surrenders BL at destination port to collect goods.
Three types:
- Straight BL — non-negotiable, consigned to a specific person
- To Order BL — negotiable, can be transferred
- Telex Release / Express BL — no original issued; buyer gets goods without paper BL. Common for trusted buyer relationships.
12. Airway Bill (AWB)
The air freight equivalent of the Bill of Lading. Issued by the airline. Unlike BL, AWB is NOT a title document — it's a receipt and contract of carriage. Buyer doesn't need the original AWB to collect goods; they just need ID proof.
13. Certificate of Origin (COO)
Certifies that your goods are manufactured in India. Two types:
- Non-preferential COO — standard certificate, no duty benefit
- Preferential COO — issued under specific trade agreements (Form A for GSP, SAFTA certificate, India-UAE CEPA COO) — gives buyer reduced import duty in their country
Issued by Export Promotion Councils or Chambers of Commerce.
14. Fumigation Certificate
For wooden packaging materials — internationally, wood packaging must be heat treated or fumigated to prevent spread of pests. A fumigation certificate proves this. Required for most exports using wooden pallets or crates, especially to USA, EU, and Australia.
15. Phytosanitary Certificate
For agricultural and plant-based products. Issued by the government's Plant Quarantine authority. Certifies goods are free from pests and diseases. Mandatory for fresh fruits, vegetables, seeds, plants, and many food products.
16. FIRC — Foreign Inward Remittance Certificate
Issued by your bank when you receive foreign currency payment for exports. Official proof that export payment was received in India. Required for GST refund claims, DGFT compliance, and income tax purposes. Keep every FIRC safely.
17. BRC / eBRC — Bank Realisation Certificate
Proof of export payment realisation. Today mostly replaced by eBRC (electronic Bank Realisation Certificate) — banks upload payment data to the DGFT portal automatically. Your eBRC is linked to your IEC and required for closing export obligations under DGFT schemes.
Section 3 — Shipping and Logistics Terms
18. FCL — Full Container Load
You book an entire shipping container exclusively for your goods. Standard sizes — 20-foot (about 25–28 CBM capacity) and 40-foot (about 55–60 CBM). Cost-effective for large shipments.
19. LCL — Less than Container Load
Your goods share a container with goods from other exporters. You pay only for the space your goods occupy, charged per CBM (Cubic Metre). Good for smaller shipments that don't fill a full container.
20. CBM — Cubic Metre
Unit of measurement for cargo volume. 1 CBM = 1 m × 1 m × 1 m. Used to calculate LCL freight charges.
Example: A carton measuring 50cm × 50cm × 40cm = 0.1 CBM
21. Freight Forwarder
A company or agent that arranges international transportation of your goods — books cargo space with shipping lines or airlines, coordinates with ports, and often handles documentation too. Your logistics partner for international shipping.
→ Full guide: What is a freight forwarder and why you need one
22. CHA — Customs House Agent
Also called Clearing and Forwarding Agent (C&F Agent). Licensed by Customs to file Shipping Bills and handle customs clearance on behalf of exporters. Your most important service partner as a new exporter.
23. ICEGATE
Indian Customs EDI (Electronic Data Interchange) Gateway. The online portal where Shipping Bills are filed, customs declarations submitted, and Duty Drawback / RoDTEP credits processed. Your CHA uses ICEGATE on your behalf.
24. LEO — Let Export Order
The green light from Indian Customs. Once Customs approves your Shipping Bill and is satisfied with the export declaration (and physical examination if required), they issue LEO. After LEO, goods can be loaded on the vessel or aircraft. No LEO = no export.
25. POL and POD — Port of Loading and Port of Discharge
POL is the Indian port where your goods are shipped. Major Indian export ports: JNPT Mumbai, Mundra (Gujarat), Chennai, Kolkata / Haldia, Cochin, Vizag.
POD is the destination port where your goods arrive in the buyer's country.
26. ETD and ETA
ETD (Estimated Time of Departure) — when the vessel leaves the port of loading.
ETA (Estimated Time of Arrival) — when the vessel arrives at the destination port.
27. Transit Time
Number of days from port of loading to port of discharge. Rough guide:
- India to Dubai: 5–8 days by sea
- India to UK: 20–25 days by sea
- India to USA (East Coast): 25–35 days by sea
- India to Australia: 18–25 days by sea
Section 4 — Incoterms (International Commercial Terms)
Incoterms are internationally recognised trade terms that define who — buyer or seller — is responsible for costs, insurance, and risk at each stage of the shipment. Published by the International Chamber of Commerce (ICC).
28. EXW — Ex Works
Maximum responsibility on the buyer. You make goods available at your factory or warehouse. Buyer arranges everything from there — transport, customs clearance, freight, insurance, delivery. Rarely used in actual export transactions.
29. FOB — Free on Board
The most commonly used Incoterm for Indian exporters. Your responsibility ends once goods are loaded on the vessel at the Indian port. You pay: inland transport to port, export customs clearance, port handling up to loading. Buyer pays: sea/air freight, insurance, destination port charges, import customs.
Example: "FOB Mumbai" means price includes delivery to and loading on vessel at Mumbai port.
30. CIF — Cost Insurance Freight
You pay for goods + export clearance + sea freight + marine insurance up to destination port. Buyer pays import customs clearance and delivery from destination port to their warehouse.
Example: "CIF Dubai" means your price includes cost of goods, freight to Dubai, and insurance.
31. CFR — Cost and Freight
Same as CIF but without insurance. You pay freight but the buyer arranges their own insurance.
32. DDP — Delivered Duty Paid
Maximum responsibility on you. You deliver goods to buyer's door, pay all freight, insurance, and import duties in the buyer's country. Most convenient for buyer, most complex for exporter.
33. DAP — Delivered at Place
You deliver to buyer's named destination — but buyer pays import duties and clears customs in their country. You bear risk until goods arrive at the destination.
Section 5 — Payment Terms
34. LC — Letter of Credit
A guarantee from the buyer's bank to pay you once you present correct shipping documents as specified in the LC. The bank's guarantee — not just the buyer's promise. Safest payment method for exporters dealing with new buyers.
- Sight LC — bank pays immediately on presentation of correct documents
- Usance LC (Deferred LC) — bank pays after a fixed period (30, 60, or 90 days after shipment)
→ Full guide: Letter of Credit for Indian Exporters
35. DP — Documents Against Payment
You ship goods and send documents to your bank. Your bank sends documents to buyer's bank. Buyer pays → gets documents → clears goods. Safer than Open Account but less secure than LC.
36. DA — Documents Against Acceptance
Same as DP but buyer signs a bill of exchange (promise to pay later) instead of paying immediately. Gets documents before paying. Riskier for the exporter.
37. TT — Telegraphic Transfer (Wire Transfer)
Direct bank-to-bank transfer of money. Fast and simple. Common for advance payments and final balance payments between trusted parties. Also called SWIFT transfer.
38. Open Account
You ship, you invoice, buyer pays later (30/60/90 days). Common between established trading partners. Maximum risk for exporter — goods and documents are already with buyer before payment. Never do this with a new, unverified buyer.
39. ECGC — Export Credit Guarantee Corporation of India
A government-owned insurance company that provides export credit insurance to Indian exporters. If your foreign buyer defaults on payment, ECGC covers a significant portion of your loss.
→ Full guide: How ECGC protects Indian exporters
Section 6 — Customs and Regulatory Terms
40. HS Code — Harmonised System Code
An internationally standardised numerical code that classifies every product traded in the world. Indian Customs uses an 8-digit version called ITC-HS Code. Getting the wrong HS Code can cause serious problems — it determines import duty rates in the buyer's country, export incentive rates, and whether any export restrictions apply.
Example: Basmati rice = HS Code 10063010
→ Use the free HS Code Finder tool to find your product's code instantly.
41. Duty Drawback
A refund of customs duties paid on imported raw materials or inputs that were used to manufacture goods now being exported. Rates published as a percentage of FOB value for each product category.
→ Full guide: Duty Drawback: Types, Calculation & Claim Process
42. RoDTEP — Remission of Duties and Taxes on Exported Products
A government scheme that refunds embedded taxes and levies not covered by Duty Drawback or GST refunds. Benefits issued as transferable electronic scrips — use them to pay your own import duties or sell them to importers.
→ Full guide: RoDTEP vs Duty Drawback — which is better?
43. Advance Authorisation (AA)
A DGFT licence that lets you import raw materials and inputs duty-free — on the condition that you will use them to manufacture export goods within a specified time. Useful for manufacturers who use imported inputs.
→ Full guide: Advance Authorisation Scheme explained
44. EPCG — Export Promotion Capital Goods Scheme
Allows import of capital goods (machinery, equipment) at zero customs duty against a commitment to export goods worth a specified multiple of the duty saved. Great for manufacturers upgrading production capacity.
→ Full guide: EPCG Scheme explained
45. EOU — Export Oriented Unit
A manufacturing unit that commits to exporting 100% (or a significant portion) of its production. EOUs get duty-free import of capital goods and raw materials, income tax benefits, and simplified procedures.
46. SEZ — Special Economic Zone
Designated zones with special economic rules to promote exports. Units in SEZs get duty-free imports, income tax exemptions, and simplified customs procedures. India has many SEZs — in Noida, Cochin, Kandla, SEEPZ Mumbai, and others.
47. Free Shipping Bill
A type of Shipping Bill filed when exporting goods that are not claiming any Duty Drawback or RoDTEP benefits. "Free" means free of claim — not free of cost.
Section 7 — Other Important Terms
48. MOQ — Minimum Order Quantity
The minimum quantity of goods you're willing to sell per order. You set this. Communicate it clearly in your Proforma Invoice and product listings.
49. FOB Value
The total value of your goods at the Indian port — including cost of production, inland freight to port, and all charges up to loading on the vessel. FOB value is the base used for calculating Duty Drawback, RoDTEP, and export statistics.
50. CIF Value
FOB value + freight charges + insurance. This is the value used by the buyer's customs to calculate import duties in their country.
51. B/E — Bill of Entry
The import equivalent of a Shipping Bill. Filed by the importer (your buyer) at their country's customs when your goods arrive. Not your document — but good to understand how the other side works.
52. SWIFT Code
A unique identification code for banks used in international wire transfers. Your buyer needs your bank's SWIFT code to send you payment. Get this from your bank branch.
53. Marine Insurance
Insurance covering goods during sea or air transit — protects against loss or damage from sinking, fire, theft, or accidents. Essential for high-value shipments. Under CIF terms, you (the exporter) buy it. Under FOB terms, the buyer buys it.
→ Full guide: Marine cargo insurance for exports
54. Pre-shipment Finance
A loan from your bank to fund production before you receive full payment from the buyer. Banks offer pre-shipment credit at subsidised interest rates to exporters. Helps manage export working capital during the production period.
55. Post-shipment Finance
A loan from your bank against your export documents after shipment but before payment is received from the buyer. Bridge finance while you wait for the buyer to pay.
56. Negotiation of Documents
When you submit export documents to your bank under an LC, the bank "negotiates" — checks documents, pays you or advances funds, and then recovers payment from the buyer's bank.
57. Discrepancy
When your export documents don't match the exact terms of the LC — wrong date, wrong description, late shipment, missing certificate. Discrepancies can delay or stop payment. Banks are very strict. Your CHA must ensure documents are 100% LC-compliant.
58. Currency Risk (Forex Risk)
The risk that exchange rate movements reduce your rupee earnings even if the dollar price stays the same. Managed through forward contracts, natural hedging, and pricing buffers.
→ Full guide: Currency risk management for Indian exporters
59. FEMA — Foreign Exchange Management Act
The Indian law that governs receipt and use of foreign exchange. All export payments must be realised within prescribed timelines (currently 9 months for most goods). Violations attract penalties from RBI. Your bank and CA will help you stay compliant.
→ Full guide: FEMA compliance for Indian exporters
60. EEFC Account — Exchange Earners' Foreign Currency Account
A special bank account that lets you hold a portion of your foreign currency earnings in the original currency (USD, EUR, etc.) without converting to INR immediately. Useful for managing currency risk and making import payments in foreign currency.
→ Full guide: How to open an EEFC account
Quick Reference Glossary Card
| Term | Full Form | What It Means in One Line |
|---|---|---|
| IEC | Import Export Code | Your export licence number |
| DGFT | Directorate General of Foreign Trade | Government export regulator |
| CHA | Customs House Agent | Your customs paperwork manager |
| BL | Bill of Lading | Title document for sea shipments |
| AWB | Airway Bill | Receipt for air shipments |
| LC | Letter of Credit | Bank guarantee of payment |
| FOB | Free on Board | Price up to Indian port loading |
| CIF | Cost Insurance Freight | Price including freight + insurance |
| LUT | Letter of Undertaking | GST zero-rating annual declaration |
| FIRC | Foreign Inward Remittance Certificate | Proof of export payment received |
| HS Code | Harmonised System Code | International product classification |
| LEO | Let Export Order | Customs green light to ship |
| RoDTEP | Remission of Duties and Taxes on Exported Products | Export embedded tax refund scheme |
| EOU | Export Oriented Unit | Factory committed to exporting |
| SEZ | Special Economic Zone | Special export zone with tax benefits |
| ECGC | Export Credit Guarantee Corporation | Export payment insurance |
| MOQ | Minimum Order Quantity | Minimum you'll sell per order |
| FCL | Full Container Load | Entire container for your goods |
| LCL | Less than Container Load | Shared container shipment |
| TT | Telegraphic Transfer | Bank wire transfer |
| FEMA | Foreign Exchange Management Act | Law governing export forex receipts |
| EEFC | Exchange Earners' Foreign Currency Account | Hold forex earnings in original currency |
Final Thoughts
You don't need to memorise all 60 terms on day one. Bookmark this page. Come back every time you hear something unfamiliar. Over time — after a few inquiries, a few Proforma Invoices, a few shipments — these terms become second nature.
Ready to go deeper? Read our full guide on how the export process works step by step, or start with getting your IEC code — the first real step in your export journey.
