Summary of recent update from PayPal is - Indians will be able to withdraw funds to Indian local banks provided they have 'Export Code' which they can provide at the time of withdrawal.
I had no idea what Export code is? So started searching things on what it is, how to get it, and the process behind getting it. So here I am with the clarification as much as I have currently.
What is Importer Exporter Code or IEC?
IEC is a 10 digit numeric code issued to Indian companies by DGFT â€“ Director General of Foreign Trade, Ministry of Commerce, Government of India and is valid for rest of your life. This means it is just a one time process.
How to Get your IEC?
As I asked some of my friends and relatives I can sense that this is a very simple process.
- Download IEC application form is available for download on dgft.gov.in or can even get it from offices of Director General of Foreign Trade.
- Filling the form is easy. If you are an individual freelancer you should be doing this as Proprietor company and so you will just need a bank certificate, PAN card, Date of birth certificate and a Demand Draft.
- You can submit the application in person to your regional DGFT office and check the current status of your application on dgft.gov.in
What is an Approximate Fee for getting IEC?
I still have not applied for IEC myself and is waiting for the final update from PayPal but as far as what I have inquired it is around rupees 250 only. Many sites and other officials (read dalals) who claim to get IEC in a week for 5000 bucks is all crap and actually you can get it in 1 week if you do yourself for Rs 250.
If you use courier to send your application charges for courier may be added to 250 bucks.
If you have more questions shoot them in comments and I will try to get answers from people I know who are in the export business.
Update: more details are available here â€“ PayPal will henceforth require a â€˜purpose codeâ€™ which is different from the Import Export Code mentioned above. This code helps PayPal furnish information that may be required by the Reserve Bank of India to identify the nature of transaction.