IEC is mandatory for any cross-border trade — exports of goods, exports of services to foreign clients (in some cases), and imports. It's a one-time registration via the DGFT portal, takes 1-3 days, and lasts indefinitely (no renewal).
For Indian SMBs exporting to foreign customers (D2C international shipping, freelance services, SaaS to global buyers), IEC enables: foreign currency receipts via banks, GST refund on zero-rated supplies, MEIS/RoDTEP export incentives, and customs clearance.
Without IEC, banks won't credit foreign currency receipts to your account, and shipping aggregators (Shiprocket, DHL) won't process export shipments.