What is AD Code? Full Form, Meaning, and Importance in Exports

If you plan to export goods from India, understanding the AD Code is crucial. This unique identifier is a legal requirement for all exporters. It helps ensure smooth customs clearance and compliance with foreign exchange laws. In this guide from  EximPe, we will discuss the AD Code’s full form, meaning, importance, and how to obtain and register it for your export business.

What is AD Code? (AD Code Full Form & Meaning)

AD Code stands for Authorised Dealer Code. It is a unique 14-digit code issued by the bank where an exporter has a current account. Only banks approved by the Reserve Bank of India (RBI) to handle foreign exchange can issue this code. The AD Code connects the exporter’s bank account with customs authorities, allowing legal and traceable international trade transactions.

Think of the AD Code as a link between your export shipments and your bank account, where you will receive foreign currency remittances. It serves as an important identifier for customs authorities to ensure that foreign exchange transactions from your exports are legitimate and handled properly.

AD Code Means

• AD Code is a regulatory identifier for exporters.
• It ensures that all export proceeds are routed through authorized banking channels.
• It is mandatory for generating shipping bills and clearing goods through customs.

Why is AD Code Important in Exports?

1. Mandatory for Customs Clearance

Exporters must register their AD Code at the port or airport from where they ship goods. Without it, they cannot generate a shipping bill, which is a key document for customs clearance. This means your goods cannot leave the country legally without an AD Code.

2. Ensures Legal Foreign Exchange Transactions

The AD Code guarantees that all export payments go through legitimate banking channels. This helps the government monitor foreign currency inflows and outflows, preventing unauthorized transactions.

3. Access to Government Benefits

Exporters with a registered AD Code can receive government incentives, duty drawbacks, and GST refunds directly into their linked bank account, making the process easier and reducing paperwork.

4. Facilitates Trade Documentation

The AD Code is necessary for key export documents like the Shipping Bill, Bill of Lading, and Letter of Credit. This ensures transparency and compliance in international trade.

5. Lifetime Validity

Once registered, the AD Code is valid for the lifetime of the exporter’s business at that port. This remains true unless there are changes in the business or banking details that require updates.

How to Obtain and Register an AD Code

Step 1: Open a Current Account with an Authorized Dealer Bank

Choose a bank authorized by the RBI to deal in foreign exchange. This bank will issue your AD Code.

Step 2: Apply for the AD Code

Submit a written application to your bank, along with required documents such as:

• Importer Exporter Code (IEC) certificate
• PAN card
• Business registration certificate
• Address proof
• Bank account details

Step 3: Obtain the AD Code Letter

After examining your documents, the bank will issue a 14-digit AD Code on its letterhead, in a format provided by the Directorate General of Foreign Trade (DGFT). 

Step 4: Register the AD Code with Customs

Present the AD Code letter to the customs office at each port or airport from which you plan to export. Registration is specific to each port. If you export from multiple ports, you must register the AD Code at each location. 

Step 5: Complete Online Registration (If Applicable)

Some ports allow online registration of the AD Code through the ICEGATE portal. You can upload scanned copies of your documents and follow the portal’s instructions to complete the process. 

Documents Required for AD Code Registration

• Importer Exporter Code (IEC)
• PAN card
• Bank certificate or AD Code letter
• GST registration certificate (if applicable)
• Address proof of business
• Authorization letter (if required)

Key Points to Remember

• AD Code is mandatory for all exporters in India.
• It is a 14-digit code issued by the exporter’s bank.
• Register the code at each port you export from.
• No AD Code = No shipping bill = No exports.
• It ensures legal, traceable, and compliant export transactions.

AD Code Fees

Usually, there is no government fee for registering the AD Code on the ICEGATE portal. However, your bank may charge a small fee for issuing the AD Code letter or for processing the related documents. It is best to check with your bank about any potential fees.

AD Code vs. IEC Code: A Quick Comparison

It's common for new exporters to confuse the AD Code with the IEC Code. While both are mandatory for exports, they serve distinct purposes:

Simply put, the AD Code guarantees that the financial aspects of your trade are handled appropriately and that your goods can physically clear customs at a particular port, while the IEC gives you permission to trade internationally. Both are essential.

Conclusion

An essential but frequently overlooked part of India's export ecosystem is the AD Code. Any serious exporter must have a thorough understanding of the AD Code, its complete form, and its significant role in exports. You can create a strong basis for easy customs clearance, effective foreign exchange management, and guaranteed access to worthwhile export incentives by obtaining your AD Code from your bank and carefully registering it with Customs at all pertinent ports. Don't let your path to international success be derailed by a missing AD Code!

FAQs

1. What is the full form of AD Code?

AD Code stands for Authorised Dealer Code.

2. Why is AD Code required for exports?

It is required for customs clearance of export shipments and to receive foreign currency in your bank account.

3. Who issues AD Code in India?

AD Code is issued by your bank that is authorised by RBI to deal in foreign exchange transactions.

4. Is AD Code and IEC the same?

No, IEC (Import Export Code) is issued by DGFT while AD Code is issued by your bank.

5. How many digits is an AD Code?

It is a 14-digit numerical code.

6. Is AD Code mandatory for export incentives?

Yes, it is mandatory to claim any duty drawback or export incentives from the government.

7. Can I use one AD Code for multiple ports?

Yes, but you must register the same AD Code separately with each port’s customs office.

8. How to check AD Code registration status?

You can check it on the ICEGATE portal after your CHA or customs broker files the registration request.

9. What happens if I export without AD Code registration?

Your shipping bill will not be processed, and customs clearance will not happen.

10. How long does it take to register AD Code with customs?

Typically, it takes 1-3 working days depending on the port and documentation.