Before starting an export business in India, it’s crucial to understand the basics of what an export business entails.
In this section, we’ll cover what export and import mean, their advantages, how to launch an export business, and the necessary documents required for exporting.
What are Exports and Imports?
Exporting is when a company sells its stuff to other countries. It’s like sending things you make or provide to different places across the globe. Importing, on the other hand, is when you buy things from different countries and bring them into your own country, which is called an import.
What are the advantages of launching an export business?
Exporting has its privileges:
1. Increased Market Potential: Selling in different locations helps lower the risks for your business. Exporting lets you sell to bigger markets outside your own country, which could attract more customers and bring more money in.
2. Higher Profit Margins: Some markets may be willing to pay higher prices for your products than what you can obtain locally, leading to increased profits. Making more products can help you save money and make more profit.
3. Diversification of the Customer Base: Selling internationally means you’re not relying too much on how well one country’s economy is doing. This diversification helps lower the risk if your local market goes through tough times.
4. Brand Enhancement: Successfully exporting your products can improve your brand’s reputation and credibility, both domestically and internationally.
5. Economies of Scale: Bigger markets might help you achieve economies of scale in production, distribution, and marketing, making more profits.
Learning Opportunities: Engaging in international trade shows you different cultures, business practices, and regulatory environments, providing valuable learning exposures that can benefit your business in different ways.
Exporting Goods from India: A Guide
Exporting goods from India involves various steps and regulations. Here’s a short and simple guide on how to export from India:
1. Register as an exporter: Obtain an Importer-Exporter Code (IEC) from the Directorate General of Foreign Trade (DGFT).
2. Identify your product and market: Research potential markets for your business and demand for your product. And Ensure your product complies fully with international standards.
3. Find different buyers: Participate in trade fairs, or work with export promotion councils to get different buyers.
4. Discuss Conditions: Agree on a price, payment terms, and delivery method with the buyer.
5. Get export documents: Commercial invoice, packing list, certificate of origin, bill of lading/airway bill. And Obtain any mandatory licences or permits.
6. Pack and label goods: Follow international packaging and labelling standards according to the exporting or importing countries.
7. Arrange shipping: Choose a freight forwarder or shipping line. And Decide on sea, air, or land transport to export goods.
8. Customs clearance: File shipping bill with custom department and Pay applicable duties and taxes.
9. Receive payment: Use methods like letter of credit (LC), wire transfer, or advance payment.
10. Claim export incentives: Apply for different schemes like Duty Drawback, EPCG, or MEIS.
Remember to comply with India’s Foreign Trade Policy and any product-specific regulations. For a smoother process, consider seeking help from export consultants or agents with the JustStart team.
What is the process to launching an export business?
Launching an export business requires careful planning, preparation, and execution, but can be rewarding in terms of growth, profitability, and global expansion opportunities.
1. Product identification: Assess whether your products or services need to be adapted or modified to meet the requirements and preferences of the target export markets.
2. Market identification: Identify potential export markets for your products or services. Consider factors such as demand, competition, regulatory compliances, and logistical considerations.
3. Set up your business: Create your company as a private limited company, LLP, or another type of business entity.
4. Get the firm’s PAN: Acquire the PAN number for your business.
5. Opening a bank account: It’s essential to open a bank account to start an export business.
6. GST Certificate: You need a GST certificate to access benefits related to export and import duties.
7. Get an IEC certificate: The Importer-Exporter Code (IEC) is a crucial identification number needed for both importing and exporting. Anyone involved in the export or import businesses must have an IEC number issued by the DGFT.
8. RCMC Certificate: The RCMC (Registration-cum-Membership Certificate) is a document issued to businesses by authorized organizations, confirming their membership in specific export promotion councils or boards. It is essential for availing benefits and incentives related to exports. Get an RCMC certificate to avail yourself of numerous benefits related to exports.
9. Certificate of Origin: Get the certificate of origin, as the certificate is often required by customs officials in the importing country to determine tariffs, quotas, and other trade regulations applicable to the imported goods. It helps prevent fraud, ensure compliance with trade agreements, and facilitate the smooth clearance of goods through customs.
Conclusion
To kickstart an export business in India, you need to plan well, do your homework, and follow the rules. It’s all about understanding how global trade works, finding what products are in demand, and making sure you meet all the legal requirements.
By doing this, you can enter into the vast opportunities available, sell Indian products worldwide, and contribute to the country’s economic growth.
The JustStart team can assist with export business and prepare the necessary documentation for exporting, such as invoices, packing lists, certificates of origin, and shipping documents.
