How to start an Import Export business in India? As a new
entrepreneur, it is important that you know about the procedure and
documentation process required to start your own Export business in India. The
export and import business has become quite lucrative in India since the inception of E-Commerce.
Successful importers and exporters started by creating
their import-export business from home. Getting into the import-export business can
make a significant profit with low investment.
Import-export businesses can be
very profitable in the long run. Even if the process itself is not a
complicated one, it can be a challenging one if you don’t know how to create it
most beneficially.
Also Read: EXPORT BUSINESS - Solution for Better Income
Also Read: EXPORT BUSINESS - Solution for Better Income
Export in itself is a very wide concept and a lot of
preparations are required by an exporter before starting an export business.
To start an export business, the following steps may
be followed:
BASIC STEPS
FOR EXPORT BUSINESS IN INDIA
1.NAME OF THE
COMPANY
Set up the company with an attractive name and logo.
2.TYPE OF
ORGANIZATIONS
A.PROPRIETOR
B.PARTNERSHIP
C.LIMITED COMPANY
3.GET PAN CARD
It is
necessary for every exporter and importer to obtain a PAN from the Income Tax
Department.
(To
apply PAN Card click here )
4.CURRENT
ACCOUNT IN THE NAME OF THE COMPANY
A current account with a bank authorized to deal in
Foreign Exchange should be opened.
5.GET
IMPORT-EXPORT CODE(IE-CODE)
An application for IEC is filed online at www.dgft.gov.in as per ANF 2A, online
payment of application fee of Rs. 500/- through net Banking or credit/debit
card is made along with requisite documents as mentioned in the application
form.
6.JOIN AS A
MEMBER IN EPC(EXPORT PROMOTION COUNCILS)
Exporters are required to obtain RCMC granted by the
concerned Export Promotion Councils/ FIEO/Commodity Boards/ Authorities.
List of Export Promotional Councils in India-click below
7.SELECT
PRODUCT TO EXPORT
All items are freely exportable except a few items
appearing in the prohibited/ restricted list.
For example:-
Top Agriculture
Products Export List – 2016 – 2017 – 2018
- Basmati
Rice
- Non-Basmati
Rice
- Fresh
Vegetables
- Groundnut
- Fresh
Fruits
- Processed
Fruits & Juices
- Cereal
Preparations
- Guar gum
- Misc
Processed Items
- Alcoholic
Beverages
- Processed
Vegetables
- Dairy
Products
- Other
Cereals
- Pulses
- Cocoa
Products
- Sheep/Goat
Meat
- Milled
Products
- Floriculture
- Poultry
Products
- Fruits
/ Vegetable Seeds
- Wheat
- Animal
Casings
- Processed
Meat
- Other
Meat
8.IDENTIFY THE
IMPORTERS
An overseas the market should be selected after research covering market size, competition,
quality requirements, payment terms, etc.
Participation
in trade fairs, buyer-seller meets, exhibitions, B2B portals, web browsing are
an effective tool to find buyers. EPC’s, Indian Missions abroad, overseas
chambers of commerce can also be helpful.
9) Sampling
Providing customized samples as per the demands of Foreign
buyers help in getting export orders.
10) Pricing/Costing
The price should be worked out taking into consideration all
expenses from sampling to the realization of export proceeds on the basis of terms
of sale i.e. Free on Board (FOB), Cost, Insurance & Freight (CIF), Cost
& Freight(C&F), etc.
11) Negotiation with Buyers
After deciding the buyer’s interest in the product, future
prospects and continuity in business, make some negotiation in price,
allowance, quality, and quantity of the products.
12) Contact ECGC
International trade involves payment risks due to buyer/
Country insolvency. These risks can be covered by an appropriate Policy from
Export Credit Guarantee Corporation Ltd (ECGC).
Where the buyer is placing
order without making the advance payment or opening letter of Credit, it is
advisable to procure credit limit on the foreign buyer from ECGC to protect
against the risk of non-payment.
(To know more about ECGC click here)
Processing
an Export Order
i. Confirmation
of order
On receiving
an export order, it should be examined carefully in respect of items,
specification, payment conditions, packaging, delivery schedule, etc. and then
the order should be confirmed.
ii. Procurement
of Goods
After
confirmation of the export order, immediate steps may be taken for
procurement/manufacture of the goods meant for export.
iii. Quality
Control
Some
products like food and agriculture, fishery, certain chemicals, etc. are
subject to compulsory pre-shipment inspection. Foreign buyers may also lay down
their own standards/specifications and insist upon inspection by their
own nominated agencies.
iv.
Finance
Exporters
are eligible to obtain pre-shipment and post-shipment finance from Commercial
Banks at concessional interest rates to complete the export transaction.
Contact your
bank for further details.
v.
Labeling, Packaging, Packing, and Marking
The export
goods should be labeled, packaged and packed strictly as per the buyer’s
specific instructions.
Good packing
helps easy handling, maximum loading, reducing shipping costs and to ensuring
safety and standard of the cargo. Marking such as an address, package
number, port and place of destination, weight, handling instructions, etc.
provides identification and information about cargo packed.
vi.
Insurance
Marine the insurance policy covers risks of loss or damage to the goods during the while
the goods are in transit.
vii.
Delivery
It is an important feature of export and the exporter must adhere to the delivery schedule.
Planning should be there to let nothing stand in the way of fast and efficient
delivery.
viii. Customs
House Agents
Exporters
may avail services of Customs House Agents licensed by the Commissioner of
Customs. They are professionals and facilitate work connected with the clearance of cargo from Customs.
ix. Documentation
· Bill
of Lading/ Airway bill
· Commercial
invoice cum packing list
· shipping
bill/ bill of export/ bill of entry (for imports)
(Other
documents like certificate of origin, inspection certificate, etc may be
required as per the case.)
After
shipment, it is obligatory to present the documents to the Bank within 21 days
for onward dispatch to the foreign Bank for arranging payment. Documents
should be drawn under Collection/Purchase/Negotiation under L/C as the case may
be, along with the following documents
- Bill
of Exchange
- Letter
of Credit (if a shipment is under L/C)
- Invoice
- Packing
List
- Airway
Bill/Bill of Lading
- Declaration
under Foreign Exchange
- Certificate
of Origin/GSP
- Inspection
Certificate, wherever necessary
- Any
other documents as required in the L/C or by the buyer or statutorily.
xi. Realization
of Export Proceeds
Export
proceeds should be realized in 9 months.
Also Read:
Top 15 Future Business Ideas For 2020-2030
What are the Benefits of Importing and Exporting Products?
Also Read:
Top 15 Future Business Ideas For 2020-2030
What are the Benefits of Importing and Exporting Products?
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