India is the land of opportunities. India has rich resources and large scale potential growth in Petroleum products, Pearl, Semi-precise Stones, Telecom Instruments, Agricultural products and etc. India’s exports growing by 1.43% from $35.2B to $35.7B between January 2022 and January 2023.
Starting a new import export business is a challenging task for new business owners and small industrialists. Whenever a new entrepreneur enters the world of international trade business, there are thousands of questions in his mind like how to start, documentation required, government policies, how to choose country and product in import export business.
This article gives you complete guidance to start import export business step by step. Follow these steps and you are ready to start your journey in import-export business.
About Import Export
Import export business is mainly the expansion of business boundaries from domestic market to global market. An import export business is a company that supplies goods, commodities and services across a foreign border.
In other words, a company whose products are sell or buy across the geographical border of a country via ship, aircraft and cargo service, cover under import export business.
How to start Import Export Business
If you are interested to start a global trade business, there are many consideration before starting or enter in this business. For this business you must have the business background or a consultant, international relations with buyer or suppliers and global finance.
Here we are sharing some tips and steps to start a successful import export business, they are:
Select a Product for Import Export
The first step is pick a product or industry based on your passion or interest and you could think to sell it in international market.
Here we are sharing the tips to select top 20 products of targeting country, such like
- Select 5 most selling products
- Select 5 brand launching products
- Select 5 raw materials products
- Select 5 spare parts product
Make sure your product quality meets the standard of targeting country.
Research the target county and market well
Exporting is not easy as we think. A depth knowledge of produce and market research required to cover the market.
For example, there are many countries that’s have the high demand of textile, FMCG, footwear, pharmaceutical and other products but they can’t full-fill it. So they import or export these items from another country.
That’s a good opportunity for many countries have high demand for products (in terms of textile, FMCG, footwear, pharmaceutical, electronic and electronics, jewelry and handicraft), but they do not have enough abundance of these products for their people.
So they import these products from another country. Also try to export these demanded products for high profit.
Make connection with buyers and suppliers
To get the success in import export business, it is essential to keep a healthy relationship with a foreign buyers and suppliers for easy material and cash flow.
Some effective ways to find the right buyer for your product are trade fairs, buyer-seller meets, exhibitions, B2B portals and web browsing. Indian missions of EPCs abroad, foreign chambers of commerce can also be helpful. Creating a multilingual website with product list, prices, payment terms and other related information will also help.
After determining the buyers interest in sample product you can negotiate with them for the cost.
Providing customized samples as per the demands of overseas buyers helps in securing export orders. As per FTP – 2015-2020, export of technical samples of freely exportable goods and bonafide merchandise will be permitted without any limit.
Pricing / Costing
Product pricing is important in order to attract the attention of buyers and boost sales, keeping in mind the international competition.
Gold of establishing export costing should be to sell maximum quantity at competitive price with maximum profit margin. Preparing an export costing sheet for each product is advisable.
Covering Risk through ECGC:
International trade involves payment risk due to bankruptcy of the buyer/country. These risks can be covered by a suitable policy of Export Credit Guarantee Corporation Limited (ECGC). Where the buyer is placing an order without making advance payment or opening a letter of credit, it is advisable to obtain a credit limit from ECGC for the overseas buyer to avoid the risk of non-payment.
Documents Required to Start Import Export Business in India
The mandatory documents for import and export depending on the Exim Policy, are:
- Company registration certificate: A legal document that ensures that a business or organization has been registered as a business, explaining the business and the terms of incorporation.
- GST certificate: A valid document as a proof of being registered under GST law in India. Any business in India whose turnover exceeds the prescribed limit for GST registration is required to be registered under GST.
- Company PAN card: PAN card is a digital system that tracks tax related transactions of an individual or company through a Permanent Account Number.
- Current bank account: A bank account is maintained and used only for business.
- IEC: IEC full form is “Import Export Code” issued by the Government of India. 10 digit code issued by the Director General of Foreign Trade (DGFT), Department of Commerce.
- Registration cum membership certificate: It is issued by the Export Promotion Council (EPC) to the exporter. It certifies that the exports are government approved products.
*MSME certificate – Only applicable with firm registration.
*Additional certificates required based on product selection.
Top-performing Import Export industries in India
India is one of the fastest growing economies worldwide, with a wide range of industries that contribute significantly to its GDP. Major exports on India, are:
- Sports goods
- Handicraft & home décor
- Agriculture Goods
- Electric & Electronics &
- Home Kitchen Appliances
It is a good decision to enter in import and export from India. This business expands the reach of your product to the international market and can generate higher profits as compared to the domestic market. Following are the advantages for starting this business in India:
- India’s large population creates a large market for goods and services.
- India is the largest developing country in terms of exports, and has a vision to increase it to 1 trillion in 2030.
- India has a supportive government and infrastructure environment.
- India is strategically located, has access to export product to markets in Asia, Africa and the Middle East.
Question: What is an export license?
Answer: An export license is a government-issued document that authorizes your company to carry out certain export transactions. The relevant agency reviews the export transaction before issuing an export license.
Question: What documents do I need to import goods?
Answer: The types of documents you will need to import goods will vary depending on the country you are importing the product from. In the United States, import licenses and permits may be required, but a Customs and Border Protection entry form is always required.
Question: What export business is profitable to start in India?
Answer: The profit of export business depends on the product selection, country, market size and many more.
About Dr. Opesh Singh:
He made the inception of OPESH Group possible in 2005. At a very young age of 21 years, he started his venture in the Drilling and Mining sectors, in India. Soon, he approached global markets, made his mark quite successfully in African Markets, at the age of 27, and is continuously adding feathers in his cap since last 17 years. Read more…
If you want to start import export business in India, then feel free to contact us at +91-8094607111.