What Is Export/Import Policy Of India And More.
The art of trade is as old as humanity itself. For as long as human beings have walked this Earth, they have bought and sold items, distributing them as they travelled across the planet. We would not be having chai every morning if it were not traded from China and Ireland would have never tasted potatoes if it weren't for the import-export business either.
As time progressed, so did our ability to trade goods across the globe. In today's date, it is practically impossible to look in a direction and not spot something that was imported from another country. Your American branded shirts that have the "made in China" tags are prime examples of this.
The world has become more interwoven and interdependent than it ever was before. The business of trade is responsible for 59.36% of the world’s annual GDP, establishing the import-export business as one of the most profitable business avenues ever to exist.
What Are India's Imports Exports?
India as such is a country that relies heavily on imports and exports. A statistic measured by the world bank in 2014 showed that India’s total trade, an aggregate of import and export of goods and services, was equivalent to about 50% of its GDP which was higher than the aggregate of both China and the United States of America.
As a country, we rely heavily on foreign investors and buyers while also being heavily dependent on foreign goods. The import-export business in India has had quite a colourful past, and it continues to be one of the highest paying, most versatile sectors in the country.
How To Start An Import Export Business In India?
Step 1: Complete Registration Process for your Import and Export Entrepreneurship
- There are quite a few procedures involved in registering your trading business under the Indian government.
- These involve quite a few documents, but none are as vital as the IEC code, or the Import Export Code, a ten digits long registration code issued by the Indian government's Directorate General of Foreign Trade (DGFT).
- Once you’ve registered your business firm, and received your IEC code, you will need to apply for the Registration Cum Membership Certificate which will allow you to avail the benefits of the exports promotion council which will get you directly in touch with potential buyers.
Step 2: Choose Your Export Products
- This is perhaps the most important part of the process as this is what your entire import-export business will rely upon.
- You need to be extremely careful while picking your export product, being mindful of international demands, trade-related taxes, regulations, market, export trends, et cetera.
Step 3: Search Your Target Market
- You need to now look for a region around the world that is both in need and in shortage of the product you'll be trading.
- You need to make sure to look for optimum profitability while scouting for the perfect trade market for your goods or services.
- A few other factors should also be kept in mind, such as trade barriers, taxes, the market union in the region, the political climate, et cetera.
Step 4: Setting Up A Customer Base
- Congratulations! You have found the perfect product and the best-suited region for your product.
- You now need to set up your customer base in that location.
- A well-established customer base will act as a guarantor, safeguarding your investments as you brave the waters of international trading.
- Looking for your target audience in a foreign location can be quite a daunting task, but it is nothing that can not be achieved through a well-planned and properly executed marketing scheme.
- You will need to partner up with marketing bodies from that region to best optimise your target audience.
- This is the step that either makes or breaks trading ambitions around the world.
Step 5: Secure Your Investments And Take Off
- No matter how well planned your business scheme is or how desperate your target market is for your offerings, your company will not take off without proper financing.
- You need to secure your funds now and put your plan into motion, packaging, shipping, and distributing your goods as you go.
- Several banks will be able to help you with this crucial stage of establishing your worldwide import-export business.
- Once you have finalised your funds, you can start right off.
- The sky is the limit for you now.
How To Start Import And Export Business In India From Home/Office?
The import and export business in India has become quite fruitful nowadays. Since the beginning of eCommerce, small businesses in India have been able to reach out to a global audience. While the import-export business sounds dubious there are certainly other factors involved that need to be monitored before getting inside the trade.
More and more entrepreneurs are venturing off to newer businesses at the comfort of their home or just working around modern co-working spaces. Henceforth, increasingly giving the import and export business in India a subtle lift or nudge even amidst the pandemic. Some other basic factors to keep in mind while getting started on the import-export business are-
- Keep up-to-date with the latest and mandatory registrations.
- Possess original government-mandated documents.
- Choose & be clear with firm/business type- Pvt ltd, sole proprietorship, LLP, or silent partnership.
- Keep your options open to hiring a logistics company.
- Check rules & regulations on international shipping plus deliveries.
- Get in touch with a Customs Clearing Agent or agencies for international/domestic shipping-related errors/downfalls.
Import Export Business Opportunities for Entrepreneurs
Let us talk about some examples of popular import-export businesses in India. Online Marketplace Investments are a big Yes considering the trend nowadays. This helps you get enlisted as a vendor and market all over the world. Exploring and Discovering things about the International market gives you an edge.
Suppose, you have got woollen wear and other winter-based clothing line, then with a data of cold countries, sell and build your market internationally. Promoting/Selling Other Brand Products- That's another way how the import-export business works. It could also be a booming business opportunity whilst connecting you to international sellers and manufacturers. Example- Pharmaceuticals, Leather Items, Tobacco, Tea, etc.
What Are The Major Problems Of India's Export Sector?
Apart from the basics of the business, there are a handful of factors that can either make or break your import and export business. These are:
1. Trade Regulations Around The Globe
It should go without saying that trade regulations around the world can severely hinder your import and export business. It becomes very impractical to sell your goods and services to a region that imposes heavy taxes on trade, regardless of the state of the market in that region, as these taxes will eventually end up eating out of your profits. It’s always better to opt for a more convenient and easily available market.
2. Effective Marketing
It can be a challenging task to market your goods and services to people of different cultures and linguistic habits. Marketing to foreigners, thus, becomes quite the challenge. In such a scenario, the ideal thing to do is to find the best marketing company to communicate better with your customers. Finding the right marketing partner for your target audience can directly translate to a very fruitful import and export business.
3. Market Competition
Given how easily accessible worldwide transportation has become over the past century, it comes as no surprise that thousands of companies are putting the pedal to the metal to dominate the global scene. Taking this into consideration, estimating potential competition becomes an important part of establishing a well-oiled import and export plan across the seas.
4. Political Climate
The political conditions of your target region, if ignored, can almost entirely sabotage any of your trade plans. For instance, a few communist countries do not allow companies from other parts of the world to export to their country. This renders that entire region unavailable. Another such situation is that of a war-torn region. Exporting to an area under attack can be detrimental to your business as it not only poses the risk of your goods getting destroyed but also puts the lives of your distribution team at risk. The diplomatic stance between your country and the country that you’re trading to can also play a huge role as evident in the case of Chinese goods getting banned in India due to the strained relationship between the two countries right now.
5. The Mood Of The Audience
Finally, it is of utmost importance to please your customers and to keep them happy. There have been numerous cases of companies losing millions of dollars overnight due to customer dissatisfaction. On the other hand, maintaining a pleasant relationship with your customer base can vastly improve brand loyalty in that region, boosting your profits in the process.
What Are The Documents Required For The Export From India?
Ans- Here's a list of documents required to export goods from India:
- Export Documents- As per Foreign Trade Policy (FTP) you need to have your Bill of Lading, Lorry Receipt, Postal Receipt, Railway Receipt & Airway Bill.
- Packing List plus Commercial Invoice, under the Indian Customs Act by the Central Board of Excise and Customs circular.
- Bill of Export
- Postal Bill of Export
- Shipping Bills
Other documents for Export Shipping
- Commercial Invoices
- Proforma Invoice
- Purchase Order
- Export Order
- Certificate Of Origin
- Packing List
- Bill Of Exchange
- Quality Check Inspection
- Letter of Credit
- Sanitary & Fumigation Certificates
- Mate's Receipt
- Marine Insurance Policy
- BL & AWB
- Exporters FEMA (Foreign Exchange Management Act) Declaration
- Export General Manifest
- LEO or Let Export Order
- Shipping Bills
Import Export India Key Takeaways
The seas of trade might be quite treacherous at times but almost always result in great stories of success if handled well. The world of trading is a very robust and profitable one, though it can be quite volatile at times.
There is no limit to what can be achieved through an efficient establishment of a well-planned trade route if it is coupled with the right marketing strategies, and there is no right time to start a trading business. Trade has existed for a long time, and it will continue to do so as well. Henceforth, the future of import export business in India will keep getting brighter and better with time.
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Q. What is the procedure for import and export in India?
Ans- These are the basic steps to begin import and export business in India:
- Obtain your IEC
- Assure legal agreements under various trade laws
- Obtain mandatory import and export business licenses
- File Bill of Entry with other compulsory documents
- Beware of import duty rates during stock clearance.
Q. What is the procedure of export from India?
Ans- These are the export procedure steps from India:
- Indian merchants send shipment advice to the importer so the importer gets notified about the goods dispatch.
- While the aforementioned exporter sends a copy of the packing list.
- It is a non-negotiable copy of the Bill of Lading, along with a commercial invoice plus the advice note.
Q. What is import and export documentation procedures?
Ans- Some of the standard procedure for import and export activities include-
- Timely Documentation
- Legal Compliances
- Transport Warehousing
- Shipping of Goods track
- Customs Clearance
- International taxes
- Unloading of goods
- Goods release
Q. What is the main export of India?
Ans- Some of the major export products in India include-
- Petroleum-based products
- Precious gemstones
- Indian jewellery
- Industrial Machineries
- Iron & Steel
- Tea & Coffee
- Meat- Beef, Pork, etc.
Q. Which country is best for export from India?
Ans- Some of the top countries where Indian exports happen are-
- United Arab Emirates
- Saudi Arab
Q. What identification is required to start an import and export business?
Ans- A PAN card is mandatory when starting your own trading business as all registered business entities are required to apply for a PAN card with the Indian Tax Department. A passport will also be required to start an overseas import and export business.
Q. How badly has the import and export business in India been affected by the COVID-19 pandemic?
Ans- Just like any other business avenue, trade has also been deeply affected by COVID-19 in India. Ever since 2004, almost all manufacturing companies in India had begun to depend on foreign inputs for their finished products deeply.
The sudden halt on imports from other countries like China, Australia, and Japan due to COVID-19 and other rising political tensions have cost terribly to the import and export business in India. Our exports have also dwindled following the global outbreak of coronavirus pandemic.
Q. Is it safe to invest in import export business in India or trades during the pandemic?
Ans- While it is true that COVID had brought a sudden halt to the import-export business in India, it has been recovering. Trade routes that had been closed off have opened again and companies have started functioning at full strength with a lot of help from modern technology.
Given that trade contributions have been on the rise since the increment of the pandemic, it is not just safe but also an especially profitable time to invest in trades and other import-export business.