How to start Export Business in India | 7 Step Guide for Beginners

 

In India, the Modi government's Make in India initiative has resulted in favourable shifts in imports and exports. Which resulted in more and more people looking for how to start Export Business in India.

India's exports increased by 9.98% in FY 2017-18. In the fiscal year 2016-17, the total value of goods exported was $ 275,852 million, while in the fiscal year 2017-18, it was $ 303,376 million.

In light of the country's current economic situation, beginning an export firm can be incredibly profitable. A step-by-step approach to beginning an export business in India is provided here.

 

7 Steps to start export business in India

 

Step 1 - Business Plan 

It is critical to creating a firm plan and a plan of action before launching any business. It is critical for anyone launching an export firm to thoroughly cover the following aspects:

• Exportable product or service
• Sourcing raw materials for the production or delivery of a product or service
• Input cost estimation
• Working capital is needed.
• Need for long-term capital (loan or equity)
• Exporting requires a licence or registration.
• market research
• Customer research
• Logistics and transportation

After gathering the following information and estimating profitability, the Entrepreneur can begin the steps necessary to obtain the relevant registrations and licences.

 

Step 2 - Business Registration

Choosing and registering the business entity is the first step in any plan to start Export Business in India

When starting an export firm, it is recommended that the entrepreneur goes for a Private Limited Company Registration Online. 

The promoters of a business can benefit from limited liability protection, transferability, and easy access to bank loans, among other benefits. 

Furthermore, working with a registered corporate organisation in India is preferred or required by overseas consumers or clients. 

Unregistered businesses are mostly proprietorships and partnership firms. 

As a result, forming a Private Limited Company is required when launching an export firm.

 

Step 3 - Registration for Taxes

Obtain a tax registration in the name of the business entity after completing the business registration process. 

The PAN, or Permanent Account Number, is the first tax registration that any new business must complete. 

After getting the PAN, the company can create a bank account and begin the loan application process, as well as equipment and raw material purchases, to begin operations. 

GST is not charged on goods or services exported from India. 

However, because the company would be purchasing raw materials from outside the state, GST registration and service tax registration may be required to bill domestic clients. 

As a result, it is advised that after creating a bank account, the essential actions be performed to obtain the appropriate tax registration.

 

Step 4 - Import/Export Code (IE Code)

An Import Export Code, or IE Code, is required for any company exporting goods from India. 

Businesses are given a unique IE Code by the Directorate General of Foreign Trade (DGFT) to track imports and exports from India. 

For getting an IE Code in the name of a firm, the following documents must be available:

In the case of the applicant is a Company/LLP/Partnership Firm:

• Name of the Company/LLP/Partnership Firm
• Certificate of Incorporation / Partnership Deed
• MOA & AOA of the Company, in the case of LLP / Partnership Firm, the Partnership Deed
• Directors/Partners Identity Proof
• Directors/Partners Address Proof
• List of Directors / Partners
• Bank Reference Letter

In case of the applicant is a Person or Proprietorship

• Name of the Proprietorship / Individual
• Identity Proof
• Address Proof
• Bank Reference Letter

 

Step 5 - Other Registrations or Licenses

In most states, the preceding registrations and permits may be sufficient to launch an export firm.

 Additional registration, such as a shop and establishment act licence, factory licence, ESI / PF registration, and so on, maybe necessary depending on the state. 

In addition, if the company plans to manufacture and export things such as food, FSSAI approval may be necessary.

 

RCMC Registration

Export Promotional Councils (EPCs) or Commodity Boards of India award RCMC (Registration Cum Membership Certificate) membership certificates that are valid for five years. 

It serves as documentation that your company has been registered with the council/board and is useful when seeking benefits or concessions under the Foreign Trade Policy, such as duty drawback, duty credit scrips, and so on.

 

ECGC Registration

ECGC provides coverage. Dealing with an international client exposes you to the danger of the buyer/country going bankrupt. 

These payment risks can be mitigated by ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd), a wholly-owned subsidiary of the Indian government that provides export credit insurance to Indian exporters through the Ministry of Commerce.

 

Step 6 - Engage the services of a customs clearing agent:

Last but not least, you must hire a professional customs clearing agent. He'll be able to assist you with the batch clearance at the port. 

It is also necessary to calculate several expenses in port, which is the responsibility of an agent. Handling fees, customs duties, transportation fees, and other costs are among them.

 

Step 7 - Online Presence

Online presence and buyers Make sure you have a complete product catalogue, as well as pricing, payment terms, and other pertinent information. 

While these should be posted on the company website (which is a must), you may also print offline catalogues to deliver to potential customers. 

Because your target audience is from another country, you might want to consider developing a multilingual website. 

Aside from the catalogue, make sure your website includes an introduction to the company's key personnel. It can assist potential clients in learning more about you and how to contact you.

You can also put up an online order form, as well as an email or feedback system so that clients can contact you with trade inquiries. In fact, it would be prudent to be available for questions on every known social media channel. 

Online marketplaces like Amazon.com, Alibaba.com, Aliexpress.com, DHGate.com, and other B2B and B2C portals allow exporters to advertise themselves as vendors on their websites and interact with buyers all over the world. 

In fact, if you have a registered business you get much more reliability. Therefore, apply for Company Registration Online.

You can find the buyers offline at trade shows, buyer-seller meetings, and exhibits. Export Promotion Councils, Indian Missions in other countries, and international chambers of business can all aid.