Requirements For Export Business In India
It is a known fact that starting an export business can be a challenging and tedious task. It is very obvious for anyone to have doubts and concerns ranging from documents required, legal formalities, and guidelines.
Keeping in mind all the above factors, we have prepared a list of requirements which are needed for doing Export Business in India:
- Establishing an Organization/Company/Firm:
To start an Export Business, it is advisable to get an establishment of your firm under one of those various categories like Sole Proprietorship, Manufacturer, Partnership, etc. All these have different requirements and you would need to consult a C.A. ( Chartered Accountant ) for the same. This procedure would also include other small formalities like naming your business, logo for a business, etc.
- Opening a Current Account in Bank:
It is necessary to get a current account corresponding to your business or firm name to deal with Foreign Exchange.
- Get a Permanent Account Number (PAN):
Getting a PAN is necessary to do the export business in India. It is a kind of universal accepted identity in India and is of much importance.
- Get an IEC (Import Export Code) from DGFT:
As per the Indian rules and regulations for export, it is necessary to get an IEC for the same. You can obtain it through DGFT and this application costs approx. Rs500. You may consult a C.A (Chartered Accountant) for the same as there are some documents required too for the same.
- Product Selection:
You need to go through the list of permitted items that are allowed for export from India. There are very few items that fall into the restricted or prohibited category which you are not allowed to export and that you need to check.
- Finding Potential Buyers:
These days it is very hard to find buyers due to the rise in competition in the past few years. You need to opt for wise options like Online Marketing, SEO, Digital Marketing which would help you to get buyers globally at very negligible costs. You can also try participating in international trade fairs and so on.
Sampling is a process in which you need to provide customized samples ( usually in very small quantities) to your buyers which are used for approval purposes for the final order which may be bulk ).
- Pricing/Costing and Negotiation with Buyers:
The pricing of the products must be realized very carefully considering all aspects like shipping charges, product in house cost value, profit margin, and so on. Make sure that it is competitive as per the market price. You should also learn to negotiate with your buyers in terms of monetary considerations.
- Risk Covering through insurance through ECGC:
Make sure that you always cover your orders with a reliable insurance company. No matter whether you ship your orders through sea or air, insurance is always a wise and safer option. You can also opt for L.C ( Letter Of Credit ) for payment assurance from your buyer in case he/she is not willing to pay you to advance or upfront money. The ECGC ( Export Credit Guarantee Corporation Ltd. ) does the same for you.
If you are also looking for or starting an export business, then feel free to reach us out for any doubt or concern. We would always love to help you and assist you.