India's export landscape is expanding rapidly, opening new doors for businesses to reach international markets. Driven by competitive pricing, quality products, and government incentives, Indian exports have grown to become a vital part of the global supply chain. For entrepreneurs, this represents an exciting opportunity to join the global market and establish a profitable export business. This step-by-step guide outlines how you can get started with exporting in India, manage the logistics, handle international payment, and navigate the regulatory requirements for a smooth entry into international trade.

1. Research Your Market and Product

Before venturing into international trade from India, comprehensive market research is essential. Understanding global demand and identifying a product with competitive advantages is the foundation of a successful export business. Key areas to investigate include:

• Market Demand: Analyse which countries demand the products you intend to export. Look for markets where Indian goods are already popular or where there is a high demand for your niche.

• Competitor Analysis: Examine competitors’ prices, distribution channels, and marketing strategies to position your product effectively.

• Compliance Requirements: Different countries have specific import regulations. Understanding the product standards, packaging, and certification requirements for each target market is crucial.

Actionable Tip

Use online resources such as the Export Promotion Council for information on product demand, pricing trends, and potential markets.

2. Choose Your Business Structure and Register Your Business

Your next step in this Indian export guide is establishing a legal business structure. Typically, export businesses in India operate as:

• Sole Proprietorship

• Partnership

• Private Limited Company

• Limited Liability Partnership (LLP)

After choosing a structure, register the business under the Ministry of Corporate Affairs (MCA), if necessary, depending on your structure.

Actionable Tip

For exporters, setting up a Private Limited Company or LLP is often advantageous, as it allows for ease in scalability and credibility among international clients.

3. Obtain an Import Export Code (IEC)

The Import Export Code (IEC) is a unique 10-digit code required for anyone looking to export or import goods from India. The IEC is issued by the Directorate General of Foreign Trade (DGFT) and is mandatory for engaging in international trade. The process to obtain IEC is straightforward and can be completed online via the DGFT website by submitting the necessary documents, which include:

• PAN card of the business or individual

• Proof of address (like an electricity bill or rent agreement)

• Bank certificate or a canceled cheque

Once issued, the IEC is valid for a lifetime, allowing you to conduct export operations seamlessly.

4. Register with an Export Promotion Council (EPC)

To gain access to market insights, trade fairs, and other promotional activities, it is beneficial to register with an Export Promotion Council (EPC). Each industry in India has a specific EPC that can provide exporters with valuable resources, industry updates, and even government incentives.

Popular EPCs include:

• Engineering Export Promotion Council (EEPC) for engineering products

• Agricultural and Processed Food Products Export Development Authority (APEDA) for agricultural products

• Handloom Export Promotion Council (HEPC) for handloom goods

Membership with an EPC can help build networks and ease market entry in foreign countries.

5. Set Up an International Payment System

Handling international payments efficiently is key to maintaining cash flow and building trust with overseas clients. It’s crucial to have an understanding of foreign exchange regulations, international payment methods, and the right payment partners.

Several options for international payments include:

• Bank Transfers: Reliable and secure, though they may incur higher fees and take longer.

• Foreign Currency Accounts: Many Indian banks offer foreign currency accounts for exporters to streamline transactions and minimize foreign exchange costs.

• International Payment Providers: Using a cross-border payment solution like Infinity that specialises in B2B transactions can simplify and expedite the process, reduce fees, and ensure compliance with foreign exchange management regulations (FEMA).

Actionable Tip

Consider setting up an account with a B2B cross border payment provider that specialises in international payment solutions to reduce fees, offer real-time tracking, and simplify currency conversion.

6. Determine Pricing and Create an Export Plan

Pricing your product for export requires careful consideration of costs, including manufacturing, logistics, tariffs, taxes, and profit margins. Developing an export plan can help you estimate costs accurately and keep your finances on track.

Elements of a Strong Export Plan:

• Pricing Strategy: Factor in the cost of production, shipping, and any added fees for customs duties in the destination country.

• Packaging and Labeling: Ensure compliance with the destination country's packaging regulations.

• Distribution Channels: Choose the most cost-effective distribution channels, whether through direct sales, agents, or distributors.

Actionable Tip

Research any subsidies or incentives offered by the Indian government to lower your operational costs and increase competitive pricing in the global market.

7. Select a Shipping Partner and Manage Logistics

Shipping logistics play a central role in international trade from India. Ensuring timely delivery is essential to meet customer expectations and avoid penalties or fees. Here’s a breakdown of shipping steps:

• Choose the Right Shipping Mode: Depending on the product type and urgency, you may choose air freight (faster but more expensive) or sea freight (cost-effective for bulk shipments).

• Handle Customs Documentation: Ensure you have all necessary documents, including the bill of lading, packing list, certificate of origin, and any other documents required by the importing country.

• Freight Forwarding: Many exporters work with freight forwarders who can handle documentation, insurance, and customs clearance, simplifying the process significantly.

Actionable Tip

Partner with a reputable logistics provider experienced in Indian exports and familiar with international shipping regulations to reduce delays.

8. Comply with Regulatory Requirements

Exporting involves several compliance obligations under India’s regulatory framework. Staying informed about evolving regulations is essential for smooth operations. Familiarize yourself with these key guidelines:

• Foreign Exchange Management Act (FEMA): This act governs international payments and currency exchange, so understanding its basics is essential for any Indian exporter.

• GST Refunds: GST on exported goods can be reclaimed, providing a financial benefit to exporters.

• BIS and FSSAI Certifications: For specific industries, products require certifications from bodies like the Bureau of Indian Standards (BIS) or the Food Safety and Standards Authority of India (FSSAI).

9. Market Your Products Internationally

Marketing your product to international buyers is crucial to gaining traction in foreign markets. Effective strategies include:

• Digital Marketing: Invest in SEO, social media, and online advertising to build an online presence. Platforms like LinkedIn are excellent for B2B exporters.

• Trade Fairs and Exhibitions: Participating in international trade shows can help build visibility and foster partnerships.

• E-commerce Platforms: Online marketplaces, like Amazon and Alibaba, are valuable channels for reaching international customers.

10. Monitor Payments and Manage Financial Risks

After securing international orders, monitoring payments and mitigating risks becomes critical. Delayed or defaulted payments can impact cash flow and profitability. Using secure payment solutions, such as letters of credit or export credit insurance, can reduce the financial risks involved.

Actionable Tip

To avoid potential financial loss, consider partnering with a trusted international payment provider that offers secure payment options, currency hedging, and transaction tracking.

Conclusion

Starting an export business in India opens numerous opportunities to tap into the global marketplace. By following these steps and paying attention to critical aspects like regulatory compliance, logistics, and international payments, you can navigate the complexities of exporting. Establishing a robust network of suppliers, buyers, and payment partners will further bolster your business success and ensure smooth operations. Equipped with the right knowledge and resources, you can take confident strides into the world of exporting in India and build a successful, globally competitive business.

Starting today can put you on the path to long-term success in the thriving export industry from India.