Want to start export/import business? No idea how to start an export business?

Hope this serves the need of your search, India has become a popular destination for import sourcing. India is one of the countries in the top twenty nations of the world in the list of high volume exporting countries and is a world leader in various goods for exports like coffee, tea, spices, and certain gemstones.

First and foremost, you must know how to legally set up the export business in India, and then we shall proceed with the process. To ensure the safe and legal export of goods, the export business must follow a simple process.

Here are the steps on how to export from India, necessary documentation and formalities required.

Since liberalization has entered the Indian economy, the process has become even easier and more accessible.

What are the initial steps that should be taken?

The procedure for starting an export business according to government guidelines, is as follows:

Step 1: You must have a valid registration on the business. Next, as mandated by the government, you must open a bank account at any registered bank in India. It is necessary to open a current account with a bank authorized to deal in foreign exchange.

To begin an export business, a sole proprietorship/partnership firm/company must be established according to the procedure, with an appealing name and logo.

Step 2: Obtaining a business Permanent Account Number (PAN) - Every exporter and importer must obtain a PAN from the internal revenue service. The businesses and bank account holders have it already.
Some banks provide the facility of opening PAN and current account in one place.

Step 3: Obtaining an IEC (Importer-Exporter Code) Number - It is mandatory to obtain an IEC for export/import from India, according to the Foreign Trade Policy.

According to ANF 2A, an application for IEC is filed online at DFGT, and an application fee of Rs 500/- is paid online via net banking or credit/debit card, along with the required documents listed in the application form.

Step 4: Registration and membership certificate (RCMC) - Exporters must obtain an RCMC from the Export Promotion Council to obtain authorization for export. They can also look for any other benefit or concession under FTP and receive services/guidance.

After completing all the above initial steps, you can look forward on what, where, whom and how to export from India. However, it is better to start research on the pricing details and related processes.

Step 5: Pricing and Sampling - Providing customized samples to meet the needs of foreign buyers aids in the acquisition of export orders. Exports of bonafide trade and technical representatives of freely exportable items are allowed without restriction under the FTP.

The price should be calculated based on the terms of sale, such as Free on Board (FOB), Cost, Insurance, and Freight (CIF), Cost and Freight (C&F), and so on; the businesses must take into account all expenses from sampling to realization of export proceeds. Also, the export cost should be fixed at a competitive price with a good profit margin.

Step 6: The most important point is knowing about the payment risks.
Payment risks will persist in international trade due to geographical barriers and insolvency issues on the side of the buyer/country. To mitigate these risks, there are few options and one of the most solid options is to obtain an Export Credit Guarantee Corporation Ltd policy (ECGC).

When a buyer places an order without paying in advance or opening a letter of credit, it's good to get a credit limit from the ECGC for the foreign buyer.

The six steps outlined above are required to begin an export and must be completed in their entirety to ensure that all licenses, permissions, and security measures are in place.

After completion of licensing and registration process, Now the game starts it's the next stage of export/ import business. i.e. How to successfully run an export/import business.

Step 1:

Export Order Confirmation
Firstly, when you have received the confirmation, make sure the Order requirements should be carefully noted upon receipt of an export order.

Step 2:
Next, check and secure the supplemental information related to the Ordered item, specifications, payment terms, and delivery date.

To avoid the risk of consignment rejection in the future, the exporter can enter into a formal agreement with the overseas buyer.

Step 3: Investing
Labeling, packaging, packing, and marking are the third and final steps.

Step 4: Export Goods Shipment Insurance
You must purchase a marine insurance policy to protect your export goods.

Step 5: Set a Dispatch Date
If the delivery is late, your efforts may be futile. As a result, the most important thing is that the export order is delivered on time to the buyer's port. After receiving the order, you must contact CHA to confirm the number of days the shipment will take to arrive at the destination port. As a result, you'll need to plan and get the package ready for delivery.

Step 6:
To reserve the required space on the vessel for shipment, the exporter must contact the shipping company well in advance.

Internal transportation from the factory/warehouse to the shipping portals must be organized to avoid loss or damage during transit. CIF agreements are typically insured by exporters, whereas C&F and FOB agreements generally are insured by importers.

Step 7:
The following mandatory documents for import and export are outlined in the Documentation of Export Goods FTP.

Commercial invoice cum packing invoice shipping bill/ invoice of export/ invoice of entry Bill of Lading/ Airway Bill Commercial invoice cum packing invoice shipping bill/ invoice of export/ invoice of access (for imports).

Note: Other documents, such as a certificate of origin or an inspection certificate, may be required depending on the circumstances.

Submitting documents to the bank
Following shipment, the documents must be presented to the bank within 21 days for forwarding to the foreign bank for payment arrangements.

With these steps mentioned above, you will have every crucial information related to how to export from India.

If you are one of the fresh competitor in the export landscape, I recommend you to consider an agency to have your back covered.

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