Market Watch

The‌ ‌Complete‌ ‌Guide‌ ‌to‌ ‌Exporting‌ ‌From‌ ‌India‌ ‌

International trade is the stepping stone of any country’s strong economy. It is the key player in establishing a competitive advantage. Ever since the inception of the liberalization, privatization, and globalization policy, India has leveraged a lot of benefits by exporting to other countries. The following guide on how to export from India will take you through all the aspects of trading amongst nations of the globe. 

The trade across borders has given the opportunity to establish a firm place as manufacturers of certain products that need a specific atmosphere, geography, and resources. This philosophy is known as comparative advantage. It means that when a country has particular resources in abundance, other nations do not have any option but to buy from the former. 

Why export?

It is a general axiom in the business industry that approximately 95% of any company’s potential market lies within foreign borders. And if any organization is restricting itself from exporting, it is missing out on a whole lot of opportunities. From an individual’s perspective, overseas business is for increasing profits. 

And from the nation’s perspective, it is the key to improve relationships between countries in times of calamity. The government looks towards international business as a health booster of the national economy. Exporting also ensures that the country’s youth is working for the betterment, and it opens new chances of growth.  

In any case, you must understand why and how to export from India. The following is a list of reasons you should not confine yourself to the domestic market and explore the global business industry.

  • To begin with, exports increase your sales potential. It is an excellent option for big and small enterprises to utilize their productivity all year round.
  • Exporting primarily contributes to increasing individual profits and the economy’s balance of trade. 
  • You can approach diversified markets and leverage the benefits of selling there.
  • Exports let you distribute your risk across multiple markets.
  • You can sell your products throughout the year without facing any idle time.
  • You get to work with a lot of different people and cultures and learn a lot.
  • You open doors to foreign direct and institutional investments. 
  • Exports allow you to reach more significant economies of scale and better profit margins. 
  • You enhance your scope of production when you know how to export from India.
  • Exports allow you to incorporate new methods and technologies of production.

How to export from India?

Having known the benefits of expanding businesses overseas, people have started to look for ways to export their products from India to other countries where the demand is much higher. And with more and more trade liberalization deals signed by the government, individual organizations and companies have a lot of scope to unfold.

To proceed with establishing an export business, you need to go through various processes. Without having a solid understanding of the process, you can not move ahead in the right direction. You must know the documents needed, the regulations, legalities, mandates, permissions, etc. Following is a step-by-step process that tells how to export from India.

  • Establish an organization

The DGFT only permits either a sole proprietorship, partnership, or company to enter the export sector. It is essential for you to have a legitimate organization with a company name and logo (if possible). 

  • Bank account

When you export, you will receive payments through online mediums. Having a current account with an authorized bank is also an essential part of starting the export journey. You will deal in foreign exchange, so you can choose a bank that converts it into Indian currency. Else, you will have to get it changed from somewhere else.

  • Getting PAN

Permanent Account Number is another crucial document that is a must-have when you export. It is essential for all financial transactions and also plays a vital role when it comes to paying taxes. When you are learning about how to export from India, you will come across the significance of PAN a lot. So, you must obtain this ten-digit number from the Income Tax Department.

  • Obtaining IEC and RCMC

The Import-Export Certificate is another binding document as per the Foreign Trade Policy. Similarly, the Registration cum Membership Certificate is essential for you to get authorization to export and import.

Once you have completed the above steps, you are now halfway there. After obtaining all the mandatory documents that state that your organization is legally defined and fulfills all requirements, you can proceed further.

  • Product selection

The selection of products that you want to export comes next. The Directorate General of Foreign Trade permits some products to be freely traded and prohibits some products. It is decided after analyzing the foreign markets. If an item is not used abroad, the DGFT does not grant permission. You can check the detailed list on DGFT’s website.

  • Market selection

The overseas market can be very different from the domestic one. The selection must be wise and informed. It would be best if you put in all efforts to understand the working of the market in other countries. Learning how to export from India is only a part. To avoid any mishaps, you also need to assess the demand, supply, trade policies, import procedures, restrictions, taxes, etc. 

  • Targeting potential buyers

There is going to be a vast pool of customers. But not everyone may be looking for something that you sell. So, you first need to see what is your target audience. It will help you make marketing strategies and approach them accordingly.

  • Finally selling

After everything, you need to finalize the price and sell the products to your customers. It also involves catering to their issues and resolving them as soon as possible. 

As an exporter from India, it becomes your responsibility to dive deep into the foreign markets and understand the flow of goods, services, and money in their economy. And if possible, you can also find some points where you can take advantage. In a nutshell, exports are an inevitable part of the economy which can offer you so much for your enterprise.