Start Import-Export Business – Over the last six years, the Indian government is promoting exports of all types of goods and services made in this country. The ‘Make in India’ initiative was launched by the Central government in collaboration with all states and Union Territories of India.
There are several other initiatives that support ‘Make in India.’ These include Skill India that aims at equipping some 10 million Indians will skills that will support export-based industries as well as Digital India that aims at providing various government services through digital channels.
Further, Startup India encourages entrepreneurs in various sectors to launch own business and enter export markets where possible.
While India is a major exporter of lots of goods worldwide, the country also depends heavily on imports.
Given this scenario, there’s a huge scope to start an import-export business in India.
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How to Start an Import-Export Business?
There are certain steps you need to follow to start own import-export business in India. Some of these are fairly simple. Others are pretty complicated and fairly expensive, as a beginner in the import-export business.
Step 1: Start Your Business
Firstly, to start an import-export business, you need to own a business. If you don’t have one already, open a business first. You cannot export or import as an individual. There are ways to send stuff abroad as personal gifts but that won’t work for business. Nor will ordering stuff from abroad as an individual, fetch any high returns.
If you already own a business, find whether it’s eligible for import-export trade. For example, you may have an automobile workshop or grocery store. That doesn’t automatically qualify to apply for various licenses and permits for import-export business. Instead, you’ll need to open a wholly new enterprise.
Even if you have a larger business, it still makes sense to open an altogether new company for import and export. That’s because the nature of your business may not be suitable for import and export.
The best way to launch an import-export business by registering it as a startup company. Get the Permanent Identification Number (PAN), Director Identification Number (DIN), digital signature, current account at the bank and other essentials for your import-export business.
Step 2: Identify the Nature of Imports & Exports
This is the second most important step you’ll have to take to start an import-export business in India. You’ll have to identify products that you wish to export and import. That’s because there’re international rules and regulations as well as Indian laws governing import-export.
Additionally, identifying the nature of imports and exports helps you know the markets. For example, certain Indian goods have high demand in some countries while specific imported goods sell quickly in India.
The nature of import-export permits and licenses you’ll have to apply for are also specifically for certain products. An import-export license doesn’t permit you to bring anything into India. Nor does it mean you can export anything you want outside this country.
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Step 3: Know Rules of Importing Exporting Countries
Knowing import-export rules of countries where you wish to do business is equally important. For example, some countries will accept certain products that conform to Indian standards such as the Food Safety & Standards Authority of India (FSSAI). However, others may require a product to be tested in their country and approved by their concerned authority.
The same holds true for imports. There are certain things that you cannot import to India though they meet or exceed international standards. Toys with wireless remote controls are one such example. Certain food products, pharmaceutical ingredients, chemicals and ancillaries also require testing and approval from local authorities before you can import them to India, whether for consumer or industrial use.
Step 4: Get Import Export Code
Once you’ve taken the above steps, approach the Directorate General of Foreign Trade (DGFT) and apply for an Import Export Code or IEC. You’ll require the IEC for various export-related documentation. Usually, an IEC allows you to import and export a variety of products under a broad category, for example, chemicals. At the same time, an IEC doesn’t permit import-export of hazardous goods, explosives, weapons and ammunition and other things.
Furthermore, also check whether your IEC permits the import of various kinds of seeds. Usually certain fruits, vegetables and seeds cannot be imported to India because they can create an ecological imbalance. Nor can you export these things to various countries because of environment protection laws. While an IEC is compulsory to start an import-export business, it’s not blanket permission that covers all sorts of goods.
Applying for an IEC can be done online through the DGFT website. You’ll need the business PAN, your picture and a canceled cheque of your current account at any bank for the purpose.
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Step 5: Apply for Registration cum Membership Certificate
There are various export promotion councils in India. These export promotion councils deal with specific products. Therefore, you’ll have to select the one that covers your import-export business and apply for registration and membership. Each export promotion council functions under the umbrella of the Indian government.
An RCMC and EIC are usually sufficient to start an import-export business in India. However, you may have to seek more than one RCMC. That’s because the nature of your import-export business would usually deal with diverse products. It also makes sense to get multiple RCMCs since you can expand your import-export business to cover more parts of the world and a wider range of products. If some products are seasonal, you’ll have protection against spurts and falls in demand. Instead, your import-export business will remain in demand all year round.
Step 6: Find Suppliers & Customers
And finally, look for suppliers for stuff that you wish to import as well as customers for things that you’ll export. Usually, an export promotion council will provide you the database of potential and qualified importers in foreign countries and exporters abroad as well. It’s better to solicit trade inquiries from companies on these databases since they’ll usually be doing business with India and have recognition from the Indian government.
To reach customers abroad, you’ll require several samples of your product. Nobody is going to import your product unless they’ve seen it and possibly tested it for desirable qualities. The same holds true for importing goods. Request samples so that you can have them tested in India for quality and other standards. You’ll have to ship these samples on demand to interested foreign buyers.
Once you complete the above steps, you’re ready to start an import-export business. Looking for orders is usually online nowadays. Therefore, you’ll require an excellent online presence with a website, blog, social media and other resources.
You may also enlist the services of a digital marketer to ensure the website of your import-export business attracts enough attention from potential buyers and suppliers. This way, you don’t have to do much searching for yourself. Instead, you can focus on developing the product and getting necessary clearances for their export and import. Acquaint yourself with import-export trade as well as banking, shipping and logistics jargon. These will help you become a better importer and exporter when you start own business in India.
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