If you are keen to explore the import export business and have the mindset to interact with new buyers and sellers from the foreign market, then it is possibly the right time to jump into the business of Import and export to make profits at a larger level. The Import export market is not new; instead, the trading of goods has been carried out for centuries.
For instance, if some country has abundant resources which another country has the demand to use as their end product but doesn’t have the availability in their country, then they will import the product from your country and vice versa.
India is blessed with natural resources, rain forests, and rich minerals that support the large agriculture business. Start export business in India to sell these low price but high demand products in the international market.
Procedure for how to start import export business in India
So, it is essential to know some of the technicalities and systems which will help you get a clear insight of what an import/export business is and also help you get an idea of How to Start an Import Export Business easily.
To start an export business in India, the first one should be aware of its types, which are discussed here:
An Export Management Company or an EMC
An Export Management Company (EMC) is one of its kind, which helps any domestic business handle its business. An export management company in India may be either a manufacturer, distributor, or wholesaler who is willing to export their product from the domestic market but is not aware of the procedure.
They even don’t want to know any of the procedures as they give the work to an EMC to handle their materials, which involves many things, such as hiring the dealer network, invoicing, distributors and representatives, arranging the shipment, marketing, and promotions, to name a few. They get paid either in the form of a salary or as a commission.
An ETC or an Export Trading Company
An export trading company works differently than an export management company. Instead of giving their work to an EMC, they hunt for the buyers who are looking for the specific product present in their domestic market and export it directly, either earning a direct profit or working on a commission basis from the seller’s end.
Import and Export Merchant
An export merchant company in India works differently to get profits. Becoming an import-export business merchant means collecting material or products directly from a domestic or foreign manufacturer. This type of merchant does not specialize in any particular product line or doesn’t have any specific clientele.
They study the market, buy the product, repack it, and then ship it to the targeted market independently, without involvement from an EMC or an ETC. It helps them to earn all the profits much more accessible, although an import and export merchant has to manage all the risks involved with his own.
Thus, while you start an export business in India, you should consider all of these aspects to ensure you are not making wrong decisions. Working with the EMC export management company would keep you in a safe place.
Apart from these factors, one should have to take note of other things which play an important role in starting and carrying out business in the long run, these are:
- Import Export Business License
- Import/Export Duties (depends on article to article)
- LC Account in the bank
- Selecting the Port
- Selecting the type of transportation (by air or through cargo shipment)
- Contacting the Logistics department
Top 5 Product Export From India
Steps to follow when starting an export business in India
In recent years, many local companies have been moving towards the export of goods. Growing India’s reputation on the global front has mainly contributed to building trust. Companies from all across the globe are partnering with Indian-based companies to import the goods manufactured or grown locally. Demand is rising; hence, the local players are leveraging the benefits and serving global companies.
The Indian government has seen a rapid shift in the local business; hence they have introduced several policies to boost export. Today, anyone with the minimum capital investment can start an export and import business in India.
Here are the steps to consider when starting an export import business.
Step 1: Registration of the company
You must have good business in India to participate in the Import and export. The government has made it compulsory for the local companies to obtain the import export license against their company registration. Follow the government norms to register the company, get the license, signup for the bank account, and submit the necessary documentation to get an Import export license.
Step 2: Getting Permanent Account Number (PAN)
Companies dealing in the trading business much get the PAN number. The bank account holder will need this to submit the TAX document. Hence, get the PAN from the authority to qualify for the Import Export.
Step 3: Registration and Membership certificate (RCMC)
The exporters much get an RCMC number from the Export Promotion Council to obtain authorization for export. Members get several benefits from the council.
Once you get all the required documents from the authority, you are ready to start selling products in the international market. I hope now you clearly understand how to start import export business in India. Make an attractive logo for export company to stand out in the crowd. Marketing may require making your brand popular in the region. Serve the client with the services, so they become loyal to your business and keep buying from you even if the competition in the market rises.
Last but not least, doing an import export business requires a thorough study of the foreign market and their demands for a specific product, which also helps a person earn a considerable amount of profit in the short and long run.
As you know everything about how to start import export business in India, start taking steps to build the foundation. Slow baby steps will keep you moving and help you achieve your goals quickly.
How to start an export business in India?
An individual can start an export business under proprietorship or the form of a partnership company. Legal documents, certification, and approval from an authority such as RCMC are essential before you start trading goods in the internal market. Also, with these documents, apply for the PAN and bank account. All of these documents are necessary to clear the goods at customs.
How much does it cost to start an export business in India?
The approx cost to start an export business in India is Rs.50,000 to Rs. 1,00,000. However, the cost will vary depending on the business’s location and operation. If you start at a large scale, the cost may go beyond the basic expenses. You also need a big team to manage the company.
What is an export/import merchant?
International import and export merchant work with the local manufacturers to sell the product in the global market. Independent entrepreneur work in this kind of business, where the products are sold in the market without intermediates.
Entrepreneurs take care of the packaging, shipping, and even reselling of the goods. The entrepreneur gets the freedom to sell any products that have demand. When the demand rises, the export import merchant looks for the client and ties with the local manufacturer in any country to ship the product directly to the domestic market.