If you’ve ever wondered how to tap into India’s export market and contribute to the 18th-largest export economy, you’re in the right place. But note that the road to global markets is paved with complexities, legalities, and endless documentation.
That’s why understanding the nitty-gritty of the export process is not just advisable—it’s indispensable. In this blog, you’ll learn how to export goods from India to the world step-by-step.
Let’s step forward!
A Step-by-Step Guide to Exporting Goods from India
1. Preparing for Export
1.1 Establish an Organisation
Before shipping goods overseas, you must establish a solid foundation for your export business. Once you’ve decided on the structure, register your company with the regional Micro, Small, and Medium Enterprises (MSME) to avail of various benefits and subsidies designed to support businesses like yours.
1.2 Open a Bank Account
Money makes the world go round, especially in international trade. You’ll need a current account to handle foreign exchange (FOREX) transactions. That’s why open a bank account.
1.3 Obtain Permanent Account Number (PAN)
Speaking of PAN, this 10-character alphanumeric identifier is non-negotiable if you plan to export or import goods. It’s not just for tax purposes; it’s mandatory for all financial transactions and serves as identity proof.
1.4 Secure Import-Export Code (IEC) Number
Think of the Import-Export Code (IEC) as your golden ticket to international trade. This 10-digit code is a must-have for anyone looking to export or import goods.
1.5 Get Registration cum Membership Certificate (RCMC)
If the IEC is your golden ticket, consider the Registration cum Membership Certificate (RCMC) as your VIP pass. Issued by Export Promotion Councils, Commodity Boards, or Development Authorities, this certificate is essential if you want to avail export incentives or concessions under the Foreign Trade Policy (FTP).
1.6 Choose Your Product and Market
Now comes the exciting part—deciding what to sell and where. This isn’t a shot in the dark; it requires meticulous research. You’ll need to study potential markets and products that align with your business model.
1.7 Set Pricing of the Product
Pricing isn’t just about covering your costs; it’s a strategic tool that can give you a competitive edge. You’ll need to consider various factors like breakeven points, freight costs, and even the competition, especially from countries like China.
1.8 Negotiating with Buyers
Whether you find your buyers online or through traditional methods like trade shows, sending samples can go a long way in building that trust.
1.9 Covering Risks through ECGC
Risk is an entrepreneur’s constant companion. The Export Credit Guarantee Corporation of India (ECGC) can be your safety net. This government-owned company provides export credit insurance to mitigate risks like buyer insolvency or political upheavals in the buyer’s country.
2. Executing the Export
2.1 Confirmation of Order
Once you’ve laid the groundwork for your export business, receiving that initial order is the first milestone. Whether it comes directly from an importer or through an Indent House, this is where the rubber meets the road.
2.2 Procurement of Goods
After confirming the order, your next step is to source the goods. Depending on the nature of your product, you may need to engage third-party inspection agencies.
Exporting isn’t just about shipping goods; it’s also about securing funds to make it happen. Various types of export financing options are available, from export credits to government grants.
2.4 Labelling, Packaging, and Marking
Labelling, packaging, and marking are not just logistical requirements but also regulatory necessities. You’ll often need inspection certificates to prove that your goods meet all the required norms.
2.5 Insurance Coverage
Insurance is a necessity in international trade. There are various types of export insurance, from cargo insurance to credit insurance, each designed to protect different aspects of the export process.
When it comes to delivery, you have multiple international shipping options, each with its own set of considerations like cost, speed, and reliability. One document you’ll become intimately familiar with is the Bill of Lading. This legal document serves as a receipt for the goods shipped and a contract for the carriage of those goods.
2.7 Customs Procedures
Before freight transportation initiates, they must clear customs. This involves many documents, including the Shipping Bill or the Bill of Export.
2.8 Customs House Agents
Customs House Agents are professionals who handle all the paperwork and ensure that your goods clear customs smoothly.
2.9 Documentation and Submission of Documents to the Bank
From the Commercial Invoice to the Certificate of Origin, each document serves a specific purpose and must be accurately filled out. Once all documents are in order, they must be submitted to your bank as part of the Documentary Bill of Exchange.
2.10 Realizing the Export Proceeds
Finally, it’s time to get paid after your goods have been shipped and all documents submitted. This involves certain banking formalities, including currency exchange considerations. Ensure you know the current exchange rates and any fees that may apply.
So, there you have it. As you venture into the export-import business, you know how to export products from India. The path is complex, but the rewards are limitless. And you don’t have to worry much about the complexities of international trade because there are reliable platforms that can make it a breeze.
With fully integrated logistics platforms like NimbusPost, exporting is a hassle-free experience. You get multiple international courier services at the best rates, port-to-port freight forwarding, real-time tracking, insurance coverage, account manager service, and more.
So, if you don’t want to juggle between the complexities of export business, sign up for NimbusPost today.
What is the cost of IEC registration?
The total cost of obtaining an Import Export Code (IEC License) in India is ₹1499. This includes a government fee of ₹500 and a professional fee of ₹999 for the registration process.
Can we export without RCMC?
No, you can’t export without a Registration cum Membership Certificate as per para 4.10 of the Export-Import policy.
Is GST registration mandatory for IEC?
No, GST registration is not mandatory for obtaining an Import-Export Code (IEC) in India.
What is the procedure to obtain RCMC?
To obtain an RCMC (Registration cum Membership Certificate) license, follow these steps:
- Visit the FIEO Registration portal and sign up using your IEC (Importer-Exporter Code) and organisation name.
- Click on the “Get for RCM License” link.
- Complete the form that appears, entering all required details accurately.
- Choose the FIEO office with which you wish to register.
- Add details about the export product you’re dealing with.
- Attach a self-attested copy of your IEC and a letter of authority.
- Fill in your GST details.
- Pay the required fee either online through the portal or offline.
- Submit the form.