How to Start Import & Export Business in India?
Jan 08, 2023
Starting a new export-import company is full of challenges. New business owners venturing into exports have a thousand questions. Their queries may range from ways to get an easy business loan to the paperwork needed. They need to learn the rules they are required to follow. Unfortunately, it isn’t easy to locate this information because it is sparse and dispersed over several online sites.
This step-by-step manual will walk you through all the tasks necessary to launch your export business, including picking the most suitable business model, identifying the best markets and customers, and finalizing your paperwork in preparation for shipping your first order. Following these procedures, you should be prepared to begin your international commerce career.
Choose Your Business Entity Type
Before launching an export-import firm, one must choose their enterprise’s structure based on their ownership structure. The next step is registering your new company and selecting a name for your corporate organization. A sole proprietorship business, partnership business, LLP, private limited company, or public limited company can all be established.
Establish Your Business
Once you’ve done the necessary research and determined that your import-export business is viable, it’s time to start it formally. Depending on your company’s capacity and size, you might need to register with municipal, state, or federal authorities. You might also need to seek credentials abroad and get the required licenses. You may need a loan for business to effectively establish your business, thus you should apply for a business loan or MSME loan, as per the nature of your establishment.
Obtain a PAN Card
A PAN Card is the first of a specific series of documents needed to launch a new export firm. To register your business, you and your partner(s) must both have acceptable documents proving your identification and residency.
Every registered business organisation must apply for a PAN Card (PAN) from the Income Tax Department. This guide covers the process for obtaining a PAN for a business entity in more detail. It is relatively similar to getting a PAN for an individual.
Select an Exportable Product
Your export-import business plan’s success depends on choosing the appropriate products. You must remember several things, including legislation, export patterns, the status of global marketplaces, and more. In our advice for choosing the best export product, you’ll discover more specific information and a general direction.
Choosing the Appropriate Export Market
You must ensure that the proper market exists for your export good or service anywhere in the world. A new exporter must consider several aspects, including the demand for the product, trade barriers, profitability, the political environment, etc. The exporter must evaluate the viability based on these parameters and pick his export market accordingly.
Purchase Your Goods from a Reputable Vendor
Now that you can identify as a registered company and know the products you intend to sell, it’s time to source your products and choose a trustworthy supplier. That may be a local producer, a supplier from over the world, or even you. After finding a source, your job is to convince them that doing business with you would be beneficial.
Have a Registration Cum Membership Certificate (RCMC)
The export of various products and service sectors is promoted through multiple export promotion committees in India. Exporters registering with these councils get access to events and resources to help them grow their businesses. Registration is also required to qualify for several advantages under India’s Foreign Trade Policy.
To register with them, you must have the RCMC. The RCMC registration process takes around a week and is valid across India. For instance, if you export agricultural or processed food goods, you can register with APEDA using the online registration feature on its website.
Export Credit Insurance
Export credit insurance, also known as trade credit insurance, can protect you if your international customer fails to make payment. Ninety-five per cent of commercial and governmental policies are included. This protection helps businesses to enter new markets, boost sales, and increase competitiveness by offering open account credit terms to overseas customers.
When paying by consignment, the exporter isn’t compensated until the buyer (or, in this case, independent distributor) sells the goods to the final customer. However, the exporter still owns the interests until they are legally sold. Consignment enables faster shipment and more product availability, boosting the exporter’s global competitiveness. Additionally, it could help with money management.
Make Sure Your Finances are in Order
Your company is unlikely to take off without access to some early finance, regardless of how well you craft your export business plan and how many contingencies you plan for. You must first make sure your financial projections are accurate.
You should estimate the financial needs of your company before moving further. Next, you need to decide which export finance option is suitable for your export firm. Depending on your company’s needs, this might take the shape of both short- and long-term funding. Additionally, you may be able to get government assistance.
Eligibility Criteria for an Import Export Business
- The minimum age limit is 21 and the maximum is 65.
- The lender will evaluate the “business vintage,” “annual turnover,” and “work experience” of the company.
- A good credit rating and repayment history
- Having never before missed a payment on a financial institution’s obligation
If you need a business loan or an MSME loan for your Import and Export business in India, visit http://flexiloans.com/. You can learn about the best business loan interest rates. Also, you can choose your repayment terms by using the business loan EMI calculator.
Frequently Asked Questions
Q. 1 What paperwork do I need to import goods?
Ans: Additional documentation can be needed depending on the country you’re importing the product. For instance, a Customs and Border Protection entrance form is always obligatory, even though import licenses and permits for the US may be necessary.
Q. 2 What is an export license?
Ans: Your company can engage in certain export operations with the help of a government-issued export license. The competent agency grants an export license after reviewing the export transaction.