You’ve always had an entrepreneurial spark and wanted to start your own business. But the traditional routes of retail, services or tech seem overdone. How about an import-export business? 

Trading goods across borders can be extremely rewarding. The potential to explore new cultures, build global connections and of course, make good money, is huge. 

Why Start an Import-Export Business in India?

Why start an import-export business in India? There are so many reasons to take the plunge!

• India has a huge consumer base of over 1.3 billion people with rising incomes, meaning demand for foreign goods is skyrocketing. You can tap into this massive market.
• The government actively supports trade and small businesses. Incentives like tax breaks, subsidies, and streamlined registration processes make it easy to get up and running.
• India has a strategic location and robust infrastructure, with major sea ports and airports that facilitate global trade. It’s never been easier to import or export goods.
• The economy is booming, with a rapidly growing middle class. People want access to high-quality international products, so there’s opportunity for massive profit and growth.
• You can build valuable international connections. Developing relationships with suppliers, customers, and partners around the world is exciting and rewarding.

This guide will walk you through how to start an import-export business in India, from developing a business plan to finding profitable products and trustworthy partners abroad.

Ready to begin your adventure in international trade? Let’s go!

1. Identifying Profitable Products for Import-Export

Consider goods that are in high demand, low supply, and will generate strong profit margins. Some exciting options include:

• Textiles, clothing and accessories are always popular imports, especially trendy fast fashion. Many buyers source apparel and textiles from India. You could export traditional Indian clothing, fabrics and embroidery to international retailers.
• Agricultural products like basmati rice, tea, spices and cashews are prized around the world for their quality and flavor. India produces many in-demand crops that you can export.
• Handicrafts and home decor like sculptures, paintings, carpets and lamps highlight India’s rich cultural heritage. Export handmade, fair trade goods to ethical retailers and collectors.
• Technology products are useful imports as India’s middle class grows. You might import and distribute smartphones, laptops, kitchen appliances or medical equipment.

Once you’ve identified some products to import or export, analyze the competition, licensing requirements, and potential customers. Then start contacting manufacturers, wholesalers, retailers and build your supply chain!

2. Obtain an Import-Export Code (IEC)

To start importing or exporting goods in India, you need to obtain an Importer-Exporter Code (IEC) from the Directorate General of Foreign Trade (DGFT). This is your business identification number for all your import and export activities.

Apply for your IEC

Apply for your IEC on the DGFT website. You’ll need to provide some basic details about your business like the name, address, directors, and the type of import/export activities you’ll be conducting. The process is fairly straightforward and you can expect to receive your IEC within a week.

Once approved, your IEC code will allow you to:

• Import raw materials and finished goods
• Export locally made goods overseas
• Avail import/export benefits and incentives offered by the Indian government
• Obtain a Digital Signature Certificate to use on the DGFT portal

Your IEC is an essential document to kickstart your business, so apply for it as soon as you have your business registered and are ready to start trading.

3. Selecting Reliable Overseas Suppliers & Buyers

• To find reliable suppliers and buyers overseas, do your homework! Get recommendations from trade associations and chambers of commerce. Check online reviews and ratings, visit company websites, and search records to verify legitimacy.
• Once you have some promising leads, reach out and express your interest in discussing a potential partnership. Ask lots of questions to determine if they share your values of honesty, transparency and high quality goods and services.
• If things click over calls or video chats, try to meet in person if possible. Seeing facilities and meeting staff face-to-face can reveal a lot. Look for modern equipment, strict quality control procedures, and workers who seem genuinely happy and invested in the company’s success.
• When you find suppliers and buyers you connect with, nurture those relationships. Send small gifts, share updates about your business growth, and express appreciation for their partnership. Strong, long-term relationships built on mutual trust and benefit are key to success in import-export.

4. Arrange for Logistics

Now that you have your import-export license and business set up, it’s time to arrange how you will physically transport your goods internationally! This step is crucial because without efficient logistics, your business won’t get off the ground.

• Find a reputable freight forwarder

A freight forwarder will handle the shipping and logistics of transporting your cargo. Ask around for recommendations and check online reviews. Meet with a few to compare services and fees. Look for a forwarder that has experience shipping to your target countries.

• Determine the best mode of transport

Will you ship by air, sea or land? Air freight is fastest but most expensive. Sea freight is cheapest but slowest. Land freight works for overland routes. Choose the option that balances cost, speed and your product type.

• Prepare the necessary documentation

Work with your forwarder to prepare documents like the bill of lading, certificate of origin, invoice, and packing list. These are required for customs clearance and must accompany your shipment.

• Package your goods properly

Make sure your goods are packaged securely to withstand the rigors of international transport. Follow any special packaging requirements for your product type. Label each package clearly with details like sender, recipient, contents and quantity.

• Track your shipment

Stay on top of where your shipment is with tracking provided by your forwarder. Be available in case any issues come up with customs. Once delivered, follow up with your customer to ensure everything arrived in good order!

5. Mastering Import-Export Documentation in India

Mastering import-export documentation in India is crucial to running a successful business. The good news is, it’s not as complicated as it seems! The key is staying on top of the required paperwork.

• Do your research

Learn the specific documentation needed for your product. The main forms are the Bill of Lading (B/L), Commercial Invoice, Packing List, and Letter of Credit. 

• Double check everything

Triple check that all details on the forms are accurate, including product details, quantities, and prices. Any errors can lead to penalties, fines or shipment delays. It’s worth the extra time to ensure everything is precise.

• Build relationships

Establish a good rapport with customs officials and freight forwarders. These valuable connections can help expedite the documentation process and clear up any questions. Offer to provide additional details or paperwork to keep things moving swiftly.

• Stay up to date with regulations

India’s import and export regulations are frequently changing. Subscribe to updates from trusted industry sources to stay on top of the latest rules. Remain compliant with all guidelines to avoid issues.

• Keep good records

Maintain thorough records of all import-export documentation, correspondence, and transactions in case of an audit. Well-organized records demonstrate your professionalism and make the process faster and easier over time.

6. Leveraging Government Schemes for New Exporters

The government of India offers several schemes to promote exports from the country. As a new exporter, you can benefit immensely from these schemes.

• Service Exports from India Scheme (SEIS)

SEIS offer duty rewards for exporting goods and services respectively. SEIS provides service exporters with a 5% incentive on net foreign exchange earnings.

• Rebate of Duties & Taxes on Exported Products (RoDTEP Scheme)

The RoDTEP scheme has replaced the old MEIS w.e.f 01 January 2021.  The RoDTEP scheme aims to refund all hidden taxes that were previously not refunded under any export incentive scheme, such as central and state taxes on fuel used for export product transportation, duties levied on electricity used for manufacturing, mandi tax levied by APMCs, toll tax and stamp duty on import-export documentation, and others.

• EOU and SEZ

Export Oriented Units (EOUs) and Special Economic Zones (SEZs) offer infrastructure and tax benefits for exporters.  As an EOU, you can import raw materials duty-free and enjoy tax holidays for a certain period. SEZs also provide world-class infrastructure, tax benefits and simplified procedures. Units in SEZs mainly export their products and services.

Checkout other schemes at IBEF and Indian Trade Portal

By leveraging these schemes, you can gain a competitive edge in international markets. The incentives and support provided help reduce costs and improve operational efficiency. Make use of them fully to establish yourself as an exporter and scale your import-export business.

Conclusion

So there you have it – if you want to start an import-export business in India, now is the time. 

The opportunity is ripe, the government is supportive, and global trade volumes are increasing. All you need to do is find the right product, locate dependable suppliers and customers, handle the paperwork efficiently, and maintain high quality standards. 

What are you waiting for? Take that first step today to turn your dream of an international trading business into a reality. The world is open for business – now go out there and get started!

Crucially, as you embark on this venture, it’s imperative to recognize the financial intricacies that underpin your business’s sustainability. 

Partnering with GJM & Co., can provide you with invaluable expertise in business formation, financial planning, and budgeting. As you weave together the fabric of your business, having a trusted advisor by your side can make all the difference in navigating the complexities of taxation, accounting, and financial strategy.

Should you have any queries or need consultation, Schedule a Call today or write to us at info@gjmco.com