HOW TO EXPORT
Indian Foreign Trade, i.e., imports and exports, is regulated by Foreign Trade Policy notified by the Central Government under the powers granted by section 5 of the foreign commerce (Development and Regulation) Act 1992. Currently, Foreign Trade Policy 2015-20 is effective from 1st April in 2015. By the FTD and R Act, export is defined as taking off from India any item via either air, sea, or land and with the proper money transfer. The FTP 2015-20 was extended to 30th September 2021.
HOW TO START EXPORT
Export in itself is a vast concept, and a lot of planning is required by exporters before launching an export company. To begin an export business, the following steps may be followed.
1) Establishing an Organisation
To start the export business, first, a Sole Proprietary concern or Partnership firm/Company has to be established according to the procedure, with an attractive name and logo.
2) Opening a Bank Account
A current account at a Bank authorized to trade in Foreign Exchange should be opened.
3) Obtaining Permanent Account Number (PAN)
It is required for each importer and exporter to obtain a PAN through the Income Tax Department.
4) Obtaining Importer-Exporter Code (IEC) Number
According to the Foreign Trade Policy, getting an IEC to import or export from India is required.
A request for IEC is made online on www.dgft.gov.in by ANF 2A. Online payment of application fees of Rs. 500/- through net debit or credit card is submitted along with the required documents specified on the online application.
5) Registration cum membership certificate (RCMC)
For availing authorization to import or export or other benefits or concession under FTP 2015-20, they must get RCMC issued by the relevant Export Promotion Councils/ FIEO/Commodity Boards and Authorities.
6.) Selection of the product
All items are exportable, except a few things on the prohibited or restricted list.
After researching the trends of export of various products from India, may make the correct choice of product(s)to be exported
7) Selection of Markets
Should be selecting an overseas market after research covers market size, competition, quality needs, payment terms, etc. Exporters may also valuate the markets supported the export advantages for a few countries underneath the FTP. Export promotion agencies, Indian Missions abroad, colleagues, friends, and relatives could be useful in gathering info.
8) Finding Buyers
Participation in trade fairs, client marketers, meets, exhibitions, B2B portals, and internet browsing are efficient ways to seek out patrons. EPC’s, Indian Missions abroad, overseas chambers of commerce also can be useful. Making a multilingual website with a product catalog, price, payment terms, and other related information would also help. How to Find Buyers For Your Export Business
Offering customized samples according to the needs of Foreign buyers can help them get orders to export. By FTP 2015-2020, exports of bonafide commerce and technical pieces of exportable products are allowed without restriction.
Product pricing is crucial in getting buyers’ attention and promoting sales insight into international competition. The value ought to be found out taking into thought all expenses from sampling to realization of export return on the premise of terms of sale, i.e., Free on Board (FOB), Cost, Insurance & Freight (CIF), value & Freight(C&F), etc. Creating export cost accounting ought to sell the most quantity at competitive worth with the most rational.
11) Discussion with buyers
After determining the buyer’s interest in the product, prospects, and continuity in business, demand for giving cheap allowance/discount in worth could also be thought-about.
12) The Covering of Risks via ECGC
International trade could be a risky business involving payment risk due to buyer/country financial condition. This risk may be protected with an acceptable Policy issued by the credit Guarantee Corporation Ltd (ECGC). Suppose the buyer is placing an order without making the advance payment or opening letter of Credit; therein case, it is advisable to procure a credit limit on the foreign buyer from ECGC to protect against the risk of non-payment.
Processing an Export Order
Also Read – Import and Export Process in India
1) Confirmation of the order
On receiving an export order, it ought to be examined fastidiously regarding specifications, payment conditions, packaging, delivery schedule, etc., and so the order ought to be confirmed. Consequently, the exporter may enter into a formal contract with the overseas client.
2) Procurement of Goods
After confirmation of the export order, may tack immediate steps for procurement/manufacture of the goods meant for export. Be aware that achieved the purchase order through effort and competition. Therefore, the procurement process should also be strict as per the buyer’s requirement.
3) Quality Control
In today’s competitive era, it’s necessary to be strict quality-aware regarding the export product. Some merchandise like food and agriculture, fishery, bound chemicals. Square measure subject to mandatory pre-shipment scrutiny. Foreign patrons may additionally lay down their standards/specifications and demand upon scrutiny by their nominative agencies. Maintaining prime quality is critical to sustaining in export business.
Exporters area units are eligible to get pre-shipment and post-shipment. Finance from business Banks at concessional interest rates to complete the export dealing. Packing Credit advance in the pre-shipment stage is grante to new exporters against lodgment of L/C or confirmed order for a hundred and eighty days to fulfil assets necessities for purchasing raw material/finished merchandise, labour expenses, packing, transporting, etc.
Usually, Banks offer seventy-fifth to ninetieth advances of the worth of the order keeping the balance as margin. Banks change the packing credit advance from the issue of export bills negotiated, purchased or discounted.
5) Labeling, Packaging, Packing, and Marking
The export goods should be labeled, packaged, and packed strictly according to the buyer’s specific directions. Innovative packaging delivers and presents the products in prime condition and enticing approach. Similarly, smart packing helps simple handling, most loading, reducing shipping prices, and ensuring the shipment’s safety and customs. Marking like address, package variety, port and place of destination, weight, handling directions, etc., provides identification and knowledge of shipment packed.
Marine insurance policy protects against the risk of damage or loss to the merchandise time the goods are in transit. In general, in a CIF contract, the exporters take care of insurance, whereas in C&F or FOB contract, the purchasers obtain insurance.
Related Article – Import Export Procedures In India
It is an essential aspect of export, and the exporter must follow the timeframe for delivery. It is necessary Planning should be there to let nothing stand in the way of fast and efficient delivery.
8) Customs House Agents
Exporters can use the services offered by Customs House Agents licensed through the commissioner of Customs. They are professionals, connect works with clearance of cargo from Customs.
FTP 2015-2020 describes the required documents needed for export and import.
- Bill of Lading/ Airway bill
- Commercial invoice packing list
- shipping bill/bill of export the bill for entry (for imports)
(Other documents such as certificates of the origin or inspection certificates, etc., might be require depending on the circumstances.)
10) Submitting documents to Bank
After the shipment is complete, it’s mandatory to submit all documents required to the Bank within 21 days to allow for onward delivery of the papers to the international Bank to arrange the payment. drawn under Collection/Purchase/Negotiation under L/C as the case may be, along with the following documents
- Bill of Exchange
- Letter of Credit (if the shipment falls under L/C)
- Letter of Credit (if shipment is under L/C)
- Packing List
- Airway Bill/Bill of Lading
- Declaration under Foreign Exchange
- Certificate of Origin/GSP
- Inspection Certificate, wherever necessary
Additional documents are necessary for the L/C or legally required by the purchaser.
Also Check – Payment Terms in Export and Import Business
In this article above, I explained step-by-step how to quickly export and process export orders. Thank you for watching till the end; please tell me the comment box if you have any questions.