How To Begin Export in India

The first step for new entrant is to identify the product or products which he intends to export. Before considering the product, one might begin by considering why to get involved with exports, at all. One may have the following objects for starting the exports.

Greater Profitability

You may decide that profitability can increase by starting the exports. Exports can certainly raise the tax- free income and can provide best means of increasing the output also.

Domestic Market Saturated/Not Available

You may resort to exports because of this reason that your local market is saturated or local market is totally finished because of the newer and better alternate products. Exports can provide the best outlet for your products.

Better Utilization of Existing Resource

You may be under-using your resources and feel that export can provide the best means of increasing the use of your existing resources in terms of money, production , marketing and personnel capacities.

Spreading the Risk

You may feel that your domestic market’s ups and downs should be evened out if you were less dependent on it, and that your export markets would not be subject to such uneven trading condition.

Livelihood as Employee

The exports may provide you livelihood as employee in some export trade house or some other business house exporting goods abroad. Working in exports department can really provide you job satisfaction. But do not forget that this is a valuable opportunity for you to learn everything about exports for tomorrow you may establish your own export business.

For achieving these objectives you will have, first of all, to prepare a strategy.

Strategy for Exports

Do not do anything unless you know the export markets well and can be sure that you can get a good share of some of them, that is to say, you must have potential demand markets overseas. You must initially recognize that there is a need for your product in other parts of the world. You strategy will then determine how you satisfy those needs by exporting. You must accordingly work out a manufacturing and selling strategy for your company. You can have the following four basic options:

Manufacturing but not Exporting

You may elect to remain a manufacturer of products suitable for export, but not actually exporting them yourself, leaning this work to be handled by experts in export marketing. You may continue to manufacture the goods which you are already manufacturing but now your buyers will be exporters in your own country.

Manufacturing and Selling from Indian Base

You may decide to manufacture all your products in your own country and sell them in overseas demand markets by supplying from your domestic base. For example, you may make hand tools covering a range of thirty items. You may make them in the domestic factory and export them to as many demand markets overseas as you can find.

Selling From Overseas Base

You may opt for manufacturing your goods in India but selling those through your own offices abroad. Such facility is being allowed to 100% export oriented units to ensure additional marketing effort. The interested units can apply to RBI on Form OBR for seeking approval.

Advisory Services to Exporters

You may prefer to sell the know-how or the skills you possess rather than the actual results of those skills.

You can guide exporters in successfully effecting the export sales. There are lot many manufacturers who are not aware of the formalities involved in exporting; you can guide them and help them in documentation and other fields.

Merchant Exports

You can procure different goods from different parts of the country and export them under your trade name.

It is easier for overseas buyer to get different goods from the same seller It also helps the exporter in changing the pattern of the goods to be exported depending upon the demand of the goods abroad. For carrying out this activity there is need of actually manufacturing the goods. It also provides the exporter with a type of insurance against sudden fall in the demand of a product abroad and against the consequences of such causalities which may take place any time in the export trade.

Service Exports

You can also undertake service exports such as software exports, computer consultancy services, management consultancy services abroad in connection with various utility managements. The New Exim Policy (1990-93) has for the first time given recognition to the important role played by service exports towards export earnings for the country. The services mentioned above have been recognized for benefits under this New Policy. Such service exports will be entitled for a replenishment licence at the rate of 10% of the Net Foreign Exchange earned. Further, such exports will also be considered, up to the full extent, for the benefit of Export House/Trading House/Star Trading House status.

Marketing

An other vital part of the exports strategy is marketing of your product. You need to prepare a detailed marketing plan for launching your product. The marketing plan should cover the following aspects.

Your Product

You must identify the product you want to sell. It is possible that the product you are already manufacturing may need certain modifications before it is fit for being launched in the overseas market. You must have the proper evaluation of the marketability of your product and the way it can be presented.

It must have some comparative advantage over its competitors. For example, if you offer garments, they must meet the fashion needs of the demand market which is fast changing.

Your Manufacturing

You must also be able to produce the goods within the order/LC validity date. You need to chalk out a strategy for completing your production cycle on time. You should also be able to catch the requirement of the buyer and undertake modifications accordingly in the manufacturing pattern. The quality of the product should also be scrupulously kept.

Your Sales Promotion

No marketing plan can be complete without your considering the methods of your exports promotion. You may have to pay visits abroad. You may consider to participate in the trade and fashion shows. Sometimes the advertisement in the foreign magazine may also be required. You will have to plan these sales promotion programmes beforehand.

Your Price

YOU can fix the price of your product only after providing for all the fixed variable and overhead costs. So an essential feature of an export marketing plan is the price and terms to be charged, together with the method you will use to quote to the customer.

However, these price quotations are also to be in tune with the base prices of some goods fixed by the Government.

Your Market in Hand

in order to arrive at a precise estimation of the sales you aim to achieve, you will need to examine your demand markets. Your whole marketing plan will depend on your orders in hand. But you must have a marketing plan for each demand market, otherwise your export trade with it will suffer from lack of direction and you will not be able to exploit its possibilities to the full.

Nor will you know what returns to expect, or even be able to say whether the operation was financially successful or not.

After you have chalked out your export strategy and marketing plan the first thing you are required to do under the Exchange Control Regulations is to obtain the exporter’s code number from Reserve Bank of India.

Exporter’s Code Number

Every person, firm or company engaged in export business in India should obtain a Code number from the Reserve Bank of India. Code number need not be obtained for export of services. In other words, firms and companies who undertake construction contracts outside India and or offer consultancy services to parties outside India are not required to obtain code number from Reserve Bank of India. It is obligatory under the Foreign Exchange Regulation Act, 1973 to obtain a code number. Following procedure should be followed while applying for allotment of code number.

1) Application in duplicate. in the prescribed form called CNX should be made to the Exchange Control Department of the Reserve Bank within whose jurisdiction the Head Principal Office of the exporter is situated. The application should be routed through the bankers of the applicant in the interest of speedy disposal. Authorized dealers have been advised to forward the application without any delay together with their confidential reports on means and standing of the applicants indicating, inter alia, date of establishment of the concern, firm, company, names, addresses of the proprietor’s, partners, directors, nature of business and period for which they have been bankers of the applicant.

2) Applications should be made only by the Head Principal Office of the firm company.

3) Advice regarding the allotment of Permanent Account Number (PAN) by the Income Tax Department should be enclosed with the application for perusal and return by the Reserve Bank.

4) If PAN is not allotted, an undertaking to furnish PAN as soon as it is allotted by the Income Tax Department should be furnished by the applicant.

5) Photocopy of RBI’s permission under section 29/ 30 of FERA 1973 if the non-resident interest in company/Firm exceeds 40%.

If the application is in order, code number will be allotted by the Reserve Bank. The code number is permanent and there is no need to review or revalidate it. The number should be cited invariably on export forms used for declaration of exports. Customs authorities’ will not entertain any export form which does not bear the exporters code number allotted by the Reserve Bank of India. The code number allotted to the applicant by the Reserve Bank of India is advised to them on the copy of form CNX submitted by the applicant.

Starting an export business in India involves a structured process with key legal and procedural steps. Here is a step-by-step guide on how to begin:

Phase 1: Planning and Setup

1. Market Research and Product Selection:
   • Identify a niche product or service from India that has high demand in international markets.
   • Research potential target markets (countries) based on demand, competition, import regulations, and political stability.
   • Understand the quality, packaging, and labeling standards required in your target countries (e.g., FDA for the US, CE for Europe).
2. Establish a Legal Entity and PAN:
   • Register your business (e.g., Sole Proprietorship, Partnership, Private Limited Company, or LLP).
   • Obtain a Permanent Account Number (PAN) from the Income Tax Department for the business entity, as it is mandatory for all financial transactions.
3. Open a Bank Account:
   • Open a Current Account with a bank authorized to deal in foreign exchange (Authorized Dealer bank).
4. Obtain an Importer-Exporter Code (IEC):
   • The IEC is a mandatory 10-digit code issued by the Directorate General of Foreign Trade (DGFT) for all import and export activities.
   • The application is filed online on the DGFT website.
5. Get GST Registration (Mandatory):
   • Although exports are typically “zero-rated,” GST registration is mandatory for exporters to claim refunds on input tax credits.
6. Obtain Registration-cum-Membership Certificate (RCMC):
   • Register with the relevant Export Promotion Council (EPC) or Commodity Board related to your product (e.g., FIEO, APEDA, EEPC).
   • The RCMC is required to avail of various export benefits and concessions under the Foreign Trade Policy.

Phase 2: Finding Buyers and Executing the Order

7. Find International Buyers:
   • Use B2B platforms (like Alibaba, IndiaMART, TradeIndia).
   • Participate in international trade fairs and exhibitions.
   • Connect through Export Promotion Councils and Indian Missions abroad.
   • Build a strong digital presence with a professional website.
8. Pricing and Negotiation:
   • Work out your competitive export costing (including all expenses like production, packaging, freight, insurance, and profit margin).
   • Negotiate the terms of sale, including the price, payment terms (e.g., Letter of Credit, Advance Payment, Open Account), and Incoterms (e.g., FOB, CIF) that define responsibilities for shipping and costs.
9. Prepare for Shipment:
   • Arrange for the production or procurement of the goods.
   • Ensure goods meet the buyer’s specifications and international quality standards (e.g., ISO, pre-shipment inspection).
   • Properly package, label, and mark the goods according to the destination country’s requirements and shipping standards.
   • Classify your product using the Harmonized System (HS) Code.
   • Obtain marine insurance to cover goods during transit.

Phase 3: Documentation and Logistics

10. Customs Clearance and Documentation:
    • Appoint a reliable Freight Forwarder or Customs House Agent (CHA) to handle logistics and customs formalities.
    • Prepare and submit mandatory documents, including:
      • Commercial Invoice and Packing List.
      • Shipping Bill (the main document for customs clearance).
      • Bill of Lading (for sea freight) or Airway Bill (for air freight).
      • Certificate of Origin.
      • Other product-specific certificates (e.g., Health, Inspection Certificate), if required.
11. Shipping and Payment Realization:
    • Your CHA will facilitate the loading and shipment of goods.
    • After shipment, submit the documents to the bank as per the agreed payment terms (e.g., under a Letter of Credit).
    • Ensure the realization of export proceeds and obtain the Foreign Inward Remittance Certificate (FIRC) from your bank as proof of payment.

Explore Government Export Incentives

As a new exporter, you should also explore government schemes to reduce costs and improve competitiveness:

• RoDTEP (Remission of Duties and Taxes on Exported Products): To refund embedded taxes not otherwise reimbursed.
• EPCG (Export Promotion Capital Goods) Scheme: Allows duty-free import of capital goods for producing export products.
• Advance Authorization Scheme: Allows duty-free import of raw materials and inputs used in the manufacture of export products.

How to Begin Export in India: A Complete Step-by-Step Guide

Exporting from India can be a highly profitable venture because of the country’s diverse product base and government support for exporters. Whether you are planning to export garments, spices, handicrafts, or industrial goods, following the proper steps ensures smooth business operations and compliance with Indian trade laws.

Step 1: Establish Your Business Entity

Before starting export operations, you must have a legal business setup. You can register your firm as:

• Proprietorship

• Partnership Firm

• Limited Liability Partnership (LLP)

• Private Limited Company

After registration, obtain a Permanent Account Number (PAN) from the Income Tax Department.

Step 2: Open a Current Account

Open a current account with any commercial bank authorized by the Reserve Bank of India (RBI) to deal in foreign exchange. This account will be used for international trade transactions.

Step 3: Obtain Import Export Code (IEC)

The Import Export Code (IEC) is mandatory for anyone involved in export or import.
You can apply online on the DGFT (Directorate General of Foreign Trade) website: https://dgft.gov.in

Documents Required:

• PAN card of the business or proprietor

• Address proof of business

• Bank details

• Passport-size photograph

Once approved, the IEC is valid for a lifetime.

Step 4: Choose Your Product and Market

Select a product with strong demand in foreign markets. Analyze:

• Global market trends

• Price competition

• Quality standards

• Packaging requirements

You can use export promotion councils, trade fairs, and online portals like IndiaMART, Alibaba, and TradeIndia to research and connect with buyers.

Step 5: Register with an Export Promotion Council (EPC)

Every exporter should register with the relevant Export Promotion Council (EPC) to access benefits under Foreign Trade Policy (FTP) such as:

• Duty drawback

• Export incentives

• Participation in trade fairs

For example:

• APEDA – Agricultural products

• EPCH – Handicrafts

• FIEO – Federation of Indian Export Organisations

Step 6: Understand Export Documentation

Export documentation is essential for customs clearance, shipment, and payment. The key documents include:

• Invoice

• Packing List

• Bill of Lading / Airway Bill

• Shipping Bill

• Certificate of Origin

• Letter of Credit (if applicable)

• Insurance Certificate

Step 7: Find International Buyers

You can find buyers through:

• B2B platforms (Alibaba, Global Sources)

• Trade exhibitions and fairs

• Indian embassies abroad

• Export promotion agencies

• Digital marketing and LinkedIn outreach

Always verify buyer authenticity before confirming large orders.

Step 8: Decide on Payment Terms

Ensure secure payment arrangements using:

• Advance Payment

• Letter of Credit (L/C)

• Documents Against Payment (D/P)

• Documents Against Acceptance (D/A)

Consult your bank to choose the safest option for your transaction.

Step 9: Arrange Pre-Shipment Finance

Banks in India offer pre-shipment and post-shipment finance to exporters under RBI guidelines. This helps you manage production, packaging, and logistics before receiving buyer payment.

Step 10: Packaging, Labeling & Quality Control

Your products must meet international quality standards and country-specific packaging norms. Obtain necessary certifications like:

• FSSAI for food products

• ISO for industrial goods

• Agmark for agricultural products

Good packaging prevents damage and improves brand reputation overseas.

Step 11: Customs Clearance

Submit your shipping documents electronically via ICEGATE (Indian Customs EDI System) for export clearance.
Your Customs House Agent (CHA) will help with:

• Generating Shipping Bill

• Getting “Let Export Order (LEO)”

• Sealing containers for shipment

Step 12: Shipment and Logistics

After customs clearance:

• Choose a reliable freight forwarder

• Book space with shipping or air cargo companies

• Track shipment until delivery to the buyer’s destination port

Ensure insurance coverage under Marine Insurance Policy to protect against transit risks.

Step 13: Realization of Export Proceeds

Once goods are shipped, the exporter should ensure payment realization within 9 months from the date of export (as per RBI norms).
Banks handle the Foreign Inward Remittance Certificate (FIRC) for proof of payment received.

Step 14: Claim Export Incentives

Exporters can claim benefits under various government schemes such as:

• RoDTEP (Remission of Duties and Taxes on Export Products)

• RoSCTL (Rebate of State and Central Taxes and Levies)

• Export Promotion Capital Goods (EPCG) Scheme

• Advance Authorization Scheme

These incentives reduce your overall export cost and boost profitability.

Conclusion

Starting an export business in India requires compliance, planning, and market understanding. Once you obtain an IEC, identify a good product, and connect with reliable buyers, you can scale up quickly using government support schemes and digital platforms. With India’s growing global trade network, this is the perfect time to begin your export journey.