How To Start An Import Export Business In India

Dec 21, 2022

820 4 mins

If you're looking for information on how to launch an import-export company in India, you've come to the correct spot. Due in large part to the internet's influence on our buying and selling behaviors, inquiries about founding import-export enterprises have increased in popularity. E-commerce has made it feasible to buy from/sell to any location in the world, from small and medium-sized firms to home-based businesses. Let’s see in detail through this article

What Exactly is an Import-export Company?

An import-export business is any organization that trades goods and services internationally while providing domestically and vice versa.

Documents Required for an Import-Export business

Company registration certificate – A legal document that ascertains that a business or an organization has been registered as a business, explaining the terms of business and incorporation.
PAN card – A PAN card is a digital system that monitors a person’s or a company’s tax-related transactions, through a single Permanent Account Number.
Current Account – A bank account maintained and only used for business.
Import Export Code (IEC) – This IEC refers to the import-export license issued by the Government of India. A 10-digit code issued by the Director-General Of Foreign Trade (DGFT), Department of Commerce.
Registration Cum Membership Certificate – It is issued by the Exports Promotional Council (EPC) to the exporter. It certifies that the exports are government-approved products.

Setting up your Import-Export business

Registering your company – You can hire legal professionals to register your import-export business in India. Depending on the type, you can register as a private company, partnership, or sole ownership, with the government.

PAN card for your business – You can use your existing PAN card or acquire a new PAN for your business, issued by the Indian government.

Securing an Import Export License – As referenced earlier, this is the 10-digit IEC issued by the DGFT. Securing this license is a mandatory requirement for setting up an import-export business.

The RCMC for the export business –This certificate is issued by the Export Promotional Council (EPC) to the exporter certifying the credibility of the goods he/she exports. There are a total of 26 EPCs in and around the country. An RCMC can be acquired from any of these.
A bank account for your business – As stated by the RBI, you need to open a current account for all financial transactions related to your business.

Reasons Why You Can Make a Lot of Money With an Export Business in India

First of all, India makes a lot of unique things that are in high demand all over the world
All over the world, people love Indian gems and jewelry, fruits and vegetables, Indian snacks, and high-quality fabrics
Because of immigration and the rise of multiculturalism, there is a lot of demand for these goods
Second, because the Indian government knows that export business is a big part of the growth of the Indian economy, it has set up a number of programs to help export businesses and traders
This makes it easy to do business and brings in a lot of money, which encourages exporters to improve and grow their businesses
Lastly, the benefits of exporting from India are increased by the high quality of our products, the low cost of our labor, and the low cost of other costs
Before we get into how to start an export business without money, let’s take a look at which goods are exported from India and which are exported from India.

Types of Import-Export business

Export Trading Company (ETC): They operate by finding domestic entities that can provide international buyers with what they are looking for, and exporting it to these foreign entities.
Export Management Company (EMC): They act as facilitators for hire, for export companies. They put the entire operation together on behalf of the export company (including finding buyers, distributors, arranging logistics, etc), and are compensated for their services.
Import/Export Agents: They are essentially free agents who buy from domestic/foreign manufacturers, and then resell the goods to businesses around the world.

Export Promotion Schemes launched by the government

The Trade Infrastructure Export Scheme (TIEC) launched in the financial year 2017 provides financial assistance to businesses owned by the Central and State Governments. Under this scheme, these businesses can secure financial support for infrastructure projects. Between 2017 and 2019, a total of 28 projects have been aided through this scheme. Aside from this, the Government of India focuses on providing an international environment for trading within each state and creating an overall environment that encourages further exports from the country.

Aside from this, the Director-General Of Foreign Trade (DGFT) operates various export schemes;

Export promotion schemes such as Advance Authorization
Export Promotion of Capital Goods
Duty-Free Import Authorization
Merchandise Exports from India Scheme (MEIS) and
Services Exports from India Scheme (SEIS)

Top-performing Import industries in India

Mineral fuels including oils
Gems & precious metals
Electrical machinery & equipment
Machinery & computers
Organic chemicals
Plastics
Iron & Steel
Oils
Medical equipment
Inorganic Chemicals

Top-performing Export industries in India

Mineral fuels, including oil
Gems & precious metals
Machinery & computers
Vehicles
Organic chemicals
Pharmaceuticals
Electrical machinery & equipment
Iron & Steel
Cotton
Clothing & Accessories

Conclusion:

An import-export firm has a different set of rules and regulations even though it is less expensive to set up than an export business. Above all, you can go a long way by first establishing your budget, and then organizing your import and export business accordingly. The leading export industry participants, including Reliance, TATA Steel, Sun Pharma Industries, Bajaj Private Limited, and Arvind Mills, started their ascent to success in this manner. If you want to play in the same league as them, you must be extremely intelligent and knowledgeable about the import-export industry. At times, setting up a whole export firm with all of its permits, regulations, and incentives might seem intimidating and difficult. In these cases, we need an expert like Vakilsearch to help you to go through the process. Do connect with the experts, who is India’s number one legal service provider for any legal help!

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