India has always been a dynamic hub of global trade, and today, its export business contributes to the country’s overall economic development. With an exhaustive list of products, a strong manufacturing base, and government policies to promote trade, exporting from India is a highly sought-after opportunity for both existing businesses and emerging entrepreneurs. You may plan to join the export business or supplement your existing activities; you are bound to be interested in knowing the minutest details of exporting from India.
This blog covers the bare essentials of exporting from India: key industries, government incentives, and do’s and don’ts when venturing into the international marketplace.
Why Export from India?
India is one of the largest exporters in the world. The products from India touch more than 200 countries across the world. The diversification and range are vast-from textiles and pharmaceuticals to IT services and agricultural products. The following is why exporting from India makes such great business sense:
1. Diverse Export Commodities:
India has ample natural resources and highly skilled labor, along with new industrial sectors that manufacture everything from software and chemicals to jewelry and car parts.
2. Government Incentives:
The Indian government also encourages exports through various schemes and incentives. There are such schemes as the Merchandise Export from India Scheme (MEIS), Export Promotion Capital Goods Scheme (EPCG scheme), and policies of drawback duty, which save exporters many fiscal incentives.
3. Strategic Location:
The geographical positioning of India between the East and the West facilitates exports, connecting businesses with markets, thereby ensuring reach into Asia, Europe, Africa, and beyond.
4. Growing International Demand:
With the evolution of global supply chains and the increasing demand in international markets for Indian products, exporting from India may result in most businesses expanding a massive customer base across diverse sectors.
Main Industries for Export from India
India has a huge exporting economy that is cutting across various sectors. As such, India would attract markets for a significant number of industries. These are some of the leading export sectors in India:
1. Textiles and Apparel:
India is the largest cotton and textile producer in the world. The Indian textile and garment industry has a strong international presence through direct exports of cotton fabrics, silk, synthetic fibers, and ready-made garments to the United States, Europe, and the Middle East.
2. Pharmaceuticals:
India’s pharmaceutical industries are the biggest players in the world markets. The country’s pharmaceutical market produces high-quality and affordable generic medicines. More than 200 countries worldwide import pharmaceutical products from India, with the U.S., Africa, and the EU being the prime market.
3. Agricultural Products:
India is one of the largest exporters of agricultural commodities, including rice, wheat, spices, tea, coffee, fruits, and vegetables. With the largest arable land, the agriculture industry gives substantial strength to the country’s economy from exportation.
4. Information Technology (IT) services:
India is known to be one of the biggest world recognitions for IT companies developing software, IT consulting, and BPO, where companies outsource their business services to multinational corporations.
5. Gem and Jewelry:
India is among one of the largest exporters of diamonds, gold, and jewelry. Indian skilled artisans are the best in their craft and export jewelry to markets in the U.S., the UAE, and Europe.
6. Automotive:
India’s automobile industry is the largest exporter of vehicles as well as automotive components, with manufacturers producing everything from cars and motorcycles to parts like engines and brake systems.
Steps to initiate exporting from India
If you are a first-time exporter or looking to expand your business into international boundaries, here are several key steps you’ll need to take in order to successfully navigate the export process from India:
1. Obtain an Importer Exporter Code (IEC)
Importer Exporter Code: This is a mandatory registration that every business needs to have if one is importing or exporting goods from India. It is issued by the Directorate General of Foreign Trade and will be necessary at the time of clearance of the customs, shipping of the goods, and receiving payments for your exports.
2. Choose Your Products and Target Market
Identifying your target market and the right kind of products is the key to success in exporting. You can research global demand, price, regulations, and competition while you select some products that can succeed well in international markets. Countries that are under a free trade agreement with India, like SAFTA or ASEAN member nations, could be more exporter-friendly.
3. Registration with Export Promotion Councils
Export Promotion Councils, or EPCs, are government-authorized bodies for exporters who help to deal with international markets. Registration under the appropriate EPC for your product will, thus, be helpful in terms of consultation with best-in-class experts, networking, and some Export Incentives.
4. Product Compliance and Quality Control
When you export, products should meet international quality standards and all destination country-regulated certifications. The industry may vary, yet depending on the case, there may be a need for ISO certification, CE marking, and food safety standards, among others.
5. Choose the Right Means of Shipment
Depending upon the dimensions and nature of your cargo, you will need to choose the right means of transportation—air, sea, or land. Sea freight is a common mode when shipping in huge quantities, though it may take time. Air freight, on the other hand, is quite fast but very expensive. A good freight forwarder will facilitate the logistics process.
6. Documentation and Customs Clearance
Exporting commodities demand a series of paperwork, including:
• Pro-forma invoice
• Bill of Lading or Airway Bill
• Packing List
• Certificate of Origin
• Export License (if applicable)
• Letter of Credit (if required by your buyer)
Ensure that all of these documents are prepared correctly so as not to be held up in customs.
7. Export Incentives and Schemes
The Government of India promotes exports through schemes that would reduce costs for exporters. For example:
• MEIS offers financial incentives in the form of rewards to exporters for the export of notified goods to specified developing countries.
• Duty Drawback: You can recover duty on the raw material imported and used in manufacturing exported products.
• Export Credit Guarantee Corporation of India (ECGC): It provides cover to exporters in respect of payment risks
8. Supply Chain
Ensure you know how you are going to get your money from the sale. The payment can be made under
• Letter of Credit (LC): The bank ensures the client’s payment by making the realization for the documents submitted.
• Advance Payment: Advance payment by the buyer before releasing the goods.
• Open Account: The seller accepts the payment after delivery of the goods (higher risk for exporters).
Government Incentives to Exporters
The Indian government has, in addition to simplification measures, made exports more attractive through a number of financial incentives. Some significant initiatives are the following:
• Make in India: The scheme encourages the production of local goods and even foreign investment because the more the products are manufactured in India, the greater the exports.
• EPCG Scheme: The scheme allows exporters to import capital goods at concessional duty rates on the condition that they complete a minimum percentage of the export performance criteria as specified.
• Special Economic Zones: A Special Economic Zone is a designated area offering concessional taxes and easy customs rules that would be encouraged to boost the country’s exports.
Conclusion: India’s Export Landscape is Full of Opportunities
India is a dynamic, diversified export economy, which provides tremendous opportunities for businesses attempting to succeed in the international market. Exporting from India, using the right strategy, having knowledge of export procedures, and having government support may perhaps unlock new avenues for growth and enhance profitability.
Whether small or big, there’s a pretty vast potential for success in the export market. With growing global demands for Indian goods and services, now is the best time to explore the benefits of exporting and begin building an international presence. Amazon Global Selling is the best platform for you to export your goods from India seamlessly.
