How to Start an Export Business in India

Indian government promotes SME growth, particularly exporters, in international markets through several programs like RoDTEP (Remission of Duties and Taxes on Export Products Scheme), SEIS (Services Export from India Scheme), EPCG (Export Promotion Capital Goods) Scheme, and RoSCTL (Rebate on State and Central Taxes and Levies) Scheme. Starting an export business in India can significantly boost an SME's sales and profits by venturing into the global markets.

To diversify your reach to a wider audience, you must first know how to start an export business in India. Here is a step-by-step guide to establishing a solid export strategy.

Steps to Start Export Business in India

Ever since the introduction of liberalisation in the Indian economy, starting an export business has become even more accessible and easier. Here are all the details on the process, documentation requirements, necessary arrangements, etc.

Step 1: Select a Niche

Market research makes it easier to identify your niche, after which you can understand your competitors, predict your customers’ expectations, and set the right pricing. It also determines whether the global market demands your product or service. Research potential markets, talk with companies that export goods similar to yours, and contact foreign countries' local chambers of commerce. Additionally, enquire about international trade trends and get the necessary licenses.

Step 2: Get Business Registered

According to the government rules, you must open a bank account in an authorised Indian bank to have valid business operations. Opening a current account with an authorised bank is mandatory to deal in international exchange. Want to know how to set up export business in India? You must register your business as a company, partnership firm, or sole proprietorship with a valid name and logo. Moreover, you must obtain an RCMC (Registration-Cum Membership Certificate) from the Export Promotion Council to gain export authorisation.

Also, Read: Nature of Business - All You Need to Know About It

Step 3: Get an IEC (Import Export Code)

Under the Foreign Trade Policy, obtaining an IEC (Import Export Code) is mandatory in India. It is a 10-digit business ID number you must obtain to export from India. As per ANF 2A, you can file an IEC application online at DFGT by submitting an application form, necessary documents, and a nominal application fee via credit card, debit card, or net banking.

Step 4: Documentation Formalities

Are you still confused about how can I start an export business in India? Complete the process by fulfilling the documentation formalities. You must build a valid business entity and obtain a PAN, IEC number, and RCMC to export your products or services from India.

Step 5: Technology and Online Presence

Technological advancements have considerably blurred geographical boundaries. With an online presence, you can reach your target audience in any part of the world. Build a user-friendly and attractive website, promote it online through effective marketing methods, and develop a brand image to receive international orders.

Now, you have understood the factors that may help you initiate your business. Moreover, you will require additional financial inputs to make your business run smoothly and expand it further. In that case, a Business Loan can be beneficial in expanding an export business. 

How Business Loan can be Beneficial in Expanding an Export Business?

Funding support in the form of business financing can be of great help to upscale an export business in India. Here is how it will help:

Capital Investment

Instead of investing your savings, borrowing from family, or liquidating assets, a loan for a business can make instant funds available to expand an export business in India.

Market Research and Expansion

Market research is an integral part of starting a successful business. You can use the loan amount for market and competition research and expand into international markets.

Infrastructure and Technology

Since a loan for business has no usage restrictions, you can use one to invest in your business infrastructure and technology. Get the latest equipment and software to serve your international customers efficiently.

Marketing and Brand Building

Marketing your business in the right places is crucial to achieving success. However, a robust marketing strategy needs expert help and investment that you can source from business financing.

Also, Read: What is a Business Plan? Definition, Tips, and How To Write One

How Much Amount You Needed to Start the Export Business

The amount of money needed to start an export business in India varies depending on the type and scale of the business. However, most estimates suggest that a small export business can be started for between Rs. 10 lakh and Rs. 15 lakhs. This amount will cover the following expenses:

• Registration fees and legal fees: This includes the cost of registering the business with the Registrar of Companies, obtaining an Importer-Exporter Code (IEC) number, and hiring a lawyer to draft any necessary contracts.
• Capital expenditures: This includes the cost of purchasing any necessary equipment or machinery, as well as leasing or renting office space.
• Other startup costs: This includes the cost of marketing and advertising, website development, and travel expenses.

In addition to the initial investment, exporters will also need to have access to working capital to cover the costs of purchasing inventory, manufacturing products, and paying employees until they receive payment from their customers. This working capital can be obtained from banks and other financial institutions.

Here are some common types of export businesses: