Thinking for a new startup? But Confused how to start an import export business in India? Or want to expand or extend your existing trading business Internationally? Don’t give it a second thought this time just go for it. It’s not that hard as one might be thinking it is! All you need to do is to follow some easy and simple things and you are all set to be done! Who can start an Import & Export Business? Any individual or any group of individuals can start the import and export business of their own choice. There are no such barriers but one is needed to have a thorough knowledge of the business before starting it.
What are the legal procedures one need to complete before getting into the import and export business? Very first you need to have your own setup. Let it be a proprietorship or any joint venture, it is important to have one. You are then required to do the GST Registration with your desired name and any logo of your choice (it should be your own and unique but not copied from anywhere else). This registration is mandatory for the registration of your business. Once the registration is done for the above thing you are now required to have a PAN card issued from the Income Tax Department of Government of India.
[For registering your GST step by step, refer our article GST Registration Process]
Having a PAN card to extend the import and export business globally is a mandatory thing. You need to issue it with the name of your entity. After the issuance of a PAN card, you need to open a current bank account with any of the commercial banks but most preferably with any of the Nationalized banks. This account should be exclusively for your venture and should not be for your personal use. After opening an account with the bank now it is of a prime necessity to register for Import Export Code number also known as an IEC number. This is the most important step which you are required to do before getting into your own import and export venture. Once the IEC number is issued you are now required to obtain an RCMC. i.e., Registration Cum Membership Certificate (only in case of Exports) which is issued only by the Export Promotion Council or Commodity Board of India. This certificate is valid only for 5 years. This helps your business to get an authorization from the Government of India. This also helps in smoothing of future export activities which are going to take place by your firm.
[If you want to issue an IEC number, refer our article How to get an Import Export Code Online in India]
After you are done with the above requirements your business is ready to set up in India and you can easily carry out your import and export trading globally. The IEC and RCMC are valid over all branches or every business premises across India. Your legal formalities are then completed to start an Import and Export business in India. Note: Only one PAN card can be issued per entity. Only one IEC number can be issued per PAN card and same is for the RCMC.
[Read our article on How to Apply for PAN card Online, if you do not have a PAN card]
After the entire above procedure has been done, next questions which may come to your mind are: what are the opportunities you have for the import and export trading? and how to select a product for your import and export business? Import and export of goods and services is a very important part of our country’s economy. And any country cannot grow and rise without interacting with the other parts of the world. And there are numerous avenues one can explore in this business or say in extending this business globally.
Exploring Online Market:
Almost everyone these days has heard about the e-commerce/ online shopping websites like Amazon.com, Alibaba.com, DHGate.com, Aliexpress.com, etc. There are many such websites which are designed and which allow the exporters across the globe to enlist himself/ herself on their websites and let him/her actually sell their products to the people living miles and miles away from them. These days internet is working like a bridge or mediator between the exporters and importers to export or import their products, goods or services to the consumers sitting across the globe.
Exploring the International Market:
This is again a very fascinating thing one can do with his import or export business. As each and every country across the globe has some very unique resources. These unique resources can be exported and imported between the countries. One needs to explore what he/she can export to the needy country and in return what one can import from the same country. It is obvious that you need to do a proper and thorough research work for the same, though some such resources are being mentioned below: Let us talk about our own country India first. What are we blessed with? What unique resources we do have?
Of course, there are many but India’s most exported products are agricultural products like wheat, Basmati rice, cereals, cotton, and tea, etc. On the other hand, India’s most imported products are mineral oils, electronics, gems, and precious and semi-precious stones. Let us talk about some other countries now from where we can import the products to India. If you are into the agricultural trading, Brazil is the best country which produces good and relevant agricultural processing equipment. Also, products like coffee, sugarcane, crop-based ethanol, and soya bean.
Next comes the very famous China with its Chinese electronic market. Almost all of us for at least once in a lifetime has used a made in China phone. Let it be a basic Chinese phone or an iPhone which is assembled in China or any other Chinese electronic equipment, China has always ruled the electronic market till now. Most of the exports of the electronic products are made in China, and so do the imports. Saudi Arabia is popularly known for its huge and rich availability of mineral fuels and mineral oils. If you are into any import trading business you can tie up with the exporters from Saudi Arabia to import these things from India.
How to execute the orders of import-export? There are certain policies which are made by the “Directorate of Foreign Trade, Ministry of Commerce, Government of India. You need to follow these policies thoroughly before getting into any kind of import or export business in India. But the main and most important job is of the Indian Central Government’s Customs Office which licenses an agent known as Customs House Agent also known as CHA to act as an agent for the transaction of any kind of business or trading related to the arrival or departure of any of the conveyances or the import and export of products and goods at a customs station. The main job of the Customs House Agent (CHA) is to maintain a detailed, thorough, itemized and up to date account of each of the import or export activity. His/her license may be a permanent one or maybe a temporary one.
What are the required documents for the process of import or export in India? You need to have all the valid and relevant documents by your side before getting into the direct trading process of the import business or export business of any goods or services. These documents shall be the registration papers of your entity, Bill of Entry in the case of imports, Commercial Invoice (a bill for the goods from the seller to the buyer), Insurance Certificate, Import or export license, Purchase order/ Letter of Credits, Pro Forma Invoice, Airway Bill, Shipper’s letter of Instructions, Generic certificate of origin, Export Packing list, Dangerous Goods Certificate, ATA Carnet, a. k. a., “Merchandise Passport” and a Destination Control Statement also known as a DC statement or DCS. Once you are ready with all these required things, Congratulations!! You are already into the import or export trading now.
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