How to Start an Export Business in India - An Ultimate Guide

Are you itching to launch your campaign and conquer every corner of the world with your products? Before enjoying the fruits of international trading, you must consider the opponents in your path. 

Navigating complex regulations, securing licenses, dealing with currency fluctuations, and managing logistics costs are just some of the challenges your product must overcome. 

But you don’t need to throw in the towel before you begin. You can cut through the chaos with the right strategies and make your export dreams a reality. The ultimate guide needs no introductions. 

So…

Setting Up an Export Business in India

Let’s dive straight into the step-by-step process you must follow to set up a successful export business in India. 

1. Conduct Market Research

Market research helps you find the types of products you can sell easily and what parts of the world are interested in buying them. 

Start by digging into your local export statistics. These reports are goldmines of information, showing you which commodities are being exported the most and which countries are snapping them up. 

You can check out the Trade Statistics from the Ministry of Commerce and Industry for the latest info on what's popular and where it's popular. 

With this knowledge, you can identify reliable product sources, build buyer connections, and gradually expand your reach.

2. Develop an Export Plan

An export plan outlines your objectives, target markets, strategies, and financial projections, serving as a roadmap for your export business. 

To develop your export plan, just follow these easy steps:

• Determine the product or service you want to export and evaluate its export potential.

• Conduct market research to identify promising target countries.

• Secure funding and insurance to guarantee your financial resources.

• Develop a distribution strategy to decide how you’ll deliver your products.

• Build a marketing plan to promote your products in the target market.

• Develop a pricing strategy tailored to your product or service.

• Outline a clear approach to connecting with potential buyers.

3. Register Your Business & Obtaining Necessary Licenses 

Enough planning; it’s time to get things done. Let’s go on a little adventure that’ll take you through all the necessary steps to establish your business and make it export-ready in India:

• Establish your business: First things first—decide on the structure of your business. Will you be a sole proprietorship, a partnership firm, or a company? Choose a catchy name and design a logo that stands out. 

• Get your company details: Obtain important details like Company PAN and Company GST as well. Register for GST here. Click here to apply for PAN. 

• Open a bank account and get an AD code: Cause how else will you get your payments? Make sure it’s authorized to deal in foreign exchange too. You also need an Authorized Dealer code to start your export business. 

• Get your Registration Cum Membership Certificate (RCMC): Your concerned Export Promotion Councils/FIEO/Commodity Boards will grant you your RCMC. This is your authorization to import/export under FTP 2015-20.

Depending on your product and target market, you may need specific licenses and certifications such as:

• APEDA Registration: For agricultural products, register with the Agricultural and Processed Food Products Export Development Authority (APEDA).

• FSSAI License: For food products, obtain a license from the Food Safety and Standards Authority of India (FSSAI).

• Product-Specific Certifications: Depending on the market, you may need certifications like ISO, CE, or others relevant to your industry.

4. Set Up Logistics and Supply Chain Management

Efficient logistics and supply chain management are the unsung heroes of a successful export business. To do so:

• Choose the right freight forwarder: Partner with a reputable freight forwarder to handle your shipping. They handle shipping and documentation. 

• Master incoterms: Incoterms, or International Commercial Terms, define who handles what and when—from shipping costs to the transfer of risk. Familiarize yourself with terms like CIF (Cost, Insurance, and Freight) and FOB (Free on Board) so that you’re never caught off guard when negotiating with buyers. Here’s a good place to start

• Craft a rock-solid supply chain plan: Start by clearly defining your goals, like reducing lead times or improving cost efficiency. Assess your current processes to identify gaps. Map out the entire supply chain, from sourcing to delivery, ensuring every step aligns with your objectives.

5. Pricing and Payment

When you’re setting a price for your product, there’s a lot to consider. It’s more than just putting a tag on it—here’s what you need to think about:

• Local cost of purchase
• Processing & bagging costs
• Inspection fees
• Logistics & warehousing expenses
• Security costs
• Insurance fees
• Forwarding charges
• The international price tag, and more…

Once you add up all the behind-the-scenes costs that go into prepping your goods, you’ll have a clear picture of your true cost price. Then, compare that with the international going rate, and boom—you’re ready to price your product like a pro.

Also, ensure the buyer guarantees payment through a Letter of Credit (LC) or even a partial payment. Protecting yourself further is crucial by securing export credit insurance from companies like ICICI Lombard, TATA AIG, or IFFCO TOKIO.

6. Marketing and Promotion

Identify international markets with strong demand and low competition. Tailor campaigns using local language, imagery, and messaging to connect with these audiences.

Leverage digital tools like social media, SEO, and email, focusing on global platforms such as WeChat, Line, and VKontakte to build awareness. 

Also, consider trade shows and events. Many Indian export companies participate in trade fairs abroad. For more info on these fairs and export opportunities, click here. 

7. Compliance and Documentation

Every country has its own rules when it comes to importing and exporting. You’ve got to know your stuff to stay ahead of the game. Understanding international trade regulations is key to keeping your business safe and compliant. A customs house agent can also help you familiarize yourself with these terms. 

Here are some of the important items you need to keep in mind for exporting from India:

• Bill of Lading: The carrier's receipt confirming your cargo is ready for shipment. It’s proof the goods were received in good condition.

• Let Export Order (LEO): The LEO is a crucial authorization issued by the customs department, signifying that goods have been cleared for export from India.

• Shipping Bill or Bill of Export: The key customs document for clearance. Without this, your goods can’t leave the country.

• Proforma Invoice: A preliminary bill sent to request advance payment used in international trade as a comprehensive price quotation to sell goods. It details the goods, price, and terms of the deal.

• Export Order/Purchase Order: The buyer’s confirmation of the order after the Proforma Invoice. It covers everything from costs to delivery preferences.

• Certificate of Origin: A certificate confirming where the goods are made. It’s like the goods’ birth certificate.

• Bill of Exchange (BE): A written order telling the buyer when and how much to pay. It’s the official payment reminder.

• Letter of Credit: A bank guarantee ensuring payment to the exporter, even if the buyer is delayed.

• Inspection/Quality Check: A pre-shipment inspection to ensure your goods meet quality standards.

• Phyto-Sanitary & Fumigation Certificates: Required for agricultural exports, proving the products meet international health standards.

Processing Your Export Orders

Here, you will learn how to guarantee timely and accurate delivery of goods to your international customers. 

Let’s get straight into it.

1. Raising and Processing Purchase Orders

Whoohoo! You received your first order. But now is not just the time to celebrate. Before you start procuring your goods, you and the importer will sign a formal agreement.

This agreement, aka the export order, can take different forms, such as a pro forma invoice, purchase order, or letter of credit. It's the green light to get things moving.

2. Production Planning

Effective production planning means that materials, equipment, and human resources are available when and where they are needed. 

This guarantees greater efficiency and reduced costs. 

Use tools like SAP IBP or NetSuite Demand Planning to predict buyer needs by analyzing sales, market trends, and even weather for seasonal goods.

3. Quality Control

Quality is your golden ticket to a stellar reputation in the export biz. Don’t just rely on luck; implement strict quality checks at every production stage. 

Create SOPs (Standard Operating Procedures) for consistency, and schedule regular audits to catch any hiccups before they snowball.

Poor quality control will only lead to product recalls, and a lack of quality check system will only keep adding to that. 

Apart from financial losses, your brand reputation may also get damaged.

4. Packaging and Labeling

Packaging is more than just wrapping up your goods—it’s a crucial element for ensuring product safety, compliance, and customer satisfaction. Improper packaging can lead to damaged goods, rejected shipments, or even legal penalties. 

Packaging protects your product during transit, especially for fragile or perishable items. It also ensures that your shipment complies with the importing country’s regulations, including material standards and labeling requirements. 

For instance, some countries mandate bilingual labels or eco-friendly materials, and failing to comply can lead to shipment delays or fines.

5. Documentation and Compliance 

Paperwork might not be glamorous, but it’s your best friend in exports. Prepare all the essentials, from your company’s bank details to your GST, PAN, and more.

Obtaining various mandatory certifications and registrations is essential for the documentation and compliance section of export business processes in India. Specifically, the Importer-Exporter Code (IEC) and Registration-Cum-Membership Certificate (RCMC) are required to facilitate international trade.

You also need personal documents like your PAN card and other details to move forward with the process. 

6. Shipping and Logistics

Partner with freight forwarders who know their stuff and can handle your goods with care. Choose air for speed, sea for cost savings, or land for nearby destinations. 

Use tracking tools to monitor every move—because there’s nothing worse than not knowing where your shipment is when a client asks.

7. Customs Clearance

In India, Custom House Agents (CHAs), are licensed professionals who handle the customs formalities, including export documentation and clearance of goods, and ensure compliance with various regulations. Work with them to submit the necessary documents, pay any duties and taxes, and ensure compliance with the import regulations of the destination country.

8. Payment Collection

Securing your payment is like sealing the deal, and it starts with trust. Negotiate terms like Letters of Credit to ensure peace of mind. Use automated invoicing systems to avoid chasing payments like a headless chicken. Stay on top of accounts receivable, and you’ll never have to worry about cash flow issues.

For a detailed note from the Department of Commerce, Government of India on setting up an export business in India, click here. 

Start Your Export Business With Bluno

Starting and managing an export business in India is a grueling task. And no, it’s not the money or the market that you have to worry about. That’s tame compared to the gargantuan mountain of documentation and compliance lying ahead of you. 

However, Bluno’s got your back with its comprehensive solutions for all your compliance-related needs and more. What are you waiting for? Ignite your export business with Bluno today. Sign up to get started.