Taking your business global: A roadmap to starting an export company in India

India's export potential is booming, fueled by government initiatives like "Make in India" that promote domestic manufacturing and international trade. Exports offer numerous benefits for Indian businesses, including increased revenue streams, access to new markets, and better brand recognition on a global scale.

But how do you export goods to other countries, identify markets, and navigate legal requirements? 

Research and identify your export market

India's export potential is vast and growing, making it an auspicious time for businesses looking to tap into international trade. In 2023, overall exports reached approximately US$62.58 billion, a 1.23% increase from the previous year¹. Additionally, leading export sectors included refined petroleum, packaged medicaments, diamonds, broadcasting equipment, and jewelry, with significant export destinations like the United States².

However, if you want to know how to start an export business and effectively navigate the global marketplace, you need to conduct thorough market research. Identifying the right export markets for your products or services can significantly impact your success.

When conducting market research, you can use various resources, including:

• Government Agencies: The Directorate General of Foreign Trade (DGFT), Export Promotion Councils, and other government bodies offer valuable data and insights into export markets.
• Trade Associations: Industry-specific trade associations provide market intelligence, networking opportunities, and export guidance. When you visit the Ministry of Commerce and Industry’s website, you will see an extensive list of associations catering to various sectors, including oil and produce, electronics, textiles, and more.
• Online Databases: Utilize online databases and platforms like Indian Trade Portal and Connect2India to access trade data, market trends, and potential buyers.

Key factors to consider

When starting an export business and evaluating potential markets, consider the following:

• Demand: Is there enough demand for your goods in the target market?
• Competition: Who are your main market competitors, and what are their strengths and weaknesses?
• Trade Barriers: Are there any tariffs, quotas, or other trade barriers that could impact your exports?
• Cultural Differences: Are there any cultural or linguistic factors that must be considered when marketing your products?

Essential steps for exporting from India

Starting your export business requires careful planning and execution. From registering your company to navigating export regulations, each step plays an important role in your international success.

1. Register your company

Before starting your export journey,register your business with the relevant authorities. In India, the Directorate General of Foreign Trade (DGFT) is a significant regulating body for foreign trade. Registering your business with the DGFT is alsoa key step toward obtaining the necessary licenses and permissions for exporting.

India offers various types of company registration, each with its own set of features and implications for exporting:

• Sole Proprietorship: This is a simple structure where the business is owned and run by one person, with no legal distinction between the owner and the business. Additionally, sole proprietorship is suitable for small-scale exporters.
• Partnership: In a partnership, two or more individualsform a business, sharing profits and liabilities. Also, it is ideal for exporters who want to pool resources and expertise.
• Limited Liability Partnership (LLP): An LLP is a hybrid structure combining the flexibility of a partnership with the limited liability of a company, offering a balance of legal protection and operational ease for exporters.
• Private Limited Company: A privately held company has a limited number of shareholders. Due to its limited liability and ability to raise capital, this option is usually a popular choice for exporters.
• Public Limited Company: A company whose shares are publicly traded on a stock exchange. This is suitable for large-scale exporters with significant capital needs.

2. Obtain necessary licenses

Once you've registered your company, the next step is to secure the required licenses and permits for exporting. These licenses vary depending on theproducts or services you intend to export, so perform your due diligence. 

One of the most crucial licenses is the Import Export Code (IEC), a mandatory requirement for any business involved in export activities from India. Issued by the DGFT, the IEC is a unique 10-digit code that serves as your business identification number for customs clearance and other trade-related procedures. The advantages of obtaining an IEC are numerous, including accessing tax benefits and enjoying lifetime validity without the hassle of renewals.

While not always mandatory, you may also find benefits in obtaining a license from the relevant Export Promotion Council (EPC) for your industry. After all, EPCs offer valuable support to exporters through market research, trade delegations, and advocacy efforts. They also issue Registration-Cum-Membership Certificates (RCMC) that may be required to access certain export benefits and incentives. To apply for an EPC license, you typically need to submit an application form along with supporting documents such as your IEC, company registration certificate, and evidence of production figures.

In addition to the IEC and EPC license, certain products or services may require specific licenses or permits from relevant regulatory bodies. For example, exporting agricultural products may require licenses from the Agricultural and Processed Food Products Export Development Authority (APEDA). 

3. Understand export documentation

You need complete and correct documents to achieve smooth and hassle-free exporting, especially once you start to deliver goods overseas. Familiarize yourself with the key export documents required for international shipments:

• Commercial Invoice: This document outlines the transaction between the exporter and importer, including product descriptions, quantities, prices, and terms of sale.
• Packing List: This document provides a comprehensive list of the package contents, including item descriptions, weights, and dimensions.
• Certificate of Origin: This certificate verifies the origin of the goods, which may be required for preferential tariff treatment or customs clearance.
• Bill of Lading or Air Waybill: Depending on the mode of transport, either a Bill of Lading (BOL), used primarily for ocean freight, or an Air Waybill (AWB), used for air freight, will be required. While both documents serve as a contract of carriage and a receipt of goods, a BOL also acts as a document of title representing ownership. On the other hand, an AWB is a non-negotiable document that does not function as proof of ownership.

4. Find a logistics partner

Navigating international shipping can be challenging, especially for businesses new to the export process. That's why choosing a reliable logistics partner is essential for a smooth and successful export journey. An experienced export shipping company like DHL Express can handle all your logistics needs, from international shipping and customs clearance to warehousing and distribution.

When evaluating export shipping services, considerglobal reach, reliability, tracking capabilities, and customs expertise. DHL Express offers a comprehensive suite of solutions that can simplify the export process and ensure your goods get to their destination on time and safely.

5. Marketing your products globally

Once you've identified your target export markets and established your logistics processes, it's time to focus on marketing your products globally. Effective marketing is essential for reaching international customers and establishing a presence in new markets.

Consider a multi-faceted approach that includes:

• Online Platforms: Leverage e-commerce platforms, online marketplaces, and your website to showcase your products and connect with potential buyers.
• Trade Shows: Join international trade shows to network with industry professionals, showcase your products, and generate leads.
• Digital Marketing: To expand your reach, use digital marketing channels and techniques like search engine optimization (SEO), social media marketing, and email marketing.

At the same time, adapt your marketing materials and communication to resonate with your target markets' cultural and linguistic preferences. This includes translating your website and marketing content, using culturally appropriate imagery, and understanding local business practices.

6. Leveraging government schemes and incentives

The Indian government offers various schemes and incentives to support and encourage businesses involved in exporting. These programs can provide valuable financial assistance, reduce export costs, and enhance competitiveness in the global marketplace.

Some key schemes to explore include:

• Merchandise Exports from India Scheme (MEIS): The MEIS provides duty credit scrips to exporters of specified goods, which can be used to offset import duties or excise taxes³.
• Export Promotion Capital Goods (EPCG) Scheme: This scheme allows exporters to import capital goods at concessional duty rates to produce export goods.
• Duty Drawback Scheme: This scheme offers refunds for excise and customs duties paid on imported supplies used to produce export goods.

In addition to these schemes, exporters can also access various tax exemptions and benefits under the Foreign Trade Policy. Also, research the latest government initiatives and leverage the available support and resources from the Directorate General of Foreign Trade website to maximize your export potential.

Start exporting with DHL Express

Exporting goods from India offers several opportunities to expand your reach and increase revenue. However, successfully venturing into international trade requires careful planning, preparation, and the right partners. Once you understand the key steps involved in exporting, leverage available resources, and choose reliable international logistics services like DHL Express, you can confidently pursue global expansion.

Ready to take your business to the next level? Open a business account with DHL Express today and unlock a world of export opportunities.

Enquire with us today to speak to an international shipping expert and start exporting out of India.