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This  Information for Become a Exporter

How To Export ?

STARTING EXPORTS!

in itself is a very wide concept, and a lot of preparations are required by an exporter before starting an export business. To start an export business, the following steps may be followed:

1. Establishing an Organization
   To start the export business, first, a Sole Proprietary concern/Partnership firm/Company has to be set up as per procedure with an attractive name and logo.

2. Opening a Bank Account
   A current account with a bank authorized to deal in Foreign Exchange should be opened.

3. Obtaining Permanent Account Number (PAN)
   It is necessary for every exporter and importer to obtain a PAN from the Income Tax Department. (To apply for a PAN Card, Click here)

4. Obtaining Importer-Exporter Code (IEC) Number

   • As per the Foreign Trade Policy, it is mandatory to obtain an IEC for export/import from India. Para 2.05 of the FTP 2015-20 lays down the procedure to be followed for obtaining an IEC, which is PAN-based.
   • An application for IEC is filed online at www.dgft.gov.in as per ANF 2A, online payment of an application fee of Rs. 500/- through net banking or credit/debit card is made along with requisite documents as mentioned in the application form. (For more information, Click here)

5. Registration cum Membership Certificate (RCMC)
   For availing authorization to import/export or any other benefit or concession under FTP 2015-20, as well as to avail of services/guidance, exporters are required to obtain an RCMC granted by the concerned Export Promotion Councils/FIEO/Commodity Boards/Authorities.

   1. Selection of Product

      All items are freely exportable except for a few items appearing in the prohibited/restricted list.

      After studying the trends of export of different products from India, proper selection of the product(s) to be exported may be made.

      7) Selection of Markets

      An overseas market should be selected after research covering market size, competition, quality requirements, payment terms, etc. Exporters can also evaluate the markets based on the export benefits available for a few countries under the FTP. Export promotion agencies, Indian Missions abroad, colleagues, friends, and relatives might be helpful in gathering information.

      8) Finding Buyers

      Participation in trade fairs, buyer-seller meets, exhibitions, B2B portals, and web browsing are effective tools to find buyers. EPCs, Indian Missions abroad, and overseas chambers of commerce can also be helpful. Creating a multilingual website with a product catalog, price, payment terms, and other related information would also help.

      9) Sampling

      Providing customized samples as per the demands of foreign buyers helps in getting export orders. As per FTP 2015-2020, exports of bonafide trade and technical samples of freely exportable items shall be allowed without any limit.

      10) Pricing/Costing

      Product pricing is crucial in getting buyers’ attention and promoting sales in view of international competition. The price should be worked out, taking into consideration all expenses from sampling to the realization of export proceeds on the basis of terms of sale, i.e., Free on Board (FOB), Cost, Insurance & Freight (CIF), Cost & Freight (C&F), etc. The goal of establishing export costing should be to sell the maximum quantity at a competitive price with a maximum profit margin. Preparing an export costing sheet for every export product is advisable.

      11) Negotiation with Buyers

      After determining the buyer’s interest in the product, future prospects, and continuity in business, the demand for giving a reasonable allowance/discount in price may be considered.

      12) Covering Risks through ECGC

      International trade involves payment risks due to buyer/country insolvency. These risks can be covered by an appropriate policy from Export Credit Guarantee Corporation Ltd (ECGC). Where the buyer is placing an order without making an advance payment or opening a letter of credit, it is advisable to procure a credit limit on the buyer from ECGC to protect against the risk of non-payment. (To know more about ECGC, Click here)

      Processing an Export Order

      i. Confirmation of Order

      On receiving an export order, it should be examined carefully in respect of items, specifications, payment conditions, packaging, delivery schedule, etc., and then the order should be confirmed. Accordingly, the exporter may enter into a formal contract with the overseas buyer.

      ii. Procurement of Goods

      After confirmation of the export order, immediate steps may be taken for procurement/manufacture of the goods meant for export. It should be remembered that the order has been obtained with much effort and competition, so the procurement should also be strictly as per the buyer's requirement.

      iii. Quality Control

      In today's competitive era, it is important to be strictly quality-conscious about export goods. Some products like food and agriculture, fishery, certain chemicals, etc., are subject to compulsory pre-shipment inspection. Foreign buyers may also lay down their own standards/specifications and insist upon inspection by their nominated agencies. Maintaining high quality is necessary to sustain an export business.

      iv. Finance

      Exporters are eligible to obtain pre-shipment and post-shipment finance from commercial banks at concessional interest rates to complete the export transaction. Packing credit advance in the pre-shipment stage is granted to new exporters against the lodgment of an L/C or confirmed order for 180 days to meet working capital requirements for the purchase of raw materials/finished goods, labor expenses, packing, transporting, etc. Normally, banks give 75% to 90% advances of the value of the order, keeping the balance as margin. Banks adjust the packing credit advance from the proceeds of export bills negotiated, purchased, or discounted.

      Post-shipment finance is given to exporters normally up to 90% of the invoice value for the normal transit period and in cases of usance export bills up to the notional due date. The maximum period for post-shipment advances is 180 days from the date of shipment. Advances granted by banks are adjusted by realization of the sale proceeds of the export bills. In case the export bill becomes overdue, banks will charge a commercial lending rate of interest.

      v. Labeling, Packaging, Packing, and Marking

      The export goods should be labeled, packaged, and packed strictly as per the buyer's specific instructions. Good packaging delivers and presents the goods in top condition and in an attractive way. Similarly, good packing helps easy handling, maximum loading, reducing shipping costs, and ensuring safety and standard storage. Marking such as address, package number, port and place of destination, weight, handling instructions, etc., provides identification and information of cargo packed.