With its rapid economic development, India is consistently growing as an export market. A promising market with a large and skilled workforce has the ability to offer a variety of export products to the world, from textiles and garments, pharmaceuticals, IT services, engineering goods, automobiles and auto components, agricultural products, to jewelry and gems and much more.
In this article, we will discuss a few aspects that you need to keep in mind as an export seller from India:
- Understanding exports from India
- Exportable products from India
- Steps to becoming an export seller in India
- Challenges and opportunities as an export seller
So let’s begin.
Understanding Exporting from India
Exporting, in simple terms, means the process of selling products or services from one country to the buyers of another country. In other words, it is known as “international trade” or “cross-border trade (CBT)”.
If you are an individual or a business seller and are looking at expanding your business, then it is important that you start exporting, as exports are important for a number of reasons:
- Exports allow you to tap into the global consumer base, thereby enabling you to reach markets that may have a high demand for your products or services.
- Exports help you to diversify your customer base and spread your risk instead of simply being dependent on domestic markets.
- Through exports, you can enter international markets, which can give you a competitive advantage over your competitors, who are focused only on the local or domestic market.
- By selling goods or services to buyers in other countries, you are able to enhance your sales and have higher chances of profit.
- Exports can help you gain brand visibility and scale your reputation globally.
- Exports help create jobs in the exporting country, as businesses need to hire people to produce the goods or services that they are exporting.
The process of exporting products from India may seem complex since it is subject to myriad government rules and regulations that exporters must continually keep abreast with. This usually involves various types of documentation, which can also make the process difficult. However, as a seller, you know that the export market is becoming more competitive with every passing day. Therefore, it’s very important that, as an exporter, one is well-prepared.
Let’s have a quick overview of what exactly is involved in the process:
- Deciding on the type of business entity and completing the necessary registration
- Obtaining the required licences, approvals or permits
- Identifying the correct product and appropriate market research
- Complying with quality standards and various country-wise safety norms
- Preparing export documentation such as importer-exporter certificate (IEC), Goods and Services Tax Identification Number (GSTIN), Permanent Account Number (PAN), etc.
- Choosing the right logistics and shipping for the transportation of goods
- Handling documentation for customs clearance and managing payments of export duties or taxes
- Completing post-shipment documentation such as the bill of exchange, certificate of origin and inspection certificates
- Being compliant with foreign exchange regulations as required by the Indian government
Now, let’s look at the export laws and policies in India:
- The Foreign Trade (Development and Regulation) Act of 1992 (FTD&R Act) governs India’s import and export trade.
- The Export Import (EXIM) Policy is issued by the Ministry of Commerce and Industry every five years and sets out the government’s export promotion and trade facilitation measures.
- Exports from India are subject to a variety of regulations, including licensing requirements, export duties and quality control standards.
- Exporters must obtain an Import-Export Code (IEC) from the Directorate General of Foreign Trade (DGFT) before exporting any goods from India.
- The DGFT also administers a number of export promotion schemes, such as the Advance Authorization Scheme and the Export Promotion Capital Goods (EPCG) Scheme.
The Indian export market is large and ever-growing, with huge potential to be among the largest exporters of goods. The Indian government has been taking steps to promote exports, such as providing incentives for exporters and reducing trade barriers.
Exportable Products from India
Some of the main export products from India are:
- Engineering goods: machinery, electrical equipment and transport equipment
- Chemicals: pharmaceuticals, fertilizers and textiles
- Gems and jewelry: diamonds, gold and silver jewelry
- Oil and gas: petroleum products and natural gas
- Agriculture and food products: rice, wheat, sugar and spices
- Automotive parts and components: engines, transmissions and tyres
Apart from these, as an export seller, you can explore other products such as leather goods, footwear and garments. India is a major exporter of medical devices and equipment, such as surgical instruments, diagnostic kits and hospital furniture. In addition to this, India is also a large exporter of textiles and apparel, such as cotton yarn and fabrics. Electronics such as mobile phones, laptops and televisions from India also find a good global market. These are just a few of the many products that have a good potential market for export. Remember that these export opportunities vary depending on your target market and the competitive landscape. Ensure that you do thorough research before proceeding.
It has been noticed that, with ongoing changes and the developing economy, emerging sectors of e-commerce, IT, software and pharmaceuticals have shown great potential for exports.:
- E-commerce: In a global market, businesses from all over the world can sell their products and services online. This gives a great opportunity to businesses to reach new customers and expand their market share.
- IT and software are essential for businesses of all sizes and there is a growing demand for these products and services in emerging markets. Businesses that can develop and market innovative IT and software solutions have a good chance of success in the export market.
- Pharmaceuticals are in high demand around the world and there are opportunities for businesses to export generic drugs and other affordable healthcare products.. However, one has to remember that the pharmaceutical sector, being regulated, brings its own regulatory challenges.
Steps to Becoming an Export Seller in India
While being an export seller in India can be a complex proposition, it can certainly become smooth if you are well-prepared. Let’s discuss what you need to do:
- The first step is to choose the product that you want to export. You need to work on some important factors, such as demand, target market, product availability, exporting costs, etc., to arrive at the correct decision.
- Research plays an important role in exports. Doing thorough research on the demand for the product in a given target market, its competition, the rules and regulations applicable to imports and exports, etc. is of utmost importance to avoid future setbacks.
- Understand the taxation implications of exporting, including GST and customs duties. Comply with tax regulations and seek country specific professional advice when necessary.
- Get the necessary documents in place, such as GSTIN, IEC, PAN, and a valid bank account that will enable you to deal in foreign currency.
- Look out for buyers for your export products. You can do this by attending trade fairs, contacting potential buyers directly or using online platforms.
- Decide on the logistics and shipping of your products internationally. Understand the logistics involved in exporting, including Incoterms, customs procedures and shipping routes.
- Plan out how you will be entering the market with your product, whether through direct exports, agents, distributors or e-commerce platforms. Your approach to these platforms will need to be tailored as per the specific needs and preferences of each market.
These are just few of the things that you need to work out as an export seller. However, there are other factors too that need your attention such as financing, product quality standards, risk management, etc.
Challenges and Opportunities
With progress come challenges and opportunities in the export market for India.
Export challenges
- Regulatory Complexity: Navigating India’s regulatory environment can be daunting. Obtaining licences and permits and complying with various rules and regulations can be time-consuming and confusing.
- Infrastructure: Despite improvements, India’s infrastructure, including transportation, logistics and warehousing, still faces challenges. Poor infrastructure can lead to delays and increased costs.
- Competition from other countries and market access: India faces competition from other countries that are also major exporters of goods and services. These countries may have lower costs or better infrastructure, which can make it difficult for Indian exporters to compete.
- Exchange rate volatility: The Indian rupee is a volatile currency, which can make it difficult for exporters to plan their finances.
- Tariffs and customs barriers: Tariffs and customs procedures in different countries can be complex. Navigating these ins and outs can be a stumbling block to entry, especially for small businesses.
- Differences in culture, tradition and language: If you want to build strong and long-term relationships with customers, it’s crucial to understand and adapt to the cultural and language differences of your target markets.
Opportunities as an export seller
- Growing demand for Indian products: There is a growing demand for Indian products in the international buyer market. This is due to a number of factors, such as the quality and affordability of Indian products, the growing middle class in many countries and the increasing awareness and adoption of Indian culture and cuisine.
- Free trade agreements: India has signed a number of free trade agreements with other countries. These agreements can reduce or eliminate tariffs on goods traded between the countries, which can make it easier for Indian exporters to sell their products in those countries.
- Government Support: There are various support measures such as incentive programs, export finance and export promotion schemes implemented by the Indian government to give a boost to Indian exporters. These support programs help exporters navigate through the challenges faced during exports.
Here are some tips that can help you overcome the challenges to export so that, you can leverage the opportunities for your business growth:
- Continuously innovate and adapt products to meet changing market demands. Stay focused on products that are sustainable and eco-friendly to tap into global trends.
- Conduct comprehensive market research to identify high-potential markets for your products and thereby reduce your dependency on a single market and open up diverse export markets for your products.
- Stay updated on the trade policies and export rules and regulations. This will help you stay compliant with the regulatory environment.
- Make sure you invest in good quality control measures that will ensure your products meet buyer expectations and international standards.
- Work on marketing strategies that will not only gain you business but also help retain customers and maintain customer loyalty.
- Invest in the continuous training and development of your workforce to keep them updated on export-related skills and market trends.
Conclusion
To conclude, if you are looking at exporting products internationally from India, you can rest assured that the Indian export market has great potential for businesses both big and small.
By systematically and carefully addressing regulatory complexities, optimizing infrastructure, diversifying markets and embracing innovation and sustainability, as an Indian exporter, you will not only be able to overcome obstacles but also leverage the diverse opportunities presented by the global stage.
If you are looking to start exporting from India on eBay, do visit our seller center.
Frequently Asked Questions
Who is an export seller?
An export seller is someone who is looking at selling his products from his home country to another country
How can I become an export seller on eBay?
It’s very easy to become an export seller on eBay. Visit our seller center to know more.
What are the benefits of being an export seller?
There are several benefits, such as reaching international markets, being able to access government support schemes, gaining profits in foreign currency, being able to sell throughout the year since demand is available in some national market or another and many more.
How can I find potential buyers for my products as an export seller?
On eBay, as an export seller from India, you do not need to look out for buyers. eBay has 132M*buyers across the globe; you simply need to decide on the target market and list your items. *as per eBay data Q2 2023
What are the legal requirements for export sellers?
There are multiple legal requirements that you need to comply with, such as obtaining the required licences and approvals, submitting documentation for customs clearance, managing payments, being compliant with foreign exchange regulations, etc.
How can I determine if my products are suitable for export?
A few of the common ways to decide if your products are suitable for export are doing thorough market research to understand the needs and requirements of a given marketplace, assessing the competition, considering the risks involved in exporting, checking on logistics for shipment of your products, analysing if your products meet the requirements of the countries you are exporting to, etc.
What are the legal requirements for exporting products from India?
Some of the legal requirements are obtaining an IEC, GSTIN, PAN, customs documentation, export declarations and licencing, complying with country laws and regulations for exports and imports, etc. There are many professional organizations and trade associations who can offer valuable resources and support for exporters.
How can I ensure my exported products meet international standards?
It’s important that your products meet international standards. Make sure that you choose the proper standards for your products, which may vary per country. Do your research to gain insights on international markets and their standards; get your products certified by third-party service providers; conduct regular inspections to avoid quality issues, etc.
How can I calculate the export costs and pricing for my products?
You need to take into consideration several factors, such as the product cost, export shipping and insurance costs, customs duties and taxes, the existing exchange rate, your fees for using a particular platform, your markup, etc. You can also talk to other exporters to seek their input and then take the appropriate decision.