How to Start Export Business in India – A Step by Step Procedure

“97% of the People who quit too soon are employed by the 3% who never gave up.”

Introduction

Starting an export business is always an important expansion of any business. If you are planning to start an export business or has any doubt in your mind, then this article is for you.

From tradition to the modern age, export business has never lost its shine in this ever-changing work environment. But one of the problems associated with this business is the lengthy and complex documentation.

As said “invention or innovation always takes birth in the arms of the problem”, we have big capitalised on this problem and wrote this article to share the practical points on how to start an export business in India.

How to start an export business in India

To understand it well, we have broken this article into easy steps, videos and info-graphics. Let us understand this step by step:

1. Choose your Form of business: Choosing your form of business is like choosing a vehicle for a very long journey. Always remember, once you start your business with any form of business, it is very difficult to change it later on.  Here are some of the important business forms:

• Proprietorship
• Partnerships
• Limited liability partnerships (LLP)
• Limited Company
• One person company

Proprietorship and Limited companies are mostly chosen by the entrepreneurs in India. You can read the comparisons on the form of business for decision making. Choose your form of business wisely.
 

2. Type of exporter: Once you have chosen your form of business, then you have another choice to make. There are two types of exporter in India:

• Merchant Exporter: Person who exports goods by purchasing from any third party and who is not a manufacturer is known as merchant exporter.
• Manufacturer Exporter: As the name suggest, the person who manufactures good and export the same, is known as manufacturer exporter.
   

3. Import Export Code (IEC): After choosing your form of business and type of exporter, then it is the time to register for import export code, commonly known as IEC Code. The process of getting the IEC code is 100% online, and there is no need to visit any government office. Here are some important points on import export code:

• IEC code is mandatory to start the export business.
• IEC code once issued is valid for lifetime.
• There is no compliance related with IEC code.

Get IEC code and proceed to next step.
 

4. Register with Export Promotional Council (RCMC): RCMC stands for Registration Cum Membership Certificate. Always remember, if you are an exporter of goods, then it is mandatory to register with the export promotional council or with Commodity Board of India.

 E.g. if you are doing the business of coconuts, then you should register with Coconut Development Board (CDB). Further, for some products, you may also have to register for more than one export promotion councils.
 

5. Inspection Certificate: After taking the above registrations, inspection certificates are also important. As per Export (Quality and Inspection) Act, 1963 it important to provide for the sound development of the Export Trade of India.

The export inspectional Council of India will help in getting the inspection certificates.
 

6. Get a Freight Forwarder: They are the ticketing agents for cargo system. Mode of shipment of the cargo may be sea, land or air. The freight rate is decided based on the three parameters:

• Mode of shipment
• Destination Port
• Volume of shipment

Hire a freight forwarder, final the rate and then proceed further.
 

7. Performa invoice (PI): After the initial discussion with the buyer, the exporter should send the PI to the buyer of goods with the maximum details possible like quality, goods description, Mode of Payment, Mode of transportation, packing material, etc. Once the buyer gets the PI, then he shall approve the PI and then proceed to next step.
    

8. Commercial Invoice (CI): Commercial invoice is just like a normal sales invoice. It should be prepared after the confirmation from the buyer on export order. Once, the commercial invoice is issued, and then register yourself with our formal bank.
    

9. AD Code Registration: AD code stands for Authorized Dealer code. Before filing any export bill, AD code must be registered with any schedule commercial banks in India.

With the help of IEC code, the schedule bank will generate the AD code. Further, the exporter shall register their IEC code and AD code with the customs authorities. AD code helps to check whether export proceeds have been realised or not.
 

10. Shipping Instructions: Depending upon the nature of goods, it has to be shipped under specific instructions. Some goods can be dangerous or may be perishable or any other type, so they have to be shipped according to the various international conventions e.g. IATA, HAZMAT etc.

 Shipping instructions are furnished by the freight forwarder after they are apprised of the various aspects of shipment.
 

11.  Packing list (PL): Packing list contains the item wise packing contents. It serves for all the parties like Exporter, Importer, Customs authorities, transport agencies, etc. about the content of the packaging.

 Customs authorities may check the goods based on the PL provided.
 

12.  Shipping Bill: Shipping bill is generated when the commercial bill, PL or other documents are submitted. This act can be done either yourself or by Custom Housing Agents (CHA).

 The shipping bill then shall be filed with the port concerned. The shipping bill can be filed online on ICE gate. After receiving the shipping bill, the assessing officer shall check whether details provided are correct or not and the exportability of goods in consonance with the Act or rules made there under.
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13.  Let Export Order (LEO): Once the assessing officer is satisfied; then he shall issue a Let Export Order.
     

14.  Stuffing/loading of goods in Container: The shipping bill along with Let export order shall be submitted to streamer agent who shall then approach the Proper Officer (PO) for allowing the shipment. The loading of  goods into the ship is done under the supervision of customs authorities.
     

15.  Bill of lading: Bill of lading is derived from the old English word i.e. loading. Bill of lading is issued by the carrier vessel after the goods are loaded. It specifies the title of goods, mode of transport, mode of payment, packing content, etc.

 Bill of lading is one of the most important documents. This bill shall be hand over to the buyer of the goods so that he can claim the goods once they reach his country.
 

16.  Export General Manifest: Shipping lines or its agents furnish the general export manifest to the customs within 7days from the date of sailing the goods.

 EGM contains all the list of all items that are loaded or were present on the ship while it sailed from the port. The EGM is the final confirmation of the physical export of the goods. This also helps in sanction of the duty drawbacks.
 

We have tried to explain the full export procedure from end to end. However, to further explain it well, we shall share infographics, videos podcast, etc.

Register for Import export code in India

In the case of ant doubt or query or feedback, please drop your query in our contact form. We would love to help you out.

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