How to Start Import Export Business in India
If you want to start import export business in India with limited investment, this article will become the best mentor for you. In this article, we are going to provide you the step by step guide with needful fundamentals.
Having great business ideas is the starting point of a scalable and sustainable business, but until you do not expand your business model, it will be giving you limited revenue, right?
If you are supplying your products only in India, you have a limited market, because you are supplying to only one country.
When you think about exporting your business, you can visit 190+ countries to distribute your products, and for that you get 195 markets instead of one market when you export your products.
Import and export business is not a business like opening a shop anywhere in India which is quite easy.
You have to learn and study how to start import export business in India with every aspect, what are the beneficial factors, what are the risk factors, how to deal with controversies during the business etc…
You must have proper details about how much minimum investment for import export business will be needed, and which documents are must to jump into the business of import and export in India.
Invoking into the import export business will half knowledge or incomplete knowledge causes a big loss in that business.
Stats for Import Export Business
Stats are the trust factor of any business, or any facts on which we are not sure to believe, so you should go through the stats of the import and export business before you start.
Another thing that the stats data must be published by the most trusted source and you also should believe in the stats which are published by the legit source, don’t consider the stats data revealed by random sources.
In order to provide legit data, there is a site from the Indian government, from where you can get the exact data stats of business for import and export.
I am pretty sure, after reading this article till the end, you will make your mind to start import export business in India, and so, you should refer to the import export stats for a better idea.
When you have a stats for any existing business, you feel a little bit more confident and make your mind with perfection to run that business idea.
What is the Import Export Business?
When a person hears about the business idea about import export, he imagines big containers in which massive weights or numbers of products are filled, and they are being shipped to the out countries.
Is it true? Yes, true, but not completely true, you can export any quantity of products to other countries.
If you do not have a product in tons, or thousands of numbers, you can forward them to the person or company who is running import export business in India, they will do the same for you with the same benefits.
Import business stands for if you bring any products from the out countries to sell them in your country, whereas exports stands for you to outsource your products to sell it outside countries.
It’s a very simple and common concept, moreover people get confused and believe it as an impossible task due to lack of proper knowledge.
You can export anything in other countries, you have to just choose the right countries and right clients for your products.
You can export the designer sarees, other garments, meat, electronic items, and many categories of products.
Benefits of Import Export Business
Domestic Economy of any country can not be constant, the occurrence of variance always happens in it.
If the economy of India gets down some time, you can recover the possible loss from other countries if your business is expanded to multiple countries.
China has around 37% shares in the world in exporting business whereas India has only 2%, and that’s why the government of India is also quite interested to grow the import export industry.
The Indian government is boosting up the business of import and export and as a result we can get many benefits from the government.
Government Goal For Export Business Till 2022
The Indian government has set the goal to pick the business of import export up to $400 Billion which is not quite easy, and for that government also is supporting the exporters, this is like a booster for those people who have a dream to start import export business in India.
There is a currency variance between each country, if you are selling some products in those countries whose economy is higher than India, you can earn a massive profit from that export.
Why People Afraid of Starting Import Export Business
It has been observed that many people are afraid of starting the business of import and export, due to some reasons.
Are those reasons valid? Let’s see what are the reasons for that people are not making up their mind to invest in import export business in India.
A common person thinks that import and export business is not made for them, this business can be run by only the rich people who have very huge investments.
Hence, it’s totally, 100% a myth, if you have only 50,000 rupees in your hand, you can execute the import export business idea in India with successful results.
Money Security Issue
Many people think that it could be possible that their money could be stuck due to international issues sometimes.
Or else, a consumer can make fraud with them while dealing in a big amount, and due to those reasons, they could have to bear a big loss in import export business.
The international issues are not predicted, they can happen anytime at any moment, and it’s not decided how long it will last.
As an effect of international issues, their business or money could be stuck for an uncertain time.
If some clients make frauds, we can not identify them, if a client refuses to pay money, or tries to cheat, we can not do anything due to citizenship law variance.
Now, with this reason, many people go on the backfoot due to this phobia, yes, this is clearly Phobia.
Because import and export business is not between just and your client, the governments of both countries are involved in them.
If any party is not able to pay, or refuses to pay your money, then the government of your country supports you to recover the money and the client country’s government fully co-operates you.
International competition is the biggest challenge for import export business for every country in the world.
China is the biggest competitor of every country’s export business due to its low cost products, and only due to this reason, exporters back their feet from the business.
But they do not know why China can do so. If you find the root cause of this, you can execute the import-export business very nicely.
First of all we have to find the reason why China is exporting its products and goods at a very cheap cost.
People could have many reasons, like China is paying low labor cost, the government of China is giving too many benefits to the export business, and China has a very high population.
Let me be clear, these all reasons are invalid. China is paying a higher labor cost than India, India has a nearby number to China in terms of population and the Indian government also is providing too many benefits for export business.
So, what is the reason behind this and how can we deal with them?
First, the exporters of China understand and study the market, and make the products from quality A to quality Z.
Second reason is that China is producing every product in bulk quantity, and according to the law of product, if you produce the product in a huge bulk, its manufacturing cost goes down.
China is getting the benefit of this strategy and making its export business profitable and scalable day by day.
Communication Gap Issue
If you are running the business of Import and Export in India, and your client is any company of Germany, you can not communicate in Hindi with your client.
Either you would have to have a good command of German, or in English, if you know neither of them, it could create barriers for your deals.
But this problem has a very simple solution that you keep a translator with you, and can make the deals very easily.
These fears do not let a person become an exporter, but, you also think with your point of view, are those valid?
No, they are invalid, because every problem has a solution, but you have to just work on it with focus and proper strategies.
Now, let’s talk about how to start import export business in India with proper strategies and pre-planning to avoid the possible harmfulness.
Investment Required For Business of Import Export
You don’t need a minimum 1 lakh rupees, you don’t need a minimum 50,000 rupees to start import export business in India.
If you have only 20,000 rupees in your hand, you can go for the import and export business, yes, the profit margin will not be too high, but you can take the initiative, it is the most beneficial aspect.
We do a deep marketing research before executing the small business idea in India, because it is the very first step to execute any business anywhere.
You must do a deep market research before planning the business of import and export, which product is more demanded in which country, what is the current trend, which are the secured countries to start the business of export.
If you do not perform proper market research and you start a business to export electronic items to China, you will make a huge loss within 6 month, am I right?
Because China does not need electronic products to import, it is already exporting a huge quantity of electronic items to the world.
Deep research is a basic and mandatory need of any business before it gets started.
Identifying The Potential Clients
Identification of proper and potential clients makes your business sustainable and scalable with profit in a very short time.
Don’t try to sell your product to every person or every company, every company or client has its criteria under which they have to work.
It’s not possible that your product’s pricing, quality and service can meet the criteria of every needy client.
Here you have two options, either find the clients with whom your product’s aspects match, or adjust your terms according to the criteria of clients.
Secondly, you may come across to meet the invalid clients, who are not loyal to their sellers. You should identify this kind of client and avoid dealing with them.
Government Rules and Regulations
Import and Export business does not run between just seller and buyer, it is the business between two countries, where the government of both courtiers are involved.
Before making deals, or before finding the client of a specific country, you should deeply go through the norms and conditions of that country’s government.
For example, the Bank of Sweden does not disclose the account details of any customer, and no one can force it to do so, because the government of Sweden supports it.
So, you should go through all the documents, rules, norms, Terms, and conditions of that country in which you are finding the customer for your import and export business.
How to Get Import Export License
Import and export business needs the interaction of two countries, government, and other modules, and the government is involved in your business, so you must have a license to start a business of import export.
You will need the IEC – Import Export Code which you can get by registering online on the official website of DGFT.
After getting the IEC, you are ready to start import and export business in India from any city, any state.
What if You Don’t Receive The Payment From Client?
This is a major risk and fear in people’s mind appears before starting the business of import and export, and it is a right approach to think about the risk factors.
But, as I mentioned above in this article, the government of both courtiers are also involved in the business, you have security about your money.
The Indian government has set up a dedicated organization for import export business named ECGC.
Ensure your consignment of your goods before sending it to the clients in foreign through ECGC, after doing so once ECGC, ECGS takes responsibility to recover your money if the client creates any issue regarding the payment.
Wrapping Up The Import Export Business Model
The business of Import and Exports seems such a hard and long proceeding business model, but I am pretty sure that your mind and thought pattern would have been changed after reading this article.
The Business Model of import export is not a small industry like opening a small shop to cover the walk-in customers from the nearby territory.
It’s a very huge world from which one can generate a huge amount of profit revenue by working dedicatedly and consistently.