How to Export
STARTING EXPORTS
Export is a big concept. Every law should be known in export. This is a very wide concept and lot of preparations is required by an exporter before starting an export business. To start export business, the following steps may be followed:
1) Establishing an Organisation
First step in export is 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 basic for every exporter and importer to obtain a PAN from the Income Tax Department.
4) Obtaining Importer-Exporter Code (IEC) Number
IEC is a 10 digit number which is necessary for undertaking export/ import. Application for obtaining IEC Number can be submitted to Regional authority of DGFT in form ANF 2A along with the documents listed therein. Applicants should try online way for apply the IEC.
Applicants can also apply for e-IEC on the DGFT website (http://dgft.gov.in/). Only one IEC can be obtained against a single PAN.
5) Registration cum membership certificate (RCMC)
Import/ export or any other benefit under FTP 2015-20, as also to avail the services/ guidance, exporters are required to obtain RCMC granted by the concerned Export Promotion Councils/ FIEO/Commodity Boards/ Authorities.
6) Selection of product
Selection of product is the difficult work if you have the plan of your business then it is good if you just searching a business then you have to focus on the right business.
7) Selection of Markets
Selection of markets is also a difficult job.An overseas market should be selected after research covering market size, competition, quality requirements, payment terms etc.
8) Finding Buyers
Participation in trade fairs, buyer-seller meets, exhibitions, B2B portals, web browsing are an effective tool to find buyers. EPC’s, Indian Missions abroad, overseas chambers of commerce can also be helpful. Use the Website to find the buyer, use product catalogue, price, payment terms and other related information would also help.
9) Sampling
Providing customized samples as per the demands of Foreign buyers help in getting export orders.
10) Pricing/Costing
Product pricing is crucial in getting buyers’ attention and promoting sales in international and national market.
11) Negotiation with Buyers
After determining the buyer’s interest in the product the second process will start with negotiation with buyers.
12) Covering Risks through ECGC
International trade involves payment risks due to buyer/ Country insolvency. These risks can be covered by an appropriate Policy by government from Export Credit Guarantee Corporation Ltd (ECGC). Where the buyer is placing order without making advance payment or opening letter of Credit, it is advisable to procure credit limit on the foreign buyer from ECGC to protect against risk of nonpayment.
Processing an Export Order
- Confirmation of order
- Procurement of Goods
- Quality Control
- Finance
- Labeling, Packaging, Packing and Marking
- Insurance
- Delivery
- Customs Procedures
- Customs House Agents
- Documentation
- Submission of documents to Bank
- Realization of Export Proceeds
