Introduction to Import-Export Business
The internet and it’s related applications have opened up a world of new options and opportunities for income generation and business creation. The inception of e-commerce has most definitely been a game changer in the way businesses have started functioning. It has made for every business to have the potential to reach a global audience from the comfort of their homes and help trade goods and services across borders. This has essentially made the world “a smaller place”. Trading of goods across international borders is also referred to as an import-export business. In this piece, we list down the procedure on how to start import export business in India. In addition to that, we also list down the opportunities that it presents for you.
In India, the major change in economic policies and the improvement in the Ease of Doing business rankings has made import-export business very popular among the youth of India.
Starting Setup for an Import-Export Business
To perform any kind of Import Export operations, you need to have a proper business setup and taxation registration for said business structures. Try keeping a unique name for your company with an eye-catchy or at the very least an attractive logo.
Check Out: Business Structures in India
If there are multiple partners for your company/business structures it is advisable that you go with either Pvt Ltd Registration or an LLP registration.
However, if you are a solo person looking to start with the import-export company, you should go for a Proprietorship Registration.
Once you’re done with the company registration, in India, the taxation system is known as GST.
Appropriately, you have to perform a GST Registration Procedure and obtain what is called a GST Identification Number (GSTIN).
Steps to Commence Export Business Operations
Once you’re done with the Company and GST registration procedures respectively, there are only a few more steps to start operations and see your import-export company skyrocket your sales expectations.
Step 1-PAN Card for business: PAN stands for Permanent Account Number. PAN Card Registration for business is basically to keep a track of the taxes and financial transactions of the organization/ business which is issued by the Income Tax Department. You need to obtain a PAN card for your business to commence import-export operations.
Step 2 Current Account – Generally when we do an ATM transaction we see two account types, Savings and Current. In order to run an export business, you need to open up a Current Account for the business with any bank of your choosing.
Step 3 IEC: IEC essentially stands for Import Export Code and it is an import-export license issued by the Directorate General of Foreign Trade (DGFT). This IEC number is asked everywhere when there is a trade of goods to and from India therefore, it is advisable to get your IEC registration as soon as possible.
Documents for IEC License
- Current Bank Account Details
- Self-Attested copy of Pan Card (Personal or Business PAN)
- Banker’s Certificate
- 2 Passport Size photographs of the applicant attested by the banker of the applicant
- A cover letter on the letterhead of the company to request a new IEC certification
Step 4: RCMC (Registration-cum-Membership-Certificate): Once an IEC has been obtained for the proposed Import Export business, you have to obtain an RCMC. This is basically a certificate which is issued by the Exports Promotions Council. There are 26 exports council all over the country. The RCMC can be obtained from any one of these 26 council locations.
Essentially, IEC and RCMC together should be enough for you to commence operations of import-export to and from India. However, there two more things you need to take care to ensure smooth operations.
Step 5: Hire an eCommerce Shipping Company: Import Export is basically a transportation of goods from one country to another. Therefore, to deliver your products across international borders, you will need a logistics company who takes of safe delivery. You can check out various courier aggregators or look at a good, reliable shipping company.
Step 6: Contact a Customs Clearing Officer: It can look a little daunting at first to get started with import-export therefore, it is advisable to contact a customs clearing officer who will help you get acquainted with getting stuff cleared at ports, transportation charges, customs duty charges and other things involved with the import-export business.
Opportunities with Export Business
Having an import-export business opens up a whole new world of opportunities for a businessman. Here are some things you can implement with an Import Export Company.
- Online Marketplace: The internet has made for a plethora of opportunities for trade of goods across the country and potentially reach customers worldwide. There are many e-commerce platforms like Amazon, Flipkart (In India) or you can also hire some technology talent to develop a website and giving your every own e-Commerce Platform.
- International Markets: Every country has their unique set of goods and products which are not available for other international buyers, you can turn your business into an exporter of some of the most unique products and in turn, you can also import some unique materials from the outside for sale within India.
- Promotion and Product Diversification: In the export-import business it is very likely that you will come across many other traders as well as manufacturers who sell different kinds of goods as compared to your business. Interacting with traders you can collaborate, promote and even diversify your own product line. You should do the appropriate research and sell items in international markets that are produced in ample quantities in India. For eg. Tea, Tobacco, as well as, leathers and medical products like bandages, face masks, gloves, gauzes etc.
Therefore, starting an Import export business can be a very good source of income generation if executed properly.
At LegalRaasta we are committed to getting your business started on the right foot by providing comprehensive CA/CS/Legal Services necessary to start an Import Export business like Company Registration, GST Registration, PAN Card Registration as well as, IEC Registration.
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