Establishing an import-export business can be very profitable, but the regulations make it difficult if you don’t follow proper guidance and procedure. In the 21st century, having a digital presence is important, so anyone starting a business also needs to cover a few basics like creating website and promoting it on social media channels.
Here is a step-by-step procedure to set up your import-export business to get ready to ship your first order.
Open a Bank Account
Opening a bank account for the purpose of business is one requirement. This is known as your current account. A current account required to transact with customers and vendors.
Select the Products for Import–Export
A crucial step is to decide the products for the import-export business. The products must be competitive in the global market so that it can sell internationally.
Get the IEC Code:
An Import Export Products (IEC) code is required to start an import-export business. The IEC application shall be filed on the DGFT website by providing company documents including Pan Card, Current Account.
Registration with Export Promotion Councils and Get the RCMC
Export Promotion Councils are responsible to promote the export of product. These councils organize events and assist exporters to promote their business.
Exporters get the RCMC after registering with EPC, and these RCMC are essential to claim benefits under Government Incentive schemes.
The Commerce and industry minister launched MEIS Scheme (Merchandise Exports from India Scheme) for the goods exporters to get the incentive of 2% to 5% of the FOB value of exports and SEIS Scheme (Service Exports From India Scheme) for the service exporters which gives 3% to 7% on the net foreign exchange earned on the notified services.
Select the Right Market to Export or Import
For the selection of the market, check the demand of export products in the market of the exporting country.
After doing market research, the next step for business planning is to find buyers for the export products. Here are four ways to find buyers.
- Create a company website
- Register with export promotion councils
- Participate in trade fairs and exhibitions
- Promote the business online
Option to Import Raw Materials Without Paying Customs Duty
There are certain import licenses issued by the Government to import duty-free inputs required to manufacture/produce export products. In India, for example, there is Advance Authorisation Scheme under which a license is issued to save the import duties.
The Indian Government replaced MEIS Scheme with RoDTEP scheme in a phased manner, as MEIS Scheme is not WTO Compliant. Here, the WTO stands for World Trade Organization, which is an international organization related to trade.
Get Ready to Ship the Order
After setting up your import-export business, the next steps are finalization of a shipping partner, the selection of a customs clearing agent, exploration of market opportunities and business promotion in the global market.
By following the above steps, exporters or importers can set up their import-export business.