With the globalisation of trade and business, we are seeing enormous growth in imports and exports in India. The Indian economy is one of the largest economies in the world and one of the fastest-growing ones too.
Foreign trade in India is promoted and facilitated by the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry (MoCI).
The DGFT issues the authorization to exporters and monitors their corresponding obligations through a network of 38 regional offices. The DGFT also implements the Foreign Trade Policy of India.
India’s overall exports (Merchandise and Services combined) in June 2021 are estimated to be $49.85 bn, exhibiting a positive growth of 31.87% over the same period last year. Overall imports in June 2021 are estimated to be $52.18 bn, exhibiting a positive growth of 73.65% over the same period last year.
A. PROCEDURE TO SET UP EXPORT AND IMPORT (EXIM) UNIT
1. SETTING UP THE BUSINESS UNIT
Which organization type is best for your business depends on numerous factors and a whole basic idea of setting up a business whether it would be Sole Proprietary OPC/LLP/ Partnership firm/ Company.
2. OPEN CURRENT ACCOUNT
A current account with a bank authorized to deal in Foreign Exchange should be opened.
3. OBTAIN PAN
If you start your business as OPC, LLP, or Company so, you get your PAN Card over registered mail as well as get a physical copy which is delivered to your business’s registered address. But Sole Proprietary and Partnership Firm need to apply for PAN separately.
4. IMPORT EXPORT CODE
An application for IEC is filed online at “www.dgft.gov.in” with payment of application fee through net banking or credit/debit card is made along with requisite documents as mentioned in the application form.
5. REGISTRATION CUM MEMBERSHIP CERTIFICATE
To avail of concessions, one must obtain a Registration cum Membership Certificate (RCMC) from Export Promotion Council (EPC)/ Federation of Indian Export Organization (FIEO)/ Commodity Boards.
6. SELECTION OF PRODUCT, MARKET, FINDING BUYERS & SELLERS, PRICING AND COSTING
After studying the trends of export and import of India, you need to do a proper selection of the product(s), Market, Competition, cost, and Pricing.
There are many Export promotion agencies, Indian Missions abroad, and different Government Schemes that might be helpful in gathering information.
7. RISK COVERAGE POLICY
International trade involves payment risks due to buyer/ Country insolvency so, get your risks covered from Export Credit Guarantee Corporation (ECGC) through an appropriate insurance policy.
B. MANDATORY DOCUMENTS FOR EXPORT AND IMPORT IN INDIA
1. FOR EXPORTS
a. Bill of Lading/ Airway Bill/ Lorry Receipt/ Railway Receipt/ Postal Receipt
b. Commercial Invoice
c. Shipping Bill/ Bill of Export
2. FOR IMPORTS
a. Bill of Lading/ Airway Bill/ Lorry Receipt/ Railway Receipt/ Postal Receipt
b. Commercial Invoice cum Packing List
c. Bill of Entry
FREQUENTLY ASKED QUESTIONS (FAQ) RELATED TO EXIM BUSINESS IN INDIA: –
1. How can we apply for PAN?
Ans. With the help of the below-mentioned link, you can access of website of Pan and get all the necessary information.
https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html
2. What is the fee for IEC?
Ans. The application fee to get IEC is Rs. 500/-
3. Is there any Application form for applying for IEC?
Ans. The application must file online (ANF 2A format) for grant of IEC at the DGFT portal.
4. What is the validity of IEC?
Ans. An IEC allotted to an applicant shall have permanent validity, but it is mandatory to update the IEC annually so that the IEC is not deactivated.
5. What is the process of Realization of Export Proceeds?
Ans. As per FTP 2015-2020, all export contracts and invoices shall be denominated either in the freely convertible currency of Indian rupees, but export proceeds should be realized in freely convertible currency except for export to Iran.
Export proceeds should be realized in 9 months.
6. How to select the best risk coverage policy?
Ans. The business risk depends upon numerous factors and business requirements so, you can select the best policy with the help of link – https://www.ecgc.in/site-map/.
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