GLOBAL SELLING BLOG

How to export: A guide to export from India

Learn how to export your products from India. Discover the necessary documents, and top products to sell internationally, and stay updated on the latest export trends.

A businessman and businesswoman are shaking hands in front of a world map with highlighted trade routes.

India has emerged as a powerhouse in global trade, exporting everything from textiles to technology. Yet, for many entrepreneurs, navigating the export process can be daunting due to its many procedures, paperwork, and regulations. In this blog post, we will discuss key aspects involved in exporting from India, covering essential preparations, key documentation, and export procedures.

How to prepare to export from India?

From understanding your target market to ensuring compliance with India’s export regulations, careful preparation can set your business on the path to international success. The following are some initial steps you can take to prepare your business for exporting from India:

1. Conduct market research

Exporters can research customer trends in different countries to identify the best markets for their product. Research may involve checking trade statistics, identifying competitors, and estimating import tariffs or barriers.

2. Obtain necessary documents

Exporters must obtain certain mandatory documents to trade internationally. These include the Importer Exporter Code (IEC) from the Directorate General of Foreign Trade (DGFT), a Registration cum Membership Certificate (RCMC) for export/import benefits, and a Permanent Account Number (PAN) of the business from the Income Tax Department. Refer to the section on documentation below for details on other documentation requirements.¹

3. Classify and comply with product standards

Except for items on the prohibited or restricted list, all products can be freely exported. Accurate classification under the Harmonized System (HS) code is necessary for customs to determine duties. Exporters must also ensure their products meet the importing country's regulations, which may include certifications, packaging requirements, and labeling laws.

4. Find buyers and form connections

Participation in trade exhibitions, buyer seller meets, export promotion councils, B2B portals, etc. are all effective methods for finding new buyers. Strong relationships with loyal customers can help exporters build a global network and ensure consistent sales.

5. Determine pricing and payment terms

Businesses should set competitive prices that account for shipping, insurance, customs duties, and taxes. Choosing the right payment method is also vital to avoid non-payment and ensure favorable payment conditions. Common payment options include advance payments, letters of credit, and documentary collection.²

6. Choose the right logistics solution

Exporters must select the right logistics partner and transport method — air, sea, or road — based on the product, destination, and time requirements. Businesses can work with reliable freight forwarders to manage customs clearance, plan shipments, and provide tracking information.

Documents required to export from India

To export goods from India, businesses must obtain and submit certain required documents. These include:

Importer Exporter Code (IEC):
The Importer Exporter Code (IEC) is a unique 10-digit identification number provided by the Directorate General of Foreign Trade (DGFT). The IEC is linked to the business’s Permanent Account Number (PAN) and is necessary for all export activities.

Authorized dealer code (AD Code):
This is a 14-digit code provided by the bank where the exporter holds a business current account. This code is required to facilitate financial transactions related to exports and is issued on the bank's letterhead. Businesses must have an IEC before obtaining an AD Code from their bank.

Letter of Undertaking (LUT):
A GST Letter of Undertaking (LUT) allows exporters to export goods without paying Integrated Goods and Services Tax (IGST). Exporters can take advantage of zero-rated turnover by filing an LUT on the GST portal to avoid upfront taxes or payments.

Importer of record (IOR):
The Importer of Record (IOR) is the entity or individual responsible for all documentation related to the import of goods into another country. For exporters, identifying the IOR in the destination country is crucial, as the IOR ensures compliance with local regulations, manages customs clearance, and handles duties, taxes, and inspections for imported goods.³

Depending on the product type, shipping method, and destination country, exporters may need to obtain other licenses and documents. Some of these may include:

● Commercial invoice
● Bill of lading
● Consular invoice
● Certificate of origin
● Inspection certification
● Dock receipt and warehouse receipt
● Destination control statement
● Insurance certificate
● Export license
● Export packing list⁴

Processing an export order: Step-by-step guide

After receiving an export order, businesses need to process, pack, ship, and deliver the order to the end customer. The following are some key steps involved in this process:

1. Prepare your product

Upon accepting an export order, confirm all details with the buyer including product description, quantities, delivery dates, and payment terms. This helps in preventing any discrepancy in the future.

2. Navigate excise clearance

Arrange all necessary paperwork and payment of duties at Central Excise. Exporters can pay excise duty and claim a rebate via the ARE-1 form, or opt for a bond/letter of undertaking to streamline the process.

3. Pre-shipment inspection

Once cleared by Central Excise, Customs will inspect your goods, issuing an Inspection Certificate in triplicate. This ensures compliance and quality before shipment.

4. Arrange logistics partner

Select the right logistics partner to manage packing, labeling, transportation, customs clearance, and documentation. Ensure goods are insured before shipping to avoid losses.

5. Customs clearance

It is mandatory for businesses to arrange customs clearance of their products before exporting them from India. Submit all necessary documents such as the bill of lading, export invoice, packing list, shipping bill, etc. to obtain customs clearance and pay applicable duties.

6. Shipment and tracking

Once customs clearance is granted, the products are shipped. Track your shipment and stay in touch with your logistics partner to ensure your products are delivered to the buyer on time.

7. Post-shipment processes

The buyer must receive copies of shipping documents, including bill of lading, commercial invoice and packing list. The buyer may have to submit these to obtain customs clearance in their country and fulfill payment terms.⁵

Most exported products from India

Indian exports encompass a diverse range of products that significantly contribute to international trade. The top product categories on Amazon global marketplaces in 2023 were as follows:

1. Apparel

India is one of the largest exporters of apparel, with strong demand for traditional and casual wear in international markets. Indian garments are renowned for their quality, craftsmanship, elegance, and diverse designs. Items like sarees, kurtas, and scarves are especially popular on Amazon stores worldwide, particularly in the USA, UK, and Australia.

2. Home

Items like rugs, curtains, bed linen, and cushions, which are known for their intricate decoration and cultural value, are in high demand in the USA, European countries, and Australia. These products are recommended due to their high quality, excellent craftsmanship, and affordable price.

3. Beauty

India’s beauty sector has excelled in exports with ayurvedic and organic items, like skincare, oils, and hair products, gaining global popularity.

4. Health and personal care

Products related to health and wellness, including dietary supplements, vitamins, and herbal remedies, are in high demand in the USA, Canada, and parts of Europe.

5. Toys

From board games and educational toys to traditional toy handicrafts, India’s emphasis on eco-friendly and non-toxic materials has led to this sector’s growth and worldwide popularity.

In addition to these categories, other significant export items from India include luggage, grocery (tea, spices, etc.), furniture, office products, and automotive, industrial and scientific supplies.

Latest trends of products exported from India

The export market of India is dynamic in nature. Here are some of the latest trends shaping the export landscape:

1. Digitization

Technology is streamlining every aspect of global trade, from market access to supply chain management. With increasing digitization, it has become essential to establish common data standards, legal frameworks, and systems for data sharing.

2. Growth of e-commerce exports

The global e-commerce market is booming, with small businesses increasingly leveraging e-commerce platforms to sell their products online and reach international customers. E-commerce export programs like Amazon Global Selling are investing in technology and offering streamlined compliance, shipping, and payment solutions to help Indian exporters build global brands without having to establish a local presence in each market.

3. Focus on sustainability

The need for sustainable manufacturing and trading processes has become critical in global trade, and Indian exporters are gradually improving and implementing environmentally friendly measures, especially in textile and agricultural industries.

4. Supply chain optimization

Supply chains are shifting from a focus on cost-cutting to prioritizing transparency and resilience. Businesses are diversifying their supply chains to mitigate risks.

Conclusion

Exporting offers a great opportunity for many Indian businesses to enter global markets, enhance growth, and boost profitability. By adhering to proper protocols, such as obtaining the necessary documentation and recognizing emerging export trends, businesses will encounter fewer difficulties and steer clear of expensive errors. E-commerce is reshaping how companies export, with e-commerce export programs like Amazon Global Selling enabling Indian exporters to access global markets seamlessly and leverage tools and solutions to streamline their export journey.

Amazon Global Selling: Easy e-commerce exports and hassle-free shipping

If you are a business owner and you want to sell your products to the world, Amazon Global Selling enables you to list and sell ‘Made in India’ products on 18 Amazon global marketplaces. As an e-commerce export program, Amazon Global Selling provides support and guidance at every step of your export journey, connecting you to Amazon’s Service Provider Network for tailored compliance, payments, and logistics support.

Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for fulfilment by Amazon (FBA) and outsource order fulfilment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.

Frequently Asked Questions

1. What is export?

Exporting is when products made or services offered in one country are sold to customers in another country. It is a key aspect of international trade and is vital for the global economy.

2. Which items are most profitable to export from India?

Some of the most profitable products to export from India are textiles, spices, cosmetics, and health and personal care products, etc. It is important to note that profitability is not uniform and depends on relevant factors such as demand in the market, price, and costs of transportation, among others.

Published on November 6, 2024.

Sources:

1. https://sell.amazon.in/grow-your-business/amazon-global-selling/export-documentation
2. https://www.indiantradeportal.in/vs.jsp?lang=0&id=0,25,44
3. https://sell.amazon.in/grow-your-business/amazon-global-selling/export-documentation
4. https://agriexchange.apeda.gov.in/Ready%20Reckoner/EXPORT_DOCUMENTATION.aspx
5. https://www.credlix.com/blogs/how-to-process-your-first-export-order
6. https://m.media-amazon.com/images/G/31/Amazon-Global-Selling-IN/Exports-Digest/Amazon-Exports-Digest-2024.pdf?initialSessionID=257-4440694-7425934&ld=NSGoogle
7. https://www.gbm.hsbc.com/en-gb/insights/international/the-top-ten-trends-shaping-the-future-of-international-trade

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