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How to Export Goods from India

Beginners ­Guide

A Comprehensive Guide: How to Efficiently Export Goods from India

Trade serves as a vital conduit for the international exchange of commodities, resources, and technology, fostering welfare through dual avenues. Primarily, it expands a nation’s market beyond its borders, potentially securing more favourable prices through exports. Simultaneously, imports make accessible commodities, resources, and technology that might otherwise be unavailable or only accessible at inflated prices, elevating consumer satisfaction. At its core, the fundamental tenet of foreign trade, known as the “law of comparative costs,” emphasizes that a country’s export-import balance is contingent not on its standalone characteristics but rather in correlation with those of its trade partners.

The integration of international trade instigates global competitiveness, compelling domestic enterprises to attain heightened efficiency when confronted with international competition. This integration into the global economy grants entrepreneurs facile access to cutting-edge technological innovations, enabling them to leverage the latest advancements to augment their productivity.

• Notably, developing countries tend to implement more stringent trade protectionism measures compared to their developed counterparts. Such measures have been observed to yield benefits within an open trade framework.

• Industries reliant on labour-intensive processes, such as clothing, footwear, and textiles, are exported by developing nations to both developed and underdeveloped countries. These exports generate substantial tax revenues in nations like Mexico, India, and China, among others.

Decide where you want to export

The first step is to understand global markets and the products in demand. This will help you decide what is the right marketplace for your export business. Get in touch with our Export team to understand the opportunities that each marketplace provides.

Get the required documentation

Obtain PAN (from Income tax Department) and IEC (from DGFT) to export from India. Application for IEC can be filled online directly on the DGFT website, and other registrations as required for your product.

Find customers

Starting an offline export business might need you to participate in trade fairs, buyer-seller meets, which would cost both time and money. But starting an export business with Wedoexport is easy and simple.

Ship and receive payments

Timely delivery not only builds trust among your customers but also leads to repeated purchase. For payments, you can either open a bank account in the respective country or collect payments in your Indian bank account.

BASIC STEPS TO EXPORT

EXPORT PROCEDURES AND DOCUMENTATION

A vital success factor in initiating any export company is clear understanding and detail information & knowledge of products to be exported. In order to be a successful in exporting one must fully understand its foreign market and do proper research rather than try to tackle every market in a single basket. Overseas design and product must be studies properly and considered carefully. Because there are specific laws dealing with International trade and foreign business, it is crucial that you familiarize yourself with state, federal, and international laws before starting your export business.

1. Establish Organisation
2. Opening a bank account
3. Obtaining PAN
4. Obtaining Import Export Code (IEC)
5. Obtaining RCMC and getting registered with Income Tax Authorities

Price is also an important factor. So, before starting an export business an exporter must consider the price offered to the buyers.

Procedures for registration

Once all the research and analysis is done it’s time to get registered with the various government authorities.Registration with Reserve Bank of India (RBI) 

Prior to 1997, it was necessary for every first-time exporter to obtain IEC number from Reserve Bank of India (RBI) before engaging in any kind of export operations. But now this job is being done by DGFT.

Registration with Director General of Foreign Trade (DGFT)

For every first-time exporter, it is necessary to get registered with the DGFT (Director General of Foreign Trade), Ministry of Commerce, Government of India. DGFT provide the exporter a unique IEC Number. IEC Number is a ten-digit code required for the purpose of export as well as import. No exporter is allowed to export his goods abroad without an IEC number. However, if the goods are exported to Nepal, or to Myanmar through the Indo-Myanmar border or to China through Gunji, Namgaya, Shipkila or Nathula ports then it is not necessary to obtain the IEC number provided the CIF value of a single consignment does not exceed Indian amount of Rs 25,000/-.

Application for IEC number can be submitted to the nearest regional authority of DGFT. The application form which is known as “Aayaat-Niryaat Form – ANF2A” can also be submitted online at the DGFT website: http://dgft.gov.in/. While submitting an application form for an IEC number, an applicant is required to submit his PAN account number. Only one IEC is issued against a single PAN number. Apart from PAN number, an applicant is also required to submit his Current Bank Account number and banker’s Certificate. An amount of Rs 1,000/- is required to be submitted with the application fee.

Registration with export promotion councils

Registered under the Indian Company Act, Export Promotion Councils or EPCs such as the Trade Promotion Council of India are non-profit organisations for the promotion of various goods exported from India in the international market. EPC works in close association with the Ministry of Commerce and Industry, Government of India and acts as a platform for interaction between the exporting community and the government. So, it becomes important for an exporter to obtain a registration cum membership certificate (RCMC) from the EPC. An application for registration should be accompanied by a self-certified copy of the IEC number. Membership fee should be paid in the form of a cheque or draft after ascertaining the amount from the concerned EPC. The RCMC certificate is valid from 1st April of the licensing year in which it was issued and shall be valid for five years ending 31st March of the licensing year unless otherwise specified.

Registration with Commodity Boards

Commodity Board is a registered agency designated by the Ministry of Commerce, Government of India for purposes of export promotion and has offices in India and abroad. Currently, there are five statutory Commodity Boards under the Department of Commerce. These Boards are responsible for the production, development and export of tea, coffee, rubber, spices and tobacco.

Registration with Income Tax Authorities

Merchandise goods exported are eligible for exemption from both Value Added Tax and Central Sales Tax. So, to get the benefit of tax exemption an exporter needs to get registered with the Tax Authorities.

Export Licence

A document issued by the competent/appropriate licensing agency after which an exporter is allowed to transport his product in a foreign market. The license is only issued after a careful review of the facts surrounding the given export transaction. The export license depends on the nature of the goods to be transported as well as the destination port. So, being an exporter, it is necessary to determine whether the product or good to be exported requires an export license or not.

Export Risk Management

Introduction

Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However, there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency. Like any business transaction, risk is also associated with good to be exported in an overseas market. Export is risk in international trade is quite different from risks involve in domestic trade. So, it becomes important to all the risks related to export in international trade with an extra measure and with a proper risk management.

Credit Risk

Sometimes because of large distance, it becomes difficult for an exporter to verify the creditworthiness and reputation of an importer or buyer. Any false buyer can increase the risk of non-payment, late payment or even straightforward fraud. So, it is necessary for an exporter to determine the creditworthiness of the foreign buyer. An exporter can seek the help of commercial firms that can provide assistance in credit-checking of foreign companies.

Poor Quality

Exported goods gets rejected by an importer on the basis of poor and substandard quality It is always recommended to properly check the goods to be exported. Sometimes buyer or importer raises the quality issue just to put pressure on an exporter in order to try and negotiate a lower price. So, it is better to allow an inspection procedure by an independent inspection company before shipment. Such an inspection protects both the importer and the exporter. Inspection is normally done at the request of importer and the costs for the inspection are borne by the importer or it may be negotiated that they be included in the contract price. Alternatively, it may be a good idea to ship one or two samples of the goods being produced to the importer by an international courier company. The final product produced to the same standards is always difficult to reduce.

Transportation

With the movement of goods from one continent to another, or even within the same continent, goods face many hazards. There is the risk of theft, damage and possibly the goods not even arriving at all.

Logistic

The exporter must understand all aspects of international logistics, in particular the contract of carriage. This contract is drawn up between a shipper and a carrier (transport operator). For this an exporter may refer to Incoterms 2000, ICC publication.

Legal

International laws and regulations change frequently. Therefore, it is important for an exporter to drafts a contract in conjunction with a legal firm, thereby ensuring that the exporter’s interests are taken care of.

Packaging and Labelling

Packaging

The basic role of packaging is to contain, protect and preserve a product as well as aid in its handling and final presentation. Packaging also has a role in the process of design, evaluation, and production of packages. The packaging can be done within the export company or the job can be assigned to an outside packaging company. Packaging provides following benefits to the goods to be exported:

• Physical Protection – Packaging provides protection against shock, vibration, temperature, moisture and dust.
• Containment or agglomeration – Packaging provides agglomeration of small objects into one package for reason of efficiency and cost factor.
• Marketing: Proper and attractive packaging play an important role in encouraging a potential buyer.
• Convenience – Packages can have features which add convenience in distribution, handling, display, sale, opening, use, and reuse.
• Security – Packaging can play an important role in reducing the security risks of shipment. It also provides authentication seals to indicate that the package and contents are not counterfeit. Packages also can include anti-theft devices, such as dye-packs, RFID tags, or electronic article surveillance tags, that can be activated or detected by devices at exit points and require specialized tools to deactivate. Using packaging in this way is a means of loss prevention.

Labelling

Like packaging, labelling should also be done with extra care. It is also important for an exporter to be familiar with all kinds of sign and symbols and should also maintain all the nationally and internationally standers while using these symbols. Labelling should be in English, and words indicating country of origin should be as large and as prominent as any other English wording on the package or label.

Labelling on product provides the following important information:

• Shipper’s mark
• Country of origin
• Weight marking (in pounds and in kilograms)
• Number of packages and size of cases (in inches and centimeters)
• Handling marks (international pictorial symbols)
• Cautionary markings, such as “This Side Up.”
• Port of entry
• Labels for hazardous materials

Labelling of a product also provides information like how to use, transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some types of information are required by governments. It is better to choose a fast-dyes for labelling purpose. Only fast dyes should be used for labelling. Essential data should be in black and subsidiary data in a less conspicuous colour; red and orange and so on. For food packed in sacks, only harmless dyes should be employed, and the dye should not come through the packing in such a way as to affect the goods.

Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification.

Details of Documentation

Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship’s owner, seller, buyer and some other parties. For each one represents a kind of certificate document.

In case of Post Parcel, no Shipping Bill is required. The relevant documents are mentioned:

• Customs Declaration Form – It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender.
• Dispatch Note – It is filled by the exporter to specify the action to be taken by the postal department at the destination in case the address is non-traceable or the parcel is refused to be accepted.
• Commercial Invoice – Issued by the exporter for the full realizable amount of goods as per trade term.
• Consular Invoice – Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Ausatralia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format and is signed/ certified by the counsel of the importing country located in the country of export.
• Customs Invoice – Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate.
• Legalised /Visaed Invoice – This shows the seller’s genuineness before the appropriate consulate or chamber or commerce/ embassy.
• Certified Invoice – It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in accordance with specific contract. Sight Draft and Usance Draft are available for this. Sight Draft is required when the exporter expects immediate payment and Usance Draft is required for credit delivery.
• Packing List – It shows the details of goods contained in each parcel / shipment.
• Export Packing List – An export packing list is much more detailed and informative than a standard domestic packing list. It includes:
– Itemization of the contents of each individual package
– The type of package, such as a box, crate, drum or carton
– The individual net, legal, tare and gross weights and measurements for each package
• Shipper’s and buyer’s references: The list is used by the shipper or forwarding agent to determine the total shipment weight and volume, and whether the correct cargo is being shipped.
• Certificate of Inspection – It is a type of document describing the condition of goods and confirming that they have been inspected.
• Black List Certificate – It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country(s).
• Manufacturer’s Certificate – It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and is available.
• Certificate of Chemical Analysis – It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc.
• Certificate of Shipment – It signifies that a certain lot of goods have been shipped.
• Health/ Veterinary/ Sanitary Certification – Required for export of foodstuffs, marine products, hides, livestock etc.
• Certificate of Conditioning – It is issued by the competent office to certify compliance of humidity factor, dry weight, etc.
• Antiquity Measurement – It is issued by Archaeological Survey of India in case of antiques.
• Shipping Order – Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date.
• Cart/ Lorry Ticket – It is prepared for admittance of the cargo through the port gate and includes the shipper’s name, cart/ lorry No., marks on packages, quantity, etc.
• Shut Out Advice – It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter.
• Insurance Certificate: An insurance certificate is used to assure the consignee that insurance will cover the loss of, or damage to, the cargo during transit. Typically, marine insurance coverage equal to 110% of the commercial invoice amount must be obtained for export shipments. If you plan to export infrequently, you may be able to buy insurance through your freight forwarder.
• Inspection Certificate: Inspection certificates often are required by foreign customs or businesses for certain regulated products. These are typically related to agriculture, health or the environment. Inspection certificates also may be required to ensure that vessels or crates are free of contaminants before entering certain ports, or that the products met the specifications outlined in a contract or purchase order.
• Short Shipment Form – It is an application to the customs authorities at port which advises short shipment of goods and required for claiming the return.

Customs Procedures for Exports

A proper knowledge of the custom rules and regulation becomes important for the exporter. For clearance of export goods, the exporter or export agent has to undertake the following formalities:

Registration

Any exporter who wants to export his good need to obtain PAN based Business Identification Number (BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export goods. The exporters must also register themselves to the authorised foreign exchange dealer code and open a current account in the designated bank for credit of any drawback incentive.

Registration in the case of export under export promotion schemes:

All the exporters intending to export under the export promotion scheme need to get their licences

Processing of Shipping Bill – Non-EDI

In case of Non-EDI, the shipping bills or bills of export are required to be filled in the format as prescribed in the Shipping Bill and Bill of Export (Form) regulations, 1991. An exporter needs to apply different forms of shipping bill/ bill of export for export of duty-free goods, export of dutiable goods and export under drawback etc.

Processing of Shipping Bill – EDI

Under the EDI System, declarations in a prescribed format are to be filed through the Service Centers of Customs. A checklist is generated for verification of data by the exporter/CHA. After verification, the data is submitted to the System by the Service Center operator and the System generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the exporter/CHA. For export items which are subject to export cess, the TR-6 challans for cess is printed and given by the Service Center to the exporter/CHA immediately after submission of shipping bill. The cess can be paid on the strength of the challan at the designated bank. No copy of shipping bill is made available to exporter/CHA at this stage.

Quota Allocation

The quota allocation label is required to be attached/pasted on the export invoice. The allocation number of AEPC (Apparel Export Promotion Council) is to be entered in the system at the time of shipping bill entry. The quota certification of the export invoice needs to be submitted to Customs along with other original documents at the time of examination of the export cargo. For determining the validity date of the quota, the relevant date needs to be the date on which the full consignment is presented to the Customs for examination and duly recorded in the Computer System.

Arrival of Goods at Docks

Based on examination and inspection goods are allowed to enter into the Dock. At this stage, the port authorities check the quantity of the goods with the documents.

System Appraisal of Shipping Bills

In most of cases, a Shipping Bill is processed by the system based on declarations made by the exporters without any human intervention. Sometimes the Shipping Bill is also processed on screen by the Customs Officer.

Customs Examination of Export Cargo

Customs Officer may verify the quantity of the goods actually received and enter them into the system and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the Dock Appraiser of the Dock who may assign a Customs Officer for the examination and intimate the officers’ name and the packages to be examined, if any, on the check list and return it to the exporter or his agent.

The Customs Officer may inspect/examine the shipment along with the Dock Appraiser. The Customs Officer enters the examination report in the system. He then marks the Electronic Bill along with all original documents and checklist to the Dock Appraiser. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents and as seen in the physical examination, he may proceed to allow “let export” for the shipment and inform the exporter or his agent.

Loading of goods in containers

The exporter or export agent hands over the exporter’s copy of the shipping bill signed by the Appraiser “Let Export” to the steamer agent. The agent then approaches the proper officer to allow the shipment. The Customs Preventive Officer supervising the loading of container and general cargo into the vessel may give “Shipped on Board” approval on the exporter’s copy of the shipping bill.

Sample check

Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the ICES/E system. There is no separate register for recording dates of samples drawn. Three copies of the test memo are prepared by the Customs Officer and are signed by the Customs Officer and Appraising Officer on behalf of Customs and the exporter or his agent.

Export of Goods under Claim for Drawback

After the actual export of the goods, the Drawback claim is processed through the EDI system by the officers of the Drawback Branch on a first come first served basis without feeling any separate form.

Generation of Shipping Bills

The Shipping Bill is generated by the system in two copies- one as a Custom copy and one as exporter copy. Both copies are then signed by the Customs officer and the Custom House Agent.

In case you miss any information or just want to give us feedback, please feel free to contact us.

Frequently Asked Questions

What are the fundamental steps to initiate the export process from India?

nitiating the export process from India involves several fundamental steps. Here are the key steps to get started:

  1. Obtain an Import Export Code (IEC): The first step is to obtain an IEC from the Directorate General of Foreign Trade (DGFT). The IEC is a 10-digit code that is mandatory for any person or business seeking to engage in export activities.

  2. Choose a Product: Identify the product(s) you want to export. Conduct market research to assess demand, competition, and potential profitability in the target market.

  3. Register Your Business: Register your business as per the legal requirements of your country, such as a proprietorship, partnership, or private limited company. Obtain necessary licenses and permits.

  4. Identify Target Market: Research and identify the target market for your product(s). Consider factors such as market size, accessibility, regulations, and cultural considerations.

  5. Understand Export Regulations: Familiarize yourself with export regulations and compliance requirements applicable to your product(s) and target market. This includes understanding customs procedures, documentation, and any trade restrictions or embargoes.

  6. Pricing and Payment: Determine the pricing strategy for your products, considering factors such as production costs, market demand, and competition. Explore various payment methods available for international transactions and choose the most suitable option.

  7. Arrange Logistics: Plan and arrange logistics for exporting your products, including transportation, packaging, and documentation. Consider using freight forwarders or logistics service providers for smooth shipment handling.

  8. Export Documentation: Prepare and complete the necessary export documentation, such as commercial invoice, packing list, bill of lading/airway bill, and export declaration forms. Ensure accuracy and compliance with regulations.

  9. Secure Export Finance: Explore available options for export financing, such as export credit insurance, export working capital loans, or government-supported schemes to ensure sufficient financial resources for your export activities.

  10. Marketing and Sales: Develop a marketing and sales strategy to promote your products in the target market. This may include participating in trade fairs, building relationships with buyers, or utilizing digital marketing channels.

How can I find buyers for my exported goods from India?

To find buyers for your exported goods from India, there are several strategies you can employ. Here are some effective methods:

  1. Trade Fairs and Expos: Participate in trade fairs and expos in your target country to connect with potential buyers. These events provide an opportunity to showcase your products and network with industry professionals.

  2. Export Promotion Bodies: Utilize the services of export promotion bodies in India, such as government agencies or trade associations. They can provide valuable resources, contacts, and assistance in finding buyers for your products.

  3. Online Directories and Search Engines: Make use of online directories and search engines to research potential buyers. Look for importers, wholesalers, distributors, or retailers who may be interested in your specific products.

  4. Market Research: Conduct thorough market research to identify the demand for your products in different countries. Analyze market trends, consumer preferences, and competition to target the right buyers.

  5. Networking: Build a strong network of contacts in the international trade community. Attend industry events, join trade associations, and engage in business networking platforms to establish relationships with potential buyers.

  6. Utilize Online Marketplaces: Explore online marketplaces that cater to international trade, such as Alibaba, Global Sources, or eBay Global Selling. These platforms connect exporters with buyers from around the world.

  7. Establish a Professional Website: Create a professional website for your export business. Showcase your products, highlight their unique features, and make it easy for potential buyers to reach out to you.

  8. Collaborate with Trade Agents: Consider working with trade agents or representatives who have experience and connections in your target market. They can help you identify and connect with suitable buyers.

What are the emerging trends in the Indian export industry?

  1. Digitalization and E-commerce: The digitalization of trade processes and the rise of e-commerce platforms have opened up new avenues for Indian exporters. Online platforms provide easier access to global markets and enable exporters to reach a wider customer base.

  2. Sustainability and Ethical Sourcing: There is a growing focus on sustainability and ethical sourcing in the export industry. Indian exporters are increasingly adopting sustainable practices in their supply chains, such as using eco-friendly materials and ensuring fair labor practices.

  3. Agro-Exports and Food Processing: The agro-export sector in India is witnessing significant growth. There is an increasing demand for processed and value-added agricultural products, both domestically and internationally. Indian exporters are capitalizing on this trend by focusing on food processing and diversifying their product offerings.

  4. Manufacturing Hub for Global Exports: India is emerging as a production hub for global exports. The country’s competitive manufacturing capabilities, skilled workforce, and favorable business environment are attracting multinational companies to set up production units in India for export purposes.

  5. Focus on High-Growth Sectors: Indian exporters are targeting high-growth sectors such as pharmaceuticals, chemicals, textiles, and jewelry. These sectors have shown resilience and strong demand in both domestic and international markets.

  6. Market Access Initiatives: The Indian government has implemented various market access initiatives to support exporters. These initiatives aim to create export hubs, improve infrastructure, facilitate trade promotion, and provide financial assistance to exporters.

How can I protect my intellectual property rights while exporting goods from India?

To protect your intellectual property rights while exporting goods from India, here are some measures you can take:

  1. Register your Intellectual Property (IP) Rights: Register your patents, trademarks, copyrights, or designs in India before exporting. This provides legal protection and establishes your ownership rights.

  2. Conduct IP Due Diligence: Perform thorough research to ensure that your IP does not infringe upon existing rights in the target market. This helps avoid legal disputes and protects your IP from claims of infringement.

  3. Use Non-Disclosure Agreements (NDAs): When engaging in business discussions or collaborations with potential buyers or partners, use NDAs to protect confidential information and trade secrets.

  4. Implement Watermarking and Digital Rights Management: If you are exporting digital content, consider implementing watermarking and digital rights management technologies to deter unauthorized use and distribution.

  5. Monitor and Enforce: Regularly monitor the market for any infringements of your IP rights. Take appropriate legal action against infringers to safeguard your rights and seek remedies.

  6. Collaborate with Customs Authorities: Work closely with customs authorities and provide them with information about your registered IP rights. They can help detect and prevent the importation of counterfeit or infringing goods.

  7. Educate Employees and Partners: Raise awareness among your employees and partners about the importance of protecting IP rights. Train them to identify and report any potential infringements.

  8. Seek Legal Advice: Consult with intellectual property lawyers or specialists who have expertise in international trade and IP laws. They can guide you on specific measures to protect your IP rights effectively.

Are there government schemes or initiatives that support and encourage exports from India, and how can exporters benefit from them?

Yes, there are several government schemes and initiatives in India that support and encourage exports. These schemes aim to provide various incentives, financial assistance, and infrastructure support to exporters. Here are some examples:

  1. Merchandise Exports from India Scheme (MEIS): MEIS offers financial incentives to exporters of specified goods based on their export performance. It provides benefits such as duty credit scrips that can be used to offset customs duties or sold in the open market.

  2. Service Exports from India Scheme (SEIS): SEIS incentivizes service exporters by providing scrips based on their net foreign exchange earnings. These scrips can be used for payment of service tax, customs duty, and other duties.

  3. Export Promotion Capital Goods (EPCG) Scheme: EPCG allows import of capital goods for producing quality goods and services with the objective of enhancing India’s export competitiveness. Under this scheme, import duty on capital goods is either exempted or reduced.

  4. Market Access Initiative (MAI) Scheme: MAI aims to promote exports by exploring new markets and supporting exporters in penetrating international markets. It provides financial assistance for market research, participation in trade fairs and exhibitions, buyer-seller meets, and other promotional activities.

  5. Rebate of State and Central Taxes and Levies (RoSCTL): RoSCTL is an export incentive scheme that provides reimbursement of certain taxes and levies paid by exporters. It helps improve the competitiveness of Indian products in the international market.

By leveraging these schemes and initiatives, exporters can benefit from financial incentives, reduced import duties, improved market access, and promotional support. These measures aim to enhance the competitiveness of Indian exports and encourage businesses to explore international markets.

What are the procedures and regulations to follow for exporting goods to countries that have trade agreements or preferential tariffs with India?

Exporting goods from India to countries that have trade agreements or preferential tariffs involves following specific procedures and regulations to ensure compliance with international trade laws. Here are the general steps and considerations:

  1. Identify the Target Country’s Trade Agreement: Research and identify the specific trade agreement or preferential tariff scheme between India and the destination country. Examples might include Free Trade Agreements (FTAs), Preferential Trade Agreements (PTAs), or Regional Trade Agreements (RTAs).

  2. Check Product Eligibility: Determine if your exported goods qualify for preferential tariffs under the trade agreement. Some products may have specific rules of origin or eligibility criteria outlined in the agreement.

  3. Obtain Certificate of Origin: If your goods meet the eligibility criteria, obtain a Certificate of Origin (CoO) or other relevant documentation. The CoO proves that your products qualify for preferential treatment under the trade agreement. This certificate is usually issued by authorized agencies or chambers of commerce.

  4. Compliance with Rules of Origin: Ensure that your products meet the rules of origin specified in the trade agreement. This might involve a certain percentage of local content or manufacturing process criteria.

  5. Documentation and Paperwork: Prepare all necessary export documentation, including invoices, packing lists, certificates, and licenses required by both Indian authorities and the importing country.

  6. Customs Procedures: Comply with the customs procedures of both India and the destination country. This includes proper declaration of goods, payment of duties (if applicable), and adherence to import/export regulations.

  7. Utilize Preferential Tariffs: When exporting, claim preferential tariff treatment by providing the necessary documentation (such as the CoO) to the customs authorities in the importing country.

  8. Stay Updated: Regularly monitor any changes or updates to trade agreements or tariff preferences between India and the destination country to ensure continued compliance.

  9. Seek Professional Assistance if Needed: For complex trade scenarios or unfamiliar territories, consider seeking guidance from trade consultants, legal advisors, or organizations specialized in international trade.

  10. Follow Export Control Regulations: Ensure compliance with export control regulations that might apply to your products, such as restrictions on dual-use goods, sanctions, or embargoes.

Remember that specific procedures and requirements can vary based on the trade agreement and the nature of the exported goods. It’s essential to thoroughly research the particular agreement and comply with all relevant regulations to facilitate smooth export operations.

For precise and updated information regarding the export process to a specific country or under a particular trade agreement, it’s advisable to consult with relevant government trade departments, customs authorities, or legal experts familiar with international trade law.

Are there specific packaging and labeling requirements that exporters from India need to adhere to for international shipments?

Yes, exporters from India need to adhere to specific packaging and labeling requirements for international shipments. Here are some key considerations:

  1. Packaging Standards: Ensure that the packaging used for your goods meets international standards and is suitable for transportation. Proper packaging helps protect the goods during transit and complies with safety regulations. It should be sturdy, secure, and appropriate for the type of product being shipped.

  2. Labeling Requirements: Labels on exported goods must comply with international standards and regulations. Key elements often required on labels include:

    • Product name or description
    • Quantity or weight of the product
    • Country of origin (India)
    • Manufacturer’s or exporter’s details
    • Handling instructions (if applicable)
    • Hazardous materials information (if applicable)
    • Barcodes or unique identification numbers

  3. Language and Markings: Labels and packaging information should be in the language of the destination country or in a language widely understood internationally (often English). It’s essential to include any required symbols, warnings, or markings as per the regulations of the importing country.

  4. Quality Standards: Some products may need to meet specific quality standards set by the importing country. Ensure that the packaging and labeling adhere to these standards to prevent rejections or delays at customs.

  5. Special Requirements for Certain Products: Certain products might have additional labeling or packaging requirements. For example, food items might need nutritional information, expiry dates, or allergen warnings.

  6. Documentation: Ensure that all necessary documentation related to packaging and labeling (such as certificates of compliance, safety data sheets, or product specifications) is accurately prepared and accompanies the shipment.

  7. Customs Regulations: Comply with the customs regulations of both India and the destination country regarding packaging and labeling. Failure to meet these requirements could result in delays or even rejection of the shipment.

  8. Specific Industry Standards: Certain industries or products may have industry-specific packaging and labeling requirements. For instance, pharmaceuticals, chemicals, electronics, and perishable goods might have unique labeling or packaging specifications.

It’s crucial to thoroughly research and understand the packaging and labeling requirements specific to your product and the target export market. Non-compliance with these requirements could lead to difficulties in customs clearance, additional costs, or even the inability to export the goods.

How does the export documentation process differ for different modes of transportation (sea, air, road, rail)?

Export documentation requirements can vary based on the mode of transportation used for shipping goods—sea, air, road, or rail. While some documents might be common across different modes, certain documents are specific to each mode due to the nature of transportation and regulatory requirements. Here’s a general overview:

  1. Sea Transportation:

    • Bill of Lading (B/L): A crucial document that serves as a receipt for goods shipped, issued by the carrier. It contains details about the cargo, its destination, and terms of transportation.
    • Packing List: Detailed list specifying the contents, quantities, and packaging of each item in the shipment.
    • Commercial Invoice: A document issued by the exporter that includes details of the goods, their value, and terms of sale.
    • Certificate of Origin (CoO): Depending on the destination, a CoO might be required to claim preferential tariff treatment.

  2. Air Transportation:

    • Air Waybill (AWB): Similar to a Bill of Lading for sea transport, it is a contract between the shipper and the air carrier for the transportation of goods.
    • Commercial Invoice: Essential for air shipments, detailing goods, value, and terms of sale.
    • Packing List: Similar to sea shipments, specifying contents and packaging details.

  3. Road Transportation:

    • CMR Note: An international consignment note that confirms the carrier has received the goods and is transporting them according to the agreement.
    • Commercial Invoice: Required for customs clearance, detailing goods, value, and terms of sale.
    • Packing List: Providing details of contents and packaging.

  4. Rail Transportation:

    • Railway Consignment Note: Similar to a CMR Note, it serves as a contract of carriage between the shipper and the railway company.
    • Commercial Invoice: Necessary for customs purposes, specifying goods, value, and terms of sale.
    • Packing List: Detailing the contents and packaging.

  5. Common Documents Across Modes:

    • Certificate of Origin: Often required for preferential tariff treatment.
    • Insurance Certificate: Providing evidence of cargo insurance coverage.
    • Export License or Permit (if applicable): Required for certain goods subject to export restrictions or controls.
How does the Goods and Services Tax (GST) impact the export process, and are there any exemptions or provisions for exporters?

The Goods and Services Tax (GST) has several implications for exporters in India, impacting various aspects of the export process. Here’s an overview:

  1. Zero-Rated Supply:

    • Under GST, exports are considered as ‘zero-rated supplies.’ This means that the GST rate on exported goods or services is 0%, ensuring that no GST is levied on exported products or services.
    • Exporters can claim a refund on the input tax credit (ITC) accumulated on inputs or input services used to manufacture or supply exported goods or services.

  2. Export Procedures:

    • Exporters need to follow specific procedures for exporting goods or services under GST, including proper documentation and compliance with GST rules.
    • A proper export invoice with specific details is required to claim zero-rated supply benefits.

  3. GST on Export Services:

    • Similar to goods, services provided to recipients outside India are zero-rated under GST. This encourages service exporters by eliminating the tax burden on exported services.

  4. Refund Mechanism:

    • Exporters can claim a refund of accumulated input tax credit (ITC) on inputs, input services, and capital goods used for exports.
    • The refund process involves filing relevant forms with supporting documents to claim the refund of GST paid on inputs used for exported goods or services.

  5. Export Promotion Schemes:

    • Various export promotion schemes are available to support exporters, such as the Export Promotion Capital Goods (EPCG) scheme and Advance Authorization Scheme. These schemes aim to facilitate exports by providing exemptions, concessions, or duty credits.

  6. Bond/LUT (Letter of Undertaking):

    • To facilitate zero-rated supplies without payment of GST at the time of export, exporters often furnish a bond or LUT to the authorities as a guarantee that they will comply with export requirements.

  7. Drawbacks and Exemptions:

    • Certain goods or services may be eligible for exemptions or drawbacks under specific circumstances. Exporters should assess these opportunities to minimize tax liabilities and enhance competitiveness in the international market.

  8. Compliance and Record Keeping:

    • Exporters need to maintain proper records of export transactions, including invoices, shipping bills, export declarations, and documentation related to the claiming of refunds.

GST has streamlined the tax system for exports in India, providing benefits such as zero-rated supplies and refund mechanisms, which aim to boost the competitiveness of Indian exporters in the global market. However, exporters need to ensure compliance with GST regulations and take advantage of available schemes and provisions to maximize benefits and minimize tax liabilities on their export activities.

What are the procedures and documentation required for claiming export incentives or benefits in India?

In India, exporters can avail themselves of various incentives and benefits to promote exports. These incentives are aimed at supporting and encouraging exports and are typically administered by different government agencies. The procedures and documentation required for claiming export incentives or benefits include:

  1. Registering as an Exporter:

    • To avail export incentives, businesses must register with relevant authorities such as the Directorate General of Foreign Trade (DGFT) and obtain Importer Exporter Code (IEC).

  2. Understanding Export Incentive Schemes:

    • Familiarize yourself with different export promotion schemes offered by the government, such as:
      • Merchandise Exports from India Scheme (MEIS)
      • Services Exports from India Scheme (SEIS)
      • Export Promotion Capital Goods (EPCG) Scheme
      • Duty Drawback Scheme
      • Advance Authorization Scheme, etc.

  3. Eligibility Criteria:

    • Check the eligibility criteria for each scheme to ensure your exports meet the requirements for availing benefits.

  4. Compliance with Scheme Requirements:

    • Ensure compliance with specific conditions, such as achieving certain export targets, using authorized ports, adhering to product categories, or following prescribed documentation procedures.

  5. Documentation Requirements:

    • Maintain proper documentation including:
      • Export Invoices
      • Shipping Bills
      • Bill of Lading/Airway Bill
      • Export Declarations
      • Certificates of Origin
      • Bank Realization Certificates (BRC)
      • Valid Export Orders/Contracts
      • Export Declaration Forms (EDF)
      • License or Authorization Documents (if applicable)
      • GST Returns and related documents
      • Other specific documents required by the scheme

  6. Application Process:

    • Submit applications for claiming incentives or benefits through the designated online portals or through physical applications, as per the requirements of the scheme.

  7. Timely Submission and Compliance:

    • Ensure timely submission of applications and compliance with all stipulated guidelines to avoid any delay or rejection of claims.

  8. Verification and Scrutiny:

    • Government authorities may scrutinize the submitted documents and information provided by the exporter. Be prepared for any audits or verifications.

  9. Claiming and Receiving Benefits:

    • After approval, exporters can claim benefits in various forms, such as duty credits, tax refunds, duty drawbacks, exemption certificates, or other incentives as per the scheme.

  10. Maintaining Records:

  • Keep accurate records of all export-related transactions, documents, and incentives claimed for future reference and audits.

It’s crucial to stay updated with any changes or modifications in export incentive schemes announced by the government and ensure compliance with the prescribed procedures and documentation to avail maximum benefits for your exports. Consulting with experts or trade advisors can also help navigate the complexities and maximize the benefits under these schemes.

Is there a streamlined process for obtaining various export licenses required for specific goods or destinations?

Yes, in India, the process for obtaining various export licenses required for specific goods or destinations has been streamlined to a considerable extent. The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, is the primary authority responsible for issuing export licenses and regulating foreign trade.

The process for obtaining export licenses has been digitalized and streamlined through the online platform known as the DGFT Portal. Here’s an outline of the streamlined process:

  1. Registration on DGFT Portal:

    • Exporters need to register themselves on the DGFT website and obtain an Importer Exporter Code (IEC) if they don’t have one already. The IEC is a mandatory requirement for undertaking export/import activities.

  2. Online Application Submission:

    • Exporters can apply for various export licenses, authorizations, or certificates through the DGFT Portal by filling out the required application forms online.

  3. License Categories:

    • Different categories of licenses are available for various purposes such as Restricted/Prohibited items, Preferential Tariff/Concessional Rate of Duty items, Special Chemicals, Precious Metals, etc.

  4. Documents Submission:

    • Applicants are required to submit necessary documents supporting their application, such as invoices, purchase orders, quality control certificates, etc., as specified by the DGFT.

  5. Application Processing:

    • The DGFT examines the applications submitted online and processes them accordingly. The processing time can vary depending on the type of license applied for and the verification required.

  6. Issuance of Licenses:

    • Upon approval, the DGFT issues the required export license, authorization, or certificate electronically through the DGFT Portal.

  7. Monitoring and Compliance:

    • Exporters must comply with the terms and conditions mentioned in the license. The DGFT monitors compliance and may conduct audits or verifications as needed.

  8. Renewal and Amendments:

    • Some licenses might require renewal or amendments over time. Exporters can apply for these updates or renewals through the DGFT Portal.

  9. Guidance and Assistance:

    • The DGFT Portal provides guidance, FAQs, and user manuals to assist exporters in understanding the procedures and requirements for obtaining various export licenses.

The digitalization of processes through the DGFT Portal has significantly streamlined the application and issuance of export licenses in India. This online platform aims to simplify procedures, reduce paperwork, and facilitate efficient and transparent processing of export-related licenses, promoting ease of doing business for exporters in the country.

How does one determine the correct classification or Harmonized System (HS) code for their exported goods?

Determining the correct classification or Harmonized System (HS) code for exported goods is crucial for accurate customs clearance and compliance with international trade regulations. Here are steps to help determine the correct HS code:

  1. Understand the Harmonized System (HS) Code:

    • The HS is a standardized system used globally to classify traded products. It’s a six to ten-digit code that categorizes goods based on their nature, composition, and intended use.

  2. Identify the Product:

    • Thoroughly understand the product you are exporting, including its composition, features, functions, and intended use. Detailed knowledge of the product is essential for accurate classification.

  3. Consult HS Code Databases:

    • Refer to official HS code databases provided by customs authorities, such as the World Customs Organization (WCO) or national customs websites. These databases offer detailed descriptions and search tools to find the appropriate HS code.

  4. Analyze HS Code Structure:

    • The HS code is structured hierarchically, with each section, chapter, and sub-heading representing specific product characteristics. Analyze these codes to narrow down the classification that best fits your product.

  5. Review Explanatory Notes and Guidelines:

    • Explanatory notes and guidelines accompany the HS code. These notes offer additional explanations, examples, and specific criteria to help classify products accurately.

  6. Compare Similar Products:

    • Compare your product to similar items within the same HS code category. This can provide insights into the correct classification based on similarities or differences in features.

  7. Seek Expert Advice if Necessary:

    • For complex products or when uncertain about classification, consider seeking guidance from customs experts, trade consultants, or industry associations familiar with HS codes.

  8. Use Online Tools and Resources:

    • Several online tools and software are available that facilitate HS code classification. These tools often use algorithms and databases to assist in finding the most appropriate code based on product descriptions.

  9. Regularly Update Classification:

    • Stay updated with any changes or amendments to HS codes. Reevaluate the classification periodically, especially when introducing new products or if regulations change.

  10. Document the Classification Process:

  • Maintain records of the HS code assigned to each exported product. Proper documentation is essential for customs declarations and compliance audits.

Accurate classification of goods with the correct HS code is crucial for customs clearance, determining tariff rates, and complying with import/export regulations. Taking the time to correctly identify the HS code for your exported goods can help prevent delays, reduce errors, and ensure smooth international trade transactions.

Can you outline the procedure for customs examination and clearance for exported goods?

The procedure for customs examination and clearance for exported goods involves several steps to ensure compliance with regulations and facilitate the smooth movement of goods across international borders. Here’s an outline of the process:

  1. Preparation of Export Documents:

    • Exporters prepare and submit necessary documentation, including commercial invoices, packing lists, export declarations, shipping bills, certificates of origin, licenses (if applicable), and any other required paperwork.

  2. Submission of Export Declaration:

    • Submit the export declaration, along with the relevant documents, to the customs authorities through the designated electronic platform or at the customs office. This declaration includes details of the exported goods, their value, quantity, destination, and other relevant information.

  3. Customs Verification and Assessment:

    • Customs officials review the submitted documentation to verify the accuracy and compliance with export regulations. They assess the declared value of goods, applicable taxes or duties, and ensure that the goods match the description provided.

  4. Physical Inspection (if required):

    • In some cases, customs may conduct a physical inspection of the goods to verify their quantity, quality, and conformity to the declared information. This inspection could involve opening packages or containers for examination.

  5. Customs Clearance and Approval:

    • Upon successful verification and assessment, customs authorities grant clearance for the export. They endorse the shipping documents, such as the shipping bill or bill of lading, indicating approval for the goods to leave the country.

  6. Payment of Export Duties or Fees (if applicable):

    • Exporters may need to pay any applicable export duties, fees, or taxes as determined by customs during the assessment process before obtaining clearance for shipment.

  7. Sealing and Release of Goods:

    • Once customs clearance is obtained, the goods are sealed or marked as cleared for export. The exporter can proceed with the shipping process, and the goods are released for transport to the intended destination.

  8. Post-Clearance Procedures:

    • Customs authorities may conduct post-clearance audits or verifications to ensure ongoing compliance with export regulations. Exporters should maintain accurate records and documentation for future reference.

  9. Electronic Data Interchange (EDI):

    • In many countries, customs clearance procedures are facilitated through electronic data interchange systems, allowing for faster processing and reduced paperwork.

  10. Special Considerations and Requirements:

  • Certain goods may have specific requirements or need additional certifications, such as perishable goods, hazardous materials, or items subject to export controls. Compliance with these requirements is crucial for customs clearance.

Understanding and complying with customs procedures are essential for exporters to facilitate timely and hassle-free clearance of goods. Working closely with customs brokers, freight forwarders, or experts in international trade can help navigate the complexities of customs procedures and ensure smooth export operations.

What are the financial considerations and methods for handling currency exchange fluctuations during the export process?

Managing currency exchange fluctuations is crucial for exporters as it can impact profitability and the overall financial health of export transactions. Here are financial considerations and methods to handle currency exchange fluctuations during the export process:

  1. Understand Foreign Exchange Risk:

    • Recognize that currency exchange rates can fluctuate due to various factors such as economic conditions, geopolitical events, interest rates, and market sentiment.

  2. Risk Assessment and Planning:

    • Assess the potential impact of currency fluctuations on export transactions. Evaluate the exposure to currency risk for each transaction and plan accordingly.

  3. Use Forward Contracts:

    • Utilize forward contracts offered by banks or financial institutions to lock in an exchange rate for future transactions. This helps mitigate the risk of adverse currency movements by securing a fixed rate in advance.

  4. Currency Hedging Instruments:

    • Explore various hedging instruments like options, futures, or swaps to hedge against currency risk. These financial tools can provide protection against unfavorable exchange rate movements.

  5. Invoice in Stable Currencies:

    • Consider invoicing in stable or commonly used currencies (e.g., US dollars, euros) to minimize exposure to fluctuations in less stable currencies. This can provide a more predictable cash flow.

  6. Negotiate Payment Terms:

    • Negotiate payment terms with buyers that factor in currency fluctuations. For instance, negotiate shorter payment cycles or set pricing terms that consider potential currency volatility.

  7. Diversification of Markets:

    • Diversify export markets to spread currency risk. Selling goods or services to multiple countries can help offset losses in one market due to currency depreciation.

  8. Monitor Exchange Rates:

    • Keep a close eye on exchange rate movements and market trends. Use financial news sources, economic reports, and market analysis to stay informed about potential currency movements.

  9. Maintain Flexibility:

    • Maintain flexibility in business operations and financial planning to adapt to currency fluctuations. Having contingency plans can help mitigate sudden adverse changes in exchange rates.

  10. Consult Financial Experts:

  • Seek advice from financial advisors, currency specialists, or trade consultants who can provide insights and strategies to manage currency risks effectively.

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