Start An Export Business

How to start an export business

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How to Start an Export Business

India is the 14th largest exporter in the world, exporting a wide range of goods and services. India’s exports are growing each year and in a recent report by HSBC, India is set to be among the top 5 exporters in the world by the year 2030. With the Indian Government aggressively promoting manufacturing in India through campaigns like Make in India,  exports from India is set to grow at a fast pace over the coming decade. In this article, we look at the licenses and registrations required to start an export business in India.

Top Export Destinations From India in 2030
Top Export Destinations From India in 2030

Business Plan

Before starting any business, it is important to draw out a business plan and plan of action. For those starting an export business, it is important to cover the following aspects throughly:

  • Product or service to be exported
  • Souring of raw material for manufacturing or delivery of the product or service
  • Costing of input costs
  • Working capital requirement
  • Long-term capital requirement (loan or equity)
  • License or registration required for exporting
  • Market study
  • Customer study
  • Transportation and logistics

Once, the above information is gathered and profitability is estimated, the Entrepreneur can commence the activities required to secure the necessary registrations and licenses.

Business Registration

The first item on any plan of action for starting an export business, is deciding and registering the business entity. In the case of an export business, it is recommended that Entrepreneur launch their venture as a Private Limited Company. Private Limited Company offers the promoters of the business – limited liability protection, transferability, easy access to bank loans and more. Further, foreign customers or clients prefer or mandate dealing with a registered corporate entity in India. Proprietorships and Partnership firms are usually classified as an unregistered business. Therefore, a registration of a Private Limited Company is recommended while starting an export business.

Tax Registration

Once the business is registered, tax registration can be obtained in the name of the business entity. PAN or Permanent Account Number is the first tax registration required for any new business. Once, PAN is obtained, the business can open a bank account and start the process for loan syndication or equipment or raw material purchases – to commence businesses. Goods or services exported from India do not attract VAT or Service Tax. However, VAT Registration may be required for the business as it would purchase raw materials from outside of the state and service tax registration may be required to bill domestic clients. Therefore, it is recommended that after opening the bank account, necessary steps are taken to obtain the relevant tax registration.

Import Export Code (IE Code)

An Import Export Code or IE Code is a must for any business involved in export of goods from India. An IE Code is a unique code given to a business by the Directorate General of Foreign Trade (DGFT) to track imports and exports from India. The following documents must available for obtaining IE Code in the name of the business:

In case of applicant being a Company/LLP/Partnership Firm:
  • Name of the Company/LLP/Partnership Firm
  • Certificate of Incorporation / Partnership Deed
  • MOA & AOA of the Company, in case of LLP / Partnership Firm, the Partnership Deed
  • Directors/Partners Identity Proof
  • Directors/Partners Address Proof
  • List of Directors / Partners
  • Bank Reference Letter
In case of applicant being a Person or Proprietorship
  • Name of the Proprietorship / Individual
  • Identity Proof
  • Address Proof
  • Bank Reference Letter

Other Licenses or Registrations

To start an export business, the above registrations and licenses may be sufficient in most states. However, based on the state, further registration such as shop & establishment act license, factory license, ESI / PF registration, etc., may also be required. Also, in case the business proposes to manufacturer and export items like food products, approval from FSSAI may also be required.

To start an export business in India, visit IndiaFilings.com or talk to an IndiaFilings Business Advisors.

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Comments (9)

Saurabh

Jan 23, 2015 at 1:26 PM

We want to open a Pvt. Ltd. Company and for that we have selected the name which, when we check on MCA site does not found any company with the same name. But still they(MCA) put objection on the name we sent to them.

Reply

NAVEEN BHATTY

May 06, 2015 at 2:06 PM

SETTING UP OF A EXPORT BUSINESS IN INDIA primarily food products . As I am new what is the cost and time required to obtain license .
Can I incorpirate a business undr the Shop ACT license and use my suppliers export code no to export products oversease to buyers
NAVEEN BHATTY @ gmail.com
+973 39454675

Reply

shivendra dhiman

Oct 09, 2015 at 4:19 PM

manufacturers of pre fabricated steel buildings , eg industrial sheds, ware houses, cold storage, steel structures

ph: 9780624663

Reply

Kashyap Lad

Feb 18, 2016 at 10:38 AM

I want to start a proprietorship based import business for electronic instruments. I was informed by you associate yesterday that it is difficult for a proprietor to import products as a proprietorship business is not registered with MCA and documentations are not provided by government in this case. I was suggested to start a LLP or Private limited company. However I am unable to do so. Pls. advise

Reply

IndiaFilings

Feb 19, 2016 at 5:43 AM

Hi Kashyap, please tell us the details you are not able to register a company or LLP.

Reply

Dnyaneshwar

Apr 11, 2016 at 12:03 AM

Hi
I want to start import and export business, what is cost and timeline for getting start?

Reply

Sumesh

Apr 11, 2016 at 3:14 PM

Hi Dnyan,
We can only help with company registration and IE code for export business . do you want to know more about export business please contact our business advisors @ 04440247777.

Reply

senthil

May 08, 2016 at 3:58 AM

i wants to get proprietary import and export license…..

Reply

Sumesh

May 09, 2016 at 12:39 PM

Hi senthil,
It’s our pleasure to assist you we think it is better to have a telephonic conversation with our business adviser. So kindly provide your contact number to guide you better or you can contact us @ 04440247777.

Reply

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