Frequently Asked Questions (FAQ)
What are the major steps in starting Exports business in India?
- Please click the link to know steps to start export from India https://www.youtube.com/watch?v=y0mSoxNL4Vg
- Establishment of Organisation: The applicant should decide a Catchy Name with an Attractive LOGO for his company.
- Open Bank Account: After obtaining PAN no apply for opening bank account in banks listed under AD (Authorized Dealer) Category 1 / Export Import Bank of India (EXIM) banks are eligible to support and process transactions with foreign parties.
- Obtain IEC number: Import and Export Code is to be obtained by the business entity for import into or export from India. Import and Export Code is popularly known as IEC number. Import and Export Code is issued by Directorate General of Foreign Trade (DGFT). IEC is a 10-digit unique number.
- Obtaining RCMC (Registration cum Membership Certificate): Registration-Cum-Membership Certificate (RCMC) is a certificate that validates an exporter dealing with products registered with an Export Promotion Council that are authorized by the Indian Government.
- After getting IEC and RCMC import export business can be started in India
How to identify buyers in the exporting countries?
- Buyer identification can be done using various sources such as B2B portals, web browsing (to find importers in the foreign market), participation in trade fairs, buyer-seller meets, exhibitions. Apart from these conventional/popular methods, buyers can be identified with the help of Export Promotional Councils (EPC), Indian Missions abroad, overseas chambers of commerce, and friends and family.
- Companies can explore other methods for connecting with buyers from the foreign market. Other methods can be becoming a member (avail subscription) of trade associations, councils, and non-profit organization. Micro, Small and Medium Enterprises (MSMEs) can also connect with Indian Embassy to explore more opportunity.
How are Exports treated under GST?
- All exports are deemed as inter-State supplies.
- Exports of goods and services are treated as zero rated supplies.
- The exporter has the option either to export under bond/Letter of Undertaking without payment of tax and claim refund of Input Tax Credit (ITC) or pay Integrated Goods and service tax (IGST) by utilizing ITC or in cash at the time of export and claim refund of IGST paid.
What are the mandatory Documents for Export and Imports?
- Bill of Lading / Airway Bill
- Commercial Invoice cum Packing List
- Shipping Bill
- For specific items of export and import NOC/License or any other documents like Phytosanitary Certificate, Health Certificate, Drug License, etc.
What are the Quality Standards for Exporting products?
- An important aspect about the goods to be exported is compulsory quality control and inspection. For this purpose, Export Inspection Council (EIC) was set up by the Government of India under Section 3 of the Export (Quality Control and Inspection) Act, 1963.
- Indicative Quality Standard for exports:
- ISI Standard
- AGMARK Standard
- ISO 9000 Standard
- BIS Hallmark
What are the benefits that can be availed by Exporters in Export oriented unit?
- EOUs has a permit to procure raw material or capital goods duty-free, either through import or through domestic sources.
- EOUs are eligible for reimbursement of GST.
- EOUs are eligible for reimbursement of duty paid on fuels procured from domestic oil companies.
- EOUs are eligible for claiming input tax credit on the goods and services and refund thereof.
- Fast track clearance facilities.
- Exemption from industrial licensing for the manufacture of items reserved for SSI sector.
What is foreign trade policy in India?
- India’s Foreign Trade Policy (FTP) provides the basic framework of policy and strategy for promoting exports and trade. It is periodically reviewed to adapt to the changing domestic and international scenario.
- The current Foreign Trade Policy (2015-20) focusses on improving India’s market share in existing markets and products as well as exploring new products and new markets.
- India’s Foreign Trade Policy also envisages helping exporters leverage benefits of Goods and Service Tax (GST), closely monitoring export performances, improving ease of trading across borders, increasing realization from India’s agriculture-based exports and promoting exports from Micro, Small and Medium Enterprises (MSMEs) and labour-intensive sectors.
What is Custom Duty in India and its types?
- Customs Duty refers to the tax imposed on the goods when they are transported across the international borders.
- The objective behind levying customs duty is to safeguard each nation’s economy, jobs, environment, residents, etc., by regulating the movement of goods, especially prohibited and restrictive goods, in and out of any country.
- Types of Custom Duty:
- Basic Customs Duty (BCD)
- Countervailing Duty (CVD)
- Additional Customs Duty or Special CVD
- Protective Duty,
- Anti-dumping Duty
- Education Cess on Custom Duty
What is most favoured nation and its advantages?
- In International Economic Relations and International Politics, the most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade.
- The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the “Most Favoured Nation” by the country granting such treatment.
- Most favoured nations for India are Bangladesh, Maldives, Nepal and Sri Lanka.
- Advantages of most favoured nation:
- These nations a get access to a wider market for better trade.
- They pay a lesser cost on their exports due to the reduction in trade barriers
- Due to the above opportunities, they get better options in terms of growth in business and competitiveness
What are the incentive schemes by Central and State Government for Exports?
- To provide promotional measures to boost India’s and State of Maharashtra exports with the objective to offset infrastructural inefficiencies and associated costs involved to provide exporters a level playing field, the following schemes has been introduced:
- Financial Assistance
- Interest Equalisation Scheme (IES)
- Gold Card Scheme by RBI
- Niryat Rin Vikas Yojana (NIRVIK) Scheme
- At production stage
- Duty Drawback Scheme
- Duty Exemption Scheme
- Duty Remission Scheme
- Export Incentive
- Merchandise Exports from India Scheme (MEIS)
- Service Exports from India Scheme (SEIS)
- Remission of Duties and Taxes on Export Product (RoDTEP) Scheme
- Export Promotion Capital Goods (EPCG) Scheme
- Trade Infrastructure for Export Scheme
- Export Promotion Credit Guarantee Scheme
What are important aspects that need to be kept in mind while exporting?
- Sampling: Providing customized samples as per the demands of Foreign buyers help in getting export orders. As per FTP 2015-2020, exports of Bonafede trade and technical samples of freely exportable items shall be allowed without any limit.
- Denomination of Exports Contracts: All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees, but the export proceeds shall be realized in freely convertible currency.
- Pricing/Costing: The price should be worked out taking into consideration all expenses from sampling to realization of export proceeds on the basis of terms of sale i.e. Free on Board (FOB), Cost, Insurance and Freight (CIF), Cost and Freight (C&F), etc. Goal of establishing export costing should be to sell maximum quantity at competitive price with maximum profit margin.
- Customs House Agents: Exporters may avail services of Customs House Agents licensed by the Commissioner of Customs. They are professionals and facilitate work connected with clearance of cargo from Customs.
- Export Inspection Agencies: They promote manufacturer exporters to implement best quality management system to produce a consistent quality product to meet buyer’s specification and gain confidence of the buyer by pre shipment inspection, quality control and certification with many laboratories countrywide.