New entrepreneurs entering into the industry of import-export has a lot of questions regarding its initiation.
The documents required and the guidelines that one should follow during the process have been listed down:
I. Setting up the business entity
Create a business setup. For starting the import-export business one needs to determine the form your business will take on the basis of proprietorship. You can establish a sole proprietorship firm, a partnership firm, an LLP, a private limited company, or a public limited company.
II. A PAN Card is a must
It is a mandatory step to obtain a PAN card from the income tax department. The process of attaining a PAN card is quite similar to that of applying for a personal pan.
III. Open a current account
After the completion of business registration and acquiring the PAN card, opening a current account is necessary. You need a current account to transact with customers and vendors. Depending on the business entity the requirements for opening a current account may vary.
IV. Issuing an IEC(Import Export Code)
IEC is essential to have if you’re looking for an import-export business in all cases except in case of restricted or prohibited goods or services. Requirements for IEC:
1.) Company PAN Card
2.) Applicant’s photograph
3.) Copy of a cancelled cheque from the business’s current account
V. Getting an RCMC (Registration Cum Membership Certificate)
Registration with the export promotion councils gives exporters access to events and assistance to diversify their business and is also necessary for availing certain benefits under India’s Foreign Trade Policy. To register with them, RCMC is necessary. There are around 26 such councils from where you can get an RCMC issued.
VI. Examining the right market for export
There are some factors that a new exporter must consider such as demand for the product, trade barriers, profitability, political environment, etc. The import-export of goods and services cannot grow without interacting with other parts of the world. Examine the market to proceed with the business effectively.
VII. Finding the customer for your product
After choosing the product and the market, it’s important to discover the customer for your product. There are many ways by which you can collect leads for your product such as creating a website, registering on buyer-seller platforms, participating in trade fairs and exhibitions, using government bodies like export promotion councils, etc.
Every step is prominent enough to be involved in the process. The proper implementation of these steps will make you ready to start the import-export business in India.