Since the country’s independence, India has transformed from a traditional raw material exporter to a high-value product and service supplier with a massive portfolio. Exports are a major driver of the world’s fifth-largest economy, with a share of 21.2% of the GDP as of 2024, as per World Bank data.

India’s export economy is also growing at breakneck speed, at a 7% rate against the global rate of 2.5%. Pharmaceuticals, drugs, engineering goods, electronics, gems, jewellery, and petroleum goods are some of the top export products from India, driving the country’s economy. Multiple factors continue to fuel the current growth of the export market:

Strong Demand for Indian Merchandise: Indian businesses export a wide variety of products, including commodities, finished goods, luxury goods, agri-products and more.

Government Initiatives to Boost Competitiveness: Various government-led initiatives, such as the Production Linked Incentive scheme, Districts as Export Hubs, and RoDTEP, boost export growth in India.

Infrastructure Development: Building of new freight corridors, port modernisation projects and schemes like PM GatiShakti Plan and TIES (Trade Infrastructure for Export Scheme) have increased the ease of doing business.

Digital Transformation of the Country: The rapid digital transformation of the country has expanded its global competitiveness and export revenue. India’s digital economy contributes nearly 1/5th of the economic activity.

The above factors make exporting businesses in India highly lucrative with a bright future ahead. As the country grows and modernises at a rapid pace, businesses with global exposure are more likely to thrive.

Here are some good reasons to open a new export business in India:

• Growth Opportunities: Exporting is one of the most rewarding business activities, as it allows businesses to supply internationally to high-demand markets. By finding markets that are offering the best prices, exporters can maximise their profits by leveraging supply-demand dynamics.

• High Profitability: Expanding to new markets increases sales, which translates into higher revenue and profits, especially when dealing with bulk orders. When exporters purchase goods in countries with lower production costs, like India and sell them to countries with higher costs of living, they can push their profit margins higher.

• Access to Less Competition: In domestic markets, businesses often face intense competition due to the similarity of products and services offered there. By carrying out good research, export businesses gain access to markets with high demand and fewer competitors.

• Diversified Customer Base: An international customer base helps mitigate risks for an export business. The more countries and regions a business is involved in, the more its revenue streams and the fewer the risks from macroeconomic events, conflicts, natural disasters, etc.

• Lower per-unit Costs: Businesses that expand globally tend to increase production to meet rising demand. This lowers their per-unit production costs due to economies of scale, increasing their net income.

Businesses that export goods from India can be divided into several categories based on their organisational structure. Here are the different types of exporters:

• Sole Proprietorships: Companies run and owned by a single person. Very easy to set up and ideal for work-from-home arrangements.

• One-person Companies: Startups and small businesses registered as a one-person company with a minimum capital amount of ₹1 lakh. Offers the flexibility of sole proprietorship and liability protection of companies.

• Partnership Company: Businesses with two or more owners (partners) where each partner shares responsibilities, profits and losses as per the partnership deed.

• Limited Liability Partnerships: Partnership business models with separate ownership of business and personal assets and limited liability protection. Requires at least one Indian partner with a minimum investment of ₹1 lakh.

• Private Limited Companies: Business entities owned entirely by private individuals under the limited liability arrangement, where each shareholder owns liabilities in proportion to their shareholding. Must have at least two directors, two shareholders and a registered office in India.

• Public Limited Companies: Similar to private limited companies, but the general public can own their shares. Private companies must register under the Registrar of Companies and go through an Initial Public Offering (IPO) to become a public company.

• Section 8 Companies: Non-profit organisations that actively take part in charitable activities. Doesn’t require any capital to register.

Check out the eligibility criteria and documents required for opening an exporter business in India:

Who Can Open an Export Business?

Any type of business with a valid IEC (Importer-Exporter Code) can export from India with no restrictions on minimum turnover or capital. The following people can open an export business:

• Individuals

• Sole proprietors

• Owners of MSMEs and startups

• Partners of LLPs and partnership firms

• Directors of private and public companies

Documents Required

Here are the documents required throughout the exporting process:

• Personal or business PAN card (based on business type)

• Identity proof, address proof, bank account details for opening current accounts, applying for IEC, etc.

• IEC certificate from the Directorate General of Foreign Trade

• 14-digit AD (Authorised Dealer) code from the Indian Customs

• BIN (Business Identification Number) from the Customs

• RCMC (Registration-cum-Membership Certificate) from the concerned Export Promotional Council

• Commercial invoice cum packing bill, shipping bill, bill of lading, airway bill, inspection certificate, certificate of origin and other documents as required by the foreign bank/importer

• PAN, identity proof, business address proof and an international credit card for ecommerce exports

• Insurance certificate, letter of credit, letter of undertaking (if required)

• Bank statement or cancelled cheque for current account details

• Partnership deed, registration certificate, MOA (memorandum of association) and AOC (Articles of Association) for company registration

• GST certificate (if GSTIN is required)

Here is a complete breakdown of the process of exporting from India, from opening a business to shipping products:

Step 1: Choose Your Product and Market

Before starting a business, do sufficient research to determine what product to sell and where to sell it. Consider multiple factors such as market size, demand, profit margins, and availability in India before choosing a product and destination country.

Step 2: Register a Business

Establish and set up a business. Then, register it legally with the RoC (Registrar of Companies) as a sole proprietorship, partnership, LLP or private company. You can register a new company online on the MCA (Ministry of Corporate Affairs) website.

Step 3: Obtain a Current Account and PAN

A current account allows you to deal with foreign exchange transactions and make withdrawals/deposits without restrictions. You can open a current account only with any bank on its online portal. Next, apply for a PAN card in the organisation’s name on the Protean website.

Step 4: Apply for an Importer-Exporter Code

As per the FTP (Foreign Trade Policy) 2023, all businesses need an IEC licence to export products from India. Register/log in to the DGFT portal and apply for an IEC licence with your PAN, address proof and bank account details. Then, get an RCMC certificate from either a major Export Promotional Council or the Federation of Indian Exporters Organisation.

Step 5: Finding Buyers

Use online tools such as ITC Trademap, Indian Trade Portal, and DGFT Market Access to research buyers. You can also directly connect with potential buyers through avenues like trade fairs, exhibitions, Indian Missions, and Export Promotion Councils.

Step 6 Setting Price and Negotiating

After you’ve decided on your offerings, set the pricing, taking factors such as demand, expenses, freight charges, insurance premiums, etc., into consideration. Then, you can negotiate with foreign importers and decide on discounts (if any). Once finalised, set the payment terms using advance payments, letters of credit or escrow accounts.

**Step 7: Processing and Packaging, **

After receiving an export order, confirm and sign the contract with the overseas buyer. Then, procure the required goods, ensuring to uphold the required quality standards and specifications. You can also obtain export financing from Indian commercial banks against your exported goods.

Step 8: Labelling, Packaging and Insurance

Before you export goods from India, you need to label and package them as per the buyer’s instructions. Make sure to use proper labelling in English and the importing country’s official language, and include important things like the origin country, address, weight, etc. For risk protection, margin cargo insurance covers damage to exported goods in transit. You can get the TATA AIG Marine Cargo Insurance for extensive and affordable coverage in over 130 countries.

Step 9: Delivery and Customs Clearance

You can send your goods overseas via air, ship or land transport, with each option having its own pros and cons. Every consignment must clear the Indian Customs, which generates a bill of lading or airway bill and shipping bill after verification by a customs officer.

Documentation and Realisation of Proceeds

After the shipment is confirmed, you need to submit all the documents to your bank within 21 days, after which they are forwarded to the importer’s bank. After receiving the documentary bill of exchange, the importer will release payments to their bank, which will credit the funds to your bank.

The following products have the highest export potential from India as per recent trends:

Electronic Goods: These include finished electronics, such as smartphones, laptops and televisions. This category has witnessed an 8 times growth over a decade.

Drugs and Pharmaceutical Goods: India is one of the largest suppliers of unbranded or generic medicines. This category includes generic drugs, vaccines, antibiotics, ayurvedic medicines, APIs

Textiles and Apparel: India has one of the richest and oldest textile exporters and is the sixth largest exporter of readymade garments as of 2024.

Tea: Both Darjeeling Tea and Assam Tea, including loose and packaged leaves, are top export items from India. India is the second-largest exporter of tea as of 2024.

Engineering Goods: Engineering goods, including auto components, machinery, machine tools, and iron and steel products, are traditionally popular exports.

Other Cereals: This category includes cereals like barley, oats, rye, quinoa, etc. It has seen recent growth due to rising health concerns.

Dairy, Meat and Poultry: This category has seen a recent boost due to various government initiatives favouring Indian poultry farmers.

Coal and Other Ores: This category includes mica, coal and other ores in addition to processed minerals.

Gems and Jewellery: This includes gold jewellery, ornaments, lab-grown diamonds, and gemstone work.

Chemicals: India exports organic chemicals, fertilisers, dyes, pigments, cosmetic chemicals and petrochemicals.

Our guide on how to export products from India helps you make a handy checklist of all documents, registrations and requirements to set up a new export business. Exporters should remember to research all the certification, packaging and labelling regulations of the buyer’s country before obtaining an Importer-Exporter Code.

Export businesses will also need comprehensive marine insurance in India, especially if they are shipping high-value goods like electronics, medicines or engineering goods. The TATA AIG Freight Insurance is the perfect choice for businesses to cover unforeseen risks like disasters, cargo loss, theft, piracy and delayed shipments at an affordable price. Check out its benefits.