Unit 1: Introduction
Introduction to Exports
Export means selling goods or services produced in one country to another country. It is a crucial part of international trade and helps businesses grow, increase profits, and gain global presence.
Benefits of Exporting
- Increases sales and profits.
- Expands market reach.
- Utilizes surplus production.
- Enhances competitiveness.
- Gains foreign exchange for the country.
Export Registration Process (India)
To start exporting from India, a business must complete the following steps:
Selection of Products and Market
Product Selection Criteria
- Demand in International Market
- Profit Margins
- Export Incentives/Support
- Ease of Manufacturing/Sourcing
- Compliance with Standards (e.g., CE, FDA)
Market Selection Criteria
- Market Size and Growth Rate
- Import Policies/Trade Agreements
- Competition Analysis
- Logistics and Transport Costs
- Political and Economic Stability
Market Research Tools: Export data portals (e.g., Export Genius), Trade Maps, DGFT data, EPC reports.
Export Payment Terms
Payment is crucial in exports to avoid risks. Common payment terms are:
Risk Management Tools
- Export Credit Insurance (ECGC)
- Bank Guarantees
- Factoring Services
Export Costing and Pricing
Export costing involves calculating the total cost incurred in producing and
delivering goods to the foreign buyer. It helps determine the minimum price
at which goods can be sold abroad without loss.
Key Cost Components
Export Pricing Methods
Preliminaries for Exports
Before starting export operations, a business must complete the following pre-export formalities:
Export Registration Details
Export Promotion Councils (Examples)
Categories of Export
1. Physical Exports
These involve the actual movement of goods from India to a foreign
country. It is the most common type of export.
Two Types
Comparison
Deemed Exports
No physical movement outside India, but goods are considered exports
under Foreign Trade Policy (FTP) because they are supplied for specific
uses.
Examples
- Supplies to SEZ units
- Supplies for export-oriented units (EOUs)
- Supplies under advance authorization licenses
- Supply to projects funded by international agencies (like World Bank)
Benefits
- Refund of GST
- Access to export incentives and duty exemptions
Merchant Exporter vs Manufacturer Exporter
Comparison
RCMC (Registration-Cum-Membership Certificate)
- RCMC is mandatory to avail export incentives under the Foreign Trade Policy.
- Issued by relevant Export Promotion Councils (EPCs).
- Replaced BCMC (Business Cum Membership Certificate) earlier used.
| Authority | Sector |
|---|---|
| FIEO | Multi-product exports |
| APEDA | Agricultural products |
| EEPC | Engineering products |
| GJEPC | Gems and Jewelry |