With the advent of globalization, there has been a massive growth in the import business of our country. Moreover, there is no denying that it is one of the largest and fastest-growing economies in the world. For the unversed, consumers are the ones who drive the economies including the production, marketing, and distribution.
People in India are crazy about imported items. So, it becomes a lucrative business option for many aspiring entrepreneurs. There is no denying that you can earn whopping amounts by doing import business. But how well do you know India's import business? We have curated some facts below for you to brush up on your knowledge.
The production scale in India has also gone up in the past few decades. It is because Indian goods have a great demand in the foreign market. That is why more goods and services are exported to other countries at present times. The result of these exports is an increase in income generation and foreign exchange. This, in turn, helps the Indian economy to grow further.
Now, keeping this in mind, some of you might have planned to start an import business of your own. However, before diving in, you must understand that this business has its own set of challenges that you will have to face in the course of time. You need to familiarize yourself with everything including the guidelines, rules, and regulations to properly govern import business. Moreover, information about the same is scanty, so you need to be careful when investigating the same. So, Here's a complete guide on how to start an import business in India in 2022.
Why is India Imports Rising?
Consumers’ demands are increasing daily in today’s world. So, the imports help bridge the gap between domestic supply and domestic demand.
All about quality
There is no denying that imported goods are of better quality as compared to domestic goods. So, the consumers who can afford the product will always go for imported goods.
In some cases, the imported goods come at a much cheaper price. The reason behind this is the larger production capacity of the foreign producer as compared to domestic producers.
A Complete Guide to Starting an Import Business in India
Select a Business Model
You need to choose the most effective business model for your franchise. It is important for you to select the business entity that you want to work on in the future. It will help you decide the financial expenses, manpower, and other factors required to start the business.
Final documentation process
You must settle the final documentation before beginning the business. Right from a PAN card to a trade license - you must make note of everything to avoid last-minute hassles or issues. It is necessary for businessmen to possess every legal document required for their business.
Compliance with rules
You must be aware of the rules and compliances associated with import business. Guidelines are a way of making people comply with the law and order. Once you are well-versed with the same, you can start your business smoothly.
Shipping the order
You need to ship your first order as soon as possible to get the business off the ground. Making connections with other dealers is another way of moving a step further to flourishing your import business.
Navigation of the business
You need to know effectively about learning to grow and navigate your business. You can take assistance from learned professionals or experienced persons in this regard. The mentorship and guidance that you will get from these people will help you discover a better version of yourself.
Pan Card is a Must
A PAN card is one of the most important documents that you need to possess when doing business. You must have a valid identity and address proof for all transactions and verifications. It is mandatory for everyone involved in businesses to apply for a PAN card at the Income Tax department in India.
Choose the Type of Business Entity
You need to choose the type of business entity you want to be a part of in the future. In this case, you need to choose from company types like LLP, private limited, partnership firm, and more. Your decision will depend on the structure of ownership of the said business. Also, do not forget to choose a unique name for your business entity.
Open a Current Account at the Bank
You must open a current account at the bank which will be used as your business account for all future purposes. This particular account is always used by business entities in the bank. Moreover, you will always need a current account to deal with other businesses or vendors.
Get the IEC and DGFT
You should also not forget about getting the Import Export Code (IEC). The Directorate General of Foreign Trade (DGFT) issues this unique registration code for all businesses. Moreover, you also need to produce various supporting documents with the same.
Choose the Right Product or Service
You must make sure to choose the correct product or service that suits your business needs. You need to keep various factors in mind when doing the same. It includes profitability, trade barriers, demand for the product, etc.
Find the Perfect Market and Buyers
You need to find the perfect market and buyers to sell your products or services at reliable profits. You should select your buyer only after having decided on the product and the market for the same.
Make sure your Finances are in Place
You also need to ensure that your finances are in place to help your business prosper further. Businesses are unlikely to take off without initial funding. So, make sure you estimate your business's financial requirements before starting with anything else.
Top Imported Products of India
Here are the top 10 commodities imported by India in 2020-2021.
- Coal, coke, and briquettes - 4.7%
- Crude petroleum - 21.6%
- Electric machinery and equipment - 2.3%
- Electronic components - 3.4%
- Gold - 5.9%
- Industrial machinery - 2.5%
- Organic chemicals - 2.5%
- Pearl, precious, and semi-precious stones - 4.7%
- Petroleum products - 5.8%
- Telecom instruments - 3%
Top Trading Partners of India
List of Top trading partners from where India imported commodities in 2020-2021.
- China - 13.7%
- Hong Kong - 3.5%
- Iraq - 5%
- Indonesia - 3.1%
- Saudi Arabia - 5.6%
- Singapore - 3.1%
- South Korea - 3.3%
- Switzerland - 3.5%
- United Arab Emirates - 6.3%
- United States of America - 7.5%
Import business has a great demand in India. Even the COVID-19 wave of 2020 could not dim the spirits of this business that flourished at its own pace. In fact, the country's foreign trade relies heavily on imports. It has led the government to encourage domestic exports and manufacturing. However, India will still be dependent on imports for the long term as it is necessary for its export ambitions. So, if you are waiting to start your import business, now is the right time to do so.
What is the best import products in India?
Jewellery and precious stones, Shoes, Perfumes, Electronics, Heavy machinery, Silk import, and Oil import are some of the best products you can import.
Which country does India import most?
China, the United States, United Arab Emirates, and Saudi Arabia are some of the top countries India imports the most.
How do I find international buyers?
Visit Trade fairs and exhibitions, Approach Government bodies like Export Promotion Councils or Embassies, and Market research about companies.