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How to start import-export business [advantages and disadvantages]


How to start import-export business [advantages and disadvantages]

Table of contents:

1. What is import export business?
2. How to start import export business?
3. What are advantages of import export business?
4. What are disadvantages of import export business?
5. What is the procedure and requirements to start import export business?


Indian government has been putting stress on Ease of doing business by coming up with major policy changes to foster economic growth across the nation. Due to this , many budding entrepreneurs are exploring Export -Import business in recent times. Though quite famous as a trade, there are still many people not aware of all the factors affecting Export and Import before venturing into the same. As much as the procedure , the pros and cons and types of businesses as a part of Export and Import must be known beforehand. So here is a detail information at your disposal.
Import-Export is an exchange of goods and services across international borders in return of money or goods equivalent.


• With the rising presence of e-commerce and logistics capabilities ,one can start online businesses and establish transportation facilities to deliver products far and wide.

• Bringing in products from a various nations and spreading it across in domestic market in the form of Direct Importing is another option in order to benefit from the elevated prices and keeping profits.

• Indian crafts are very much in demand in international frontiers which makes it an ideal market for craftsmen. It is innovative and profitable at the same time. Online as well as direct channels are available in order to start this kind of an enterprise. Getting in touch with agents can accelerate the process.

• Acting as a middlemen in order to facilitate the entire process for businessmen is another option to establish your export import business without investing much in the products development.

• Storage is another significant facility since infrastructure is equally important to support this extensive business. Therefore, one can get into storage business within Export- Import as well.

• There is a huge requirement for those who can handle the paperwork since it is the most cumbersome part.

• Once you have sufficient knowledge about the entire trade , consultancy in this specific field with concrete knowledge is in huge demand and thus is one more good option to go for.

• Ones with adequate amount of capital, can invest in start ups venturing into export and import because it requires considerable amount of initial investment to start with.

• There is a risk in every business and that’s where insurance comes into play. Insurance for export-import items is a fruitful business to begin.

• Every business needs a marketing expertise for it to reach the prospective clients at the right time. Handling the marketing assignments is one the most prominent options.


• It is cost effective to source raw materials and thus increases profit margins , serving the whole motive of running a business.

• Export Import arrangements creates wider avenues for business expansion as it is one of the easiest to reach the global markets and thus increases sales.

• There are various products which should be bought from particular country for the quality and expertise offered in producing it. So access to premium quality products is a major benefit as well.

• Governments introduce numerous tax concessions and incentives from time to time in the form of VAT tax refunds for export and import in order to encourage overseas trade.

• Import covers for the shortages of certain material in a country and creates revenue sources at the same time by exporting surplus produce.

• Local population benefits from the variety of products and increases options to choose from.

• Export and import also has a tremendous impact on the economy at large accelerating its growth.

• Underdeveloped countries to gain access to advanced technology and bring home improvements inspired by the developed ones.

• Economies of scale is the most luring benefit of producing for export.

• By regular interactions with international clients, there is an additional advantage of being exposed to new cultures and gaining new experiences due to travel opportunities.


• It is a hassle and very time consuming to obtain a license and fulfil all the legal regulations.

• Often vendors end up providing cheap quality product to the receiving nation affecting the business’s reputation in the long run.

• Local vendors are in a better position to understand the customers better and have access to first-hand information.

• Bilateral tensions between nations always inhibit smooth business operations and create uncertainties. So there is always an underlying risk factor involved.

• Communication and lack of human touch are prominent hurdles due to distance impacting relationships with partners as well as customers.

• Export – Import industry disrupts the domestic business ,hampering economic growth and increasing dependence of other nations leading to negative trade balances.

• High tariffs are charged by the countries in the form of export duties and custom duties affecting their overall balance sheets.

• Currency exchange rates volatile. Even minute movements can impact profits and lead to losses.

• Competing with the domestic markets is a challenge considering they have well established network of suppliers as well as customer base.

• Very frequent travelling to locations for meetings and personal presence is normal , so, this kind of business is not for those who can not travel extensively.


There are five pre requisites to start your Export Import business:

• It is mandatory to have a PAN Card to start your own business . You can contact the Income Tax Department of India for the same.

• The second step is to register your business , be it a sole proprietorship, a partnership, a private firm or an LLP. Lawyers offer such services in order to streamline the registration process. Along with the registration , a Service Tax registration number or a VAT registration certificate is equally important.

• There is a requirement for a Current Account with a bank.

• Import Export Code is an important component of the entire process and is provided by the Government of India for those conducting an Import-Export business.

• Registration Cum Membership Certificate (RCMC) is essential to get assistance and attend events conducted by export-import councils.

About author

Dipen Shah

Dipen Shah : Author

Motivational speaker, Business consultantpolitical analysts.


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