Foreign Trade in India is regulated by the Foreign Trade Policy of the nation as notified by the Central Government of India. Presently the foreign trade policy for 2023-28 is in effect.

Clear comprehension, in-depth knowledge, and information about the products to be exported are essential factors for success when starting any export business. Instead of attempting to handle every market in a single basket, one must thoroughly understand its overseas market and conduct adequate research to be effective in exporting. International products and designs must be adequately researched and carefully examined. You must become familiar with state, federal, and international regulations before beginning your export business because there are unique rules governing international trade and overseas business.

The steps of starting exports include:

1. Establishing the organization: Before beginning an export business, a sole proprietorship, partnership firm, or company must be legally established with a catchy name and logo.
2. Opening a bank account: The organization must open a current account with a bank that is authorized to deal in Foreign Exchange.
3. Obtaining PAN: Every exporter must obtain a PAN from the income tax department
4. Obtaining the Import Export Code: The Foreign Trade Policy states that it is essential for every exporter and importer to obtain an Import Export Code or IEC for importing from or exporting to India. The website www.dgft.gov.in accepts online applications for IEC. According to the application form (ANF 2A), which can be found here: (https://content.dgft.gov.in/Website/ANF-2A_0.pdf), the application fee of Rs. 500 must be paid online through net banking or a credit/debit card, and the necessary documents must also be submitted.
5. Obtaining RCMC and getting registered with Income Tax Authorities: Exporters must receive RCMC from the relevant Export Promotion Councils/ FIEO/Commodity Boards/ Authorities to be eligible for a license to import or export or any other benefit or concession under the Foreign Trade Policy
6. Selection of the product: Except for a few products on the prohibited or restricted list, everything can be exported without restriction. A careful selection of the products to be exported may be done after researching the trends in the export of various products from India.
7. Selection of Markets: After researching the market's size, competition, required quality, payment terms, etc., a foreign market should be chosen. Exporters can also assess the markets using the export incentives offered by the FTP for a select few nations. Colleagues, friends, and family members as well as export promotion organizations, and Indian missions overseas, may be able to provide information.
8. Finding Buyers: An efficient way to locate buyers is to take part in trade shows, buyer-seller gatherings, exhibitions, B2B portals, and web browsing. Additionally useful are Export Promotion Councils, Indian Missions Abroad, and International Chambers of Commerce. It would also be beneficial to create a bilingual website with a product catalog, price, payment terms, and other relevant information.
9. Sampling: Receiving export orders depends on offering customized samples that meet the requirements of foreign customers. According to the FTP 2015-2020, there are no restrictions on the export of genuine trade goods and technical samples of commodities that are freely exportable.
10. Pricing/Costing: Given the competitiveness of the global market, product price is essential for grabbing consumers' attention and boosting sales. Based on the terms of the sale, the price should be calculated taking into account all costs from sampling to realizing export revenues. Cost, Insurance & Freight (CIF), Free on Board (FOB), Cost & Freight (C&F), etc. Setting up export costing should have as its objective selling the most products at the best possible profit.  It is recommended to create an export costing sheet for each export product.
11. Negotiation with Buyers: Demand for offering a suitable allowance or discount in price may be taken into consideration after analyzing the buyer's interest in the product, future possibilities, and business continuity.
12. Covering Risks through Export Credit Guarantee Corporation Ltd.: Payment risks in international trade arise from buyer/country insolvency. A suitable Policy from Export Credit Guarantee Corporation Ltd (ECGC) can protect against these risks. To guard against the danger of non-payment when the buyer places an order without making an advance payment or obtaining a letter of credit, it is advisable to obtain a credit limit on the foreign buyer from ECGC.

The steps for processing an Export Order

1. Confirmation of order: On receiving an export order, it should be examined carefully concerning items, specifications, payment conditions, packaging, delivery schedule, etc. and then the order should be confirmed. Accordingly, the exporter may enter into a formal contract with the overseas buyer
2. Procurement of Goods: After confirmation of the export order, immediate steps may be taken for procurement/manufacture of the goods meant for export. It should be remembered that the order has been obtained with much effort and competition so the procurement should also be strictly as per buyer’s requirement.
3. Quality Control: In today’s competitive era, it is important to be strict in quality conscious about the export goods.  Some products like food and agriculture, fishery, certain chemicals, etc. are subject to compulsory pre-shipment inspection. Foreign buyers may also lay down their standards/specifications and insist upon inspection by their own nominated agencies. Maintaining high quality is necessary to sustain in export business.
4. Finance: Exporters are eligible to obtain pre-shipment and post-shipment finance from Commercial Banks at concessional interest rates to complete the export transaction. Packing Credit advance in the pre-shipment stage is granted to new exporters against lodgment of a Letter of Credit or confirmed order for 180 days to meet working capital requirements for the purchase of raw material/finished goods, labor expenses, packing, transporting, etc.   Normally Banks give 75 to 90 percent advances of the value of the order keeping the balance as margin.  Banks adjust the packing credit advance from the proceeds of export bills negotiated, purchased, or discounted. Post Shipment finance is given to exporters normally up to 90 percent of the Invoice value for a normal transit period and in cases of usance export bills up to the notional due date. The maximum period for post-shipment advances is 180 days from the date of shipment.  Advances granted by Banks are adjusted by the realization of the sale proceeds of the export bills. In case the export bill becomes overdue Banks will charge a commercial lending rate of interest.
5. Labelling, Packaging, Packing, and Marking: The export goods should be labeled and packaged strictly as per the buyer’s specific instructions.  Good packaging delivers and presents the goods in top condition and in an attractive way. Similarly, good packing helps easy handling, maximum loading, reducing shipping costs, and ensuring the safety and standard of the cargo.  Marking such as an address, package number, port and place of destination, weight, handling instructions, etc. provides identification and information about the cargo packed.
6. Insurance: Marine insurance policy covers risks of loss or damage to the goods while the goods are in transit. Generally, in Cost, insurance & and freight (CIF) contracts the exporters arrange the insurance whereas for C&F and FOB contracts the buyers obtain insurance policies.
7. Delivery: It is an important feature of export and the exporter must adhere to the delivery schedule. Planning should be there to let nothing stand in the way of fast and efficient delivery.
8. Customs Procedures: It is necessary to obtain PAN based Business Identification Number (BIN) from the Customs before filing of shipping bill for clearance of export goods and open a current account in the designated bank for crediting any drawback amount and the same has to be registered on the system.

In the case of non-EDI (Electronic data interchange), the shipping bills or bills of export are required to be filled in the format as prescribed in the Shipping Bill and Bill of Export (Form) regulations, 1991. An exporter needs to apply different forms of shipping bills/bills of export for the export of duty-free goods, export of dutiable goods, export under drawback, etc.

Under the EDI System, declarations in a prescribed format are to be filed through the Service Centres of Customs. A checklist is generated for verification of data by the exporter. After verification, the data is submitted to the System by the Service Centre operator and the System generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the exporter. In most cases, a Shipping Bill is processed by the system based on declarations made by the exporters without any human intervention. Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the Indian Customs EDI (ICES/E) system.

Any corrections/amendments in the checklist generated after the filing of the declaration can be made at the service center if the documents have not yet been submitted in the system and the shipping bill number has not been generated. In situations, where corrections are required to be made after the generation of the shipping bill number or after the goods have been brought into the Export Dock, amendments are carried out in the following manners.

The goods have not yet been allowed "let export" amendments may be permitted by the Assistant Commissioner (Exports).

Where the "Let Export" order has already been given, amendments may be permitted only by the Additional/Joint Commissioner, Custom House, in charge of the export section.

In both cases, after the permission for amendments has been granted, the Assistant Commissioner / Deputy Commissioner (Export) may approve the amendments to the system on behalf of the Additional /Joint Commissioner. Where the printout of the Shipping Bill has already been generated, the exporter may first surrender all copies of the shipping bill to the Dock Appraiser for cancellation before the amendment is approved on the system.

Customs House Agents: Exporters may avail services of Customs House Agents licensed by the Commissioner of Customs.  They are professionals and facilitate work connected with the clearance of cargo from Customs.

Documentation: FTP 2023-2028 describes the following mandatory documents for import and export.

• Bill of Lading/Airway Bill
• Commercial invoice cum packing list
• Shipping bill/ bill of export/ bill of entry (for imports)
• Import Export Code(Other documents like certificate of origin, inspection certificate, etc may be required as per the case.) 

Submission of documents to Bank: After shipment, it is obligatory to present the documents to the Bank within 21 days for onward dispatch to the foreign Bank for arranging payment.  Documents should be drawn under Collection/Purchase/Negotiation under L/C as the case may be, along with the following documents

• Bill of Exchange
• Letter of Credit (if the shipment is under L/C)
• Invoice
• Packing List
• Airway Bill/Bill of Lading
• Declaration under Foreign Exchange
• Certificate of Origin/GSP
• Inspection Certificate, wherever necessary
• Any other document as required in the L/C or by the buyer or statutorily.

Realization of Export Proceeds:  Export proceeds must be realized in freely convertible currency or Indian rupees, subject to certain restrictions, according to the Indian Foreign Trade Policy 2023-28. The exporter is required to make arrangements for the full realisation of export earnings under the normal course of business. Within a predetermined time frame, the total export value must be realised and returned to India. According to the current Foreign Trade Policy, the cap for status holder exporters is Rs. 10 lakhs or 2% of the average annual export realisation during the three licencing years prior (April-March), whichever is higher. Under the Foreign Trade Policy, the Centre has permitted foreign trade settlements in Indian rupees for export promotion programmes. The current Foreign Trade Policy must be followed whether importing or exporting goods or services.