How To Select The Right Product To Export From India?

Did you know that India’s exports of goods and services as a percentage of GDP is 19.74%? Indeed, the scope of the export business in India is quite demanding and profitable. But to make it a thriving export business, it is critical to select the apt product for the same. Are you searching for some good export business ideas or looking for ways to choose the product to export? Then you must check out the detailed write-up that covers the top seven things that you should keep in your account while selecting the product for your export business.

1. Market and Product Trends

To select the product for the export business, conduct extensive research on the market and current trends and demands. Carry out detailed research based on various factors on the export market trends and analyse the information to create an adequate gamut of the high-demanding and profitable export products.

2. Production Capacity and Product Availability

Once you have carried out the research and have a list of trending and profitable export products, you will have to identify production capacity and product availability. So, ensure that you have a surplus amount of product to export and that you can meet the requirement of a higher number of products by sufficient production capacity. In that case, you should shortlist those products for which you have an adequate production capacity in India, and you can obtain the product for the anticipated quantities. Thus, a stable supply base is vital to certify that you can export the goods to international clients and countries within the defined and agreed delivery timelines.

3. Product Potential

Product potential is an essential factor in identifying the potential of export products in the targeted export country or market. For instance, you have selected a product to export with adequate production capacity and product stock but the shipped product’s scope in the targeted country is limited. In that case, you will face hardships to do long-term export business with international clients. So, make sure that you have ample knowledge of the product potential in the targeted country before proceeding with the global client’s legal trade compliance documentation process.

4. Trade Restrictions

Did you know that countries can impose restrictions on specific products and cut off the export business? Some countries can limit the export products’ quantity or impose heavy taxes on the exporter country.

For instance, India banned the export of onions in foreign markets. But exporters could export them in some forms, such as sliced, diced, or powdered. In mid-2020, India’s Directorate General of Foreign Trade imposed the export of onions to the foreign market due to heavy rainfall in the onion-producing states and shortfall in the quality onions production, leading to the low production capacity and product availability. So, do ensure that you have researched and studied the various trade restrictions imposed or would be imposed on export goods. To overcome the trade restrictions factor, you can prefer those countries that follow liberal trade policies.

5. Shifting Spending Patterns

To run a profitable export business, you should gauge the shifting spending patterns of the product. Ensure that you keep an eye on the country’s GDP, spending preference of the product, and graph of the average citizen’s income. It will aid you in analysing the demand for the shipped product in the county. For instance, suppose you export an essential product exported in a country, such as milk, bread, vegetables, or fruits. In that case, the demands of the products will be unaffected by the rise in the average citizen’s income or GDP of the exported country. People will buy the essential item the way they were buying earlier, so it will not shoot the profit rate in such cases. But if there is a surge in the average citizen’s income in the exported country, then the demand and supply will be higher for luxury products. So, if you observe a rise in the citizens’ income, shipping luxury items such as jewellery, cars, and mobiles will be a great choice. To gain higher profits, you should consider and emphasise luxury goods due to shifting spending patterns in response to rising incomes.

6. Product Competition

Carrying out a structured and strategic approach for analysing the competition of the export product is a must. Ensure that you have a detailed list of competitors with their rate cards at which they are exporting products similar to yours. It will help you to decide whether to choose that product of the export business or not. For instance, suppose you want to export a product, and your competitors are selling at the rate of 10,000 INR per box. But after calculating all the costs incurred at various phases of the product export cycle, you are not making enough profit. In that case, you can consider other top-selling and demanded products for the export business. Analyses of product competition would be exported products, saving you from splurging a lot of money and expenses and making marginal profits.

7. Product Associated Costs

Before finalising the product for the export process, ensure that you have calculated the product associate costs of the would-be export product. It is beneficial to determine the profit margins per export cycle and decide whether to include or not to include the product in your export business. To calculate the associated costs, you should study the product rate trends at each phase of the export cycle. Based on the research and study, calculate the product associated cost and carefully analyse the profit margin it will deliver. Some import-export businesses fail miserably after choosing the best and in trend export product as they neglect the extra expense of the overseas export business.

Ensure that you have an estimated budget on costs incurred at the various phases of the export business product line, such as insurance charges, labour charges, export certificates, and shipping costs. Many external factors might affect the total cost and profit margin calculation; some aspects are inflation rate, epidemic, natural calamities, and more. So, consider all the requisites factors and extra cost factors into your account while determining the total cost and expected profit margin.

Key Takeaways

Now that you have insights into the ins and outs of export business and the best export business ideas to how to start import export business in India, begin drafting the import export business plan for the apt selected product to strategically kick start the export business ideas. Ensure that you have followed all the seven criteria to implement the import and export business ideas.

Also Read:

1) How to Start Dry Fruit Export Business in 2021 from India?
2) How to start a business on importing raw materials?
3) How to Start a Meat Export Business in India?
4) How to start a gold jewellery export business?

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FAQs

Q. How to start an import and export business?

Ans. To start the import export business, you must follow a strategic approach by drafting a structured and well-planned import export business plan to execute the export business ideas in the marketplace. The initial and vital step to implement the export business idea is to register the business as a firm and attain a valid legal export license or the import-export code.

Q. What are some import export business ideas?

Ans. Some of the most profitable and successful import-export business ideas are clothing, jewellery, food items, tiles, raw ingredients, and more.

Q. What is the estimated budget to start the best export business ideas in India?

Ans. To implement India’s best export business ideas, you will need an estimated budget of around 70,000 INR or more to get a valid license to export the product to various countries and purchase all the required resources for the export business.