Import can be defined as an act of transporting capital, goods, or service that is abundantly available in a foreign country into our domestic land in exchange for finances.
Export can be defined as an act of transporting capital, goods, or service that is abundantly available in our domestic land to a foreign country in exchange for finances.
International trade represents a significant share of gross domestic product (GDP) in most counties. Often organisations consider international trade to increase their markets, ensure their product is available to a larger base thus creating an impact on the economic development/growth of a nation.
Considering imports/exports as a career choice or a business is great but with sufficient research & understanding of various sectors within the vast field. Here we talk about a few variants that might be helpful.
- Export Management Company (EMC) – A domestic company that looks after overseas sales; acting as a distributor or a sales representative by hiring dealers, creating invoices for customers, handling advertising, marketing & promotions, marking & packaging, arranging to ship, and also arranging finances if necessary.
- Export Trading Company ( ETC) – ETC is an independent company that acts as a dealer but identifies a foreign buyer who is willing to spend on certain goods and then finds a domestic source ready to export. They often offer supporting services like warehousing, shipping, insuring & billing on behalf of the client.
- Import/ Export Merchant – These are more like freelancers. They do not have a particular client base nor has a particular niche. These purchase goods directly from a domestic or foreign manufacturer, do the packing, shipping & sells the goods on their own. Generally, all the risks, profits & losses are bared by the merchant himself.
Steps to Export goods :
- Look for a buyer. When the goods are ready, you got to sell them to a potential buyer.
- Generate the pro – forma invoice. Negotiate with the pricing and make a deal. An Invoice is a bill generated that is sent to the buyer before the goods are exported.
- Get the credit letter from the bank. It is a guaranteeing letter from the bank that the buyer’s payment will be received by the seller on time and with the specified amount.
- Meet the requirements of the credit letter. Get the merchandise ready, be ready with the shipping & insurance arrangements and packing.
- Export the merchandise and collect shipping documents.
- Submit them to the bank.
Steps to Import goods :
- Look for a seller. In order to buy and be able to resell you need a potential seller.
- Accept the pro – forma invoice. Receive the quotation, negotiate with the price, and make a deal.
- Open a credit letter in the bank.
- Verify the product shipping details, receive documents from the exporter.
- Approach customs to collect goods.
According to the latest survey by ‘World’s top exports’ here’s the list of India’s top 10 exports.
- Mineral fuels including Oils (13.7%)
- Gems, precious stones/metals (11.4%)
- Machinery including computers (6.6%)
- Organic chemicals (5.7%)
- Vehicles (5.3%)
- Pharmaceuticals (5%)
- Electrical machinery, equipment (4.5%)
- Iron, steel (3%)
- Clothing, Accessories (2.7%)
- Knit or crochet clothing, accessories ( 2.5%)
The list of India’s top 10 Imports.
- Mineral fuels including oil ( 32%) – 27% as of 2020
- Gems, precious metals ( 12.5%) – 14% as of 2020
- Electrical machinery equipment (10.5%) – 10% as of 2020
- Machinery including computers (9.2%) – 8% as of 2020
- Organic chemicals ( 4.3%) – 4% as of 2020
- Plastics, Plastic articles (3.1%)
- Iron, steel (2.4%)
- Animal/vegetable fats, oils, waxes ( 2%)
- Optical, technical, medical apparatus (2%)
- Fertilisers (1.5%)
While the top 10 exports accounted for roughly 60.2% of the total value of shipments, the top 10 imports account for 79.4% of the total value.
As of now the fastest increase in imports are fertilisers with an increase of about 23.3%
16.8% of total India’s exports are to the United States of America followed by the United Arab Emirates at 9.2%
Major companies influencing imports & exports are Reliance Industries, Oil & natural gas, Indian Oil, Tata Motors. Tata Steel, Coal India, Steel Authority of India, Bharat petroleum, Mahindra & Mahindra, etc.