How to Start an Engineering Goods Export Business from India?

How to Start an Engineering Goods Export Business from India?

You can start an engineering goods export business from India by following a simple nine-step process. The fastest way to start exporting is to register your company first, get your Importer Exporter Code (IEC) right after that, and immediately obtain the mandatory EEPC Registration-cum-Membership Certificate (RCMC). Engineering exports are a huge and growing sector in India. The government supports this industry strongly. This article will show you the entire blueprint, step-by-step. 

1. Register Your Business Entity

You must first decide the legal structure of your business. This choice affects how you pay taxes. It affects how much liability you have. Common types are:

• Proprietorship: This is the easiest one to start. You run the business as an individual. You must use your personal PAN card. This is good for very small startups.
• Partnership/LLP: This is good if you have partners. A Limited Liability Partnership (LLP) is often preferred. It protects your personal assets from business debt.
• Private Limited Company: This is the best choice if you plan for rapid growth or want to raise investment money later. It provides the strongest legal protection for your partners.

2. Obtain Importer Exporter Code (IEC)

The Importer Exporter Code (IEC) is the most critical license for any trade business. You must get this code to import or export anything in or out of India.

• Application: You apply for the IEC online through the Directorate General of Foreign Trade (DGFT) website. This is an easy process.
• Requirement: You need the company PAN, your bank account details, and a few other key documents.
• Importance: The IEC is like a mandatory passport number for your export business. You cannot ship anything without it, so you must get this first.

3. Register for Goods and Services Tax (GST)

You must register for the Goods and Services Tax (GST). Even if your sales volume is low, you need this registration.

• Zero-Rated Exports: Exports of goods and services from India are considered Zero-Rated under the GST framework. This means exporters do not have to pay GST on their exports
• Refund Claim: You can claim a refund of the GST paid on the raw materials or services you used to make your export product. You need a valid GST registration to claim these important refunds which saves you money

4. Join the Engineering Export Promotion Council (EEPC)

This step is not optional. You must obtain the Registration-cum-Membership Certificate (RCMC) from the Engineering Export Promotion Council of India (EEPC). The EEPC is the main Export Promotion Council (EPC) for engineering goods. They represent everything from industrial machinery to automotive parts

5. Get Your Udyam (MSME) Registration

While this step is not mandatory for everyone it is highly recommended. You should register your business under the Micro, Small and Medium Enterprises Development Act. This is done through the Udyam Registration Portal.

6. Determine the Engineering Product Category

Engineering goods cover a huge range. You must focus on a small, specific niche first. Think about what you can produce easily or source reliably

• Example Niches: Focus on just one area. You could focus on only Automotive Parts (like gaskets and filters). You could focus on only Stainless Steel Utensils. Or you could focus on Industrial Fasteners (nuts and bolts)
• HSN Code: Every product has a specific six-digit Harmonized System of Nomenclature (HSN) code. You must know the correct HSN code for your product. This code is needed for all export documents

7. Research Target Markets and Buyers

Do not try to sell everywhere at once. Focus your efforts on specific countries where demand is high

• Market Research: Use data from EEPC reports. Look at the DGFT trade statistics. These sources show you which countries are importing your specific HSN code product. Find out which countries offer the best profit margins
• Buyer Identification: You can use trade portals like Alibaba and Global Sources. You can also use international trade fair directories. The best way is to participate in Buyer-Seller Meets (BSMs) organized by EEPC

8. Understand Export Financing and Payment

Managing money is very important in international trade. You must secure your payment.

• Payment Terms: Do not ship goods without having secure payment terms. The most common and safest method is the Letter of Credit (LC). An LC is a promise from the buyer's bank to pay the seller. This removes much of the payment risk for you. Other terms include Documents against Payment (DAP) or Advance Payment
• Export Credit Guarantee Corporation (ECGC): You should get insurance from the ECGC. This insurance protects you if the foreign buyer or their government fails to pay you due to some problem. This small investment gives you great security.

Final Words

Starting an engineering goods export business means dealing with many compliance steps. You must get the right HSN codes. You must get the mandatory EEPC RCMC. You must register for GST refunds. 

Agile Regulatory specializes in simplifying this entire regulatory path. We are experts in DGFT and all Export Promotion Council procedures. We handle the full application process for your IEC, MSME, and the critical EEPC RCMC. 

Contact Agile Regulatory today. We will set up your engineering export business foundation properly.