As the fastest-growing large economy in the world, with a large youth demographic and a rising middle class, India offers exciting export opportunities for UK businesses.
The two markets also have strong ties through people, ideas, institutions, language and technology, which certainly helps the establishment of successful partnerships.
But is exporting to India right for your company? What are the challenges of exporting to India? And how do you approach it?
Making the decision to export to a new market can open up huge opportunities for your business. But it can be daunting, with plenty of challenges, procedures and documents to consider.
To make it a little easier, we talk you through everything you need to know before exporting to India.
Opportunities for exporting to India
India is a large and growing market, and there are export opportunities for lots of sectors. Companies in the technology, fintech and automotive industries could fare particularly well by exporting to India. If your business operates in any of these sectors, exporting to India could present a huge turning point for your company.
Technology
India is one of the most data-rich countries in the world, with a huge number of internet subscribers and some of the lowest mobile data costs. There is also a huge start-up ecosystem, with emerging technologies such as artificial intelligence (AI) and machine learning being applied to the healthcare, education and financial industries.
The telecoms market is particularly appealing to UK exporters, with opportunities for companies offering cutting-edge technology and services that will cater to the 5G market.
There is also the India-UK tech partnership, which aims to bring together the best minds working in tech and innovation.
Fintech
India has a large and rapidly growing fintech sector, and the strong demand for digital onboarding, lending, wealth management, and technology around regulation, insurance and blockchain offers big opportunities for UK exporters.
India also offers one of the highest rates of expected return on fintech projects - 29% versus the global average of 20%.
Automotive
India is the fourth-largest automobile market in the world, presenting considerable opportunities for UK companies in the manufacture of tractors, two-wheelers, buses, cars and commercial vehicles. Plus electric vehicles too - thanks to a new government target for all new vehicles to be electric by 2030. India is also a viable outsourcing hub for UK exporters due to low production costs and increased domestic demand.
The challenges of exporting to India
While India is now rated 77th out of 190 countries in the World Bank's Ease of Doing Business With index, having taken a giant leap up the rankings in recent years, exporting to India can be a long process that requires some patience.
India is a price-competitive market and you will be expected to negotiate on the price for your goods. You will also need to check what the import duty is for your product in India to see if export is viable. Once all additional taxes are included, it is often a minimum of 35%.
Other things to consider when exporting to India are:
- Multiple religious, ethnic and annual variations in holiday timings
- Barriers to trade and investment in some sectors because of regulatory constraints
- Intellectual property protection (IP)
- Risk of delays due to administrative requirements
- Extreme weather (in the summer and monsoon seasons) can affect business
- Risk of bribery and corruption
A No-deal Brexit may also affect UK companies exporting to India. The UK does not have a trade agreement with India. Up-to-date information in the lead up to the UK leaving the EU can be found on the UK Government website here.
How to get started
The procedures and documentation involved in exporting can often be an obstacle for businesses, so we’ve broken it down for you to make it as easy as possible. If you need support, the Bedfordshire Chamber of Commerce can help you.
Taxes, restrictions and requirements
- The UK and India have a signed double taxation agreement, meaning the same income is not taxed twice. Taxes are controlled by the central and state governments.
- Some imported products will need to meet Indian quality standards and be certified by the Bureau of Indian Standards (BIS) before being exported to India. If you’re exporting food, you will also need to use the Food Import Clearance System.
- All imported goods and transport documents must show standard units of measurement and weight, and be labelled in English or Hindi.
- You will also need to register your intellectual property in India to protect against potential infringement. You can read more about how to protect your IP rights in India here.
Documentation
There are a number of documents required to export to India, all of which will need to be dealt with in great detail.
Export documentation may include:
- Bills of Lading
- Cargo Notification Regulations
- Authorised Economic Operate Scheme
- EC Certificate of Origin
- Export Accompanying Document (EAD)
An EC Certificate of Origin can be obtained from your local Chamber of Commerce. It is not mandatory, but may be requested in the contract. For advice on how to complete an EC Certificate of Origin, click here.
Special certificates may also be needed for exporting certain products, such as alcoholic beverages, animal products, chemicals, cosmetics, or textiles and clothing.
Operating in India
You can export to India by contacting customers directly, before appointing a partner in India. It may even be best to appoint a number of agents or distributors to cover different regions as India does not operate as a single national market and regulations can vary.
If you’re considering online selling to India, The Department of International Trade can help you find the online marketplace best suited to your product or service. Click here for a list of contacts in each state.
You can secure terms of payment through a letter of credit or documentary collection through your bank. Your contract should always clearly state the terms for delivery and payment of goods and services.
Support from the Chamber
While exporting to a new market can be a big decision for your company, you don’t need to go it alone. Your local Chamber of Commerce can help you build a greater knowledge of international trade and support you with the procedures and documentation involved. The UK India Business Council are also a great source of information for businesses looking to work with India.
At the Bedfordshire Chamber of Commerce, we have a vast network of partners that can offer support for market research services, consultancy services, export documentation and export training. We also host regular workshops to help businesses with export procedures. You can see a list of upcoming workshops here.
