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India - exporting and custom clearance question

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Kuvera

New Contributor
Jun 17, 2021
5
6
11
I'm starting a business where I'll be acting as a middleman or what is apparently known as export agent. I'm new to this, but the idea is simple. I have already interested buyers in Europe and I have a shortlist of suppliers in India. I lived in India for long enough to understand how things work there(ie. I'll go there for every shipment), so I don't need any advice in that regard.

However the setup, in terms of involved parties, is a bit confusing when it comes to customs clearance/exporting goods.
I have an LLP in the UK, suppliers are in India and buyers in the EU. The UK LLP can't act as an exporter as it doesn't have the export license(in India), so I'll deal with suppliers that have an export license. According to few clearance agents I talked to it can be done so that supplier's export license is used for customs clearance purpose. Although I bought the goods from them and I'm not the importer!? Anyone has experience with such scenario?
Another thing that I'm a bit worried about is the paperwork that buyers/importers will get along with goods. I don't know exactly what paperwork goes with the shipment, but my concern is that importers will be able to see from whom I'm buying goods and what price I'm actually paying. Then they might go to the supplier themself as they would have all of the info needed to do so. So I suppose both price I got the goods for and actual supplier would be visible in the documents that would end up with the buyer/importer. Is that correct?

If anyone has some experience in this kind of setup, please share it.
 

deliux

Contributor
Read Millionaire Fastlane
May 21, 2021
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I'm starting a business where I'll be acting as a middleman or what is apparently known as export agent. I'm new to this, but the idea is simple. I have already interested buyers in Europe and I have a shortlist of suppliers in India. I lived in India for long enough to understand how things work there(ie. I'll go there for every shipment), so I don't need any advice in that regard.

However the setup, in terms of involved parties, is a bit confusing when it comes to customs clearance/exporting goods.
I have an LLP in the UK, suppliers are in India and buyers in the EU. The UK LLP can't act as an exporter as it doesn't have the export license(in India), so I'll deal with suppliers that have an export license. According to few clearance agents I talked to it can be done so that supplier's export license is used for customs clearance purpose. Although I bought the goods from them and I'm not the importer!? Anyone has experience with such scenario?
Another thing that I'm a bit worried about is the paperwork that buyers/importers will get along with goods. I don't know exactly what paperwork goes with the shipment, but my concern is that importers will be able to see from whom I'm buying goods and what price I'm actually paying. Then they might go to the supplier themself as they would have all of the info needed to do so. So I suppose both price I got the goods for and actual supplier would be visible in the documents that would end up with the buyer/importer. Is that correct?

If anyone has some experience in this kind of setup, please share it.
My suggestion is to look for advise in right authorities regarding the taxation. It is very messy thing with a lot of sideways. If it is quite descent amount of money involved I would suggest you hire consultancy agency or good accountant. You would be surprise and they might save you money as well help to avoid additional expenses.

I know importing from China if you do not want any paper work to be included you just ask them and they do that. Not sure about India, but I believe that you can make those arrangements as well.

By the way. Do you know if there are reasonable channels fro dropshipping from India?

Good luck with your business!
 

Walter Hay

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Sep 13, 2014
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I know importing from China if you do not want any paper work to be included you just ask them and they do that. Not sure about India, but I believe that you can make those arrangements as well.
Every shipment arriving in any country will need documents. For small, simple transactions, at the very least there must be a Commercial Invoice accompanying the shipment.

For high value and/or large volume shipments there will be other documents required, but to say which I would need to know a lot more. If payment is by Letter of Credit, that document will specify certain requirements including Bill of Lading or AirWaybill.

Based on what little information you have provided, it seems that you need to set up a business entity in India to act as the exporter.

From my experience in attempting to export to India I know that the red tape is enormous, and corruption can have a huge impact on the outcome. Delays can be imposed and the cost of delays can be huge.

I would look elsewhere.

Walter
 

robertwills

Bronze Contributor
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Sep 9, 2020
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Every shipment arriving in any country will need documents. For small, simple transactions, at the very least there must be a Commercial Invoice accompanying the shipment.

For high value and/or large volume shipments there will be other documents required, but to say which I would need to know a lot more. If payment is by Letter of Credit, that document will specify certain requirements including Bill of Lading or AirWaybill.

Based on what little information you have provided, it seems that you need to set up a business entity in India to act as the exporter.

From my experience in attempting to export to India I know that the red tape is enormous, and corruption can have a huge impact on the outcome. Delays can be imposed and the cost of delays can be huge.

I would look elsewhere.

Walter
We to get rid of of red tape and corruption. Rather we need to get rid of it. Enough is enough.
 

Kuvera

New Contributor
Jun 17, 2021
5
6
11
By the way. Do you know if there are reasonable channels fro dropshipping from India?

No idea. Haven't looked into it.

Every shipment arriving in any country will need documents. For small, simple transactions, at the very least there must be a Commercial Invoice accompanying the shipment.

For high value and/or large volume shipments there will be other documents required, but to say which I would need to know a lot more. If payment is by Letter of Credit, that document will specify certain requirements including Bill of Lading or AirWaybill.

Based on what little information you have provided, it seems that you need to set up a business entity in India to act as the exporter.

From my experience in attempting to export to India I know that the red tape is enormous, and corruption can have a huge impact on the outcome. Delays can be imposed and the cost of delays can be huge.

Buyers I talked to would be willing to pay in cash via bank transfer, so there wouldn't be a letter of credit.
I tried to set up a business there and it's a nightmare. I was already figuring out how to get so called import-export code and everything else necessary to act as an exporter. Currently some government official at the Companies register decided I should give him 500 EUR cos I'm a westerner. Bribes and red tape are a huge issue in India and I'm well aware of it as I lived there. That's the main reason why i don't want to have a company there and even less a bank account, from which I might get locked out, on a whim of some corrupt official. Therefore, I'll use my UK registered LLP as a platform to trade.
I hear you, but profit margins one can get exporting from India are worth the hassle. There's really a huge potential in goods I want to buy over there.

After a bit more research and phone calls with clearing and forwarding agents in Bombay, it seems the whole thing is doable, no problem. Suppliers will be exporters on paper and few of them told me it can be done so that original price is not stated in the paperwork.
I'll be going there to negotiate with suppliers, to find a clearing and forwarding agent and to supervise the first shipment. After that, I'd be there for every shipment.
@Walter Hay , in other post you mentioned there are companies you can pay to supervise and inspect a shipment for you. How do you call those guys? What are some of reputable international companies? Once when it's up and running it might come handy to use those guys if I can't be there every single time.
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
2,998
12,138
2,453
World citizen
@Walter Hay , in other post you mentioned there are companies you can pay to supervise and inspect a shipment for you. How do you call those guys? What are some of reputable international companies? Once when it's up and running it might come handy to use those guys if I can't be there every single time.
I have written quite a lot about Inspection Services and I suggest you use the search button in the top right end of the page to search for posts by me with the keywords Inspection Services.

You will find more than just the names.

Walter
 
Last edited:

Kuvera

New Contributor
Jun 17, 2021
5
6
11
I am interested about delivery options from India to US. I am talking about small quantities. Is it expensive?
My first concern in that regard would be the reliability and speed of delivery. There are local courier services like Blue dart, global ones like DHL and hit and miss service of Indian post. My friend sent a 20kg parcel from India to Europe thru Indian post, took about a month(maybe due to C0VlD) and the fee was around 6000Rs.

@Walter Hay ,thanks for the info!
 

dandy2902

New Contributor
May 12, 2021
23
7
14
I'm starting a business where I'll be acting as a middleman or what is apparently known as export agent. I'm new to this, but the idea is simple. I have already interested buyers in Europe and I have a shortlist of suppliers in India. I lived in India for long enough to understand how things work there(ie. I'll go there for every shipment), so I don't need any advice in that regard.

However the setup, in terms of involved parties, is a bit confusing when it comes to customs clearance/exporting goods.
I have an LLP in the UK, suppliers are in India and buyers in the EU. The UK LLP can't act as an exporter as it doesn't have the export license(in India), so I'll deal with suppliers that have an export license. According to few clearance agents I talked to it can be done so that supplier's export license is used for customs clearance purpose. Although I bought the goods from them and I'm not the importer!? Anyone has experience with such scenario?
Another thing that I'm a bit worried about is the paperwork that buyers/importers will get along with goods. I don't know exactly what paperwork goes with the shipment, but my concern is that importers will be able to see from whom I'm buying goods and what price I'm actually paying. Then they might go to the supplier themself as they would have all of the info needed to do so. So I suppose both price I got the goods for and actual supplier would be visible in the documents that would end up with the buyer/importer. Is that correct?

If anyone has some experience in this kind of setup, please share it.
You may work with an exporting agencies or a bank responsible for export/import activities to handle these things. They may help you solve problems about financial issues and process you have to be done.
 

deliux

Contributor
Read Millionaire Fastlane
May 21, 2021
49
32
45
My first concern in that regard would be the reliability and speed of delivery. There are local courier services like Blue dart, global ones like DHL and hit and miss service of Indian post. My friend sent a 20kg parcel from India to Europe thru Indian post, took about a month(maybe due to C0VlD) and the fee was around 6000Rs.

@Walter Hay ,thanks for the info!
Thanks for sharing it. What I realise is that people are willing to wait if the product is not urgent to use, for good price and that is what they want( triggered right emotion). I was looking for options to dropship from India, so far I did not find right path to do so. I know that it is possible as there are sellers who do t
so. I just do not have right information.

Do you have similar websites like Alibaba or Aliexpress In India?
 

Kuvera

New Contributor
Jun 17, 2021
5
6
11
Do you have similar websites like Alibaba or Aliexpress In India?
Indiamart, Amazon.in or Flipcart. if you can find what you'd like to droppship, contact the seller and see are they up for it. But India and Indians can be hard to understand, coming from the western mindset. Dunno what is your experience with the country, but doing anything business-wise over there can be a real challenge. I totally get why @Walter Hay said he'd look elsewhere, plus people you'll have to deal with are really a mixed bag. There are honest and great people over there, but there are also unreasonable, greedy and shortsighted people. So you really need to do your best to find people that you can do business with.
 

SunnyN

Contributor
Oct 2, 2014
31
23
42
36
Hi Kuvera,
I am Sunny from Mumbai. I am into export import business and also MBA in International Business. Reading your post, I understand some of the pros and cons of your current situation.
Pros: You have ready buyers in Europe and an existing Limited Liability Partnership in your country.
Cons: You are stuck in a situation where you can't move ahead due to lack of IEC(Import Export Code) license. Also, you are afraid your buyers will make direct contact with sellers after the first transaction which is the nightmare for any Agent. He/she does all the hard work but does not get his dues.

A few inputs from my side, as an Indian, it took me upto 3 months to get my proprietorship firm registered and with my IEC. Yes, it was bit cumbersome. I also spent most of my lockdown time researching and contacting buyers and sellers around the Globe. From all this, I inferred as an Indian that we have an abundance of quality suppliers but they are not getting proper exposure and are afraid of being cheated. As you know, Export business is something which is based on long-term commitment, reliance and trust due to the big amount of money involved.
To address one of your concerns about buyers snatching away your supplier info and then concluding business with them, there can be instruments like you can team up with agents or businesses in India and draw up documents where the information about both seller and buyer is hidden under the clause. I remember this case study vaguely.
If you are more interested to know about this, let me know. I will research from a local's perspective.
I'm starting a business where I'll be acting as a middleman or what is apparently known as export agent. I'm new to this, but the idea is simple. I have already interested buyers in Europe and I have a shortlist of suppliers in India. I lived in India for long enough to understand how things work there(ie. I'll go there for every shipment), so I don't need any advice in that regard.

However the setup, in terms of involved parties, is a bit confusing when it comes to customs clearance/exporting goods.
I have an LLP in the UK, suppliers are in India and buyers in the EU. The UK LLP can't act as an exporter as it doesn't have the export license(in India), so I'll deal with suppliers that have an export license. According to few clearance agents I talked to it can be done so that supplier's export license is used for customs clearance purpose. Although I bought the goods from them and I'm not the importer!? Anyone has experience with such scenario?
Another thing that I'm a bit worried about is the paperwork that buyers/importers will get along with goods. I don't know exactly what paperwork goes with the shipment, but my concern is that importers will be able to see from whom I'm buying goods and what price I'm actually paying. Then they might go to the supplier themself as they would have all of the info needed to do so. So I suppose both price I got the goods for and actual supplier would be visible in the documents that would end up with the buyer/importer. Is that correct?

If anyone has some experience in this kind of setup, please share it.
 

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