Import Export Code (IEC) is an alphanumeric 10 digit registration number that is issued by Directorate General of Foreign Trade (DGFT). Irrespective of the structure of business organization, it is necessary to obtain IEC for every importer and exporters who are planning to deal with their business globally.
Import and export business is of significant importance for the expansion and growth of any country and for that reason, it is obligatory to have control and administration on the activities of import, export and such other activities connected therewith. Therefore, the Government of India has introduced a compulsory requirement to have an Import Export Code (IEC) for the businesses and commerce trading and dealing with import and export. In this article, we will know about the types of products that can be exported by One IEC.
Why Is IEC Required In Business?
- IEC is a mandatory and pre-requisite condition before starting up with the import and export of goods and services worldwide.
- In order to succeed in the shipment clearance, the importer will have to show his IEC.
- Custom clearance is the process for verification and checking of the imported goods. The custom department is the exclusive authority to conduct custom clearance and the person importing the goods will have to give IEC for successful custom clearance.
- When an importer is sending money to a foreign country through banks then IEC is required by the bank.
- When any exporter is receiving money in foreign currency into his bank account directly then also bank requires the Import Export Code (IEC).
Read our article:How to obtain IEC Code in India
How Many Types of Products can one IEC Export?
The two important questions that arise are whether a company can carry out import and export without obtaining the IEC registration and how many types of products can be imported in one IEC? The answer to which is that it is a mandatory requirement for every company to go for IEC registration as this code serves as an indication that the company is credible and trustworthy with its business operations.
Furthermore, the person is required to open a bank account which is also a compulsory requirement during the registration time for IEC. It is mandatory to have a bank account as all the funds concerning the business operations shall be received in this account.
The other answer regarding the types of products that can be exported through a single IEC is that the user can export all the products that are not barred. The user has to check with the EPC to verify if the category of products they want to export is provided in it or not. Hence, there are various types of products that can be exported under one IEC but it must be in accordance with the guidelines of EPC.
How to Select a Product for Export Business?
Identifying the types of products plays a very vital role before starting a business. A major issue in any export business is an understanding of the types of products that can be exported in one IEC and the detailed knowledge about the products to be exported.
The selected product must be in demand in the countries where it is to be exported. Although, various products can be exported by a single IEC but it is equally important to make a wise selection and to consider the different government policies connected with the export of the particular product.
Find Unique Products made in India
It is important to find the products that India is known for and what are its top exports and the country which imports from us. The majority of the information is publicly available in the databases hosted by the Ministry of Commerce and the DGFT. By examining India’s trade statistics, the user will get an idea of the products that have a reliable reputation overseas.
Analyze Demand & Supply of Product in Global Market
It is important to inspect the details about the supply chain of the different types of products and the other particulars like how is it manufactured, and its raw material sources, producers involved, components, demand of the types of products based on the season, promotion of the product, the kind of guarantees and replacements if any that can be given in its place, etc. These questions will vary from product to product.
Select a Country with Steady Demand of Product
It is imperative to ensure that all the products are on a sustainable demand in the country to which it is shipped. It is essential to find out the right export market in particular geographies in which the demand already exists.
It is very important to analyse the growth prospects of the business and to ensure that those types of products are reaching out to a wider audience in the country. Stagnating sales can be disadvantageous to the export business. Thus, the exporter must ensure that the business is scalable for future prospects.
Profitability of the Product
For a business, it is important to choose products that have the prospective to reward financially. Thus, the exporter must identify the economic supply of the product and make sure that the target consumer is prepared to pay a good price for such products.
The market should be unique with regard to the trade regulations and compliances. It is important to adhere to the rules of the product’s targeted country and also have knowledge about the foreign country’s trade relations with India.
Chances of Competition
If the product is unique, then there are high chances that it will face tough competition from other businesses already engaged in exporting the same or similar product. Thus, the different types of products must be unique and different from the competitors. It is also important to focus on the quality which will attract more consumers.
It is important that the product is unique and it does not have an export tradition as because a distinctive overseas import has the potential to sell much better than the traditional one.
Therefore, the exporters must always be prepared with the IEC registration and must ensure that they follow all the guidelines while exporting the different types of products in one IEC.
Read our article:What is the IEC Registration Process in India?