7 Tips To Help You Export To India From Australia
Exporting goods to an international market like India can be a great way to build your brand overseas. This guide provides helpful information to prepare your business for a successful international expansion.
The export trade between Australia and India is the 5th largest, according to the Department of Foreign Affairs. Major exports from Australia include coal, gold, vegetables and copper ores.
Before you get started with this guide, it may be beneficial to learn more about export costs and what it takes for your business to start exporting. See our beginners’ guide to exporting from Australia is a great starting point.
There’s also lots of fantastic advice for exporting to India here.
In this guide we’ll cover:
- Finding the right products to export to India.
- Understanding the types of products you can (and can’t) export.
- How to export to India.
- Costs to export containers from Australia to India.
- Understanding licenses for exporting to India.
- Export and import duty, tariffs, and taxes.
- Getting paid in foreign currency.
Finding the right products to export to India
When exporting to India, it is important to conduct market research before taking the plunge. To have a successful and revenue generating export business in India, your products will have to be sold for a profit. Understand that India is a large manufacturer of low cost products – so make sure that there is a demand for your product and that it’s not too difficult to penetrate the market.
- Avoid food and perishables — Food and produce are very expensive to export, since you need specialised shipping. Additionally, food exports are subject to strict criteria, so you’re best off avoiding them altogether.
- Avoid mass-produced, cheap goods — India makes so many of these types of goods domestically, you’re never going to compete when you factor in the costs of manufacturing and logistics.
- Do your market research — Flipkart and Amazon, both enormous online marketplaces, have a huge presence in India — You can certainly sell through these marketplaces, and they’re a good place to start when it comes to market research. Additionally, look into specialised market reports on what sells in India.
- Aim at luxury products — Ideally, you’ll want to provide “luxury” items that aren’t produced domestically in India. These can be lifestyle goods and aspirational products, often with a strong aesthetic. Think clothes, furniture, cars, electronics, accessories, and designer items.
- Understand your margins and pricing — Exporting can eat into your margins. So make sure you’ve got a rock-solid understanding of all your costs and the price you want to sell at, and account for exchange rates to make sure you can still turn a profit.
Understanding the types of products you can and can’t export to India
Both Australia and India have limitations on what you can export and import.
Australia export restrictions
The Australian authorities prevent or restrict goods like some chemicals, biological materials, pharmaceuticals, animal and plant species, weapons, and more from export. You can find a complete list here. You should also learn what Australian Customs needs from you if you want to export.
India import restrictions
Some types of imports are restricted and prohibited. These include firearms, narcotic drugs, obscene material and live animals. For the full list, refer here.
The best ways to export products to India
Exporting to India can be a difficult process, especially when there are not a lot of information available online. It may be beneficial to hire someone who is experienced with exporting to India.
This is generally the process of exportation:
- You manufacture or purchase the items domestically, in Australia OR you manufacture them elsewhere and arrange for shipping from there to India.
- You understand the various regulations, tariffs, and licenses you need to export.
- You arrange for international shipping from the point of origin to India— For larger items and big quantities, you will typically use container cargo, for smaller quantities, you might use an international shipper like FedEx.
- On arrival of your goods in India you pay the necessary duty, tariffs, and any other fees.
- You arrange for your goods to be held on your behalf in India.
- You market your goods for sale in India, often through a retail store, third-party marketplace, ecommerce website, or some other outlet.
- You sell your goods and arrange for them to be sent to your customers.
- You get paid and transfer your money back to Australia.
- You pay any necessary local taxes in India and Australia.
Typical container costs — Shipping from Australia to India
International shipping might not be as expensive as you think. According to the Sea Freight Calculator, the cost of renting a full container to ship goods from Australia to India is approximately:
20 ft container — $1,800 USD
40 ft container — $2,300 USD
And according to Australia Trade, renting part of a container will cost you between $150 and $250 AUD per cubic meter or 1,000 kilos, whichever is greater.
Remember that these are only shipping costs — The cost of actually having your goods freighted from one port to another. They don’t include costs involved in getting your goods to a warehouse, insurance, duties, and other fees. Make sure you understand your total logistics costs so you can factor them into your pricing.
We’d advise you to compare a number of quotes from shipping companies and suppliers based on the type and quantity of goods you want to export.
Understanding licenses for exporting to India
The type of license you need to import into India depends on the type of goods you want to send there. AusTrade website has more details, find more information here.
Note that the rules and regulations around importing and exporting to and from India do change from time to time. Make sure you check with official sources to ensure you’ve always got the latest information.
Export and import tariffs, duties, and taxes for India
Certain taxes and duties may apply, depending on the type of goods you are importing into India. The Indian Customs has a duty calculator that can assist you to work out duty rates.
As you can see, there is some work involved in exporting to India, but if you’ve already made good inroads into the Australian domestic market, it can be a great next step. Make sure you do your research, understand what you’re getting into, and plan carefully. Then you’ll be ready to launch, and sell your products.
What about receiving money in foreign currency?
Indian businesses will typically pay you in US dollars or Indian Rupees. If you are selling products in the Indian market, consider using the TransferWise Borderless Account.
Until recently, Australian businesses had 3 options to receive money from overseas customers:
- Get paid into a local Australian based, Australian dollar account.
- Open a Foreign Currency Account, usually with a bank
- Use a payment gateway like PayPal, Braintree or Stripe
Unfortunately, these options are usually filled with fees, balance requirements or massive exchange rate mark-ups.
In October 2017, TransferWise released the Borderless account in Australia and it’s really impressive. It allows you to receive, hold and transfer 27 different currencies.
A unique feature that is particularly useful for businesses, is the ability to have local bank account details in USD, EUR, GBP or AUD. This makes receiving money from overseas customers exceptionally easy.