Once you’ve assessed your readiness for import-export, the next step is to understand how international trade works in India, what opportunities exist for SMEs, and how imports and exports differ.
India’s IMPEX ecosystem offers enormous potential for small and medium enterprises, but navigating it successfully requires clear understanding. This post will help you see the landscape clearly, identify where SMEs can fit, and spot opportunities that match your capabilities.
Table of Contents
Difference Between Import and Export
Example:
A Kerala spice manufacturer exporting to Europe earns in Euros and builds a global brand.
A small machinery supplier importing CNC machines from Germany improves production efficiency locally.
Why SMEs Should Consider IMPEX
Market Expansion: Access customers beyond local demand.
Diversification: Reduce dependence on domestic market fluctuations.
Higher Profit Margins: Certain export products can fetch premium prices.
Learning & Growth: Exposure to global quality standards, technology, and supply chain management.
Actionable Insight: Focus on products where you have cost or quality advantage. Exporting commodity products without differentiation rarely works.
Types of Import & Export Activities
Export Types
Merchandise Exports – Tangible goods like textiles, spices, machinery.
Service Exports – IT services, consultancy, BPO, online education.
Import Types
Raw Materials & Components – For manufacturing finished goods.
Finished Goods – For resale or retail.
Practical Tip: SMEs should start with products/services they fully control to reduce risk.
Indian Government Support for SMEs
The Government of India offers several schemes to encourage SMEs in IMPEX:
Export Promotion Councils (EPCs): Industry-specific support and market intelligence.
RoDTEP (Remission of Duties & Taxes on Exported Products): Refund of embedded taxes for exporters.
Market Access Initiative (MAI): Helps SMEs explore international markets.
Duty Drawback Scheme: Refunds customs/excise duties for exported goods.
Actionable Exercise:
Visit DGFT Official Website and check schemes relevant to your industry.
Make a shortlist of 2–3 schemes that can reduce costs or improve competitiveness.
Understanding Market Opportunities
SMEs often make the mistake of assuming any product can sell internationally. Key factors to identify opportunities:
Demand Trends: What are top importing countries buying? Use trade databases like MEIDB or ITC Trade Map.
Competition Analysis: Who are the established exporters? What can you offer differently?
Ease of Entry: Regulatory hurdles, certifications, and shipping complexity.
Example: A textile SME in Surat researched MEIDB and found high demand for organic cotton products in Europe. They differentiated by eco-friendly packaging and compliance certifications, creating a profitable niche.
Common Misconceptions About IMPEX
“I can export anything I sell domestically” – International markets require standards, certifications, and compliance.
“It’s too complicated for SMEs” – With IEC, AD Code, and stepwise procedures, SMEs can start small and scale.
“Imports are expensive and risky” – Strategic imports can reduce costs or enhance product quality significantly.
“Government support is complicated” – Most schemes are online, with clear application procedures.
Actionable Insight: Awareness and preparation reduce risk dramatically.
Checklist for SMEs Entering IMPEX
Self-assessed readiness (Post 1)
Product/service selection aligned with capabilities
IEC and AD Code registration (Post 4)
Knowledge of import/export types
Awareness of government incentives
Market research for demand, competition, and regulations
Action Step: Tick off items on this checklist before making your first transaction.
Now that you understand the Indian import-export landscape, the next step is getting your documents in order.