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Exporting from India to the USA: Key Know-Hows for Smooth Trade

vijay

Vijay Kumar

Senior Specialist - Marketing @ Shiprocket

January 2, 2024

7 min read

If you are an eCommerce seller, starting your export business to the USA may not be simple. You will need intense research and understanding of various factors like the US market, products in demand, the customs process for exporting, the legal requirements, etc. Want to know how to expand your business into the US market? Here is an actionable plan that will help you export from India to the USA profitably. 

Export from India to the USA

The largest export market for India is the United States. The USA received 18.1% of imports valued at USD 80.2 billion in 2022. The second largest export market for India is the United Arab Emirates with 7.3%. The Netherlands receives 4.5%, China 3.6%, and the United Kingdom 2.1% of India’s imports.

What are the Products in Demand in the USA Market?

To begin a profitable export from India to the USA, businesses should first know the export value of each of the markets.

(Graph Source: https://www.tpci.in/indiabusinesstrade/wp-content/uploads/2023/11/Indias-top-10-exported-commodities_-H1-2023-24.png

Data Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1967357)

The statistical data shows that the US market is nearly double that of the second largest export market for India, which is the UAE. Hence, planning your export from India to the USA will have a higher export value than exporting to other markets.   

Now, let us explore the products that are in high demand in the USA and are imported in large quantities from India: 

  • Diamonds
  • Jewelry
  • Textiles
  • Leather products
  • Handicrafts.  
  • Food
  • Organic chemicals
  • Packaged medicaments
  • Mineral fuels
  • Oils
  • Distillation products

The export charge from India to the United States varies based on the destination port and the shipping partner.

Sell in the USA with Popular eCommerce Platforms: Outstanding Online Marketplaces

Backed by the knowledge of the best-selling Indian exports in the USA, let us find the top marketplaces for eCommerce businesses. 

In the US there are over 1 million online marketplaces, with over 24 different types of platforms for different niches. Here are some of the outstanding online marketplaces you should consider for your business:

  1. Amazon: If you want to start your export business from India to the USA, Amazon is the most recommended marketplace for you. Begin by registering with Amazon Global Selling to sell in over 30 export product categories. You can also choose to ship via Fulfillment by Amazon (FBA), a platform that bundles all Amazon services like prime benefits, customer service, hassle-free returns, storage, delivery, pickup,etc. You also have the choice of using third-party logistics services. Amazon gives you access to sell to over 100 million Prime members and more. 
  2. eBay: One of the oldest eCommerce platforms in the USA, it has a large number of loyal customers. You will need to register on the platform and add your profile before you can pick CBT as your shipping method. Offer a local address and a US bank account for this. Additionally, select the international shipping listings and the countries you will ship to. Next, you will choose your preferred shipping provider and include locations where you will not offer shipping services.
  3. Shopify:  One of the trending online marketplaces for Indian companies wanting to start an export business in the USA. Shopify is a highly integrated platform with loads of features for automated commerce. It has over 300,000 stores and an annual turnover of USD 2 billion.
  4. Esty: A specialty products marketplace, Etsy is the most-loved platform in the US for unique, vintage and handmade products. The most popular categories it offers are jewelry, home and living, accessories, craft supplies, clothing and shoes, wedding items, toys, games, and collectibles. When you register on Etsy, you can access its customer service team.

The Entire Procedure for Export from India to the USA

When you want to start your Export from India to the USA, You will need to process different sets of documents. Let us look at some of the main applications and processes you need to complete:

a. Obtain IEC: Import Export Code (ICE) is a 10-digit code for a business to conduct any type of export-import business in India. The Directorate General of Foreign Trade ( DGFT) issues this certification/license. Businesses need to fill out the Grant/ Renewal application form for ICE and submit it to the regional authority with the required documents. 

b. Getting FDA Approval: The Food and Drug Administration, FDA, ensures that businesses engaged in the food business offer their products that are safe to use and labeled as per their prescribed rules. The drugs, medical devices, and cosmetics are covered by FDA rules. The FDA monitors, and tracks drug safety and approves marketing. 

c. Prepare Proper Documentation: The US Customs and Border Protection is needed for exporting to the US. You will need to pay duties, and fees as per law and provide information for a clear shipment through customs. You will need to give details of various products, their value, origin of the products, export destination, etc. 

e. Export Charges to the USA: One of the most important aspects of export business is the export price. It reflects the costs of production and not the selling price in global markets. The prices have to be compared with domestic and retail prices. But these cannot be compared with insurance, transportation, and other costs to bring goods to resell in global ports. 

The charges are determined by the cost of ocean freight per kilogram per container, the volume of the container load,  if the container is full or less, destination ports, and the shipping line in use. For example, if you want to export from Mumbai to New York port, the charges are roughly INR 1000 per cubic meter for Less than Container Load (LCL) and double if the load is Full Container load(FCL). 

Shiprocket X: Assisting Exporters with International Shipping

A leading shipping solution provider, Shiprocket X is a cross-border platform that aids exporters in meeting customer needs in over 220 global locations. Its differentiating features are:  

  • Provides an on-page international shipping rate calculator. It helps exporters to compare shipping rates 
  • Focuses on offering low freight rates by partnering with multiple courier providers
  • Provides a single platform, easing visibility for exporters to track orders across 12+ sales channels
  • Provides real-time updates on orders in transit via email, SMS, and WhatsApp
  • Facilitates door-to-door deliveries with transparent B2B delivery access and no weight restrictions.

Shiprocket X also offers fee-based subscription options for medium-large sellers. These subscriptions include: 

  • Negotiated shipping rates
  • Multiple eCommerce channel integrations
  • Emergency support

Shiprocket X can also help integrate multiple marketplaces, carriers, and carts into one international shipping platform.

Conclusion

To begin your export from India to the USA, you will need to study the US market for the products you want to sell. The next step is to choose the best online marketplace in the US, like Amazon, Shopify, Etsy, or eBay, and register as a seller. You will gain access to millions of online buyers on these platforms. Follow through with preparing the documents for your license to run an export/import business from the Indian government. Renew it regularly for ease of use. 

During the time of registration on the marketplaces, you are required to choose your shipping partners. Register with Shiprocket X for an algorithm-based shipping solution that can integrate all your services for seamless delivery to your overseas buyers. 

How to send samples to businesses in the USA from India?

The most common practice is to send the sample as a Personal Carriage of export parcels. Rules permit the shipping of samples valued up to USD 1 million for export promotion, and sales abroad.  

Are export goods exempted from taxes?

Yes, exports of goods are exempted from GST. Businesses should claim a refund of input tax credit for input and output services incurred during the export of goods or services, subject to eligibility for such exemptions.

Is there a TDS deduction for export?

TDS is not applicable where IGST is charged. Hence, all supplies under SEZ, exports, and interstate trade are exempted from TDS deductions. 

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