Shipping to India: Huge Potential for Profit … and Pitfall
Exporting products to and importing products from India has the potential to generate large profits. However, there are a variety of ways goods can be held up in Indian Customs, be delayed indefinitely or even lost entirely.
In order to avoid these pitfalls, it is critical that shippers work with a logistics agency that understands the challenges of exporting to India and how to overcome them.
Questions to Ask
Prior to hiring a logistics agency, make sure they understand the import/export landscape of India. If the agency you hire only has experience with customs and logistics in developed countries, they will struggle with even the most basic logistics requisites in India.
There are a number of key considerations an exporter must be aware of and comply with in order to export to India:
1) The ability to properly declare a product. Improperly declaring a product(s) can lead to a nightmare of disasters. For example, exporting used motorcycles to India and mistakenly neglecting to mention “used” on commercial and shipping documents, will without question delay the delivery of your products by weeks, sometimes longer.
2) Does the agency have an understanding of India’s geography and transportation infra structure? India is not the United States. Shipping products via Courier or by truck is very, very expensive. Additionally, many of India’s key population centers are inland and can only be accessed by train. The costs of additional transport after arrival at air & ocean ports can have a significant impact on an exporter selling to this market.
3) Does the agency understand customs regulations? While Indian customs has made significant progress in its processes, challenges remain. For example, no partial arrivals are allowed in certain major cities & Indian customs only accepts landing of entire consignments in order to release the goods. If the logistics agency you hire does not have a work around for this regulation, the consequential delays can be disastrous.
4) Understanding costs as a whole. The last thing you want is a big surprise the day your cargo arrives in India, particularly a financial one. If the logistics agency is not savvy enough to give you a cost determination prior to shipping, a variety of problems could ensue in terms of billing.
For one, some duties can be over 30%. If you are exporting a product for importation into India and your logistics company doesn’t account for the cost of duties, you may end up losing money on the entire venture.
While there is money to be made in India as a result of their incredibly large population, it is important to be careful with to whom you trust your product. Make certain you hire a reliable and proven logistics agency/freight forwarder that can effectively process your shipments and quickly solve any problems that arise.
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