Starting an export business can be a thrilling experience, especially when the market conditions are in your favour. Gems and jewellery are the widely used exported commodities from India. You’d be surprised to know that the gems and jewellery industry contributes a massive 7% to India’s GDP(Gross Domestic Product), which is a staggering figure if you look at it. On top of that, India’s gems and jewellery export during 2021-22 stood at US$ 419 billion, with a 44% growth from the previous year, as stated by the India Brand Equity Foundation.
By looking at the current growth and immense potential in the sector, the Government of India has established the Gem & Jewellery Export Promotion Council – GJEPC India to establish a platform for the gems and jewellery exporter community to empower them through strategic and financial assistance. The GJEPC was established to empower jewellery exports from India and ensure that the exporters don’t face difficulties in the process. The council has more than 7000 registered members who enjoy the benefits and assistance offered by the council. Despite all the assistance from the government, every exporter must work on strengthening their operations and establish robust business models that can be expanded with time and reach exponential growth. To help you excel in your business, here are five essential steps to start your jewellery export business.
1. Establish a business plan
One of the initial steps toward starting any kind of business is having a strong business plan in place. The business plan works as a roadmap for the business owners to navigate their business towards success and ensure necessary steps are taken to stay on track. It also helps to establish a local and global brand identity. Various essential things are included in the business plan. The business plan creates a set of guidelines across various business operations such as staff management, location costs, import-export costs, transport expenses, payroll, legal operations, financial planning, warehouse expenses and other business operations.
When starting a jewellery export business, you need to have a strong business plan in place. It will help you establish strategies on which jewellery products to choose for export, what marketing strategies to follow and ensure higher profit margins through sales.
2. Choose the right international market.
Choosing the right international market to export your jewellery is one of the key steps toward a successful export business. It would be futile to export your products to the market where there is minimal or no demand for your products. On the other hand, exporting your jewellery products to a high-demand market will yield higher sales and better profit. There are different ways to understand the demand for your products. You can study various market reports, research papers, and surveys to understand which international markets export the most jewellery items from India. It would also give you more information about the nature of income, lifestyle choices, competitors, and potential challenges in the particular market. That way, you can devise strategies to tackle those problems.
According to IBEF, USA, UAE, Hong Kong, Israel, Singapore, Thailand, Japan, Netherlands are some of the top countries where India exports gems and jewellery products. It’s also important to know that the USA is the most prominent jewellery importer in the year 2021-22, with imports that were valued at US$ 14.5 billion, which grew from US$ 8.7 billion since the previous year.
3. Apply for Company PAN
Every export business must acquire the essential documents that give your business a legal identity. That is why every company that wants to export products outside India needs to have a Permanent Account Number (PAN). The government of India has made it mandatory for businesses to have their company PAN before indulging in any kind of business operation. The PAN helps in various business operations and getting other business documents necessary for exporting. It also helps exporters to open a current account in the bank and obtain IEC from the DGFT.
4. Open a current bank account and obtain an AD Code.
Your company bank account is a central point for all your financial transactions. Therefore it is crucial for a business that wants to export jewellery from India to open a current bank account. As you will be receiving and sending foreign currency, the bank you choose must be authorized to deal with foreign exchange. The next step is obtaining the bank’s AD code (Authorized Dealer Code).
An AD Code is a 14-digit numerical code provided by the bank where you have a current account in order to conduct your import-export business. The code is printed on a document with the bank’s letterhead, according to the DGFT format. To grant an AD Code, a bank must deal in foreign currency or be an authorized dealer of foreign currency. This is consistent with the goal of an AD Code, which is to ensure that foreign currency transactions in an exporter’s current account are the result of legitimate trade.
5. Obtain IEC code
The Government of India has obligated exporters to obtain export documents to be able to export products outside India, and IEC or Import Export Code is one of them. An IEC code is a 10-digit code mandatory for every import and export business. The Director-General of Foreign Trade (DGFT), Ministry of Commerce, issues the IEC code, which has lifetime validity. But it’s also essential to update the details yearly as mandated by the DGFT. The IEC code is vital for clearing shipments from customs and making financial transactions to and from foreign banks.
The IEC certificate helps traders to venture into international markets and register for e-commerce marketplaces like Amazon Global Selling. The export businesses who register for IEC can avail of subsidies, strategic assistance and numerous other benefits from the DGFT and Merchandise Export from India Scheme (MEIS) and Gem & Jewellery Export Promotion Council – GJEPC.
Gems and jewellery are undoubtedly on the rise and will see more growth over the next few years. By following these steps, jewellery exporters can ensure their business lays a strong foundation and prepares itself to expand into international marketplaces where gems and jewellery are in high demand.