The GDP percentage of India’s exports of goods and services is 19.74%. The scope of export business is demanding and profitable. However, picking the right product and market for your export business is critical to make it a thriving business.
Exporting opens up ample opportunities, but finding the right market and product is the backbone for entering the international market.
- The governmental body DGFT (Directorate General of Foreign Trade) has issued a list of items a business owner can export from India.
- The government of India also launched ODOP (One District One Product) to promote locally produced goods and support local creativity, skills, and resources of India in other parts of the world.
Factors to consider while choosing the right product for your export business
When selecting the right product for your export business, consider these five crucial factors to ensure success:
Low Volume/High Margin Products:
When starting an export business globally, consider the competition with the Chinese market. Their products are high in volume and low in price, making it difficult to sustain your product. Try to focus on exporting unique, not easily accessible, and hard to replicate products. Products such as gems, Jewellery, and handicrafts typically have high profit margins and do not require high shipping costs.
India is one of the world’s largest exporters of gems and jewelry. Gems and jewelry contribute 7% of India’s GDP and 15.71% of India’s merchandise exports. These stones signify power, success, and reputation for women and are considered essential to providing social and economic security; hence, the number will increase in the coming years. One must consider this a potential export product as it’s gonna be a US$100 billion market by 2027.
[Source: The Times of India]
Non-Commodity/India Exclusive:
Different types of products are available worldwide and have set standard prices, making it difficult to place your product in the market. Look for items that are made in India, which makes them exclusive, unique, and distinctive internationally. For example, Indian spices, Ayurvedic products, or even handcrafted textiles and clothes appeal to foreign buyers as they offer a cultural uniqueness.
Ashwagandha exports have grown eightfold in the last six years and are one of the most sought-after health supplements globally, in 60 countries, says Rajesh Kotecha, secretary of the Ministry of Ayush. The industry is about $24 billion today, with Gurjart leading the industry with 850 Ayurvedic manufacturing plants. The industry has high growth potential in the coming years, which is the best time for new exporters to enter the field.
[Source: The Hindu Business Line]
No Expiration/Long Shelf Life:
When exporting products into the international market, perishable goods are usually at significant risk due to spoilage during transit and storage. Choose products with a long shelf life, such as Silk, wood, and metal. This reduces the risk of loss and results in better inventory to maintain a reliable supply chain and ensure customer satisfaction.
India is the second largest producer of silk worldwide, with 36,582 metric tons produced in FY23. India offers different types of silk, such as Mulberry, Eri, Tasar, and Muga. In FY23, India’s exports of silk and silk products stood at US$220.58 million.
If you are planning to start an export business in silk, the government of India is implementing several initiatives to help the exports reach their maximum potential. Some of these include the Tribal Sub-Plan (TSP), Silk Samagra, and Scheduled Caste Sub-Plan (SCSP).
[Source: Indian Trade Portal]
High Customer Demand/Trendy:
Products with maximum user demand and trends more likely to rule the market are other factors one must consider when starting an export business globally. Products that are eco-friendly, reusable, and organic are trendy worldwide. Align your product with the audience’s interest to increase sales. To export and gain customer attention, you can consider products like bamboo toothbrushes, shopping bags, and cotton clothes.
According to cow dung export data and cow dung cake export, India is the largest exporter of cow dung, with 1,1133 shipments, followed by Vietnam and China. Cow dung production is a viable and lucrative industry with a promising future.
So, if you’re considering exporting cow dung cake from India, consider it!
[Source: Cow Dung Export Data]
Non-Restricted/Low Compliance Goods:
Exports come with strict regulations and high compliance, which usually affects operations. Consider selecting products with fewer regulatory hurdles, like fashion accessories, home decor, and toys. This eventually reduces the legal issues and simplifies export and market placement.
India’s exports of toys have increased 239% over the last eight years to $326 million in 2022-23. After the PM called for a focus on the toy sector, an inter-ministerial committee devised action points to promote toy production and exports.
So, if you have a passion for toys, the government is ready to support it.
[Source: The Hindu Business Line]
Other factors to consider:
Other factors you should consider when choosing the right product for export from India.
Market Trends and Demand:
Finding a country with a sustainable demand for your product is essential when considering merchandise export. One must understand the production cost, process, raw material supply, and key supply chain intricacies of product origin and quality.
Analyzing factors like seasonality, demand fluctuations, and market trends helps gauge the international market’s product potential. Furthermore, considering the promotional opportunities, developmental strategies, production planning, and customer satisfaction can help exporters build trust and loyalty amongst its busters in the market, along with giving them a dynamic understanding of supply and demand to make better-informed decisions, mitigate risks, and capitalize in the international market.
Growth Potentials:
Understanding and evaluating the growth prospects for your export product ensures long-term success. It is important to consider future demand trends and potential market shifts to anticipate changes in customer preferences, advancements in technology, and emerging market trends and help identify new areas for expansion.
Furthermore, analyzing the competition from the local industries can help you diversify your market reach and open doors to exploring opportunities in neighbouring countries for long-term success and capitalization.
Product Effectiveness:
When selecting a product for export, it is important to analyze it with strong potential and financial rewards. Suppose you are considering exporting hand-made craft products from India. Before making any decision, conduct market research to understand the product’s susceptibility and analyze all expenses associated with exporting the product.
By prioritizing profitability and calculating financial analysis against the expected sale cost, one can determine the product’s viability and choose the export methods to offer the highest financial potential in the global market.
Existing Competition:
Competition is inevitable in the export business. Hence, it is essential to recognize the business within the geographical area you plan to export. To stand out in the competitive market and create a place for your product, highlight the USPs (Unique Selling Points), superior quality, competitive price, after-sales service, or a mix of these factors.
Competitor analysis is one way to help you position your product effectiveness in the export market and devise strategies to defeat stiff competition.
Trade Laws and Regulation:
Each market has its compliance requirements that exporters must adhere to. Hence, it is necessary to research the trade regulations of the chosen country to ensure compliance and avoid any issues or risks. This research includes identifying any past instances of restriction on similar products, taxes, and duties, the country’s trade relation with India, and other valuable insight into challenges and opportunities.
By doing so, exporters can easily navigate the regulatory landscape, mitigate risk, and maximize capitalization opportunities to successfully export business.
Planning export market strategy:
Another factor in choosing the right product for an export business is to select a country with consistent demand for the product. For example, exporting rice from India to a country where maize is more popular might not succeed. Therefore, one must understand the role demand consideration, target, market economy, and climate political play in the growth of one’s business.
This also helps one establish a strong foothold in the international market.
Additional Tips to Consider:
- The uniqueness of the product is directly proportional to the business’s success.
- To avoid competition, consider exporting a distinct and fresh product overseas.
- Select a product that increases your market horizons and ways to capitalize.
- Ensure the delivery of quality products to have better customer retention
Things to be cautious of:
- Avoid products with temporary popularity.
- Understand the Indian production standard and the overseas requirements to ensure the smooth export of your product.
- Have a backup source for your product to delay defaults in delivery.
Top 5 exported items from India:
- Leather and its products
- Petroleum products
- Gems and Jewellery
- Automobiles and Equipment
- Pharmaceutical Products
Final Thoughts
Choosing the right product to export . Prioritising quality, scalability, and market selection are equally necessary for long-term success in the international market.
With these tips, exporters can easily navigate the export market and set their businesses up for sustainable growth and success in global market ventures.
Follow us for more updates on export imports.
