Deciding where to export

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Bikky Khosla | 29 Oct, 2013
Where should I export? It's one of the trickiest questions that puzzles new exporters. After deciding the risks and benefits involved in export business, this is another critical decision an exporter has to take. When I discuss on how they decide which country to sell their products, many small exporters view that looking at many a market at a time is difficult, so the best way to start with is examining only one or two potential markets.

This is a simple and safe approach, but I think there are some other key factors that must be considered carefully by small exporters, particularly those who are new to exporting, to ensure picking up of a safe and promising market at initial exploration.

Political embargo, for example, is one such factor. Our government does not permit exports of some specific goods to some countries and similarly some countries do not allow import of some specific items from us. So such countries should be straight away be excluded from the list of target markets. In a similar way, some markets are comparatively less accessible in terms of import regulations and tariffs, or there might be restrictions on remittances and convertibility of currency.

Contrary to this, countries with which free trade agreements were signed may offer potential opportunities to exporters in terms of lowered tariff and non-tariff barriers. In addition, some countries and regions accord preferential treatment to products from developing countries like India. The European Union, Common Market countries, Australia, USA, etc. are some countries that instituted Generalized System of Preferences (GSP) for imports. Such countries may be chosen for immediate exploitation for export.

Similarly, distance is another point that should be taken into consideration. Markets which are comparatively distant involve higher freight. In addition, longer distance makes it difficult to adhere to delivery schedules and maintain a regular supply line. This is why new exporters should concentrate on neighbouring countries at the initial stages instead of trying to secure a foothold in long-distance markets.

It is also important to consider product specification requirements. In other words, countries or regions that are very strict on requirements in terms of product specifications may be overlooked by new exporters. In addition, countries where the business community comprises Indians, Bangladeshis, Sri Lankans, Pakistanis, etc. are more easily explorable as they are more receptive to Indian goods.

I invite readers' feedback. Your suggestions will help novice exporters choose their export market.