I want to start my own business in India.
I want to start with trading (importing and selling) of non renewable energy products and services. I also want to represent some companies and their products as their dealers here in India.
So should I register myself as a PVT Ltd Co. with import export license, or should I exclusively register myself as a Trading PVT Ltd Co.? I am a little confused here as I would in future want to start providing my own products and services in this domain.
Please Advice. Thanks in Advance.
Answer: What I understand from your question is that you already have contact in foreign countries and to start with you want to sell their products in India. Well, Its a good idea. It is better you register your company as a private limited, and then you can obviously sell your own products under that entity.
You can go to the official Indian government site for more details about registration process. http://india.gov.in/howdo/otherservice_details.php?service=19
You will definitely need an import license from local authority to legally import goods from other countries.
Few points to keep in mind before you jump full-fledged…
- Do proper market research/survey to understand demand for products you are going to import.
- Understand profit margin in this field…
- Do study local competitors and their products
I am not sure about how you have setup finance and payments, but do proper study of overseas payments, there is something called “Credit Note”, which is very useful when you are importing products in India and require credit from seller.
Dollar rates to keep in Mind: As you are importing, every Rs.1 increase in dollar rates will directly affect your profit margin. There is something called “Hedging”, which protects you from fluctuation in currency rates. All these big companies like Infosys, Wipro etc does implement this.
Hedging simply means you fix the dollar rates, for e.g. Rs.50 per $1. Now even if it goes to Rs.55 you will get paid Rs50 and if it goes down to Rs.45 … you will still get Rs.50 per/USD.
Let me know if you have any more queries, You can use comment form below.