Why Exporting from India can be challenging

The Indian export industry has boomed over the past few years. In March 2022, the Indian Ministry of Commerce and Industry reported that the country's exports had peaked at $400 billion. This was a significant milestone, as the Indian government has implemented strategic policies to boost the country's export volumes. On all fronts, the achievement indicated that India had become an active player in the global market. However, the recent $400 billion milestone does not tell the whole story. 

While the Indian export industry has recorded impressive numbers in recent years, Indian exporters still face some challenges during the export process. This article discusses the challenges Indian exporters experience and how to solve them. 

Significant Challenges in India's Export Sector

1. Limited Access to Credit

Access to credit means access to loans. Therefore, financial assistance is at the core of the export business. Without the requisite finance, most exporters cannot create competitive products or expand their businesses. However, access to credit has consistently posed a problem for Indian exporters. Realizing this challenge, the Indian government launched initiatives to provide exporters with financial assistance, but the challenge still exists. The persistence of the problem is primarily tied to the following factors: 

1. Inadequate Publicity: There is not enough publicity about the existing financial incentives for exporters in India. This lack of awareness is why banks generally have a low patronage rate for the schemes created specifically for exporters. 


2. High Costs: Even when exporters are aware of incentives, the cost of obtaining financial assistance can be relatively high. Many exporters have to pay high-interest rates that they can hardly afford. This causes exporters to avoid borrowing loans altogether.  
3. Lack of Collateral: Most small businesses mainly export on a relatively small scale. This means they do not possess the same assets as more prominent exporters. Thus, financial institutions are often more reluctant to provide loans since many small exporters rarely have adequate collateral.

2. Need for additional infrastructure

While the Indian government has increased infrastructural investment in recent years, some gaps still exist. Many Indian sectors still experience infrastructural problems. According to the Observer Research Foundation (ORF), India's population growth has significantly strained its inadequate infrastructure. This infrastructure problem manifests in many forms. First, India's ports are congested. For instance, the Nhava Sheva port is reputed for its congestion. According to reports, truck congestion in the port often extends as far as 10 kilometers. This problem places a lag on the swift exportation of products. Another infrastructure problem is the inadequate road network. According to The Conversation, road maintenance is insufficient in India, and roads are often congested. Also, only 3% of India's roads are national highways. This situation severely impacts the smooth movement of goods across the country, especially for exporters that need to move export products to the ports. 

3. Complex Export Processes:

While there is no doubt that the government needs to implement measures to protect exports and ensure due diligence, the Indian export process can be inconvenient. It requires numerous documents at virtually every stage of the export process. These processes can not only get confusing but also discourage exporters from exporting. 

4. Limited Training

Export processes differ across countries. For example, the US requires specific standards before exports are allowed into the country. Export goods, particularly food products, are also inspected to determine their suitability for the US market. However, some Indian exporters are not aware of these processes. This situation often leads to few cases where Indian exports are rejected in foreign markets. For instance, according to a report by Live Mint, some foreign markets declined Indian tea and wheat exports earlier this year. The rejection was due to their inability to fulfill phytosanitary standards. 

Solving the Challenges: Actions of the Indian Government 

As mentioned earlier, India has some export challenges. The Indian government understands these challenges, and it has increased efforts to eliminate many of them. The following are some of the policies implemented by the Indian government to reduce export challenges:

• Infrastructural Investment

For India to overcome its infrastructural gaps, large-scale investment is needed. But, more importantly, infrastructural projects like rail development, road maintenance, and port upgrades will ease the export process. In realization of this, the Indian government has invested heavily in infrastructure. For example, the government has recently initiated over ten high-speed rail projects.

• Digitization

India's ports are sometimes congested. This congestion is mainly due to the widespread manual processes. For example, trucks are queued at ports to resolve issues that authorities can quickly settle online. More so, congestion lines will move quicker if they can conclude processes swiftly. Thus, Digitization is needed to decongest port lines. Automating port procedures will help port activities move quicker. The Indian government has increased efforts to digitize port operations. For instance, the Jawaharlal Nehru Port Trust recently launched an app to reduce port traffic. The port has also released an e-wallet to digitize duty payments. 

• Sensitization

Most of India's export challenges relate to low publicity of beneficial schemes. To solve this problem, the Indian government has been creating workshops to educate exporters on n foreign markets' financial incentives and import standards. This is expected to encourage exporters to take advantage of government-sponsored opportunities. For example, the Bombay Chamber of Commerce recently conducted a workshop to educate exporters on customs procedures and export incentives. 

India has significantly progressed concerning its exports. However, there is room for improvement.  There is an expectation that the government’s policies will catalyze this improvement. However, while most of the solutions depend on the government's actions, exporters can also take measures to make the export process less challenging. One of such is utilizing an e-commerce export-import marketplace. A B2B e-commerce export platform like Doocan provides logistics assistance to exporters. It also connects Indian exporters to US markets by facilitating the export process. This platform takes a significant burden off exporters' shoulders.