The Indian Government has made it a priority to ramp up domestic manufacturing and improve export competitiveness. According to a report by Bain and Company, India is expected to scale up its manufacturing exports to $1 trillion by FY28. With initiatives like AatmaNirbharBharat and Make in India, the Government has been leading the push for a self-reliant India and trying to foster and facilitate funding, innovation and production within the country. In addition, through the production-linked incentive or PLI scheme, which covers 14 sectors with a total allocation of $25 billion, the Government aims to give companies incentives to boost domestic production across multiple sectors and reduce India’s dependency on imports.
With a conducive and supportive environment at home, it has become important for exporters to leverage technology to expand their reach into international markets and grab a larger market share. Due to digitised trade services offered by banks and other partners, it has become easier for export businesses to expand operations and improve their market presence.
Here is a look at a few quick, effective digitised trade services to consider:
Setting up your export contract
Banking Partners- Online Transactions & LOC
Online Export Marketing
Managing Currency Risks.
Market research to explore potential export opportunities:
Looking for new export opportunities in international markets is key for an exporter to expand their business. It needs to begin with an online search of the key markets that one is interested in exploring.
It is always best to start small, understand the nuances of new international markets and then grow into that market. Find out the need and demand for the product that you are providing, narrow down your market and reach out to potential leads.
Today, exporters can use various online resources that provide in-depth insights on international economics, trade and investments. Exporters can use these resources/partners to monitor both domestic and international economic trends and analyse their impact on both foreign and domestic markets.
Setting up your export contract:
The process of applying for tenders and winning contracts has also migrated to the online space. Exporters can leverage various online platforms to apply for export contracts, including through the Government of India’s
portal and online portals run by governments of foreign countries for interested parties to apply for tenders and check their status.
Banking partner for online trade services:
Out of all the stages involved in the export process, taking care of the financial requirements is of utmost importance, as this is the foundation of any cross-border trade transaction. A bank with strong international presence is preferred as it builds trust between trade partners. Banks like
ICICI Bank, which offers a range of digitised trade services for importers and exporters,
facilitates online transactions in case of foreign trade so that unnecessary delays and payment risks can be avoided. EDPMS linked module e-DOCS on Trade Online (ICICI Bank’s online platform) helps exporters regularise their shipping bills quickly, without visiting the bank.
Letter of Credit
forms the backbone of international trade transactions. It is a secure method of guaranteeing payments. Through a Letter of Credit, the importing party’s bank makes a commitment to pay the agreed amount to the exporter seller within the stipulated time, subject to certain conditions.
ICICI Bank negotiates the export bills drawn under the Letter of Credit, if the documents are found to be credit compliant at very competitive rates, both in rupee as well as foreign currency, with world-class service standards. Negotiation under LC is much simpler than availing regular working capital limits from a bank.
E-commerce for wider reach:
Today e-commerce has become a necessity for business, if they want to ensure growth and continuity. E-commerce exports help businesses transcend boundaries and get access to a much larger pool of customers. With expanding digital access, the ability for sellers to manage fulfillment and complete transactions through a range of integrated logistics and payment on trusted open marketplaces that enable a frictionless experience is one of the key factors that is driving cross border e-commerce.
E-commerce exports provide a mechanism that reduces dependency on intermediaries and brings the business to as close to the consumers as possible. As recently as eight years ago, if an Indian business wanted to set up an exports business, they had to visit global trade fairs, book orders, figure out logistics and shipping and then wait for the payments to come in. Now all of this is achieved seamlessly online, thanks to e-commerce.
Having a digital presence is important for a business to put down an effective export marketing plan. By making use of a digital marketing strategy, one is able to communicate efficiently with potential customers and customise the products and services as per the needs/feedback of the market. An export marketing plan enables businesses to create a structured design to sell its products overseas without much inconvenience.
Currency risk is an important factor that needs to be taken into account for any business engaged in international trade. This is because exchange rates can impact your business. For example, importers may want to pay you in their own currency and by the time you get the payment, the value of that currency could have depreciated, which could hurt your profits.
It is important to have a partner who can write a Forward Contract for your business to hedge these risks and protect your business. Forward Contracts make sure that you will profit from the contract if there is an unfavourable movement in the currency, which you are getting paid in.
Through its fully integrated services and state-of-the-art dealing rooms to manage exporters’ forex exposure,
ICICI Bank offers exporters a range of services to manage their forex and currency risk,
, including competitive pricing, dedicated professional relationship manager, wide network of corresponding partners and faster receipt of payments.
Due to technology, geographical boundaries have been obliterated, the world has become smaller and cross-border trade opportunities have increased manifold. However, to be able to expand and reach customers in foreign markets, making use of digitised services is crucial. From researching about the potential market, effectively communicating with the target audience to carrying out payments and availing export finance, exporters can now tap a range of digitised trade services such as those offered by
banks like ICICI Bank
, to expand their export business and reduce the risks associated with cross-border trade.