Title - How must one select a market for exports using Import Export Data?

 

The most crucial decisions in foreign trade are market selections. Scanning the global market, which consists of more than 200 independent nations, each carrying its own distinctive characteristics, is quite vast to choose from for trade, especially when considering import export data. For any company, it is challenging to establish operations in all markets. There are numerous challenges that might hinder entry into a particular market, and these challenges can be identified and assessed through careful analysis of Import export data.

Important factors that need to be considered in any export market selection process in import export business are:

·         Political embargo

There are several countries that have a political embargo, especially on exports. These countries should be excluded from your list of potential trade markets. For instance, there are certain restrictions on the export of certain goods or services from India to a few foreign countries. Similarly, there are countries that do not allow the import of certain goods or services from certain countries.

 

·         Special requirements

Each and every market is different with different set of rules and restrictions. In terms of goods or services, the specifications, quality, and price may demand a special requirement from the said country. For instance, a particular product or service may have niche in some market may not necessarily have the same a niche in another market in another part of the world. Buying decisions, behaviors and attitudes change from region to region. One must keep this point in mind during the market selection process.

 

·         Product Specification

Product specification demands differ from market to market. For instance, talking about electrical goods, each country specifies a different voltage. Electrical goods in India require 220 voltage power while a few countries demand 110 voltage. An Indian exporter must avoid exporting to such markets where the product specification is different from the standard ones. This also happens when the cost of product and its adaptation may be very high.

·         Remote locations

International countries or markets that are remotely situated with no little access to shipping services make it all the more difficult for delivery schedules. This also makes goods or services uncompetitive because of freight charges which will cost more. Therefore, distance must be kept in mind while choosing international trade markets.

·         Market accessibility

Due to various import rules and regulations, certain international markets are less accessible compared to other international markets. Also keep in mind, Indian goods or services may not receive preferential treatment under the MFN (Most Favoured Nation) clause. There also could be restrictions on remittances and convertibility of foreign exchange rate in some countries. It is always advisable to avoid these markets as they prove to be less friendly in terms of international trade.

·         Business Community

In a lot of countries, there is a section of the society that is the business community. These business communities comprise of Indians, Pakistanis, Sri Lankans, Bangladeshis etc. These sections are most comfortable and familiar with trade practices in India. Countries where these sections exist is easier for an Indian to do business as they are more receptive in most aspects and also the communication barrier is lowered due to familiarity. It is therefore easier and advisable to explore such markets, especially for a beginner.  

·         Preferential Treatment

As understood, certain markets are difficult to crack, while some countries also prefer goods and services from certain developing countries. For instance, USA, Australia, EU etc. have a scheme of Generalised System of Preferences (GSP) for imports from developing countries like us. Such countries can be considered for immediate exporting.