19 Sep 2018Posted By: Mudit Handa

How to set up Business in Export of Automobile Parts from India

Undeniably, a unique Import Export Code is a key to access the global market where you can truly find a plethora of lucrative opportunities in the name of your business.

As we all know, the export promotion has been the key drive of the Indian government ever since independence. In the recent years, the trade & commerce authorities have undertaken numerous initiatives and schemes in order to shore up the exports from India. All exim trade corporations across India can easily access those schemes with a unique Import Export Code registration.


#1. How about exporting Automobile equipment?

No doubt, it can be truly a great idea to begin your venture in exporting of genuine Automobile spare parts. As a matter of fact, Automobile equipment ranks 8th in the list of top 10 largest exports from India, with the total value of exports amounting to $4.4 billion (₹318.5 billion). If you can really excel in the export of Automobile spare parts & accessories, it can be an opportunity for life.


#2. How to begin export-business in Automobile equipment?

Given below are the steps to begin export trade in automotive spare parts:

  1. Incorporation: To start a venture in the export of automobile parts, you first need to establish your entity as a sole proprietary firm, partnership firm or through a company formation. Evidently, you must select a catchy name for your venture.
  2. Opening bank account: Next is to open a bank account in your business name with a bank authorised to deal in forex.
  3. PAN registration: Every exporter needs to obtain a PAN card in the business name. For this, you need to go for PAN registration.
  4. GST registration: obviously, an exporter is required to have a valid tax registration. And for that, you definitely need a GST registration.
  5. IEC registration: Here comes the most integral part, i.e. the IEC registration process. Undeniably, an Import Export Code is the key to launch your product in the global market.
  6. Certificate of origin: this document that validates the origin of the goods imported in any country.
  7. Market identification: Next you need to find the best market for your product. In case of auto parts, this will depend upon which vehicle parts you wish to export and from which company. Broadly, Germany, US, Japan, China and South Korea are among the best avenues for auto parts exports.
  8. Technical conformities: Of course! You need to be prepared with the required Technical benchmarks and regulations for your auto parts. For instance, ISO certification 16949 is necessary if you are engaged in the automotive industry.


#3. How to deal with the importers?

The next stage is of dealing with your buyer. This should be undertaken cautiously. You have to begin with the process of pricing & costing. Following parameters are to be considered while costing-

  • Manufacturing cost
  • Packaging cost (individual & bulk)
  • Financing cost
  • Promotional expenses
  • Documentation & legal expenses
  • Transportation & freight
  • Taxes & custom duties

The pricing will be done by adding your profit margin to these costs.

Know the of your product. 

#4. What is the rate of import duties on Automobile spare parts in India?

The import duties prevalent in India on Automotive spare parts are as below-

  • Basic Customs Duty: 10%
  • Countervailing Duty (CVD): 12%
  • Special CVD: 4%

With that, you can easily begin your exports in the field of Automotive equipment.


In case you need any guidance on online IEC Registration, feel free to contact us at 8881-069-069.


Posted By Johny Varghese
Posted Date 2018-09-20 10:23:55

So it's 26% import duty for auto parts. For a product of ₹ 100 it will be ₹ 126 . Again have to pay GST for sales.

Posted By Mudit Handa
Posted Date 2018-09-20 15:41:49

Exactly Mr. Varghese. However, you need not pay IGST on exports if you file an LUT.

Posted By Mudit Handa
Posted Date 2018-09-20 15:45:26

Additionally, you need to consider the import duty only if your intent is the import of Automotive equipment.

Posted Date 2020-02-10 10:36:23

is there any export duties for exporting cars ??

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