Export Tips for Indian SMEs: 12 Practical Lessons from 88 Years of Customs & Freight Experience

Exporting out of India rewards patience and punishes shortcuts. Whether you\'re shipping your first container or your hundredth, the same traps keep catching SMEs: wrong HS codes, missed scheme benefits, misunderstood Incoterms, and Letters of Credit that look valid until the bank calls a discrepancy.

Here are 12 practical export tips distilled from 88 years of Dhanraj & Sons\' customs and freight practice — focused on what actually saves Indian SME exporters money and late-night phone calls.

1. Get your IEC before you take the order, not after

The Importer Exporter Code (IEC) from DGFT is non-negotiable for any commercial export. It takes 1–3 working days online, but orders evaporate faster. Apply the moment you start negotiations, not when the buyer asks for a Proforma.

2. File a LUT if you want GST-free exports

Most exporters should file a Letter of Undertaking (LUT) on the GST portal at the start of each financial year. It lets you export without paying IGST upfront, instead of the cash-flow-heavy IGST-and-refund route. It\'s free and takes 10 minutes — skip it and you\'ll tie up working capital for 3–6 months while you wait for refunds.

3. Classify your HS code like a lawyer would

HS code classification is the foundation of everything — duty, scheme eligibility, FTA benefits, prohibitions. Small errors compound: a wrong first-6-digit classification can cost you the difference between 0% and 18% duty in the destination country, or disqualify you from RODTEP. When in doubt, pull an Advance Ruling from CBIC rather than guess.

4. Claim RODTEP and RoSCTL on every eligible shipment

The Remission of Duties and Taxes on Exported Products (RODTEP) scheme automatically credits 0.5% to 4.3% of FOB value to your ledger — but only if you correctly flag the claim on the Shipping Bill. Many SMEs miss this because their forwarder didn\'t tick the right box. Confirm with your CHA shipment-by-shipment.

5. Use FTA Certificates of Origin to unlock duty savings for your buyer

India has Free Trade Agreements with ASEAN, UAE, Australia, Japan, Korea, Mauritius and others. A properly issued Form AI / Form I / Form CEPA certificate can take the buyer\'s import duty from 15% to 0% — making your offer instantly more competitive than a non-FTA supplier. The cost to issue one? A few hundred rupees through your Chamber of Commerce.

6. Pick your Incoterm like it matters — because it does

FOB, CIF, CFR, DAP and DDP all shift cost and risk differently. A common SME mistake is quoting DDP (Delivered Duty Paid) to a European buyer without understanding you\'re now liable for destination duty, VAT registration, and customs clearance in a country you\'ve never visited. Default to FOB or CIF for your first decade of exports unless you\'ve specifically priced the DDP risk.

7. Read every Letter of Credit twice before shipping

LC discrepancies are the single biggest avoidable cause of non-payment. Typical issues: dates off by one day, Incoterm mismatch, Bill of Lading endorsement wrong, insurance certificate missing a clause. Always review the LC against your capability before accepting it — not after the cargo sails.

8. Insure the cargo, even when the Incoterm doesn\'t require it

Marine insurance costs 0.1–0.4% of cargo value. A single container loss without insurance can wipe out the profit on 100 previous shipments. Under FOB, it\'s technically the buyer\'s risk — but if your buyer refuses shipment over damage, you\'re back to square one.

9. Budget for demurrage and detention — then avoid them

Every hour a container sits at port after free days expire adds to your landed cost. Sync your documentation timelines (Shipping Bill, SDF, EGM) with the shipping line\'s cut-off and your trailer availability. A good CHA earns their fee by preventing a single demurrage event.

10. Keep AD Code and Bank Realisation files spotless

Your Authorised Dealer (AD) bank code must be registered at every port you export through. Export realisations must be reconciled in EDPMS within 9 months. Miss either and you lose scheme benefits, face DGFT action, and risk DGFT caution-listing.

11. Apply for EPCG / Advance Authorisation for duty-free imports of inputs

If you import raw materials or capital goods to produce exports, schemes like EPCG and Advance Authorisation let you import duty-free against an export obligation. Underutilised by SMEs because the compliance (EODC closure, bond management) looks scary — but the duty savings almost always justify the admin cost.

12. Build a relationship with one capable customs broker, not five rate-shoppers

Customs clearing is relationship-driven. Brokers who\'ve worked with the same appraising officers for 20 years will get your shipment examined and released faster than a cheaper newcomer with no standing. Measure your CHA on clearance turnaround, query resolution time and proactive advice — not just on per-shipment fee.

Bonus: build an export compliance calendar

Most of the pain above comes from missed deadlines — LUT renewal, AD code refresh, EODC closure, RODTEP claim windows, RBI realisation, GST refund filing. Put them on a single calendar at the start of every financial year and review monthly.

Ready to export smarter?

Dhanraj & Sons has been helping Indian exporters navigate customs, freight and compliance since 1938. If you\'re new to exporting — or have been exporting for years and suspect you\'re leaving scheme benefits on the table — talk to our team for a no-obligation review of your current process.