Type Of Exporters In The Global Trade And The Important Role They Play
Moving goods from a domestic country to overseas buyers is a process of export and it is done by types of exporters in India
Type of export houses sell various goods to overseas buyers and get foreign currencies to India. Types of exporters boost India export and strengthen the Indian economy.
Global Trade And Exports
The globe has become a single trading hub due to advanced transportation. Merchants and traders import and export goods through various means. They rely on airplanes, ships, rail, and roadways to carry out trade.
International borders act as a barrier, but trade transcends these obstacles. It is one of the major contributors to any country’s gross domestic product (GDP). And export happens when goods and services produced in one country are sold in another nation. The foreign buyer is called an importer, while the seller of such goods and services is called an exporter.
The most popular goods exported are rice, textile, oil, vehicles, and computers. Manufactured items, aircraft, weapons, food, and chemicals are also actively sold overseas. Some exporters also deal in computers, electronics, and live animals. China, USA, Germany, and Japan are the global leaders in the trade. Their foreign exports’ value ranges between US$738 billion to US$2.5 trillion.
The Role Of Exporters
Let us discuss how many Types of Exporter in India fulfill the export demand and its requirement.
An exporter sells goods and services in an overseas market. This trading activity brings money into the country’s economy. The exporting nation’s GDP increases and it achieves a better standard of living and economy. However, the net GDP is calculated after subtracting the imports to the country.
- The large exporters contribute to 50% of the total global GDP.
- They also contribute to a total of 30% of the global trade.
- Exporters follow rules and regulations to abide by the law.
- They try to make products cheaper for global consumers.
- Exporters also strive to strengthen intellectual property rights.
Types Of Exporters
There are different types of exporters based on the business model. The differences also extend to licenses, distribution channels, and legal considerations. The following exporters create success stories through their innovation, investments, and insightful natu
- Manufacturer cum Exporter
Large businesses and organizations participate in this trade. They manufacture export-quality goods to sell abroad. They also procure and process raw materials into finished goods. Normally, they don’t depend on intermediaries or middlemen to export.
Manufacturing and then exporting has a huge risk involved as it requires huge investment and capital to start manufacturing. There would be a limited option to switch from one business to another if the product does not work or the demand for the product being manufactured drops.
- Merchant Exporter
These exporters are primarily smaller, specialized organizations. They act as middlemen between manufacturers and foreign buyers. They procure orders directly or indirectly through their agencies. They adopt a strategy that focuses on risk reduction and profit maximization.
My company works as merchant exporter. We export a lot of machinery and equipment by procuring from the reputed and branded multinational manufacturing companies.
Unlike the manufacturer cum exporter, the merchant exporter has a free hand to switch from one product to another if the existing product does not work or the demand for the product in exporting countries becomes less.
The merchant exporting will be the first option if you are planning to jump in the field of exporting the world.
- Service Exporter
The service exporter specializes in non-physical or intangible products. He usually operates a company that delivers services to a foreign client. As a result, the country of his residence benefits immensely. Some well know services include software, healthcare, hotels, and consultancy businesses. The foreign client can be a full-fledged company or a single person.
- Deemed Exporter
Deemed exporters do not participate in a trade like regular exporters. Their operations involve a special category of goods called deemed exports. In such transactions, the goods supplied do not leave the country of origin. While payments made for the supplies are done in native currency or free foreign exchange. Some deemed exporters act as middlemen and sell to foreign customers.
My Company is the direct exporter and it acts as deemed exporter some time while supplying goods meant for export to its associate companies.
In this case, we buy the goods on the local GST billing and sell it to the company that exports to its overseas client.
This is worth mention that the direct exporting receives all the export benefit the Indian government provides but the deemed export is not eligible to receive export incentives and other export benefits.
A deemed export is just a kind of local sale and purchases business activities and no export benefit would be availed.
- Project Exporter
The globe has become an inter-connected place due to technology. Some exporters exploit this reality by undertaking overseas projects. They recruit and deploy personnel to work for a foreign client. These exporters are subject to national, regional, and international laws and acts.
Global Business Value
Some of the global organizations which oversee regulations are WTO, NAFTA, CAFTA-DR, GEE, etc,. GEE or the global economic system is a social network that facilitates international sales. Export to different countries is not as risky as before. So the various exporters add value to their industry.
- All the exporters undertake global-level risk to carry out trade. They rely on assistance to overcome trade barriers and achieve profits.
- International sales have become safe, secure, and efficient. Streamlined global finances and banking ensure reliable payment methods – both online and offline!
- Small and medium-sized companies cater to domestic markets and they may expand into global markets to meet the export demand.
- A large number of goods and services find global acceptance. Therefore, even small, mid-sized companies can safely export their products.
- Global trade overcomes cultural and linguistic barriers. Interpreters and the English language act as an effective conduit between the exporter and the foreign buyer.
Take away from this blog is to start exporting as merchant exporter so that you could start with the small budget and experiment. If any turbulence of slowing down the chosen export occurs, you would change the export product easily with marginal cost to spend.
Direct exporting to avail export benefits is recommended. Avoid manufacturing in the initial days of exporting. A deemed export is for a time when you are not able to do the direct export?
Keep the deemed export as last option
If you like this blog, please comment and share it on Facebook, LinkedIn, Twitter, and other social media with your family and friends so that maximum people get benefited from this blog.