Sourcing from India: Finding the right supplier

This article is an excerpt from Sourcing From: India, a series of reports that provides buyers sourcing information from alternative manufacturing hubs in Asia. 

The Sourcing From series is produced by the Hinrich Foundation, a development organization that aims to promote sustainable global trade by, among others, helping create jobs in emerging Asia. It also produces industry-specific sourcing reports through Online Developing Country Sourcing.

The export industry in India is dominated by small-scale manufacturers. As such, importing from the country is a complex process so getting goods from suppliers on time, at the right quality and in exact quantity requires adept negotiating skills and in-depth knowledge of relevant industries.

Buyers' searches should go beyond the basic objective of finding the product they need. A more important task is to find the best possible supplier or at the very least a knowledgeable and well-experienced guide, who has already extensively dealt with foreign buyers and is familiar with every step of the exporting process.

Federation of Indian Export Organizations

The Federation of Indian Export Organizations (FIEO), established in 1965, is the major body supporting most exporting organizations and institutions. It also functions as a primary servicing agency providing integrated assistance to government-recognized export houses and acts as a central coordinating agency promoting consulting service in India. FIEO directly and indirectly serves the interests of over 100,000 exporters in the country who contribute more than 70 percent of India’s exports.

Export Promotion Councils

These councils act as middlemen for Indian manufacturers and foreign buyers. They are industry-specific rather than general export promoters. As front-line organizations aimed at promoting exports, these councils offer well-designed and eye-catching public relations materials, which contain useful information on products related to their respective group.

At present there are 14 Export Promotion Councils under the administrative control of the Department of Commerce. Each council is in charge of promoting an industry or product group. The role of these councils varies, but generally they are a good starting point for getting information on a specific industry and for directing foreign buyers to manufacturers.

Trading houses & export houses

Companies with good track records of overseas sales are granted the status of export house by the FIEO. A trading house is an even higher status conferred on companies with considerable foreign exchange earnings. A level above trading house is "star trading house" and even "super star trading house".

The distinct advantage to the buyer, particularly first-timers, in working with these companies is that trading houses are experienced in every aspect of the exporting process. For a buyer nervous about his first purchase from India, a trading house is the best option available. It can be used on a long-term basis and can take responsibility for the whole package, from order to delivery.

In addition to ensuring the reliability of suppliers, these companies can overcome the obstacles inherent in the current Indian export scene, bureaucratic delays, poor transportation, substandard quality and petty corruption. With a well-established pattern and its own employees at the factory and port monitoring the shipment, the trading house ensures that the buyer is in good hands.

Chambers of Commerce

Given the size of the Indian economy, other industry-related bodies are playing active roles in promoting exports and linking up prospective foreign buyers with local manufactures. The two major all-India chambers of commerce are the Associated Chambers of Commerce and Industry (ASSOCHAM) and the Federation of Indian Chambers of Commerce and Industry (FICCI). They conduct market surveys, arrange overseas trade missions, buyer-seller meetings, and publish regular information for manufacturers and buyers alike.

Established in 1920, ASSOCHAM is the oldest national central organization of chambers of commerce in India. With corporate headquarters in New Delhi, ASSOCHAM has more than 450,000 members across India and 60 expert committees in fields including information technology, biotechnology, telecom, banking and finance, tourism, corporate finance, legal reforms, education and infrastructure.

Spearheading the cause of Indian business interests, FICCI is a nongovernment, not-for-profit organization with a nationwide network of regional, state and local chambers of commerce, industry and trade associations, professional institutions, corporate bodies and private firms and institutions. FICCI has an indirect membership over 250,000 small, medium and large-scale businesses.

Trade associations

A number of trade associations in India sponsor similar activities for their members. One of the most influential is the Confederation of Indian Industry. CII is a national industry association serving and representing companies in the public and private industries. It has 64 offices in India which include nine Centers of Excellence, and seven overseas offices in Australia, Egypt, China, France, Singapore, UK and the US.

CII has over 7,000 members from both private and public sectors. Buyers can contact suppliers and evaluate goods before coming to India through its overseas offices.

Trade publications

Trade journals are some of the most effective ways of locating the right supplier. The number of such publications is on the rise, providing global buyers the most important and updated information over a wide range of consumer products made in Asia.

Various local publications are also available in India. Magazines, such as Business India, Business World, Commerce Weekly, and Fortune India provide useful background, commentary and production data that all interested foreign buyers can use to look for the most appropriate supplier. Economically oriented daily newspapers, including the Financial Express and the Economic Times, can also be of assistance to suppliers.

Organizations engaged in export promotion (export promotion councils, industry associations, chambers of commerce, etc.) also publish periodic newsletters and magazines. These cover a range of topics from general analysis of the India’s economy to market research for specific goods and services.

Using an Agent

Some buyers choose to employ and agent to do the initial market research required to get the needed products. Getting an agent can be the best option for buyers not wanting to spend much time doing background research and following up orders. With its large pool of MBAs and other professionals, India can provide skilled people to take care of business interests, for considerably less than what many Western suppliers would pay for equivalent skills in their home countries.

Embassies

Indian Embassies in various countries are also commissioned to promote Indian export opportunities.

India sourcing reports

Learn more about specific industries in India, view sample products and find reliable suppliers to source from in our available sourcing reports below.