Challenges of Exporting from India: B2C Insights

The Indian government often emphasises enhancements in the “ease of doing business,” yet a discontented entrepreneur’s recent Reddit entry forcefully contested this perspective, revealing the burdensome bureaucracy tied to exporting directly to global clients (B2C exports).

Ease of Doing Business vs Reality

In a post titled “Why You Should Not Try Exporting from India Vent & Rant,” Reddit user Limp-Question-4778 recounted his four-year struggle, asserting that “All the talk of ease of doing business is just talk and no walk. You are better off moving to Dubai and exporting from there than from India.”

The entrepreneur hails from a small Indian village and initially thrived in the domestic market, processing between 300 and 400 orders each day. His challenges emerged when international clients showed interest in 2022. The convoluted requirements he encountered included securing an IEC Certificate, registering on ICEGATE, obtaining an AD code from the bank, and mandatory shipping via licensed couriers—tasks he labelled as “nonsensical for a $30 export.”

Punished by GST Twice for a Rejected Shipment

The situation took a turn for the worse when a customer declined a shipment, leading the Indian government to impose GST charges twice—first for the outgoing shipment and again for its return. The entrepreneur highlighted this, stating that “We had to pay GST TWICE on a shipment on which we did not earn a penny,” underlining how punitive regulations impact small enterprises.

Further issues arose from a document known as CSB 5, a compulsory shipping bill exporters must keep. Due to inadequate integration between Customs, GST, and RBI systems, he discovered in 2024 around ₹50 lakh worth of “open” shipping bills. The cost to close each bill was ₹400, ultimately amounting to ₹8 lakh—approximately 16% of his revenue. Struggling to meet the stringent deadline, the RBI classified his account as non-compliant, freezing it and effectively halting his export business.

Silence from Authorities Despite Repeated Appeals

Despite multiple outreach attempts for support from regulatory agencies, he received no response. The entrepreneur reached out numerous times to the RBI and even submitted detailed diagrams explaining his circumstances to the office of Commerce Minister Piyush Goyal—only to be met with silence.

ITC Claims Trigger Bureaucratic Nightmares

Small businesses commonly shy away from claiming Input Tax Credit (ITC) out of fear of inciting a GST audit and ensuing harassment. The entrepreneur expressed his frustration, stating, “We honestly don’t have the funds, people or stamina to deal with one more bureaucratic nightmare.”

India vs UK: A Stark Comparison

Illustrating India’s bureaucratic absurdities, he compared his experience establishing a UK-based business remotely: “I can set up a UK-based company & bank account in 2 days… sitting in India, I can’t set up a company in 2 months despite bribes.”

He also regretted the lost job opportunities for over 50 rural women whose lives had been positively impacted by his business. The forced closure due to bureaucratic challenges led these workers back to their previous struggles.