transporting, etc.

Normally Banks give 75% to 90% advances of the value of the order
keeping the balance as margin. Banks adjust the packing credit advance from the
proceeds of export bills negotiated, purchased or discounted.

Post Shipment finance is given to exporters normally upto 90% of the Invoice
value for normal transit period and in cases of issuance export bills up to notional due
date. The maximum period for post-shipment advances is 180 days from the date of
shipment. Advances granted by Banks are adjusted by realization of the sale proceeds
of the export bills. In case export bill becomes overdue Banks will charge commercial
lending rate of interest.

v. Labelling, Packaging, Packing and Marking:

The export goods should be labelled, packaged and packed strictly as per the
buyer’s specific instructions. Good packaging delivers and presents the goods in top
condition and in attractive way. Similarly, good packing helps easy handling,
maximum loading, reducing shipping costs and to ensuring safety and standard of the
cargo. Marking such as address, package number, port and place of destination,
weight, handling instructions, etc. provides identification and information of cargo
packed.

PACKAGING

Introduction:

An important stage after manufacturing of goods or their procurement is their

preparation for shipment which involves packaging and labelling of goods to be
exported. Proper packaging and labelling not only makes the final product look
attractive but also save a huge amount of money by saving the product from wrong
handling the export process.

It is essential for exporters to keep four potential problems in mind when

designing a shipping crate for international shipping: breakage, moisture, leakage,
pilferage, and excessive weight. Exporters should take into account the demands of
international shipping when designing their export shipping crates.

Packaging:

The primary role of packaging is to contain, protect and preserve a product as

well as aid in its handling and final presentation. Packaging also refers to the process
of design, evaluation, and production of packages. The packaging can be done within
the export company or the job can be assigned to an outside packaging company.
Packaging provides following benefits to the goods to be exported:

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  Physical Protection – Packaging provides protection against shock, vibration,
temperature, moisture and dust.
 Containment or agglomeration – Packaging provides agglomeration of small
objects into one package for reason of efficiency and cost factor. For example it
is better to put 1000 pencils in one box rather than putting each pencil in
separate 1000 boxes.
 Marketing: Proper and attractive packaging play an important role in
encouraging a potential buyer.
 Convenience - Packages can have features which add convenience in
distribution, handling, display, sale, opening, use, and reuse.
 Security - Packaging can play an important role in reducing the security risks
of shipment. It also provides authentication seals to indicate that the package
and contents are not counterfeit. Packages also can include anti-theft devices,
such as dye-packs, RFID tags, or electronic article surveillance tags, that can be
activated or detected by devices at exit points and require specialized tools to
deactivate. Using packaging in this way is a means of loss prevention.

Types of Packaging-

1 Boxes and Crates-

Boxes for packaging are solid and covered on all sides so that items remain
secure. On the other hand, crates typically have their sides open, but their tops and
bottoms solid.

2 Paperboard boxes-

To produce it, fibrous materials from wood or recycled waste paper are turned
into pulp and then bleached. There are several grades of cardboard packaging, each of
which is suitable for different packaging requirements. It is lightweight yet strong.

3 Corrugated boxes-

It is commonly known as cardboard boxes. There are also different types of

corrugated boxes depending on their durability and strength.

4 Plastic boxes-

It is important to use airtight plastic packaging containers in order to

preserve food quality and eliminate contamination. Additionally, plastic packaging
does not break easily and can be stored with food in extreme conditions.

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5 Clipboard packaging-

Chipboard packaging is a cost-effective packaging option for products from

industries such as electronics, medical, food, beverages, and cosmetic. Chipboard is
made of reclaimed paper stock and can easily be cut, folded, and formed.
6 Poly bag –

This is one of the most common types of packaging and it can contain various
products including food, flowers, waste, chemicals, magazines, etc. It is structurally
simple to make poly bags, making it possible to completely customize the design, style,
and size, but remain cost-effective. In addition, poly bags can also be recycled,
depending on the construction. Poly bags are durable yet lightweight, flexible and
reusable.
7 Bottles and Jars-

Bottles and jars offer outstanding product protection when they are stacked
or transported. They come in a variety of materials, including: Glass, Plastic, Tin and
Ceramic. You can find high-quality containers for essential oils, candles, food, etc.
Generally, packaging refers to the act of wrapping or bottling products to
make them safe from damage during transportation and storage. It keeps a product
safe and marketable while also identifying, describing, and promoting it. Packaging
also creates a preference for a product.

Labelling:
Like packaging, labelling should also be done with extra care. It is also
important for an exporter to be familiar with all kinds of sign and symbols and should
also maintain all the nationally and internationally standards while using these
symbols. Labelling should be in English, and words indicating country of origin should
be as large and as prominent as any other English wording on the package or label.

Labelling on product provides the following important information:

 Shipper's mark
 Country of origin
 Weight marking (in pounds and in kilograms)
 Number of packages and size of cases (in inches and centimetres)
 Handling marks (international pictorial symbols)
 Cautionary markings, such as "This Side Up."
 Port of entry
 Labels for hazardous materials

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 Labelling of a product also provides information like how to use, transport,
recycle, or dispose of the package or product. With pharmaceuticals, food, medical,
and chemical products, some types of information are required by governments.
It is better to choose a fast dyes for labelling purpose. Only fast dyes should
be used for labelling. Essential data should be in black and subsidiary data in a less
conspicuous colour; red and orange and so on. For food packed in sacks, only
harmless dyes should be employed, and the dye should not come through the packing
in such a way as to affect the goods.

vi. Insurance:

Marine insurance policies cover risks of loss or damage to the goods during
the while the goods are in transit. Generally in CIF contract the exporters arrange the
insurance whereas for C&F and FOB contract the buyers obtain insurance policy.

vii. Delivery:

It is important feature of export and the exporter must adhere the delivery
schedule. Planning should be there to let nothing stand in the way of fast and efficient
delivery.

Realisation of Export Proceeds: On receiving the documentary bill of exchange, the

importer releases payment in case of sight draft or accepts the usance draft
undertaking to pay on maturity of the bill of exchange. The exporter’s bank receives
the payment through importer's bank and is credited to exporter's account.

Letter of Credit: The respective buyer’s bank issues the Letter of Credit to confirm
the payment to the exporter on the committed date, in case the buyer gets late in
paying the bills. It is an essential document which is guaranteed by the bank in order
to honour the buyer purchase order.

viii. Customs Procedures:

It is necessary to obtain PAN based Business Identification Number (BIN)

from the Customs prior to filing of shipping bill for clearance of export good and open
a current account in the designated bank for crediting of any drawback amount and
the same has to be registered on the system.
In case of Non-EDI, the shipping bills or bills of export are required to be filled
in the format as prescribed in the Shipping Bill and Bill of Export (Form) regulations,
1991. An exporter need to apply different forms of shipping bill/ bill of export for
export of duty free goods, export of dutiable goods and export under drawback etc.
Under EDI System, declarations in prescribed format are to be filed through
the Service Centres of Customs. A checklist is generated for verification of data by the
exporter/CHA. After verification, the data is submitted to the System by the Service
Centre operator and the System generates a Shipping Bill Number, which is endorsed

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on the printed checklist and returned to the exporter/CHA. In most of the cases, a
Shipping Bill is processed by the system on the basis of declarations made by the
exporters without any human intervention. Where the Appraiser Dock (export) orders
for samples to be drawn and tested, the Customs Officer may proceed to draw two
samples from the consignment and enter the particulars thereof along with details of
the testing agency in the ICES/E system.
Any correction/amendments in the check list generated after filing of
declaration can be made at the service centre, if the documents have not yet been
submitted in the system and the shipping bill number has not been generated. In
situations, where corrections are required to be made after the generation of the
shipping bill number or after the goods have been brought into the Export Dock,
amendments is carried out in the following manners.
• The goods have not yet been allowed "let export" amendments may be permitted
by the Assistant Commissioner (Exports).
• Where the "Let Export" order has already been given, amendments may be
permitted only by the Additional/Joint Commissioner, Custom House, in charge
of export section.
In both the cases, after the permission for amendments has been granted,
the Assistant Commissioner / Deputy Commissioner (Export) may approve the
amendments on the system on behalf of the Additional /Joint Commissioner. Where
the print out of the Shipping Bill has already been generated, the exporter may first
surrender all copies of the shipping bill to the Dock Appraiser for cancellation before
amendment is approved on the system.
ix. Customs House Agents:
Exporters may avail services of Customs House Agents licensed by the
Commissioner of Customs. They are professionals and facilitate work connected with
clearance of cargo from Customs.
x. Documentation:

FTP 2023 describes the following mandatory documents for import and export.

• Bill of Lading/ Airway bill

• Commercial invoice cum packing list
• shipping bill/ bill of export/ bill of entry (for imports)
(Other documents like certificate of origin, inspection certificate etc
may be required as per the case.)
xi. Submission of Documents to Bank:

After shipment, it is obligatory to present the documents to the Bank within 21

days for onward dispatch to the foreign Bank for arranging payment. Documents
should be drawn under Collection/Purchase/Negotiation under L/C as the case may
be, along with the following documents:

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 • Bill of Exchange
• Letter of Credit (if shipment is under L/C)
• Invoice
• Packing List
• Airway Bill/Bill of Lading
• Declaration under Foreign Exchange
• Certificate of Origin/GSP
• Inspection Certificate, wherever necessary
• Any other document as required in the L/C or by the buyer or statutorily.

EXPORT DOCUMENTATION: EXPORT FROM INDIA

Export from India demands documents depending upon the destination where
the product needs to be exported and also the kind of product that is about to get
exported. Different countries require different certifications for different product range.
While these documents not just give insight regarding the item and its destination port
but on the other hand, they are also utilized with the end goal of tax assessment and
quality control investigation certification.

Here is a list of documents that you need to furnish while exporting overseas
from India.

1. Bill of Landing:

Bill of landing is one of the essential documents in charge of export bound

cargos. It is issued by the carrier to represent a contract and a receipt between the
shipper and the carrier. Under this Bill, the carrier acknowledges that the goods have
been received from the exporter in good condition and is ready to ship.

2. Commercial Invoice cum Packing List:

Recently under Government guidelines two documents, Packing List and
Commercial Invoice, required by Customs have been merged into one document.

I. Commercial Invoice: It is a necessary document in export. Once the products

are good to go, a Commercial Invoice is prepared and submitted to the Customs
by the exporter. The customs signature is required before the shipment begins.
II. Packing List: This document is required when the cargo contains more than
one product. A proper packaging list is prepared, listing the distinct items,
which needs to be export.

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