Steps involved in Export Procedure

All the export procedure may vary transaction to transaction. The steps which are usually
followed in an export procedure are described below:
1. Receiptof enquiry and sending quotations: Theexporters generally share details about
their business and persuade prospective buyers and in response to this the prospective
buyer may raise an enquiry. The exporter sends a reply to the enquiry in the form of a
quotation/proforma invoice.
2. Receipt of order or indent: The importer may
ay place an order/indent with the exporter
in case the quotations are acceptable to the prospective buyer.
3. Assessing importer's creditworthiness and securing a guarantee for payments: At the
time of confirmation of the order the exporter wants to be assured of the
importer's
creditworthiness so as to avoid complications at a later stage. He may also secure a
guarantee for payments from the importer through a letter of credit.
4. Obtaining export licence: In India, the exportfirnm must have an export licence
before it
proceeds with exports. The exporter has to open a bank account in any bank authorised
by the Reserve Bank of India (RBI) for getting an
account number and also to apply for
obtaining Import Export Code (EC) number from the Directorate General Foreign Trade
(DGFT) or Regional Import Export Licensing Authority.
5. Obtaining pre-shipment finance: An
exporter may
pre-shipment finance to undertake export production.approach his banker for obtaining
6. Production or procurement of
goods: The exporter undertakes the
production of goods as per the specifications of the importer mentionedprocurement
or
7. Pre-shipment inspection: In in the order.
order to ensure that only good quality
has made compulsoryproducts ofexported
from the country the Government of India are
products by a competent agency as designated by the inspection certain
Control and Inspection Act, 1963. If the
product to
government under Export Quality
be
category, the exporter needs to contact the Export exported comes under such a
Inspection Agency (EIA) or the other
designated agency for obtaining inspection certificate.
8. Excise clearance: Excise
on the materials used inclearance is obtained by applying and paying the exercise duty
manufacturing goods to the concerned Excise
Commissioner
 in the region with an
obtain an excise invoice as per the Central
order to promote clearance from the concerned Excise Tariff Act. The
Excise exporter has to
the government or it is
exports, in many cases the Commi ssione in the region. In
refunded excise duty payment is either exempted by
later on which
9. Obtaining certificate of origin: The is known as duty drawback.
that
proof the goods have
taking actually importer has to obtain a certificate of origin as a
been
export is place. The trade
to issue this certificate.
manufactured in the country from where the
consulate located in the exporter's country is authorised
10. Reservation of shipping
company issues a shipping space: On acceptance of application for shipping, the shipping
order which is an to the captain of the ship that
the specified goods after their instruction
customs clearance at a
board. designated port be recelveu
11. Packing and forwarding: The exporter gets the goods packed as per the instructions
of the importer. AISO, markings containing necessary
address of the importer, gross and net weight, Dort of details including the name and
of origin, etc. are made on the packing. shipment and destination, couruy
12. Insurance of goods: The exporter gets the goods insured in order to
protect them agats
the risks of loss or damage of the goods due to the perils of the sea during the transit.
13. Customs clearance: A shipping bill is prepared by the exporter which includes details
of the goods being exported and submitted to the customs
appraiser at the custo
house. Later on, a carting order is issued by the superintendent of the concerned port
trust. After obtaining the carting order, the cargo is physically moved into the port area
and stored in the appropriate shed.
14. Obtaining mates receipt: When the cargo is loaded on board, the commanding officer
of the ship issues a mate's receipt to the port superintendent containing the information
about the name of the vessel, berth, date of shipment, description of packages, marks
and numbers, condition of the cargo at the time of receipt on board the ship, etc.,
15. Payment of freight and issuance of bill of lading: On payment of the freight, the
shipping company issues a bill of lading which serves as an evidence that the shipping
company has accepted the goods for carrying to the designated destination. In the case
the goods are being sent by air, this document is referred to as airway bill.
16. Preparation of invoice: After the despatch of the goods invoice is prepared and the C&F
agent gets it duly attested by the customs. The invoice states the quantity of goods sent
and the amount to be paid by the importer.
the exporter informs the importer
17. Securing payment: After the goods have been shipped importer
about it. He forwards the various documents to the through his/her banker
with the Instruction that these may be delivered to the importer after acceptance of the
document
bill of exchange sent along with it. A bll of exchange can be of two types:
Submission
against sight (sight draft) and document against acceptance (usance draft).
of the relevant documents to the bank tor the purpose of getting the payment from the
bank is called 'negotiation of the documents'. The importer's bank makes pavment to
the exporter's bank and then it is credited to the Exporter's account. The exporter can
for the pavmant
also get immediate payment from his/ her bank rather than waiting
till the release of money by the imPorter. n ths case, the exporter has to sign a letter
of indemnity. On receiving the payment ror exPorts, the exporter needs to get a bank
certificate of payment.
 Procedur
Steps involved in Import procedure are described below:
import
The various steps involved in an desirous of obtaining goods has to send a written
person/firm
short listed for supply information
1. Trade enquiry: The of
whom he has exports he
requestto the exporter and conditionson which the latter is ready to
price and various terms proforma invoice is send to the importer by the exporter.
response to atrade enquiry a to deal in certain
wishes
Procurement of import licence: In case the importer
2.
certain restriction on import he needs to procure an import licence. It is
carry
which
for every importer (and also for exporter) to get registered
with
obligatory
the in India
Directorate General Foreign Trade (DGFT) or Regional Import Export Licensing
Authority.
The importer has to submit an application infor
3. Obtaining foreign exchange:licence
a prescribed
obtain
to a bank which is authorised by RBI
torm along with the import Exchange Control Act.
foreign exchange as per the provisions of importer places an
4. Placing order or indent: After obtaining the import licence with the
order/indent exporter for supply of the particular products.
importer's bank
5. Obtaining letter of credit: A letter of credit is a guarantee issued by the
bank of the
that it will honour payment up to a certain amount of export bills to the
exporter.
6. Arranging for finance: The importer needs to arrange adequate finance in advarnce to
pay to the exporter on arrival of goods at the port.
7. Receipt of shipment advice: The importer receives a shipping advice from the exporter
after goods have been shipped by him (exporter).
8. Retirement of import documents: Retirement of import documents means the àcceptance
of bill of exchange for the purpose of getting delivery of the documents.
9. Arrival of goods: When the goods arrive at the port of the importer, the person in charge
of the carrier (ship or airway) informs the officer in charge at the dock or the airport
about it and provides the document called import general manifest. Import general
manifest is a document that contains the details of the imported goods. It is a document
on the ba_is of which unloading of cargo takes place.
10. Customs clearance and release of goods: Whern the ship arrives at the port, the
shipps
company issues a delivery order in order to authorises the importer to take the deliveryY
of goods. Then the importer makes the payment of charges levied by the
in lieu of services provided by them. After the dock authorities
is given back one copy of the application knownpayment of dock charges, the 1mpo
as 'port trust dues receipt'. After tr
the importer fills in a'bill of entry' form
the documents have been examined by the for assessment of customs import duty.
and the importer is appraiser an examination order is issued
expected to pay the
presented to the dock superintendent whoimport duty (if anv). Then the bill of enty
in turn forwards the
examination to an examiner. The examiner gives his reeport on the bill for
goods the physically
of entry which is
later on shown to the port
authority. Finally, the importer or his C&F agent receive the
release order after paying the
necessary charges to the port
 OBJECTIVES OF EXPORT TRADE
The objectives of export trade are diverse and contribute to economic growth and
development. Some of the main objectives include:

1. Economic Growth: Exporting helps boost a country's GDP by generating

revenue from goods and services sold abroad.
2. Foreign Exchange Earnings: Exports bring in foreign currency, which
strengthens a country's reserves and enables it to pay for imports, invest in
infrastructure, and manage international debts.
3. Market Diversification: Export trade helps businesses reach new markets,
reducing dependence on domestic markets and providing opportunities for
expansion and growth.
4. Employment Generation: Increased demand for products from foreign
markets leads to higher production and job creation in industries that cater to
export needs.
5. Utilizing Surplus Production: Export trade allows countries to sell surplus
goods that are not consumed domestically, preventing waste and creating
economic value.

OBJECTIVES OF IMPORT TRADE

Import trade serves several important objectives, contributing to a country's

economic development and consumer welfare. Here are some key objectives of
import trade:

1. Access to Goods and Services Not Available Domestically: Import trade

allows countries to acquire products or services that are not produced
locally, meeting domestic demand for specialized goods like advanced
technology, raw materials, or luxury items.
2. Diversification of Products: Through imports, consumers and businesses
can access a wider variety of goods, leading to more choices and competitive
prices in the market.
3. Technology and Knowledge Transfer: Imports, especially of machinery,
equipment, and advanced technologies, can help improve domestic
industries by introducing new technology, skills, and innovative processes.
4. Cost-Effective Production: Some raw materials and intermediate goods
may be cheaper or of higher quality when imported. This can reduce
production costs for domestic manufacturers and improve overall efficiency.

5.Promoting Economic Specialization: Import trade allows countries to focus on

the production of goods where they have a comparative advantage, while relying
on imports for other goods. This specialization can lead to greater economic
efficiency and growth.
 Documents involved in international trade
1. Indent
It is adocument for placing an export or import order, which contains adescription of the goods ordered, prices
to be paid, delivery terms, packing and marking details and delivery instructions.
2. Letter of Credit
Aletter of credit is a guarantee issued by the importer's bank that it will honour payment up to a certain amount
of export bills to the bank of the exporter. It is necessary to minimise the risks of non-payment by the importer
once the goods reach the import destination.
3. Shipping Order
The exporting firm applies to the shipping company for provision of the shipping space. On acceptance of the
application for shipping, the shipping company issues ashipping order.
Ashipping order is an instruction tothe captain of the ship that the specified goods, after their customs clearance
at a designated port, be received on board.
4. Shipping Bills
Before the goods can be loaded on the ship, customs clearance is necessary. For this, theexporter prepares the
shipping bill.
Shipping bill is the main document on the basis of which the customs office gives the permission for export.
Shipping bill contains the details of the exporter's and address, particulars of the goods being exported,
name of the vessel, port at which goods are to be discharged and the country of final destination.
5. Mate's Receipt
Amate's receipt is a receipt issued by the captain/ commanding officer of the ship (called 'mate)when the cargo
(ie, the goods) is loaded on the ship. It is aprima facie evidence that goods are loaded on board. Mate's receipt
is first handed over to the port superintendent. The port superintendent, on receipts of port dues, hands over the
mate's receipts to the Clearing and Forwarding agent (C 8& Fagent) appointed by the exporter.
Mate's receipt is an important document because the title documentof goods (i.e., billof lading) is prepared on
the basis of the mate's receipt.
Types of Mate's Receipts
@Ckan Mates Receipt: The commanding officer of the ship issues a clean mate's receipt, if he is satisfied
that goods are packed properly and there is no defect in the packing of the cargo.
) Qualifted Mates Receipt: Aqualified mate's receipt is issued when the commanding officer of the ship is
not satisfied with the packing of the goods, and the shipping company does not take any responsibility of
damage in transit.
 What is DP/DAP?
DOcuments against P..
intemational trade. DP or DAPterms of payment means,
1t is one of the terns of pavment in Bill
Lading/Airway Bill, InvOice, Packing List. of
The Cxporter submits all required documents along with Bill of these shipping don Exchange )vith
the bank to send to the buver through thebuyer's bank. The seller's bank, ater verificaion, sends
buyer to collect original shipping documents from the bank after making
the buyer's bank. The buyer's bank, then, notifies the
necessary payment for the imports.
Why delay to receive money from overseas buyer under DP terms?
receive money late. This h
Although terms of payment under sale contract is against DP basis, some of the exporters (sellers)
commonly under sea mode of shipment since transit time to arrive goods under sea shipment is more than air shipment. More
notifying by his hank t
under DP terms, some of the importers do not accept documents immediately from bank even after
delays to accept documents from bank till arrival of goods at port of destination.