exports

From India to other countries

 ECGC
• This is where your tension is eased
,ECGC India,established in 1957 takes
care of various risks involved in export
business it offers credit risk insurance
cover for exporters against loss in export
of goods or services
• 1 standard policy
• 2 small exporters policy( turn over not
exceeds 50 lacs /year.)
• 3 specific shipment policy

• 4 export (specific buyers) policy

• 5 export turn over policy

• 6 exposure single buyers policy

• 7 exposure multi buyers policy

 contd
• 8 consignment exports policy
• 9Cinsignment exports (stock holding
agent) policy
10 service policy (service industries)
11specific contract for supply contract
• A specific shipment (s) policy
• B specific contract policy
 contd
12 software project policy
These different policies are depended upon
type of exports and situations of countries
the products are being exported
The following risks are covered depending on
the policies we opt as per our needs in
general
1 commercial risks
2 political risks
 contd

1 commercial risks-
Insolvency of the buyer

Failure of the buyer to make the payment due within a

specified period normally 4 months from the date of
issue

Buyers failure to accept the goods, subject to certain

conditions
 contd
2 political risks-
Imposition of restriction by the government
of the buyer’s country or any government
action, which may block or delay the
transfer of payment made by the buyer
war, civil war, revolution or civil
disturbances in the buyer’s country ,new
import restrictions or cancellations of a
valid import license in the buyer’s country
 Political risks (contd)
Interruption or diversion of voyage outside
India resulting in payment of additional
freight or insurance charges which can
not be recovered from the buyer
Any other cause of loss occurring outside
India not normally insured by general
insurers and beyond the control of both
exporter and the buyer
Status certificates (govt. export performance certificates)

• Category total- FOB/FOR value during the preceding

three licensing years (in Rs)

• EXPORT HOUSE - 45 CRORE

• TRADING HOUSE - 300 CRORE

• STAR TRADING HOUSE -1500 CRORE

• SUPER STAR TRADING HOUSE- 600CRORE

 Are you relaxed now?
You should be by now because when you take a
risk you will be concerned about your security of
the stock or about currency expectations
but that’s not all--------------
1.We have to register for IEC (import export code)
from DGFT (director general of foreign trade)
2.Registration cum membership certificate
(RCMC) from export promotion council
3.Registration with ECGC
 But think! Can we export?
• Are the products we do businness are
export worthy
• Are these products are recognised by the
govt for exports
• If yes any restrictions by the govt on these
products
• What is the demand of these products in
other countries
 contd
• Possible nearest country where we can
start doing business to begin with
• Present production capacity and full
capacity to meet the required demand for
goods to be delivered in time
• Are we up to the quality standards to
export our products
• Are we ready to upgrade our machinery
to meet standards if required
 contd
• Are we in a position to wait if there is delay in payments
due to various reasons in order to run the show with out
any hindrance (financially )
An importer sends us an enquiry basing on follow up to
send a quotation mentioning details of products ,price,
quality, mode of delivery terms and conditions if any
Any importer will be asking the samples to gain confidence
on the quality and to meet his requirements here we
actually make the beginning in the exports procedures
Enough care has to be taken for the shipment of samples
as that is going to decide your future in exports because
quality and specifications should be intact in order to get
better results
 You have done it, what next?
• Your product has been approved by the
importer of X country now you are in all
smiles
 Export procedures
• 1 Indent -(with all the details as told mode of payment is
also mentioned generally on L/C)

• 2 Pro forma invoice -(for clarification on total amount on

foreign currency and other costs involved for shipping etc)

• 3 Export invoice- (with complete details like invoice

number, date, buyers indent /purchase order, address of
exporter, address of consignee, address of buyer,
description of goods ,price, quantity ,gross weight, net
weight, packing ,country of origin, marks flight, port of
loading, destination, route of travel, payment terms, etc)
 contd

• 4Consular invoice this invoice is signed by consul

of the importers country (U S,CANADA)

• 5Customs invoice special form prescribed by

custom authorities of importing country and helps
for allowing entry of goods in the importing country
at preferential rates (U S ,CANADA)

6 COA- (certificate of analysis of the product, bath

number, manufacturing date, date of expiry),
pyrogen(fever) free report if required
 contd
• 7 Packing list -(invoice number ,date, indent/purchase order number, address of
exporter, address of consignee ,address of buyer, pre carriage by, vessel/flight
number, port of discharge , port of loading ,final destination, marks and numbers
container numbers, number and kind of packages, description of goods, quantity,
remarks, etc

8 L/C- (letter of credit details as per the contract between the importer and
exporter) payment terms are mentioned,

• 9 ARE1,CT1- forms duly filled meant for tax exemption for export of goods, form N
required for octrai in mumbai

• 10 Drug license copy ,factory license copy ,GMP certificate copy, income tax
PAN number
 contd

• 11 Export value declaration- value of currency involved in the country of

export

• 12 SDF (self declaration form) it is the declaration under foreign exchange

regulation act, declaring that the value as contracted with the buyer is same
as the full export value in the shipping bills ,

13 Shippers certificate for non hazardous cargo (declaring that the

products are not listed under current edition of IATA/dangerous goods
regulations-DGR)

14 Certificate of origin that the product is manufactured in this country

where the company is situated( issued through chamber of commerce in the
country concerned)
 contd

15 Draw back/AIR drawback/section 74 drawback/advance license/ duty

entitlement pass book scheme (depb)/export promotion capital goods
scheme (epcg). various schemes available to claim the duty free on
export goods

16 Incoterms international commercial terms- this is the declaration given by

the exporter that who is going to pay what kind of expenses (exporter and
importer) from embarkation to debarkation depending on the contract upon by
the importer and exporter like ex works (EXW), free carrier (FCA), free
along side ship (FAS),free on board (FOB), cost and frieght (CFR),cost
insurance and frieght (CIF), cost and insurance (CI), carriage paid to
(CPT),carriage and insurance paid (CIP) , deliverd at frontier (DAF),
deliverd ex ship (DES), deliverd ex quay (DEQ),deliverd duty unpaid
(DDU), deliverd duty paid (DDP) ,generally FOB ,CPT,CIP,CFR,CIF ,FCA are
commonly used which is to be mentioned in the export invoice along with
payment terms
 contd

17 Shipping bill/bill of landing –issued by shipping agent for the

ship’s owner responsibility to take the goods from one place to
another for the seller documentary proof that the merchandise was
shipped in a certain vessel ,in certain conditions and consignee to
certain buyer including merchandise conditions characteristics and
quantity ,for the buyer the necessary document for claim the
merchandise

18 air way bill –a reciept issued by international courier company and

an evidence of the contract of carriage
 contd
19 marine insurance- A specific policy, B open cover policy C custom
duty cover policy depending on type of shipment, country and
number of shipments risk coverage's the policies are being designed

20 customs decleration –letter to the customs authority producing the

filled all necessary documents (originals with copies)ready for the
export of goods

21-original copies of all the documents related have to be sent to

the consignee, generally the consignee is the bank who in turn
informs the importer to pay the amount and collect the
documents to release the good from the designated place
 contd

• 22- And also most important thing is some countries ask for different
set of forms like form 7,form9,form3 etc which have to be sent along
with the documents

• 23-bonds and surety/security may be required to be provided to

authority of customs and central excise for claiming duty
exemption ,generally B1 general bond is used for this purpose,B17
bond is used by EOU/EHTP/STP units

• 24-payment terms in general T.T (telegraphic transfer or cash advance)

,L/C at sight given by the buyers bank that they will pay for the goods
exported,CAD cash against document ,mentioned in the L/C
and to be mentioned in the export invoice
 contd

• 25 types of credit (L/C) – irrevocable L/C, unconfirmed L/C, confirmed

L/C, standby L/C ,revolving L/C, transferable L/C, back to back L/C

Just keep in mind all is not that easy and nothing is impossible as long
as we take necessary precautions in documentations as per the
contract and quality specifications are met up to the standards
,sufficient insurance coverage is given to take care of the goods it
will be a good beginning and a successful journey towards a great
achievements in the business
wish you good luck
Thank you
Krishna
(corrections are well come in any manner please free to send your
opinions on these slides)