By: HIMANSHU MALHOTRA

The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer". In International Trade, "exports" refers to selling goods and services produced in home country to other markets.

An import is any good or service brought into one country from another country in a legitimate fashion, typically for use in trade. Import goods or services are provided to domestic consumers by foreign producers. An import in the receiving country is an export to the sending country.

Imports, along with exports, form the basis of international trade. Import of goods normally requires involvement of the customs authorities in both the country of import and the country of export and are often subject to import quotas, tariffs and trade agreements. When the "imports" are the set of goods and services imported, "Imports" also means the economic value of all goods and services that are imported.

Import and export has been an integral part of our lives for a very long time. Global sourcing in import and export practices is just as important as the multinational purchasing that comes with it. Without global sourcing, multinational purchasing would not be possible since global sourcing involves the identifying of alternate supplier choices and taking advantage of the different kinds of talent that are out there on the market. Multinational purchasing, on the other hand, entails that products are acquired from various international import and export practices.

One company may have import and export agreements with several different international corporations in order to assemble products that will be distributed to consumers of other business. This makes import and export practices as a result of multinational purchasing an integral part of a global economy.

A good example of import and export operations is say the plastic casing for an Mp3 player may be exported to China from Korea in order for the product to undergo some additional manufacturing. The product may then be exported from China to be imported by the United States so that a special computer chip may be placed within the product. In the meantime, global sourcing is ensuring that the import and export supplier choices are at the top of their market and making sure that the talent contained within the business is at the highest standard. This brings about confidence that import and export operations will remain smooth and multinational purchasing does not falter.

Right from ancient times till the establishment of the British Empire, India was famed for her fabulous wealth. Even during the medieval period, i.e. roughly from the 12th to the 16th centuries, the country was prosperous despite the frequent political upheavals. A notable feature of this period was the growth of towns in various parts of the country. This development was the result of the political and economic policies followed by the Muslim rulers. These towns grew into trade and industrial centres which in turn led to the general prosperity.

Indias exports far exceeded her imports both in the number of items as well as in volume. The chief articles of import were horses, from Kabul and Arabia, dry fruits and precious stones. India also imported glassware from Europe, high grade textiles like satin from West Asia, while China supplied raw silk and porcelain. Foreign luxury goods were highly popular among the royalty and the nobility. These included wines, dry fruits, precious stones, corals, scented oils, perfumes and velvets.

Indian goods are shipped to European countries through the Red Sea and the Mediterranean ports. Indian products were also sent to East Africa, Malaya, China and the Far East. In China, Indian textiles were valued more than silk. Trade was also conducted through overland routes with Afghanistan, Central Asia and Persia. The route lay through Kashmir, Quetta and the Khyber Pass. Iraq and Bukhara were the other countries with which India conducted trade via the land route.

Thus India had always enjoyed a favourable balance in her trade relations with other countries. Her earnings from the export of textiles, sugar, spices and indigo alone went up to crores of rupees. The state coffers were amply stocked with gold and silver.

However the political conditions in India in the 18th century brought about a sea change in the situation. This period was marked by decline of the Mughal government and the rise of the Maratha power. After Aurangzeb, who was the last of the great Mughal Emperors, the state crumbled and it could not protect the mercantile community as before. Though the regional powers did extend patronage to the artisans and manufacturers, they did not have the economic and military means to sustain it. Consequently trade dwindled.

The rise of the British East India Company in the mid 18th century dealt a fatal blow to the prosperity of the country. The victory of the English over the Nawab of Bengal at the Battle of Plassey in 1757 marked a turning point in the fortunes of the country. In order to disrupt the trade relations between the Indian mercantile community and the foreigners, the Company imposed heavy duties on both imports and exports. After the Company had established its supremacy in Bengal, it prevented merchants from Asian countries from coming to the eastern provinces for trading purposes. The export of Indian textiles to England was totally banned.

The Company increasingly monopolised the foreign trade in India thereby reducing the mercantile community to bankruptcy. Not only did it cripple the indigenous manufactures, but also it started importing various items such as cloth, utensils, horses, etc. from England. This so adversely affected the Indian traders that they turned to other professions for their livelihood. The great trading community, which had flourished during the Mughal rule, had dwindled to non-existence by the end of the eighteenth century. Thus the once glorious arts and crafts of India died a natural death.

Rank9th (nominal) / 4th (PPP)Currency1

Indian Economic Policy Protectionism From Independence in 1947 till mid 1990s, India with some exceptions, always faced deficit in its balance of payments i.e. imports always exceeded exports. This was characteristic of a developing country struggling for reconstruction and modernization of its economy. Imports galloped because of increasing requirements of capital goods, defence equipments, petroleum products, and raw materials. Exports remained relatively sluggish owing to lack of exportable surplus, competition in the international market, inflation at home, and increasing protectionist policies, of the developed countries.

 Economic

liberalisation of 1991. India is a founding-member of General Agreement on Tariffs and Trade(GATT) since 1947 and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. Role of IMF, World Bank, WTO, ASEAN, etc. FDIs.

 India

exports were worth 29344 Millions USD in July of 2011. Exports amount to 22% of Indias GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. Indias main export partners are European Union, United States, United Arab Emirates and China .

 India

imports were worth 40426 Millions USD in July of 2011. India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs. Other imported products are: machinery, gems, fertilizers and chemicals. Main import partners are European Union, Saudi Arabia and United States.

 The

fifteen largest trading partners of India represent 62.1% of Indian imports, and 58.1% of Indian exports. As a single economy the Gulf Cooperation Council(GCC) is the largest trading partner of India with almost $100 billion in total trade. As a single economy, the EU is the second largest trading partner of India with 27.5 billion worth of EU goods going to India and 25.4 billion of Indian goods going to the EU, totaling approximately 52.9 billion in total trade.

In 1950, India accounted for 1.8 percent (1.85 percent of exports and 1.71 percent of imports) of world trade, gradually declining to 0.53 percent by 1991; it marginally improved to 0.61 percent in 1994. The decline in Indias share in world trade has not only been arrested but reversed. Below table shows trends in Indias share in the world trade during the post-Independence period. It is discernible that of late Indias share in world exports in on the increase. It s noteworthy that India commands an important place in world trade in tea, precious, and semiprecious stone, spices, iron ore, leather and coffee. The Foreign Trade Policy, 2004 2009 has set an ambitious task of achieving 1.5 percent share in the world trade by the year 2009.

Tariffs Ad valorem Specific Quotas Embargo voluntary export restraint

A commercial policy (also referred to as a trade policy or international trade policy)is a set of rules and regulations that are intended to change international trade flows, particulary to restrict imports. free trade areas Custom unions free economic areas

To appreciate trade with other nations. TO protect domestic market prevailing in the country. To increase the export of particular product which will help in expanding domestic market. To prevent the imports of particular goods for giving protection to infant industries or developing key industry or saving foreign exchange, etc. To encourage the imports of capital goods for speeding up the economic development of the country. To restrict the imports of goods which create unfavorable balance of payments. To assist or prevent the export or import of goods and services for achieving the desired rate of exchange.

To enter into trade agreements with foreign nations for stabilizing the foreign trade. Some nations make an attempt to protect their industries with trade policies which place a heavy burden on importers, allowing domestic producers of goods and services to get ahead in the market with lower prices or more availability. Others avoid trade barriers, promoting free trade, in which domestic producers are given no special treatment, and international producers are free to bring in their products. There are three proposed arguments offered as explanation for why nation adopt commercial policies.

Exim Policy, also known as the Foreign Trade Policy is announced every 5 years by Ministry of Commerce and Industry, Government of India. It is updated every year on the 31st of March and all the amendments and improvements in the scheme are effective from the 1st of April. Exim policy deals in general provisions pertaining to exports and imports, promotional measures, duty exemption schemes, export promotion schemes, special economic zone programs and other details for different sectors.

The government appointed the Import and Export Policy Committee headed by Mr.Mudaliar in 1962 to review Governments trade policy. The recommendations of the committee were accepted by the government. Mr.V.P.Singh, the then Commerce Minister, announced the Export Import policy on the 12th of April, 1985.It was here that for the first time the Government announced the policy on a three year basis. The basic aim of the policy was to facilitate production through easier and quicker access to imported inputs, impart continuity and stability of Exim Policy, strengthen the export production base, facilitate technological up gradation and affect all possible savings in imports.

The import policy in the post independence period was guided by consideration of a growth oriented policy which should ultimately lead us to the objective of self reliance: Imports should be limited as far as possible so as to conserve foreign exchange. Imports of those items were to be encouraged which would help the industrialization of the economy and imports of such items which could be produced at home were discouraged or completely banned. The nature of imports should be so modified that it helped export promotion, and thus mitigate the deficit in the balance of payments position ultimately.

India`s foreign trade is regulated by the foreign trade (Development and Regulation) Act, 1992 which replaced the import and export (control) Act,1947. Prior to mid -1991, foreign trade of India suffered from strict bureaucratic and discretionary controls. To reduce controls, simplify procedures and to create a congenial environment for trade, the government made a statement on trade policy in parliament on august 13, 1991, ushering a new era in the foreign trade policy of India. Instead of controls and regulations, the focus shifted to promotion and development of foreign trade.

EXIM POLICY, 1992-97 EXIM POLICY, 1997-2002 MODIFIED EXIM POLICY, APRIL 1998 EXIM POLICY 1999-2000 EXIM POLICY 2000-2001 EXIM Policy, 2001-2002 EXIM Policy , 2002-2007 EXIM Policy, 2003-2004 Mini EXIM policy, Jan 2004 FOREIGN TRADE POLICY, 2004-2009 EXIM Policy, 2009-2014

1) Additional benefit of 2% bonus, over and above the existing benefits of 5% / 2% under Focus Product Scheme, allowed for about 135 existing products, which have suffered due to recession in exports. Major sectors include all Handicrafts items, Silk Carpets, Toys and Sports Goods. 2) 256 new products added under FPS , which shall be entitled for benefits @ 2% of FOB value of exports to all markets. Major Sectors / Product Groups are Engineering, Electronics, Rubber & Rubber Products, Other Oil Meals, Finished Leather, Packaged Coconut Water and Coconut Shell worked items. 3) Nearly 300 products from the readymade garment sector incentivised under MLFPS for further 6 months from October, 2010 to march, 2011 for exports to 27 EU countries.

Zero duty EPCG scheme, introduced in August 2009 and valid for only two years upto 31.3.2011, has been extended by one more year till 31.3.2012. In addition, to give a boost to technological upgradation for additional sectors as well, the benefit of the scheme has been expanded to cover paper & paperboard and articles thereof, ceramic products, refractories, glass & glassware, rubber & articles thereof, Plywood and allied products, marine products, sports goods and toys and additional engineering products. Additional Towns of Export Excellence (TEEs) announced viz. Barmer (Rajasthan) for Handicrafts; Bhiwandi (Maharashtra) for Textiles; and Agra (Uttar Pradesh) for Leather Products.

Status Holders contribute to a substantial part of our exports. To support them to upgrade their technology, 1% Status Holder Incentive Scheme (SHIS) introduced in August 2009 and valid for only two years upto 31.3.2011, has been extended by one more year for 2011-12 exports. In addition, to give a boost to technological up-gradation for additional sectors as well, the benefit of the scheme has been expanded to cover chemical & Allied products, paper, paperboard and articles thereof, ceramic products, refractories, glass & glassware, rubber & articles thereof, plywood and allied products, electronics products, sports goods and toys and additional engineering products.

Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi-finished leather from Public bonded warehouses, without payment of any export duty. This will facilitate the logistics for establishment of such warehouses and easy access to raw material for the leather sector. Finished Leather export shall be entitled for Duty Credit Scrip @ 2% under FPS. Additional 2% bonus benefits over and above the existing benefits under Focus Product Scheme would significantly benefit the Leather Sector.

Additional 2% bonus benefits over and above the existing benefits under Focus Product Scheme would significantly benefit the Handloom Sector.

Promote export of products such as micro cloth, which has become popular in home textiles. Readymade Garment sector granted enhanced support under MLFPS for a period of further 6 months from October, 2010 to March, 2011 for exports to 27 EU countries.

The list of items allowed for duty free import by Gems & Jewellery sector has been expanded by Inclusion of additional items such as Tags and labels, Security censor on card, Staple wire, Poly bag. This will reduce the cost of the product to some extent.

The facility of duty free import of tools under Duty Free Import scrips for Handicraft sector shall be made operational. Additional 2% bonus benefits over and above the existing benefits under Focus Product Scheme will significantly benefit the Handicrafts and Silk Carpets sectors.

Instant Tea and CSNL Cardinol included for benefits under VKGUY @ 5% of FOB value of exports. Oil Meals (Cotton, rape seed, groundnut), Castor Oil derivatives, Packed Coconut Water and Coconut Shell worked items shall be entitled for benefits @ 2% of FOB value of exports to all markets under FPS.

Additional items of Engineering, namely, Pipes & Tubes, Electric Generating Sets, Cast Articles of Iron & Steel, Ferro Manganese and Ferro Silicon shall now be entitled for benefit @ 2% under FPS A number of Engineering items namely, Machine Tools, Compressors, Iron & Steel Structures including Transmission Towers and Scaffolding, LPG Cylinders, Ductile Tubes & Pipes shall now be entitled for benefits @ 2% of FOB value of exports to all markets under FPS instead of their exports to specific markets under MLFPS earlier. Telecom Equipments, Colour TVs, Audio Systems, Optical Media, Semi-conductors, Capacitors, Resistors, PCBs, LEDs, Conductors, Desktops and Notebooks shall now be entitled for benefits @ 2% of FOB value of exports to all markets under FPS instead of their exports to limited market under MLFPS earlier.

Exim Bank is managed by a Board of Directors, which has representatives from the Government, Reserve Bank of India, Export Credit Guarantee Corporation (ECGC) of India, a financial institution, public sector banks, and the business community.

for providing financial assistance to exporters and importers, and for functioning as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the countrys international trade
shall act on business principles with due regard to public interest

Exim Bank plays four-pronged role with regard to India's foreign trade: those of a coordinator, a source of finance, consultant and promoter. Exim Bank is the Coordinator of the Working Group Mechanism for clearance of Project and Services Exports and Deferred Payment Exports (for amounts above a certain value currently US$ 100 million). The Working Group comprises Exim Bank, Government of India representatives (Ministries of Finance, Commerce, External Affairs), Reserve Bank of India, Export Credit Guarantee Corporation of India Ltd. and commercial banks who are authorised foreign exchange dealers. Exim Bank plays a pivotal role in promoting and financing project exports. Promoting Trade and Investment Promotion Agencies. Exim Bank offers Rediscounting Facility to commercial banks, enabling them to rediscount export bills of their SSI customers.

Over the last four decades India has recorded remarkable expansion and diversification in practically all areas of industrial development. India's vast resources-human, agricultural, mineral and industrial- have been fully exploited for this purpose. The New Industrial Policy has helped in catalysing foreign investment into India. Of the total FDI approvals, 80% are in the priority sectors such as power, oil refineries, electronics and electrical equipment, chemicals, telecommunications, food processing etc.

The new five-year Exim policy is expected to bring about a positive growth in exports in the days to come. The policy was the result of a paradigm shift from narrow issues of mere procedural formalities to much larger aspects of exports which would work as the ``true engine of growth''. The policy was clear and required involvement of the state government to make it successful. Adequate measures have been taken to curtail transaction costs. The concept of using special economic zone (SEZ) and agriculture export zones to boost exports of goods, services and agricultural products is a positive step.

Setting up an appropriate business organization Choosing appropriate mode of operation. Selecting the markets Selecting prospective Buyers Selecting channels of distribution Negotiating with Prospective Buyers Processing an Export order Entering into an Export contract Registration Register With Export Promotion Council Despatching Samples Appointing Agents Acquire Export License Acquire Export Credit Insurance Arranging Finance Forward Contracts Procuring/Manufacturing Goods for Export & their Inspection by Government Authorities Labeling, Packaging, Packing and Marking Goods

The first and the foremost question you as a prospective exporter has to decide is about the kind of business organisation needed for the purpose.
The proper selection of organisation will depend upon Your ability to raise finance

a)

b)
c) d)

Your capacity to bear the risk


1)

2)

You can chose any of the following modes of operations: Merchant Exporter i.e. buying the goods from the market or from a manufacturer and then selling them to foreign buyers. Manufacturer Exporter i.e. manufacturing the goods yourself for export Sales

Target markets should be selected after careful consideration of various factors like political embargo, scope of exporter's selected product, demand stability, preferential treatment to products from developing countries, market penetration by competitive countries and products, distance of potential market, transport problems, language problems, tariff and nontariff barriers, distribution infrastructure, size of demand in the market, expected life span of market and product requirements, sales and distribution channels. For this purpose you should collect adequate market information before selecting one or more target markets. The information can be collected from various sources like Export Promotion Council (EPCs)/Commodity Boards, Federation of Indian Export Organisation, (FIEO), Indian Institute of Foreign Trade (IIFT), Indian Trade Promotion Organisation (ITPO), Indian Embassies Abroad, Foreign Embassies in India, Import Promotion Institutions Abroad, Overseas Chambers of Commerce and Industries, Various Directories, Journals, Market Survey Reports.

One can collect addresses of the prospective buyers of the commodity from the following sources:
1.

Enquiries from friends and relatives or other acquaintances residing in foreign countries. Visiting/ participating in International Trade Fairs and Exhibitions in India and abroad. Contact with the Export Promotion Councils, Commodity Boards and other Government Agencies. Consulting International Yellow Pages Collecting information from International Trade Directories/ Journals/periodicals available in the libraries of Directorate General of Commercial Intelligence and Statistics, IIFT, EPCs, ITPO etc.

2.

3. 4.

The following channels of distribution are generally utilised while exporting to overseas markets : a) Exports through Export Consortia b) Export through Canalising Agencies c) Export through Other Established Merchant Exporters or Export Houses, or Trading Houses d) Direct Exports e) Export through Overseas Sales Agencies

One should not be happy merely on receiving an export order. You should first acknowledge the export order, and then proceed to examine carefully in respect of items, specification, preshipment inspection, payment conditions, special packaging, labelling and marketing requirements, shipment and delivery date, marine insurance, documentation etc. if you are satisfied on these aspects, a formal confirmation should be sent to the buyer, otherwise clarification should be sought from the buyer before confirming the order. After confirmation of the export order immediate steps should be taken for procurement/manufacture of the export goods.

In order to avoid disputes, it is necessary to enter into an export contract with the overseas buyer. For this purpose, export contract should be carefully drafted incorporating comprehensive but in precise terms, all relevant and important conditions of the trade deal. The different aspects of an export contract are enumerated as under : Product, Standards and Specifications Quantity Inspection Total Value of Contract Terms of Delivery Taxes, Duties and Charges Period of Delivery/Shipment Packing, Labelling and Marking Terms of Payment-- Amount/Mode & Currency Discounts and Commissions Licenses and Permits Insurance Documentary Requirements Guarantee

Few step for an enterprise to become an export organisation are:1) REGISTRATION AS A BUSINESS ENTITY:- A new export unit can be started by registering as proprietorship, partnership or imited liability company. 2) IEC NUMBER - Any company wish to export/import need to obtain a Import Export code(IEC) number. IEC is issued by Regional licensing authority of DGFT. For communication with any office in regard to for export and import needs IEC number. 3) RCMC means the certificate of registration and membership granted by an Export Promotion Council/ Commodity Board/ Development Authority or other competent authority as prescribed by Foreign Trade Policy to an exporting unit. Any person, applying for a licence/ authorisation/certificate/permission to import/ export or any other benefit or concession under Foreign Trade Policy is required to furnish (RCMC). It is also required for executing a bond before Central Excise authorities, which exempts exporters to furnish bank guarantees.

Export Promotion Councils have been set up by various ministries of the Central Government to promote and develop the exports of particular group of products, projects and services. For certain group of products, which are sensitive from the viewpoint of national consumption, there are commodity boards instead. Thus while we have export promotion councils for apparel, leather, software, chemicals, engineering goods etc., India has commodity boards for tea, coffee, jute etc.
4) REGISTRATION WITH SALES TAX OFFICE :-Exported goods from India are exempt from central & state sales tax. However, for getting exemption of such taxes or claming their refund, wherever permissible under Foreign Trade Policy, the exporting unit should be registered with sales tax authorities. 5) REGISTRATION WITH EXCISE DEPT.:-If an exporting unit is engaged in manufacturing of products, it needs registration with excise department & formalities remain the same as for any domestic unit. This registration is required for claiming refund of excise duties under various schemes of the government.

As the overseas buyers generally insist for the samples before placing confirmed orders, it is essential that the samples are attractive, informative and have retention and reminder value. Besides, the exporter should know the Government policy and procedures for export of samples from India. He should also be aware about the cheapest modes of sending samples.

Selling through an overseas agent is an effective strategy. These agents serve as a source of market intelligence. Regularly sending the latest trends on the current fashion, taste and price in the market. Being a man on the spot, the agent is in a position to render his advice to exporter or new methods and strategy for pushing up sales of your products. He also provides you support in the matter of transportation, reservation of accommodation, appointment with the government as and when required by you. In some countries it is compulsory under their law to sell through local agents only.

Export credit insurance protects you from the consequences of the payment risks, both political and commercial. It enables you to expand your overseas business without fear of loss. Further, it creates a favorable climate for you under which you can hope to get timely and liberal credit facilities from the banks at home. Eg. In India one can obtain Export Credit Insurance from the Export Credit and Guarantee Corporation(ECGC) of India Limited, In order to provide its Export Credit Insurance.

Financial assistance to the exporters are generally provided by Commercial Banks, before shipment as well as after shipment of the said goods.
The assistance provided before shipment of goods is known as per-shipment finance and that provided after the shipment of goods is known as post-shipment finance. Pre-shipment finance is given for working capital for purchase of raw-material, processing, packing, transportation, ware-housing etc. of the goods meant for export. Post-shipment finance is provided for bridging the gap between the shipment of goods and realization of export proceeds.It is done by the Banks by purchasing or negotiating the export documents or by extending advance against export bills accepted on collection basis.

1. 2.

Elimination of exchange risk due to movement in the exchange rat can be avoided by the following options: By invoicing in Indian Rupees. By fixing the Foreign Exchange Contract.

 Select

the commodity/Product you wish to

import Registration with Regional Licencing Authority and obtaining IEC Code Selecting the Overseas Supplier Finalising the Terms of Import Payment against imports Scrutiny of documents Mode of payment Customs Clearance of imported goods Warehousing of Imported goods

Be aware of the import potential and the commercial viability of the commodity/product. Check whether the items of your interest fall in the Restricted list of ITC(HS) Classifications of Exports & Imports items. Prohibited items are not permitted to be imported at all. List of Prohibited items of import are detailed below: Tallow, Fat or Oils rendered, unrendered or otherwise of any animal origin, animal rennet and wild animals including their parts and products and ivory any part and products, including ivory. For import of items appearing in Restricted list you need secure import licence. Third category of items comes under the Canalised list of items. Import of items included in Canalised list are permitted to be imported through Canalising Agencies. Thus items not appearing in Prohibited list, Restricted list and or in Canalised list can be imported Freely without any import licence. A large number of Consumer goods are freely importable without licence.

Registration with Regional Licensing Authority is a prerequisite for import of goods. The Customs will not allow clearance of goods unless: The importer has obtained IE Code Number from Regional Licensing Authority. However, no such registration is necessary for persons importing goods from/ to Nepal provided Value of a single Consignment does not exceed Rs. 25000/=

Imports can be made from any country of the world except Fiji and Iraq. The information regarding overseas supplier can generally be obtained from the following sources: Trade Directories and Yellow Pages, like Singapore yellow pages, Japan yellow pages, USA yellow pages etc. available from leading booksellers in India including. Consulate Generals and Trade Representatives of various countries in India and abroad. The advertisement in foreign papers may also be useful. Similar informations are also available in our Import-Export database. Capability and Creditworthiness of Overseas Supplier.

It is advisable that before finalising the terms of Import Order, you should call for the samples or catalogue and other relevant literatures and the specification of the items to be imported. Once you are satisfied with the samples and the creditworthiness of the overseas supplier, you can proceed to finalise the term of the contract to be entered into. For this purpose, the Import Contract should be carefully and comprehensively drafted incorporating therein precise terms, all relevant conditions of the trade deal. There should not be any ambiguity regarding the exact specifications of the goods and terms of the purchase including import price, mode of payment, type of packaging, port of shipment, delivery schedule, etc.

While finalising the terms of import contract, the Importer, should, inter alia, be fully conversant with the mode of pricing and the manner of payment for the imports. As regards mode of pricing, the overseas supplier normally quote the terms prevailing in international trade.

Payment under better of Credit is a universally accepted mode of payment. A Letter of Credit is a Signed instrument and an undertaking by the banker of the buyer to pay the seller a certain sum of money on presentation of documents evidencing Shipment of Specified goods subject to Compliance with the stipulated terms and Conditions.

This is a very important function and this should be done with great care. After receiving the document from the overseas supplier's bank the importer's bank will scrutinise them to verify the extent of correctness as per the terms of the L/C.

Payments in retirement of bills drawn under L/C as well as bills received from abroad for collection against imports into India, must be received by authorised dealers, irrespective of amount, by debit to the account of the importer with themselves or by means of a crossed cheque drawn by him on his other bankers. Payment against bills should not be accepted in cash. This rule also applies to private imports where the amount involved is Rs. 20,000 or more.

Customs Authorities and the Clearing agents play the key role in the import of goods. All goods imported into India have to pass through the procedure of Customs clearance as they cross Indian border. The goods are examined, appraised, assessed, evaluated and then allowed to be taken out of charge of the Customs for use by the importer.

An importer may not like to clear or may have certain problems in clearing the imported goods immediately on payment of duty for home consumption. In that case the importer can deposit the goods in a Public or Private Bonded Warehouse, provided he is satisfied with the arrangement. Thus, the importer can avail the facility of deferring payment of duty on imported goods pending their actual clearance.

A common saying is that exporting and importing has nothing much to do with products and a lot to do with documentation! It sounds completely odd but it is true!

Export Import trade is a regular practice for several manufacturing industries, and the basis for living for others. It is almost sure that you have employed various importing methods in your trade before, but there are few essential things to keep in mind when systematizing your documentation. The Import Export documents that accompany all import export items are an integral part of all import export activities.

There is generally some variation in the Import Export documents documentations required for trade from country to country but theyre sure to include the following: Purchase order Letter of credit Shipment documents Certificates of origin Quality or inspection certificates Packing list Invoice Others(!)

A written sales contract between buyer and seller detailing the exact merchandise or services to be rendered from a single vendor. It will specify payment terms, delivery dates, item identification, quantities, shipping terms and all other obligations and conditions. Purchase orders are generally preprinted, numbered documents generated by the retailer's financial management system which shows that purchase details have been recorded and payment will be made.

Letter of Credit L/c also known as Documentary Credit is a widely used term to make payment secure in domestic and international trade. The document is issued by a financial organization at the buyer request. Buyer also provide the necessary instructions in preparing the document.

The International Chamber of Commerce (ICC) in the Uniform Custom and Practice for Documentary Credit (UCPDC) defines L/C as:

"An arrangement, however named or described, whereby a bank (the Issuing bank) acting at the request and on the instructions of a customer (the Applicant) or on its own behalf : Is to make a payment to or to the order third party ( the beneficiary ) or is to accept bills of exchange (drafts) drawn by the beneficiary.

Authorised another bank to effect such payments or to accept and pay such bills of exchange (draft). Authorised another bank to negotiate against stipulated documents provided that the terms are complied with.

 Air

waybill, bill of lading, or truck bill of lading, commercial invoice, certificate of origin, insurance certificate, packing list, or other documents required to clear customs and take delivery of the goods.

A Certificate of Origin (often abbreviated to CO or COO) is a document used in international trade. It traditionally states from what country the shipped goods originate, but "originate" in a CO does not mean the country the goods are shipped from, but the country where the goods are actually made.

The inspection certificate---inspection report or report of findings---is required by some importers and/or importing countries. The export-manufacturer also uses such a report in the inspection of its own productions.

 The

list of all of the cartons within the container and the contents within.

 The

most important document, make sure that a full summary of goods is outlined and its invoiced in the currency of sale.

An exporter without any commercial contract is completely exposed of foreign exchange risks that arises due to the probability of an adverse change in exchange rates. Therefore, it becomes important for the exporter to gain some knowledge about the foreign exchange rates, quoting of exchange rates and various factors determining the exchange rates. In this section, we have discussed various topics related to foreign exchange rates in detail.

 Eg.

Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification.

The relevant documents are mentioned are: Customs Declaration Form - It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender. Despatch Note- It is filled by the exporter to specify the action to be taken by the postal department at the destination in case the address is non-traceable or the parcel is refused to be accepted. Commercial Invoice - Issued by the exporter for the full realisable amount of goods as per trade term.

Consular Invoice - Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Ausatralia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format and is signed/ certified by the counsel of the importing country located in the country of export.

Customs Invoice - Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate. Packing List - It shows the details of goods contained in each parcel / shipment. Certificate of Inspection It is a type of document describing the condition of goods and confirming that they have been inspected.
Manufacturer's Certificate - It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and is available. Certificate of Chemical Analysis - It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc. Certificate of Shipment - It signifies that a certain lot of goods have been shipped.

Health/ Veterinary/ Sanitary Certification - Required for export of foodstuffs, marine products, hides, livestock etc.
Certificate of Conditioning - It is issued by the competent office to certify compliance of humidity factor, dry weight, etc. Antiquity Measurement It is issued by Archaeological Survey of India in case of antiques. Shipping Order - Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date. Cart/ Lorry Ticket - It is prepared for admittance of the cargo through the port gate and includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc.

1. Power of Attorney - By the Importer signing this form they are hereby authorizing Gallagher Transport Int'l and all it's employees to sign all Customs & Border Protection forms on their behalf.
2. Commerical Invoice - This is something the importer must provide to GTI. Normally the importer has this form in their possesion and is not something GTI provides. Although, if the importer does not have a commerical invoice than GTI can provide upon request. C.B.P. does allow importers to simply write an invoice for their imported items, if they know what exactly is in the shipment and know the correct piece count and value. 3. Packing List - This is a form that is not a requirement from C.B.P. but may or may not get your customs entry rejected and cause C.B.P. to ask more questions about your entry. Therefore taking more time to clear your good from C.B.P. By clicking on the link you can get a form that has been created if you feel you would rather have a packing list.

4. House Bill of Lading (if any) - This is not a requirment from C.B.P. but is required if a House Bill of Lading has been issued by your shipper. Your shipper would be able to tell you how to obtain a copy of the House Bill of Lading, if one has been issued. If you need to track your shipment please click on the link to your left for your ocean or air shipment tracking page. Or you can contact Gallagher Transport Intl and have one of our employees track it for you.
5. Master Bill of Lading - This is a required form for C.B.P. Your shipper would be able to tell you how to obtain a copy of the Master Bill of Lading. If you have an ocean import shipiment, an original copy of the Master Bill of Lading will need to be provided to your shippers U.S. contact with your endorsement anywhere on the back of the original Master Bill of lading. If you need to track your shipment please click on the link to your left for your ocean or air shipment tracking page. Or you can contact Gallagher Transport Intl and have one of our employees track it for you.

6. Arrival Notice - This is not a requirment from C.B.P but . is VITAL to GTI in tracking your shipment and knowing if any charges or other forms are required in order to get your freight delivered to you (the importer). Your shipper would be able to tell you how to obtain a copy of the arrival notice, if one has been issued. If you need to track your shipment please click on the link to your left for your ocean or air shipment tracking page. Or you can contact Gallagher Transport Intl and have one of our employees track it for you.

UNIFORM ON ALL DOCUMENTS

Name

and Address of Seller/Shipper Name and Address of Buyer/Consignee. Origin point and Destination point. Port of Load/Unload. Description of the Goods. Number of pieces, cartons, crates. Net Weight, Gross Weight, Volume. Invoice and Purchase Order Number.