Introduction

The exchange of goods and services across the border is called export. One can define export as sale of goods from one country to another country. Export trade involves outflow of goods and inflow of foreign exchange. The goods may be tangible goods (physical goods) or intangible goods (services). Export trade arises because the border countries differ in the demand for goods and services and in their capacity to supply them. Each country's resources like land, minerals, skills and machinery etc, enable it to produce certain goods and services more efficiently then other. For differences in the relative supplies of the different productivity resources within a country will mean differences in their relative prices, therefore, differences in the cost of production of various goods and services. The differences in commodity prices are the basic cause of export trade between the countries. The country would specialize and export these products, which it can produce comparatively cheaply. The international trade encourages country's economic growth in two ways, by providing opportunities for international specialization and diffusing between countries the benefit of modern industry technology. Specialization implies trade and can not occur with out it, and specialization and division of labor is the major caused of increased productivity and rising real per capital incomes Export because, like any other business activities is directly influenced by entrepreneur should, therefore, understand the policy framework relative to export before taking decision to start export business. Infect that is pre requisite for export planning.

How To Export
There are various stages to export your product.

Get Prepare
Before entering in export trade it is very important for you to know the stages of export. So plan to handle all types of risk like knowing about all foreign policy of your country and the entire legal framework. It is very important to learn the basic thing required in export trade.

Chose your business type

Decide that you want to be manufacturer exporter or a merchant exporter. A manufacturer exporter is who export manufacturer the goods and a merchant exporter is who purchase the goods from manufacturer and then export them.

Organizing an export firm

Organizing an export firm according to your requirement. You can select a firm type from * solo prosperity firm * partnership firm * private limited company and * public limited company.

Choose your product

It is very important that you choose a right product. Choose a product that has very high demand, easily available and easy to adopt.

Choose your target market

Choose your target market very carefully after deeply research. Visit the target market to find the test of market and choice of people because every country' s people have different view. So try to understand the market trend of that country and culture of the country.

Setting Up An Export Firm

A business enterprise is called export firm if it has been allotted * Import Export Code * Membership and Registration with export promotion councils * Registration with Sales Tax/ VAT department.

Procedure for setting up an export firm

You should take the following steps to set up an export firm.

1 - Naming of the export firm

The name of export firm should be simple, short and attractive; it is preferred to use the words like; global, overseas, international, exports etc.

2 - Form of export firm

An export firm may be organized in one of the following forms. * Solo proprietary firm * Partnership firm * Private limited company * Public limited company

Solo Proprietary Firm

In case you want to start export business along either (1) Merchant exporter or (2) manufacturer exporter, you will have a solo proprietary firm. It is oldest and most simple form of business enterprises. no legal formalities are involved in organizing a solo proprietary firm. Where as you enjoy all the profit made from business, you will also be entirely responsible for any loss or debts in cured.

Partnership Firm
A partnership firm can be formed herein up to 20 persons can join together for business purpose, you have to decided the terms and condition with your partner/pertners in the form of an agreement called "Partnership Deed". The partnership deed should include among others, the following points * Amount of capital contribution of each buyer * Share of profit/loss of each partner * What happens when a partner leaves or dies.

Private Limited Company

If you want to organize a private limited company, you require minimum of 2 persons (maximum of 50 persons). Under the company act, a company has to be compulsorily registered with the registrar of companies of state where the company is proposed to be set up. The most important difference between private limited company and partnership firm and solo proprietary is that the liability of a shareholder is limited to the amount he Owens as share capital. One advantage of a private limited company ids that it enables other people to subscribe money to the company and to receive pay off in the form of dividend if the company is making profit

Public Limited Company

A public limited company can be formed by the minimum of 7 persons with no limit on the maximum number. Thus a public limited company can have wide membership and operates with substantial financial resources. The minimum no of directors is 3 and maximum is 12. A director of company should not hold more than 20 directorship of public limited company. The appointment of a managing director of a public limited company must be approved by the Government.

If you have decided to organize your firm as private limited company or public limited company, you have to take the following steps.

(a) Apply in the prescribed form to the Registrar of company for approval of company name (b) Once the name of company is approved, then submit the following documents to the Registrar of companies * Application for registration * Memorandum of Association * Articles of Association * List of proposed director with their name and address * Written consent of the proposed director to act as such and to take qualification share * Declaration of an advocate of High Court/Supreme Court, Charted Accountant, Company Secretary/ Director of the company that all the legal requirements regarding registration(also called incorporation) have been duly compiled with * Notice of registered office address. if registered office address is not decided it can be submitted within 30 days of incorporation * Copy of letter to Registrar of companies giving approval to the proposed name of your company * Payment of prescribed fee. If all the documents are found in order, them registrar of companies will issue you a registration certificate called certificate of incorporation.

3- PAN Of Income Tax

You are required to apply to the income tax department for the allotment of PAN in the name of a proposed business firm. PAN number is pre condition for the allotment of import export code.

4- Import Export Code (IEC)

Getting Import Export Code (IEC)

Every Company/person importing and exporting goods require an Import export code (IEC) number. If you want to start import/export then it is must for you to have an import export code (IEC) number. In India DGFT (Director General of Foreign Trade) issue the Import Export Code (IEC) number. Import Export Code number is unique 10 digit code number. The import export code (IEC) number is issued by the regional office of the DGFT known as Regional Licensing Authority. Application for Import Export Code (IEC) number should be made in the prescribed form of the regional office having territorial jurisdiction over the applicant. IF a company/firm having branches then only the head office or registered office of the company/firm applies for allotment of the import export code (IEC) number. The branch offices will use the import export code (IEC) number allotted to his head office/ registered office.

Documents required for Import Export Code (IEC) number

The following documents are to be submitted along with the application for the issue of import exports code (IEC) number.

* Two copies of the T.R-6 from showing the payment of fee of Rs 1000. You can also pay this fee in the form of demand draft in favor of Regional Licensing authority. * Certificate from a banker in the prescribed form. *Three passport size photo of the applicant, attested by Gazetted Officer or Bank Manger. Two photos are to be affixes on the import export code (IEC) form and third is to be attached. * Prescribed declaration on company/firm's letterhead regarding non-resident interest and caution listing by RBI or DGFT * Authority letter in the case of Partnership Firm/resolution of the board of directors in the case of (private limited/public limited), to authorize the person singing the application * Copy of PAN Card you can also deposit the fee in the notified branches of the Central Bank Of India. The import export code (IEC) number allotted to a company will be valid for import/export of any product by the company and will de valid till it is revokes. If you don't make even a single shipment in a year then DGFT will block your import export code (IEC) number. Whenever there is any change in the name, address and constitution of an import export code (IEC) number holder, such changes should be intimated to the licensing authority concerned (which issue the IEC number) within 60 days from the date of change.

Surrender Of Import Export Code (IEC) Number

If an IEC holder does not wish to operate the allotted IEC number, he may surrender the same by informing the issuing authority. On receipt of such intimation, the issuing authority shall immediately cancel the same and electronically transmit it to DGFT for onward transmission to the Customs and Regional Authorities.

Import Export Code Number : Exempted Categories

The following categories of importers or exporters are exempted from obtaining import export code (IEC) number: * Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters covered by clause 3(2) [except subclauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993. * Ministries/Departments of the Central or State Government. * Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture. * Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000. * Persons importing/exporting goods from/to Nepal provided the CIF value of a single consignment does not exceed Indian Rs.25,000. However, the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of the ITC(HS) except in the case of exports by category(ii) above. The following permanent IEC numbers shall be used by the categories of importers/ exporters mentioned against them for import/ export purposes..

Methods of Payments
In international trade lots of payment methods are available but in the normal commercial practice there are five methods of payment. These are * Letter Of Credit (L/C)

* Open Account * Cash in Advance * Documents Against Payment (D/P) * Documents Against Acceptance (D/A).

Letter of Credit (L/C)

L/C is the letter of credit by institution of credibility. This is the best and safest method of payment in export trade. Letter of credit (L/C) is a written undertaking by a bank, given to a exporter on the instruction of the buyer. In this methods of payment, if your does not make the payment then buyer's bank will pay the complete amount. Letter of credit (L/C) is contract between importer and exporter with the guarantee of a bank. Since banks deals in paperwork, not in physical goods the export documentation specified serve as proxy to the real thing.

Types of Letter of Credit (L/C)

The Letter of Credit (L/C) can take one of the following terms. * Revocable Letter of Credit (L/C): - If the Letter of Credit (L/C) can be cancelled or modified at any time with out consent of the exporter, it is called revocable Letter of Credit (L/C). *Irrevocable Letter of Credit (L/C) : - If the Letter of Credit (L/C) can not be cancelled or modify with out consent of the exporter, it is called irrevocable Letter of Credit (L/C). * Confirmed Letter of Credit (L/C) : - A Letter of Credit (L/C) called confirmed when the issuing bank's corresponding bank in the country of exporter adds its confirmation to the Letter of Credit (L/C) issued by the issuing bank. Once Letter of Credit (L/C) is confirmed the conforming bank assumes primary liability for payment to the exporter. * Unconfirmed Letter of Credit (L/C): - If the Letter of Credit (L/C) is not confirmed by the any bank in the country of exporter then such types of Letter of Credit (L/C) is called unconfirmed Letter of Credit (L/C)..

The best form of Letter of Credit (L/C) is confirmed and irrevocable and it is the best guarantee for payment to the exporter. Letter of Credit (L/C) contains the list of documents and other terms & condition, which have to be strictly followed by the exporter to obtain the amount under Letter of Credit (L/C).

Open Account
Although there are risks attached to open account trade in international trade but it can still afford a wide verity and advantages to both importer and exporter. Open account is expending within the European union and other part of the developed country. The disadvantage of open account is its flexibility, low cost in terms of set up & user friendliness particularly to the importer. For the exporter, it can be attractive option if the seller lacks experience in administering other methods of payments. With open account trading, as anew comer you must be concerned with effective credit control & insuring the transaction.

Cash In Advance
It is best method of payment. It is very good for you if your buyer pay in advance. If you receive money in advance then you can run your process smoothly. In thus method of payment the buyer is at a disadvantage position having made the payment both in terms of own cash flow & risk. You have to consider whatever this is a payment method, which will build a mutually profitable long-term relationship. This method of payment is not a common method of payment in international trade.

Documents Against Payment (D/P)

In this method of payment, the exporter ships the goods to his buyer and sends his draft (bill of exchange) with the necessary export documents through his bank. The exporter bank then sends the documents to the corresponding bank in buyer's

country. The bank of importer asks the importer to pay the draft & release the documents. If the buyer pay the amount then bank handover the documents to buyer and if the buyer does not make the payment, then bank will not handover the documents to buyer and exporter will suffer loss. So it is a risky method of payment. You can cover our risk credit risk by taking credit risk policy (insurance policy).

Documents Against Acceptance (D/A)

This is the most unsecured method of payment in export trade. In this method of payment exporter sends the documents to his buyer through his bank. The buyer's bank handover the documents to the buyer only upon acceptance imply that he agrees to pay the amount of draft (bill of exchange) after expire of the period of credit (or usance period). In his method of payment usance period is allow. The maximum usance period is for 180 days. The disadvantage of Documents Against Acceptance (D/A) terms is that its allow to buyer to take delivery of the goods before making the payment. So chose this method only when the buyer is very reliable and also cover your risk under credit risk policy (Insurance Policy).

Choose the right product and market

Choosing the right product is very important in export trade. Keep the following point in mind before choosing the right product. * * * * Product should have very high demand. You have to match the product to target income people. Should have maximum potential in the large market. To suit the taste and requirement of the people in different country.

Criteria for selecting the right product

* * * * Trends in export Production capacity and product availability Product adoption Demand for the product abroad

* Probability * Restriction or trade barriers for export and import * The incentives offered by the government for the export of the product.

Choose target market

When you decided to export the product, then it is very important to choose the right market for your product. Before selecting the market, research the market very carefully. There are some points, which will help you to choose the right market for your product. * Demographic Environment * Psychology Factor * Population Growth * * * * Cultural Environment Political Environment Social Environment Technology Environment.

Criteria for selecting the right product

* Trends in export * * * * Production capacity and product availability Product adoption Demand for the product abroad Probability

* Restriction or trade barriers for export and import * The incentives offered by the government for the export of the product.

 Choose target market

When you decided to export the product, then it is very important to choose the right market for your product. Before selecting the market, research the market very carefully. There are some points, which will help you to choose the right market for your product. * Demographic Environment * Psychology Factor * Population Growth * * * * Cultural Environment Political Environment Social Environment Technology Environment.

Locating a Buyer
Once you decided about the export then the problem come that whom to export. Finding buyer in export is not an easy task. You can find your buyer through three ways. These are 1- Buying Agents 2- Trade Fairs 3- Internet.

Buying Agents
You can choose this option to find overseas buyer. The agents are preferable in the following business situation. * Communication is major problem for most of the traditional exporters. * Some market like Scandinavia, Spain, etc. cannot be penetrated through except with the help of agents who ensure payment. This is essential in view of the fact that some of the buyers are reliable but tends to delay payments.

Function of Buying Agents

Most agents perform the following function * Quality Control: - some agents on behalf of the buyer perform this and it becomes a regular feature if the agents are a buying agent with an office in exporter country.. * Ensuring payment: - this is important function, if the buyer is not sending payment through confirmed & irrevocable L/C. Buying agents can perform many other sundry function like warehousing etc.

Commission
The rate of commission range from 2 5 to 15 % depending upon the function performed by agents. However, the general industry rate if about 7 %.

Finding Buying Agents

You can find agents through Internet and own embassy abroad or local chamber of commerce.

Del Cadre Agents

Del Cadre Agents receive higher than usual commission when they act Del Cadre. This means that they take the credit risk for the order they obtain and are responsible for making payment to the exporter, if the buyer fails to do so. Del Cadre Agents are normally paid a higher commission than ordinary agents. Del Cadre Agents are not very common, but where they exist they enable exporters to sell with great confidence, particularly in market where it is difficult for them to getting the payment.

 Trade Fairs
A trade fairs offers an exporter the best opportunity to meet potential buyer and display product to them. The following are the keys to successful participation in the fair. * * * * * * * * Be sure that your product is ready for the market and are reliable. Have clear objective Enter in right trade fair Plan and budget in advance Promote your exhibit to target visitor before the trade fair Have an effective representative on your stand. Follow up promptly after the trade fair. Exhibit at a trade fair repeatedly, not just once.

Deciding to Exhibit
Before deciding to exhibit at a trade fair, ask yourself the following question * Which are the most important markets for my product? * Does the product for export meet the requirements of the market? * Is my production capacity is large enough to meet the order that may result? *What are my objectives in this market and what problems I might encounter in attempting to achieve them? * Is participating in trade fair the most advisable means to attain these objectives? * Is the trade fair under consideration, he most appropriate one to take part in? * What would be the cost of participating in this trade fair? Selecting the most appropriate trade fair is one of the keys to exhibiting successfully. to select the most appopreate one, it is important to appreciate the difference in nature and role between trade fairs at home and foreign countries.

Types Of Trade Fairs

* * * * General Fairs Specialized fairs Consumer fairs/exhibition Permanent fairs

* Solo exhibition * Broachers fairs/ Online fairs when selecting a trade fair, it is important to check the type of trade visitors. At any fair the trade visitor may be mainly retails that do not import directly. Such fair, which includes both exhibition and importer, would be worth visiting.

Preparation To Trade Fairs

The first step in preparing for trade fair is collection information such as Place, date, organizer. * Space and erected stands available; cost, application deadline * Local stand staff * Insurance and security arrangements * Deadline for arrival of stands an goods The exporter should collect the information about the market of the country of the trade fair such as * Product requirements, including specifications, packaging and legal requirements. * Duties and taxes * Retail Prices * Trade Channels * Import agents and Buyer.

 Internet
You can also find the buyer through Internet. There are lots of export import directories available on the net. You can submit your product and also can post trade leads.

Incoterms 2000
The incoterms refers to international commercial terms (2000). Its is also called trade terms. Incoterms tells about the allocation of cost, risk, and obligation between exporter and importer. There are total 13 incoterms. These are * ExW (Ex works) * * * * * * * * * * * * FCA (Free Carrier) FAS (Free Alongside Ship) FOB (Free On Board) CFR or CNF (Cost and Freight) CIF (Cost Insurance Freight) CPT (Carriage Paid To) CIP (Carriage and Insurance Paid To) DAF (Delivered at Frontier) DES (Delivered Ex Ship) DEQ (Delivered Ex Quay) DDU (Delivered Duty Unpaid) DDP(Delivered Duty Paid)

Ex Works (named place)

Exworks means that the seller fulfills his obligation to deliver when ha has made the goods available at the promises (i.e., factory, warehouse) to the buyer. Seller is not responsible for * Loading the goods on the vehicle provided by the buyer. * Clearing the goods for export. The buyer bears the all the cost and risk involved in taking the goods from the seller's premises to the desired destination.

FCA (Free Carrier) (named place)

In this incoterm the seller fulfill his obligation to deliver when he has handed over the goods, in the charge of the carrier named by the buyer at the named place. It is the responsibility of the exporter/seller to ensure custom clearance to the export shipment. If no precise place in indicated by the buyer, the seller may chose within the place orange stipulated where the carrier shall take the goods into his charge

FAS (Free Alongside Ship) (named port of shipment)

In this incoterm the seller fulfill his obligation to deliver when the goods have been placed along side the vessel on the quay or in lighters at the named port of shipment. It is the responsibility of the seller to ensure custom clearance of the export shipment. In this incoterms buyer will bears the all the cost and risk of loss or damage to the goods from the moment. In this incoterms buyer will arrange the space in the vessel or charters a ship.

FOB (Free On Board) (named port of shipment)

In this incoterms the seller will load the goods on the board of vessel over the ship's rail at the named port of shipment. In this incoterms buyer will bears the all the cost and risk in his country of loss or damage to goods from the point onwards. This incoterms requires the seller to clear the goods for exports from the custom in his country. In this incoterms buyer will bears the freight and insurance cost.

CFR or CNF (Cost and Freight) (named port of destination)

In this incoterms the seller must pay the cost and freight necessary to bring the goods to the named port of destination. It is the responsibility of the seller to ensure custom clearance of export shipment. Once the goods are placed on the board of vessel, all the risk is transferred from the seller to his buyer. In this incoterms buyer is responsible of arranging marine insurance.

CIF (Cost Insurance Freight) (named port of destination)

This incoterms is same as CFR but the only difference is that in this incoterms the seller will also arrange the marine insurance against the buyer risk of loss or damage the goods during the carriage of goods.

CPT (Carriage Paid To) (named port of destination)

In this incoterms the seller pays the freight for the carriage of the goods to the named destination. The risk of loss or damage of the goods, as well as any additional cost due to event Occurring after the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. If subsequent carrier is used for the carrier to the agreed destination, the risk passes when the goods have been delivered to the first carrier.

CIP (Carriage and Insurance Paid To) (named port of destination)

In this incoterms the seller has the same obligation as under CPT except the seller should insure the goods against the buyer's risk of loss or damage to the goods during the carrier. In this incoterms the seller is required to clear the goods for export from the custom in his country.

DAF (Delivered at Frontier) (named place)

In this incterms the seller fulfils his obligation to deliver when the goods have been made available, cleared for export at the named destination at the frontier but before the custom border of the adjoining country.

DES (Delivered Ex Ship) (named port of destination)

In this incoterms the seller fulfils his obligation to deliver when the goods have been made available to the buyer "On Board" the ship uncleared for import at the named port of destination.

DEQ (Delivered Ex Quay) (named port of destination)

In this incoterms the seller fulfils his obligation to deliver when he has made the goods available to the buyer on the quay (wharf) at the named port of destination. In this incoterms the seller has to bear the all cost and risk involved up to the point of delivery of the goods to the buyer on the quay. it is the responsibility of the buyer to arrange the custom clearance of import consignment and pay all the cost, duties, taxes and charges from the point of delivery onwards.

DDU (Delivered Duty Unpaid) (named port of destination)

In this incoterms the seller has to bear the cost and risk involved in bringing the goods (excluding duties, taxes and other offices charges payable upon transportation as well as cost and risk of carrying out custom formalities) to the named place in the country of import. In this incoterms the buyer has to pay "demurrage charges" caused by failure to clear the goods for import in time.

DDP (Delivered Duty Paid) (named port of destination)

In this incoterms the seller fulfils his obligation to deliver when the goods have been made available at the named placed in the country of import. It is the responsibility of the seller to clear the goods for import from the custom in the importer's country. In this incoterms the seller has to bear the risk and cost including duties, taxes and other charges for the delivery of goods in importer's country.

Processing Of An Export Order

When you successfully receive the order then process the order carefully. There are various steps involved in processing of an export order.

Step 1
The exporter should write a simple letter to the buyer thanking him for the export order and stating that the confirmation of the some would be sent.

Step 2
The export order should be examined carefully and its contents scrutinizes in terms of the profoma invoice/contract sent to the buyer, on the following steps * The exporter should reconfirm the source of the supply of the product. If exporter is manufacturer exporter and manufacturer the product or his is merchant exporter then purchase the product. * Size and specification should be same as per your offer/quotation. * Arrange the re shipment inspection. if the buyer desire the inspection to be done by an agents/agency of his choice, financial and physical aspect of inspection should be examine and communication to the buyer. Now it is time for packing, packaging and labeling

Step 3 :- Reserve the shipping space

The exporter should make reservation of cargo space for air freighting or freighting of the export consignment as per the delivery period commitments made to the buyer. You can also take the services of clearing and forwarding agents for obtained space.

Step 4
If your product is in the list of restricted item then apply for the grant of export authorization.

Step 5: - Submit the document to the bank

Prepare the document required in export order and submit the document to your bank. Ensure the following things before submitting the documents to bank * You have the correct number of copies of each documents and they carry information called for. * * * * The document name must match exactly what the L/C or contact calls for. Name and address of importer should be correct and same in each document. Complete set of document required by buyer the description of goods should be same.

Clearing and forwarding (C&F) agents

It is essential in export trade that the shipment of goods is sent to the buyer in time. Infact timely delivery is one of the conditions of the export trade. No exporter can relax on this aspect. He should ensure smooth and timely shipment of goods.

Clearing and forwarding agents provide this service. Clearing and forwarding (C&F) agents provides services to an exporter to ensure smooth and timely shipment of goods. The clearing and forwarding (C&F) agents provides various essential and desirable services. these are as follow

Essential services
* Warehousing facilities before the goods are transported to docks/port * Transportation of goods to docks and arrangement of warehousing at port * Booking of shipment space and air fright space. * Arrangement for shipment to be on board * obtaining marine insurance policy * Preparation and presenting of shipping documents, bill of lading, dock receipt, export declaration and extra

Desirable services
* Warehousing facilities abroad, at least in major international market, in case of importer refuse to take delivery of the goods for any reason. * He can trace the goods, if shipment goes as tray, through his international connection * Arrangement for assessing damage to the shipment.

Export Packaging and Packing

Today packaging is considering as one of the most important element for marketing any product. No body can underscore the need for good packaging when he decided to export his product. Packaging means packing of the product in some container to reach the ultimate consumer. Packing mans protective covering used for transportation and shipment of goods. Packaging fulfills a vital role in helping to get the export product to the market in the best condition, as will as in presenting goods to overseas buyer in a attractive way. Packaging of a product performs the role of silent salesmen as it * Improves presentation of the product * protect the product during distribution * Makes handling and retail display of the product easier. Good packing is one; whish protects its contents against hazard like dampness, rough handling, stacking, improper storage, insect infestation, pillage, tampering and pilferage. The choice of a suitable packaging is primarily determined by the significant characteristics of the product like physical and chemical properties and also by density, weight, and distance to be shipped.

Types of Packaging and Packing Packaging

An exporter can use the following containers foe packaging of the product * Polythene Bags * Box made of card paper or card board * Box made of fiber board/plastic/acrylic/sheets.

Packing
The following types of boxes can be used for packing of the package meant for exports.

Wooden Boxes

The wooden boxes are most useful forms of packing as these are strong enough to withstand the load places on the top of it without crushing or cousins damage. The weight of a standard wooden box should not exceed to 100 kegs. This helps in minimizing the freight handling charges and freight of the shipment. a cube shapes wooden box has the maximum protective strength. Fragile goods should be packed in wooden box.

Fiber Board or Corrugated Board Boxes

These boxes are useful for shipment of non-fragile goods. Its use is very common in developed countries. The boxes should be, as far as possible, cube shaped and each box should not exceed 20-25 kegs in weight. These boxes have light weight, saves in shipping cost with a good deal of strength, fair resistance to moisture, compression. The exporter should use cushioning material like rubberized animal hair, plastic material, polythene form shafts, straws, saw dust, wood dust and pear cuttings. This helps in protecting the packages from damage caused by bumping, rubbing or tossing about in the boxes, during rough weather at sea or because of vibration within an aircraft

Steel Drums
Steel drums are used for sending liquids in bulk. A drum should normally not exceed more than 250 kegs. Second hand drums should be used only if the buyer has agreed to use.

Labeling
The main purpose of labeling is to inform the consumer/user about the quality and quantity of the product. The exporter should as certain the labeling requirements from the foreign buyers and strictly complies with them.

Labeling requirements of different countries

Every country uses the different types of labeling. Generally, every country has prescribed that the label on the product must indicate the country of origin. Thus, for exporter from India, it is essential to ensure the each item carries a label 'Made In India'. Beside, there may be certain other requirement as detailed below. For example * In Oman, use of adhesive label on product is prohibited. Label should also be printed in both Arabic and English. * * In Germany, the label on the textile item must indicate the origin of the fabric used * In Canada, each package must carry label, printed in English and French. The label should contain the following information * Country of origin * Specification of the product (Size, Weight etc) * Lot number of consignment.

Factor to be taken care

* Include only relevant information * Use the language of importer's country, if possible * Check spelling of information, given on label. An error can lead the conclusion that the exporter is careless.

Pre Shipment Inspection

The Government of India had enacted export (quality control and inspection) act, 1963, which came into force from January 1, 1964. The Government of India had set up export inspection councils (EIC) to provide the sound development of the export trade through quality control and pre shipment inspection. The Government has prescribed standard of quality and inspection of various commodities meant for export. The Government of India notified 1057 items under the compulsory quality control and pre shipment inspection. These items

related to the product group of * Engineering products * * * * Chemical and allied products Food and agricultural products Jute and jute products Coir and coir products

* Footwear and footwear components * Cashew * Fish and fish products

System of inspection
There are three systems of inspection. These are * Consignment inspection * In - process quality control * self- certification scheme.

Consignment inspection
Under the Consignment wise inspection system, each export consignment is inspected and tested by the recognized inspection agencies. The selection of the items is made on the basis of statistical plan to satisfy conformity of the product with the prescribed standard. After inspection, the recognizes inspection agency issue the pre shipment inspection certificate to the exporter. The exporter giving the detail of the shipment to the ispection agency along with the following documents atleast 7 days in advance of the expected date of shipment/dispatch should make application for pre shipment inspection. * Copy of contact * Detail of packing specification * Commercial invoice giving evidence of the FOB valve * Fee of inspection by check/Demand draft . The inspection fee is generally 0.4% of FOB value of shipment. the ispection agency will depute an inspector to conduct the pre shipment inspection at the expoter factory or warehouse. After the satisfactory completion of the inspection a certificate of inspection is issued to the exporter, which he has to submit to the export department of custom, for the clearance of export cargo.

In - process quality control

In - process quality control units are issued pre shipment inspection certificate on request by EIA. Such units have to submit a statement of certificate issued in respect of various shipments during a months. the statement must be submitted by 15 day of the following months. the inspection fee is 0.2% of FOB value of each consignment and is to be remitted along with monthly statements.

In - self- certification scheme

The manufacturing units which have proven record of maintenance of quality are given have record of maintenance of quality are given of self-certification so that they can issue pre shipment inspection certificate themselves. The unit will be well equipped with testing facilities. The unit indenting to avail of this facility should apply to the director (inspection and quality control). The director, while considering the application, will inspect the manufacturing unit for proper maintenance and testing facilities provided in the units, these units are required to pay a fee at the rate of 0.1% of FOB value subject to a minimum of Rs 2500 and maximum of Rs 1 lacks in 1 year and the recognition may be extended if the manufacturing unit continues to fulfill the recognized norms.

Fumigation
The export of goods prone to infestation in storage and transit are subjected to compulsory fumigation to ensure that the goods reach their destination in safe condition. Such goods include de-oiled rice bran, crushed bones, hooves and horns.

ISI/AGMARK Units
ISI/AGMARK are invariable recognized as a mark of adequate quality foe export purpose. Products manufactured by the units, which are allowed to use ISI/AGMARK, are not required to be inspected by any inspection agency. The custom authorities will allow the export of product of purpose marked ISI or AGMARK without any pre shipment inspection certificate.

ISI/Appeal against rejection

If the consignment is not approved for export, the concerned EIA will issue a rejection note. An exporter can file an appeal against rejection within 10 days of the receipt of rejection note to the EIA. The EIA will convene the meeting of the application panel to examine the consignment, if deemed necessary. The decision of panel will be final.

Exemption from pre shipment inspection

*Export house, star export house, trading house, star trading house, premier trading house have been exempted from the preview of compulsory pre shipment inspection. * 100% EOUs and units set up in EPZ/FTZ/SEZ are exempt from pre shipment inspection.

Marine Insurance
In export trade various risk is involved. For these risk the insurance is also available. For cargo risk the marine insurance is available. Marine insurance is an insurance cover for marine cargo, air cargo and post parcels. The purpose of marine (cargo) insurance is to protect goods angst physical loss and damage during transit. Marine insurance contract is an agreement, by which the insurance company (insurer) agrees to indemnify the owner (insured) of ship or cargo risk, which are incidental to marine adventure. Such contracts are based on the following principle. (1) Principle of utmost good faith: - The insured must disclose to the insurer all the material facts or circumstances which are known to him ought to be known to him in the ordinary course of business. (2) Principle of insurable interest: - Insurable interest is understood as an interest in the preservation of a thing or continuance of a life, recognized by law. Thus, one can have an insurable interest only when one would stand to benefit financial by the continuance of the life or object insured otherwise financial loss would result. (3) Principle of indemnity: - The contract of insurance only indemnifies (made good) a loss resulting from risk covered under the policy.

Detail in the policy

* Name and address of Insure * Value of goods insure * Types of risk covered * * * * Details of goods covered Times and period of policy Details of agent where claim is to file Name and place of shipment and discharge

* Details of transit along with transshipment detail, if any

Who must take the policy

It is depend on the incoterm choose by buyer and seller.

Types of risk covered under the policy

The shipper can cover his risk under the following risk depending upon his need and terms of trade.

1- Institute cargo clauses 'C' (Minimum, an act of men): This policy cover loss of a damage to the goods caused by

* Fire or an explosion * Stranding, grounding, sinking or capsizing of the vessel * * * * Overturning or derailment of land conveyance Collision or contact of vessel, craft or conveyance with any external object other than water. Discharge of cargo at port of discharge general average sacrifice

* Jettison The cover extend over the entire period of transit from the time the goods leaves the warehouse at the place of commencement of transit and continues during such transit including deviation (not within the control of insured) and terminates on delivery of the goods at the warehouses at the destination named in the policy or on expiry of 60 days after the completion of discharge from the vessel at the final port. This policy will not cover the following risk * Loss, damage or expense caused by delay and inherent vice or nature or the subject matter * Loss, damage or expense attributable to willful misconduct of the insured * Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject matter insured * Insufficiency or unsuitability of packing * Deliberate damage to or deliberate destination of the goods * Loss, damage or expense arising from the use of atomic weapon or nuclear fission and/ or like reaction or radioactive force.

2 -Institute cargo clauses 'B' (An act of nature and God) :This policy covers the loss or damage to goods due to an act of nature or God. This policy also includes Institute cargo clases 'C'. This policy cover the following risk * Loss or damage to the goods due to earthquake, volcanic eruption or lightning * washing, overloading *Loss or damage to the goods caused by the entry of sea, lake, river water into vessel. Craft. Conveyance, container lifts van or place of storage. * Total loss of any package lost overboard or dropped while loading onto or unloading from vessel or craft. This policy will not cover the risk comes under Institute cargo clauses 'A'.

3 -Institute Cargo Clauses 'A' (Maximum): This policy cover the risk of loss or damage to the goods insured and it is the widest cover. This policy will not cover the risk excluded under Institute cargo clauses'C'

4 -War and SRCC (Strikes, Riots and civil commotion) :The shipper can obtain war and SRCC cover along with all the three types of policies by payment of an additional payment. The above cover is granted by attaching institute war clauses (cargo) and institute strike claims (cargo) to the policy of insurance.

Claim procedure Documents required for claim

* Original invoice and packing list * Proof of loss * Document of declaration of consignment

Precaution
Exporter must take care of the following point * Amount issued is usually 110% of CIF value of goods

* An insurance document is not dated later than the date of shipment * Amount insured must be stated in the currency of invoice to take care of the exchange fluctuation. * An insurance company or its agents issue an insurance document. The document issued by the broker is not a good document. * Overwriting, cutting and handwriting is not allowed on the insurance document

Credit Risk Insurance

Export risk insurance is designed to protect the exporters from the consequence of the payment risk both political and commercial and to enable them to expand their overseas business without fear of loss. Thus, Export Credit and Guarantee Corporation (ECGC) provide export credit insurance support to Indian exporter.

Export Credit and Guarantee Corporation (ECGC)

The primary goal of export credit and guarantee corporation (ECGC) is to support the export promotion drive in India by * Providing a range of credit risk insurance cover to exporters against loss of goods and services * Offering guarantees to banks and financial institutions to enable exporters obtain better facilities from them.

Function of Export Credit and Guarantee Corporation (ECGC)

The two main function of export credit and guarantee corporation (ECGC) are * It covers the risk of non payment due to commercial and political risks arising in respect of exports on credit terms * It issue guarantees to banks underwriting a major part of the loss that may arise in respect of advance or other support they extend to exporters in connection with their export business.

Risk Coverage: Shipment (Comprehensive Risks) Policy: Standard Policy

Export Credit and Guarantee Corporation (ECGC) covers the risk of exporters against overseas credit risk under standard policy and specify contract policy. Shipment (Comprehensive Risks) policy is commonly known as the standers policy and is ideally suitable to cover risk in respect of goods exported on short-term credit (credit not exceed 180 days). It is a whole turnover policy designed to provide a continuing insurance for regular flow of export shipment of raw materials, consumer goods, and consumer durables. The policy covers both commercial and political risk from the date of shipment. It is issued to exporter, which anticipated export turnover for next 12 months is more than Rs 50 lacks.

Risk Covered under this policy

Under the shipment (Comprehensive Risks) policy, the Export Credit and Guarantee Corporation (ECGC) covers the following risk from the date of shipment.

Commercial Risk
* Insolvency of buyer * Failure of the buyer to make the payment due within a specified period. * Buyer failure to accept the good, subject to certain condition.

Political Risk
* Imposition of restriction by the government of the buyers country or any government action which may block or delay the transfer of payment made by the buyer * War, civil war, revolution, civil disturbances in the buyer's country * new import restriction or cancellation of a valid import license * 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 caused of loss occurring outside India, not normally insured by general insurance and beyond the control of both the exporter and buyer.

Risk Not Covered under this policy

The policy does not cover losses due to following risk * Commercial disputes like quality of the product * Caused inherent in the nature of the goods * * * * Buyer's failure to obtain necessary import authorization in his country Insolvency or default of any agents of the exporter or the collecting bank loss or damage to goods which can be covered by general insurance Exchange fluctuation rates

* Failure of the exporter to fulfill the terms of the export contact or negligence on his part.

Shipment covered
The shipment (Comprehensive Risks) policy is meant to cover all the shipment that may be made by an exporter or credit terms during a period of 24 months ahead. The exporters required getting the insurance provided by the policy for each and every shipment that may be made by him in the next 24 months on DA, DP or open delivery terms to all buyer other than his own associates. The policy cannot be issued for selected shipment, selected buyer or selected markets.

Shipment made by air

When shipment made by air, then the buyer are often able to contain delivery of the goods from the airlines before making payment of the bill or accepting them for payments, as the case may be. If he buyer fails to make the payment subsequently as per the contract the risk of loss will not be covered under the policy if premium has been paid on the shipment for DA, DP terms of payments.

Procedure for risk coverage

Maximum Liability
As the policy is intended to cover all the shipment that may be made by exporter in a period of 24 months ahead, the Export Credit and Guarantee Corporation (ECGC) will fix its maximum liability under each policy. The maximum liability is the limit up to which ECGC would accepts liability for shipment made in each of the policy year, for both political and commercial risk. The maximum liability fixed under the policy can be enhanced subsequently, if necessary.

Credit Limit on Buyer

Commercial risk are covered subject to credit limit approved by the Export Credit and Guarantee Corporation (ECGC), on each buyer to whom shipments are made on credit limit on each buyer.

Percentage of risk covered

The Export Credit and Guarantee Corporation (ECGC) normally pays 90% of the loss, whether it arise due to commercial risk or political risk. The remaining 10% has to borne by the exporter himself.

Minimum Premium
Policy will be issued against a minimum premium of Rs 10000/-, which will be adjusted against premium payable on shipment declaration.

Resale of unaccepted goods

The policy holder is obliged to take immediate the effective action to minimize the possible loss if and when a buyer does not take delivery of the goods. If he wishes to resell the goods to an alternate buyer he should take the prior approval of the ECGC. Notice of resell should be given to the original buyer so that, it would be possible to take legal action against him subsequently, if considered necessary, for recovery of the loss. if the exporter decides to bring the

goods back to India, the ECGC will make paid 90% of the reshipment expenses.

How to obtain a policy

The exporter should fill in a proposal form which can be obtained from any of the ECGC offices and send it to the nearest ECGC office. He should also confirm his acceptance of the premium rates, which will be given to him along with the proposed form and remit a minimum premium as prescribes by Export Credit and Guarantee Corporation (ECGC).

Small Exporter Policy

The small exporter's policy is basically the standard policy, incorporating certain important in terms of cover, in order to encourage small exporters to obtain and operate the policy. It will be issued to exporters whose anticipated export turnover for the next 12 months does not exceed Rs 50 lacks. Period of policy: - small exporter's policy will be issued for a period of 12 months. Premium: - Minimum premium payable for a small exporter's policy is Rs 2000/-. Declaration of shipment: - Shipment needs to be declared on quarterly basis. Declaration of overdue payment: - Small exporters are required to submit monthly declaration of all payment remaining overdue by more than 60 days from the due date. Percentage of cover: -In this policy ECGC will pay the 95% of the loss is due to commercial risk and 100% if loss is caused by any of the political risk.

Resale of unaccepted goods

If buyer does not accept the goods, then exporter can sell the goods to an alternate buyer without obtaining prior approval from the Export Credit and Guarantee Corporation (ECGC). The Export Credit and Guarantee Corporation (ECGC) may consider payment of claim up to an amount considered reasonable by the ECGC, provided that the ECGC is satisfied that that the exporter did his best under the circumstances to minimize the loss.

Export Documentation
Documentation is very essential part of export trade. From the beginning to till the end of export process the export documents play a very vital role.

Types of Export Documents

Documents used in export trade are as follow * Pro-Forma Invoice: - It is a quotation send by exporter to his buyer. This is issued by exporter to his buyer giving details about the order. On the basis of pro forma invoice buyer open the letter of credit. * Commercial Invoice: - this document shows the value of goods. There are three types of Commercial invoice used in export trade. 1- (Custom Invoice): - When the Commercial invoice is prepared on the format prescribed by the custom authorities of importer's country, it is called custom invoice, this invoices required in USA, Canada and Australia. 2 - Consular Invoice: - When the Commercial invoice is duly verify (sign) by the Embassy/Consulate of the importer country based in the country of exporter is called consular invoice. Embassy/Consulate attested invoice become legalized/ consular invoice. This type of invoice is required in countries like Mexico & Middle East countries. 3 - Legalized Invoice : - It is same as consular invoice. This term is use in country like Turkey, Liberia, Taiwan, Latin American countries.

* Packing List : - This documents have all the information about the gross weight of goods, net weight of goods, packing type, marks and no of boxes etc. * Certificate of Inspection/ Quality control : - A document in which certification is made as to the good condition of the merchandise immediately prior to shipment. The buyer usually designates the inspecting organization, usually an independent inspection agency or govermen body. This is usually performed by a third party and often obtained from independent testing organizations. * Certificate of Insurance : - This is a proof that exporter covers the loss of or damage to the cargo during transit. * Mate Receipt: - It is a receipt issued by the shipping line at the time of loading the goods on the ship. This receipt states the condition in which goods received by shipping line. This is used when goods are sends by sea only. * Transport Documents 1- Bill of lading: - This is a contract between the owner of the goods and shipping line. This is the proof of shipment that you have sent the goods. Bill of lading is issued by shipping line against mate receipt. It is issued in set of negotiable and nonnegotiable copies. Bill of lading includes (a) Title of goods receipt for the goods shipped & an admission to their apparent condition & quality at the time of shipment. 2- Airway Bill : - Airway bill (AWB) refers to a receipt issued by an international courier company for goods and it is evidence of the contract of carriage, but it is not a document of title to the goods. Airway bill is non-negotiable. 3 - Combined Transport Documents : When goods are send by more then one source of transport. this document is required. 4 - Track Receipt : When goods are send by track to another country, this recipt is issued by transport company 5- Railway receipt : When goods are send by rail to another country, this recipt is required. 6 - Post office receipt : When goods are send by post office to another country, this recipt is issuesd by post office.

* Certificate of origin : - Certificate of origin is a document that show the country in which the goods are produced or manufacture. Certificate of origin is issued by chamber of commerce of exporter's country. Some countries (i.e. Middle East) require that certificate of origin be notarized, certified by local chamber of commerce and legalized by the commercial section of the consulate of the destination country. * GSP Certificate of origin : GSP (Generalised System of Preferences) program or the preferential tariff treatment, a free or reduced duty is granted by developed countries to certain manufactured goods from the least developed countries, in order to bolster their exports and economic growth. Most imports eligible under the GSP program are free of duty. There are over 20 industrialized countries---donor countries (country of destination)---which maintain GSP programs and over 100 least developed countries---beneficiary countries (country of origin)---which are eligible under the GSP program. * Bill Of exchange: - A written order for a certain sum of money, to be transferred on a certain date from the person who owes the money or agrees to make the payment (the drawee) to the creditor to whom the money is owed (the drawer of the draft). * Letter to the bank for Collection/negotiation of documents * ARE-1 with declaration * Exchange Control Declaration form (SDF/GRI)(PP)(SOFTEX) * Health Certificate For shipment of live animals and animal products (processed foodstuffs, poultry, meat, fish seafood,

dairy products, and eggs and egg products). Note: Some countries require that health certificates be notarized or certified by a chamber and legalized by a consulate. Health certificates are issued by the U.S. Department of Agricultures Animal and Plant Health Inspection Service (APHIS).

* Marine Insurance : An isurance which will compensate the owner of goods transported overseas in the event of loss which cannot be legally recovered from the carrier. Export Finance
Exporter needs finance for purchasing, processing, manufacturing or packing of goods for export. After the goods have been shipped there is time gap between the time of shipment and receipt of export proceeds from the buyer. Export finance is the cheapest, easiest and the most liberal finance available in industry. It is generally found that they exporter are in need of finance at 2 stages namely at pre shipment stage (before the goods are shipped) and at the post shipment stage(when the goods have been shipped).

Pre shipment Finance

Pre shipment finance is related to export after procuring the order, to purchase the row material, processing pre shipment inspection, packing, insurance, transport charges, export duty, dock charges and custom house charges.

Packing Credit
Extended by the banker for the procurement of raw material, processing, pre shipment finance and packing.

Shipping Loan
To meet the insure, transport, export license fees, export duty, dock charges and custom house charges.

Person eligible for packing credit

Packing credit can be grated to an exporter, who has export order in his own name and who will actually export the goods. However, as an exception to this rule, packing credit can be granted to supporting manufacturers or suppliers of goods, who do not have export ordering his name and are exporting through merchant exporter or export house.

Basic criteria for granting packing credit

Since export finance is a purpose oriented, it is granted to the eligible exporter or the manufacturers against evidence/lodgment of irrevocable L/C, established/transferred through the medium of a reputed bank or confirmed order/contacts placed by buyer.

Purpose of finance
Packing credit finance, being purpose-oriented finance, is granted for the specific purpose of procuring raw material, purchasing, manufacturing, processing, transporting, warehousing, packing and shipped the goods.

Quantum of finance
There is no fix formula for determines the quantum of finance, to be granted to exporter but banks normally finance 60% to 80% of the total value of export in many stage.

Period of finance
Maximum extendibility is only for 180 days or expiry date or processing period which ever is earlier.

Rate of interest

1 - 80 days -----> PLR - 2.5% 80 - 270 days -----> PLR - 0.5% 270 - 360 days -----> commercial rate of interest beyond 360 days -----> premium rate of interest PLR is Prime landing rate.

Post shipment finance

Post shipment finance is the finance extended by the bank after effective the shipment to bridge the financial gap. Post shipment finance is required because at the pre shipment stage exporter gets only 60% to 80%. So balance amount need to be released to him after shipment. Post shipment finance can be classified as under

Negotiation (settlement) of document under L/C

The exporter tenders the documents to his bank and the bank pass the value to the exporter even before receiving it. It is done with resource (right of recovery).

Purchase of document without L/C

In case there is no L/C. the bank purchase the document drawn under the order. Exporter's bank runs a bigger risk in this case. Bank while purchasing the documensinsist of ECGC policy + credit limit on buyer. So that bank cans fallback on ECGC in the case of need.

Advance against document sent on collection basis

Sometimes, it is possible that there is a shortfall in sanction bills, purchase or negotiation limit. To cover the entire amount of a bill tendered by the exporter for purchase or negotiation, or the document drawn under L/C have some discrepancies and the bank is reasonably sure that the same will be accepted to the buyer and that the bill will be paid. Under such situation, considering the immediate need and requirement of the exporter, the bank may send the bill on collection basis and finance him to some extent out of the total bill amount.

Advance against retention money

When the capital goods are being exported the buyer does not pay the full amount to the exporter but retain certain amount as retention money. It is lieu of performance guarantee according to India law only 10% is retention money only for 6 months.

Advance against undrawn balance

In certain line of export, it is the trade practice that bills are not to be drawn for the full invoice value of the goods but it leave small parts undrawn for payment after adjustment due to difference in rates, weight, quality. The undrawn amount is pay by the buyer after testing the goods at the discharge port. Bank finance the undrawn balance subject to a minimum of 10% of the value of export and an undertaking is obtained from the exporter that he will surrender the balance within 6 months or 12 months from the date of shipment.

Person eligible for post shipment finance

in case of physical export, post shipment finance is extended to the actual exporter who has exported the goods or to an exporter in those name export document are transferred.

Basis of post shipment finance

Post shipment finance is always extended against the evidence of shipment of export goods or supplies made to the designated agencies (in the case of deemed exports).

Purpose of post shipment finance

Post shipment finance, being basically on export sales finance, is meant for financial export sales receivables after the date of shipment of goods of the trade of realization of the export proceeds.

Quantum of post shipment finance

Post shipment finance can be extendedly to 100% of invoice value of goods.

Period of post shipment finance

Post shipment finance can be a both short term and long term finance depending upon the payment terms.

Rate of post shipment finance

Upto 90 days --------> PLR - 2.5% 91 - 180 days -------> PLR - 0.5% 181 days and more --------> depend on the bank.

Custom Clearance
Once the pre shipment inspection of the export consignment is over and packing has been completed, the exporter should arrange for shipment of goods. At this stage, services of a clearing and forwarding agents should be taken to ensure timely and smooth shipment of goods. The various steps in involved in the process of custom clearance. These are as follow.

1- Documents required for custom clearance

* Commercial invoice - 2 copies * Packing list - 2 copies * Copy of L/C or contact * * * * ARE - 1 form - 3 copies Quality inspection certificate Annexure 'A' with deceleration Exchange control deceleration (SDF/GR)

* Custom copy of export authorization in case of restricted item

2- Submission of Documents to port trust authorities

The documents are * Port trust copy of shipping bill - 2 copies * Export application (for payment of dock charges) - 2 copies * Cart chit - 2 copies This is necessary in case of export by sea only.

3- Payment of airport terminal storage and processing charges

Exporter is required to pay the airport terminal storage and processing charges (TSP) to the airport authority.

4- Processing of documents
The documents tendered are checked to as certain whether the same are in order and whether that is consistent. The detail of goods, FOB value, duty drawback rate (whenever applicable) and input output norms (whenever applicable) given on the shipping bill are checked by the inspector and the superintendent of customs.

* After processing of the documents, shipped bill and SDF/GRI form (original copies) are detached from the set of documents. * At this stage export cargo is brought in accordance with carting order issued by the airlines to allow entry of cargo in the warehouse * After the goods have been received in the warehouse the same are specified to physical examination. The superintendent of customs directs the inspector to physically inspect the goods and record on the duplicate and triplicate copy of the shipping bill. * The superintendent of custom will finalize the record and on the basis the cargo is cleared for export * The cargo is then shifted to the shed of airlines (in case of air shipment), in care of ICD the cargo is shifted to the container for shipment to the port. The customer, shipping company and railway authorities shall affix the seal on the container. * After loading of cargo, bill of loading/ airway bill is issued by the shipping company/ airlines. * Lastly, the exporter shall receive back export promotion copy of the shipping bill and duplicate copy of SDF/GR form as well as other documents.

Export Incentives
The Government of India provides various incentives & facilities to the exporter. These export incentives and facilities are as follow. * Duty Drawback (DBK) * Duty Entitlement Passbook Scheme (DEPB) * Focus Market Scheme (FMS) * * * * Focus Product Scheme (FPS). Duty Exemption Scheme Vishesh Krishi and Gram Udyog Yojna (VKGUY) Marketing Development Assistance (MDA)

* Export Promotion Capital Goods Scheme * Served from India Scheme * Exchange earner Foreign Currency Account (EEFC A/C)

Duty Drawback
The duty drawback refers to the refund in respect of central Excise & Custom duties paid by manufacturer and/or exporter in relation to the inputs used for manufacturing of the products. Duty drawback is not applicable in the respect of a product if (a)- No excise/custom duties were paid for its manufacturer and/or exporter. (b)- Amount of the drawback is less then 1 % of FOB value.(except where the amount of drawback is more than Rs 500 per shipment) (c) - manufacturer and/or exporter is by 100% EOU/EPZ/SEZ Units. (d)- If manufacturer and/or exporter apply for duty entitlement pass book scheme.

Duty Drawback Rates

The government of India announces every year on 31 may, the rates of Duty drawback in respect of scheduled items. All such rates are called all industry rates. The rates indicated custom & excise duty allocation. These rates are generally made effective for one year from 1 June. In case duty drawback rates are not announced for a product, then you can submit an application in the prescribed form for determination of specific rate of duty drawback for the particles product. Such a rate is known as Brand rate. If the rate of duty drawback is less then 80 % of the duties paid then the exporter can apply for its upwards revision in prescribes form.

Duty Drawback Under EDI System

In all custom station where EDI system has been introduced for processing of shipping documents, the exporter are not

required to file duty drawback claims, such claims are processed simultaneously with shipping documents. For receiving this amount you have to be maintain a bank account with a bank, which is link with customhouse.

Duty Entitlement Pass Book (DEPB)

Under the Duty Entitlement Pass Book (DEPB) scheme, exporter is eligible to claim credit as specified percentage of FOB value if exports made in freely convertible currency. The rate of Duty Entitlement Pass Book (DEPB) is announced by DGFT. The rates of Duty Entitlement Pass Book (DEPB) are decided by DGFT after every 5 years but they have right to change the rates at nay time.

How to Apply
You can apply for this only when you received the payment. Application for the grant of credit under Duty Entitlement Pass Book (DEPB) on post export basis may be made to the licensing authority concerned in ANF-4G along with the documents. The application for obtaining credit should be field within a period of 6 months from the date of realization of export proceeds. You can file one or more application subject to the condition that each application shall contain not more than 10 shipping bills. All the shipping bills in any of the application must related to export made from same port (custom house) only. The Duty Entitlement Pass Book (DEPB) shall be issued with single port of registration, which will be port from where the exports have been affected.

Application Fee
You have to pay the fee of Duty Entitlement Pass Book (DEPB) at the rate of Rs 5/- per thousand subject to minimum of Rs 200/-, in cash or by demand draft drawn in favor of regional licensing authority/DGFT as applicable.

Vishesh krishi And Gram Udyog Yojna

The objective of this scheme is to prompt the export of fruits, vegetables, flower, minor forest product and their value added product. Export of agricultural product shall be entitled for duty credit scrip equivalent to 5 % of FOB value of exports for each licensing year.

Focus Market Scheme

Government of India gives the duty credit scrip equivalent to 2.5 % of FOB value of exports to some countries to increase the export in these countries.

Focus Product Scheme

Government of India gives the duty credit scrip equivalent to 1.25 % of FOB value of exports to some products to increase the export of these products.

Export Promotion Capital Goods Scheme (EPCG)

According to this scheme, a domestic manufacturer can import machinery and plant without paying customs duty or settling at a concessional rate of customs duty. But his undertakings should be as mentioned below:

Customs Duty Rate

Export Obligation

Time

10%

4 times exports (on FOB basis) of CIF value 5 years of machinery. 6 times exports (on FOB basis) of CIF value 8 years of machinery or 5 times exports on net foreign earnings basis of CIF value of machinery. 6 times exports (on FOB basis) of CIF value 8 years of machinery or 5 times exports on net foreign earnings basis of CIF value of machinery.

Nil in case CIF value is Rs200mn or more.

Nil in case CIF value is Rs50mn or more for agriculture, aquaculture, animal husbandry, floriculture, horticulture, poultry and sericulture.
.

World Trade Organization (WTO)

The International trade is based on multilateral trading system. It is a system involving trade amongst various countries. it is therefore, necessary that the rules and regulation of such system are properly define. In the year 1947, an attempt was made by 23 countries in the world to define the basic norms for conduct of international trade. The trade negotiation amongst these 23 countries in multilateral treaty called general agreement On Traffic and Trade (GATT) in the year 1948. The GATT was established to secure the conduct of international trade based on the principles of non-discrimination, transparency and liberalization The GATT had been organizing international trade negotiation to define the regulation for and strengthening multilateral trading system over the years. The latest round of international trade regulation was conducted under auspices of GATT from 1986 to 1993. It was on 15 December that the latest round of international trade negotiation among 117 countries was conducted at Uruguay. The agreement so conducted were signed on April 16,1994 by 123 countries. The agreement has come to known as a Uruguay round or the GATT 94. One of the agreements during the Uruguay round was regarding renaming of GATT as World Trade Organization (WTO). The GATT 1994 is being implemented with effect from 1 of January 1995 when the very first agreement regarding the establishment of world trade organization (WTO) was established. Thus the World Trade Organization (WTO) held its last round of international trade negotiation at Doha in July 2006. At present 151 countries are member of World Trade Organization (WTO).

Objective of World Trade Organization (WTO)

* To ensure the conduct the international trade on non-discrimination basis. * * * * To raise standard of living and income, ensuring full employment To expend production and trade Protecting environment Ensuring better share for developing countries.

Function of World Trade Organization (WTO)

* * * * Administering World Trade Organization (WTO) trade agreement Forum the trade negotiation Handling trade disputes Monitoring national trade policy

* Technical assistance and training for developing countries * Co-operation with other international organization (like help from World Bank and IMF).

Legal framework of World Trade Organization (WTO)

* Protection through import traffic * Reduction in traffic and binding against further increase * Conduct of trade according to M.F.N. clauses * Commitment to national treatment rule.