EXPORT ADMINISTRATION AND PRODUCTION MANAGEMENT

Submitted by

SHIKHA YADAV REGISTRATION NO:1105654

In partial fulfillment of the requirements for the award of the degree Of

MASTER OF BUSINESS ADMINISTRATION

In

INTERNATIONAL BUSINESS
Under the guidance of

Ms. NINA JETHWA,

Industry Guide Aurobindo Handmade Paper Factory Pondicherry

Mr. P.SRIDHARAN,
Faculty Guide Assistant Professor Dept. of International Business Pondicherry University

Department of International Business Pondicherry University August-October 2011

DEPARTMENT OF INTERNATIONAL BUSINESS

School of Management, Pondicherry University, Puducherry 605 014.

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Ms.SHIKHA YADAV, (Reg. No. 1105654) a student of MBA International Business, 2010 2012 batch has successfully completed her project in AUROBINDO HANDMADE PAPER FACTORY, PONDICHERRY, INDIA. Her period of training commenced from 1st September,2011 to 29th October,2011. She has prepared the report titled EXPORT ADMINISTRATION AND PRODUCTION MANAGEMENT for the requirement of the concern and for Master of Business Administration in International Business program in the Department of International Business, School of Management, Pondicherry University, Puducherry 605 014.

Dr. P.SRIDHARAN
Associate professor, Dept. of Intl Business, School of Management, Pondicherry University, Puducherry 605 014.

Dr. MOHAN K. PILLAI

Head of the Department, Dept. of Intl Business, School of Management, Pondicherry University, Puducherry 605 014.

DECLARATION

I hereby state that the Project Report titled Export Administration and Production Management, is submitted in partial fulfillment of the degree of Master of Business Administration (International Business) is an original work entirely done by me and is based entirely on my observation. It has not previously formed the basis for the award of any other degree, diploma, fellowship or any other similar title.The facts presented here are true to the best of my knowledge.

Place:Pondicherry Date:

(SHIKHA YADAV)

ACKNOWLEDGEMENT

I express my sincere gratitude to Ms.REBA ROY of AUROBINDO HANDMADE PAPER FACTORY for providing me project in their esteemed organization. I would also like to thank, Ms.NINA JETHWA, who has been constant source of information and inspiration. I am extremely thankful to my Academic Guide Dr.P.SRIDHARAN, Department of International Business, Pondicherry University for his valuable guidance and support during my project. I express my sincere thanks to Dr.MOHAN K.PILLAI,Head of the Department, Department of International Business, School of Management. And all Lecturers, Department of International Business, for their guidance and support throughout this project. I would also like to convey my heartfelt gratitude to my mother and my friends for their constant encouragement, support, help and valuable advice to make this project a success. Finally, I express my gratitude to the almighty God for the successful completion of my project.

LIST OF CONTENTS S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Particulars
Introduction Problem statement Objectives Research methodology Period of the study Limitations of the study Introduction to Shri Aurobindo Handmade Paper Factory Company Profile Pre-Export Activities Processing of Export Order Documents connected to Transportation of goods Flowchart of Export Procedure Modes of Payment Government Incentives for Exports Conclusion Bibliography

Page No. 6 6 6 6 6 7 8 11 14 32 39 40 41 44 45

INTRODUCTION
In the briefest terms,exporting is the process of earning money by selling products(or services) in foreign markets.It is finding customers and enterprise which can serve better than these customers current suppliers .It is in serving these customers successfully that the enterprise grows and prospers,simultaneously increasing direct and indirect employment.

PROBLEM STATEMENT
To study the export procedures in Aurobindo Handmade Paper Factory,Pondicherry.

OBJECTIVES
To study the export procedures. To study the documentation process required for exports.

RESEARCH METHODOLOGY

RESEARCH DESIGN

The research design of this project is descriptive in nature.

DATA COLLECTION: Primary data: Information with the manager and other staff members at Aurobindo Handmade Paper Factory.

 Secondary data: The sources of secondary data which helped in my project are books and websites.

LIMITATIONS OF THE STUDY

No direct knowledge of the operations of Forwarding Agents. All the findings are based on the information from Seller/Exporter side only. Export Rules, Regulations & Compliances are too wide to cover thoroughly in short term project.

INTRODUCTION TO AUROBINDO HANDMADE PAPER FACTORY COMPANY PROFILE

OUR VISION A place where people can come and be inspired ...explore their own creative genius, discover and develop new techniques in art. The Hand Made Paper Factory, started in 1959, is internationally known for the strong and beautifully coloured paper,it produces by hand. The grades of paper vary from thin bond (67gsm) to very thick drawing paper (660gsm). The most successful items are the special papers: bagasse, bamboo, ricehusk, gunny, straw, algae and tea leaves in paper pulp so that an abstract design is created on the paper when it finally emerges. Another successful item is marbled paper with which stationery items are made. Marbling is a Japanese art of abstract painting done on water. Every sheet of paper is an individual work of art and varies both in shade and design. 50% of the products made in the Hand Made Paper Factory are exported to USA, Europe and Asia. This factory one of the Ashrams most successful commercial enterprises,with the paper produced here being exported to various parts of the world.

The marbling of paper is an ancient art first practised in Japan in the ninth century. Completely realised by hand, it consists in producing certain patterns and effects by means of colours on water. A piece of paper or silk is laid on the water, so that the flowing patterns get imprinted on it.

Aurobindo Handmade Paper Factory consists of four sections: 1. Marbling Section 2. Screen Painting Section 3. Stationery Section 4. Paper Factory

Marbling Section is fully dedicated to marbling of paper sheets.The process starts with sprinkling oil paints in a tank full of water and then spreading the paper sheets on the water.Then,the paper sheets are allowed to dry for some time.The result is sheets with magnificient designs all over it.The process requires three main raw materials:oil paints,water and paper sheets.The paper used is either produced in the Factory itself or bought from local outside dealers or Noida.The oil paints used are supplied from the local suppliers.

LOCAL SUPPLIERS

NOIDA OR LOCAL SUPPLIERS

WATER

OIL PAINTS

PAPER SHEETS

MARBLING COMPOSITION OF MARBLING SECTION

Screen Painting Section is engaged in printing of various papers and visiting cards.It uses the finished products of Marbling section and films to copy the pattern to be printed on each paper.These films are bought in from Banglore.The pattern is designed in the main office of the factory according to the tastes and
9

demand of the customers.The pattern is then sent to the screen printing section to be printed on sheets.The printing of visiting cards on marbled paper has a high demand with the foreign customers.

FILMS

PATTERNS (designed according to the customer demands)

MARBLED PAPER (from Marbling Section)

SCREEN PAINTING

SCREEN PAINTING SECTION

The Stationery Section uses the finished products of Marbling Section to create some unique handmade stationery items such as diaries,bookmarks,greeting cards etc.Each product is made by hands which gives each of them a different flavour. The Paper Factory produces papers which are made from cotton.The cotton is first,stirred into pulp with water and then carved into sheets.These sheets are then,dried to produce the final product. The Factory also consists of a Paper showroom which displays all kinds of paper produced and processed in the factory.It also has a store offering the various stationery items produced in the Stationery Section.It showcases all the unique products which can lure every human being. The factory has a museum also to impart knowledge about the history of handmade paper making all over the world as well as India.

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PRE-EXPORT ACTIVITIES
The planned group work for export order processing can greatly facilitate subsequent operations and avoid the hassles associated with the process. The preexport activities can be divided into the following sets of activities: A. Study Of Government Rules And Regulations B. Identifying Various Parties And Liasion C. Registration D. Obtaining I/E Code Number.

A) Study Of Govt. Rules And Regulations

International trade is governed by a plethora of rules and regulations of various government bodies of exporter and importer. A careful study of these as a prerequisite of exports while the rules governing exports will vary with commodity and importer countrys regulation, as a broad frame work the most important Acts/Publications which must be consulted by an exporter in connection with processing of an export order are : a) b) c) d) Foreign trade(development and regulation) act, 1992 Customs act,1962 Carriage of goods by sea act, 1924 Foreign exchange regulations act, 1973 (now being replaced by FEMA and Money Laundering Bills) e) Schedule of charges of goods in respect of the port of shipment

11

B) Identifying Parties And Liasioning With Them

Exports involve coordinated effects of a large numbers of interdependent organizations. The main parties which are involved in export process are : The Exporter The Foreign Buyer The Negotiation Bank The Reserve Bank of India Director General of Foreign Trade The Collector of Customs The Port Commissioner Clearing & Forwarding Agents. Besides these, other parties may also be associated depending on the nature of commodity and rules guiding the export of the same. Examples of these bodies can be Inspection Agencies, Export Promotion Council, Concor, Ministry of Agriculture etc.

C) Registration
For stepping in the field of an export business, it is compulsory for a company to get registered with Export Promotion Council related to the main product line with which they are dealing.

FUNCTION OF EXPORT PROMOTION COUNCIL:

The main function of EPC is to promote and develop the export of the related product line for enhancing the export. They organize Trade Fairs with in India and Abroad. They encourage the members registered with them to participate
12

in Trade Fairs and advertise their products in whole world. The main role of the EPC is to Project Indias image abroad as a reliable supplier of high quality goods. The EPC keeps abreast of the trends and opportunities in the foreign markets and circulate important information among its members. APPLICATION & DOCUMENTS REQUIRED FOR REGISTRATION: Application form cum Membership form worth Rs.10 A copy of PAN No. issued by income tax authorities duly Import Export Code Number Sales Tax Copy Bank draft of Rs.6000.

D) Importer/Exporter Code Number

Every person / firm / company engaged in export business in India is required to obtain Import-Export Code(IEC) No. from the Regional Licensing Authority concerned (Director General of Foreign Trade). Custom authorities shall not allow clearance of goods to an importer or exporter who does not posses IEC No. It is compulsory quote this Code Number in the relevant Bill of Entry / Shipping Bill.

Applications and supporting Documents Required to Get IEC Number: Application form Commercial Bank Account Number(Current or Cash-Credit Account) Demand draft for payment of Rs.1000 Certificate from the banker of the applicant in the format given in the application form. Two copies of passport size photograph of applicant duly attested by the banker of applicant. Permanent Account No (PAN).
13

PROCESSING OF EXPORT ORDER

Stage-1st Receipt of Purchase Order from Customer

First of all,we receive the customer order usually through mail.The Purchase Order consists of the vendor name and address, ship to information, purchase order number, item numbers or inventory part numbers, item or inventory part description, quantity, and price.
Sample Purchase Order:

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Stage-2nd

Performa Invoice is prepared

A Performa Invoice is prepared according to the Purchase Order.It includes weight and quantity totals, grand total.A sample is given below:

15

Stage-3rd

Order Processing

The order details are passed on to the Production Assistant(Incharge of production).The Production Assistant gives us information about the material requirements according to the order.Based on the requirements,we place orders with the suppliers and provide the materials to the Production Department.

Stage-4th
1) Packing

Packing and Labeling

The Packing is done according to the importers instructions and covers the following operations: i) Final finishing of the goods(final passing, clipping etc) ii) Tagging & Folding(according to importers instructions) iii) Packing(Cartoon, pair-packing).

2) Labeling
Specific marketing and labeling is used on report shipping cartons & containers to: i) Meet shipping regulations ii) Ensure proper handling iii) Conceal the identity of contents iv) Help receivers identify shipments.

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Stage 5th

Pre-Shipment Operations

Documents used for Pre-Shipment

The pre-shipment documents generally include shipment advice form, invoice, packing list etc. 1) Shipment Advice Form: It is a sort of covering letter, showing the list of documents enclosed with it. It also contains some other details like Lorry Receipt No., RBI Code No. B/L particulars etc. Sample:

17

2) Letter of credit: A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any.(As our factory is a small scale enterprise,LC is not used for the transactions.)

Sample document LC:

THE MOON BANK INTERNATIONAL OPERATIONS 5 MOONLIGHT BLVD., EXPORT-CITY AND POSTAL CODE EXPORT-COUNTRY

OUR ADVICE NO. MB-5432

ISSUING BANK REF. NO. & DATE SBRE-777 January 26, 2001

TO

UVW Exports 88 Prosperity Street East, Suite 707 Export-City and Postal Code

Dear Sirs:

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We have been requested by The Sun Bank, Sunlight City, Import-Country to advise that they have opened with us their irrevocable documentary credit number SB-87654 for account of DEF Imports, 7 Sunshine Street, Sunlight City, Import-Country in your favor for the amount of not exceeding Twenty Five Thousand U.S. Dollars (US$25,000.00)

available by your draft(s) drawn on at invoice value

us sight

for

full

accompanied by the following documents: 1. Signed commercial invoice in five (5) copies indicating the buyer's Purchase Order No. DEF-101 dated January 10, 2001. 2. Packing list in five (5) copies. 3. Full set 3/3 clean on board ocean bill of lading, plus two (2) non-negotiable copies, issued to order of The Sun Bank, Sunlight City, Import-Country, notify the above accountee, marked "freight Prepaid", dated latest March 19, 2001, and showing documentary credit number. 4. Insurance policy in duplicate for 110% CIF value covering Institute Cargo Clauses (A), Institute War and Strike Clauses, evidencing that claims are payable in Import-Country.

Covering:

100 Sets 'ABC' Brand Pneumatic Tools, 1/2" drive, complete with hose and quick couplings, CIF Sunny Port

Moonbeam Port, Export-Country Country Partial shipment Prohibited Transshipment Permitted Shipment from Special conditions: 19

to

Sunny Port, Import-

1. All documents indicating the Import License No. IP/123456 dated January 18, 2001. 2. All charges outside the Import-Country are on beneficiary's account.

Documents must be presented for payment within shipment. Draft(s) drawn under this credit must be marked

15

days after the date of

Drawn under documentary credit No. SB-87654 of The Sun Bank, Sunlight City, Import-Country, dated January 26, 2001 We confirm this credit and hereby undertake that all drafts drawn under and in conformity with the terms of this credit will be duly honored upon delivery of documents as specified, if presented at this office on or before March 26, 2001

Very truly yours,

Authorized Signature

Unless otherwise expressly stated, this Credit is subject to the Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500.

3) Commercial Invoice: The commercial invoice is a record or evidence of transaction between the exporter and the importer. Invoice is a bill for itemized goods or services. The pre-shipment invoice is a shipment detailing the transaction.

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Sample Commercial Invoice:

4) Packing List: It is a document showing the details of goods contained in individual packages, which helps customs authorities and receives in identifying the contents of specific package. It contains almost all the information provided in invoice along with details of packing like: No. of bales or cartons Gross weight Net weight
21

Dimensions etc. Sample Packing List:

22

5) ARE-1 Form: This document is prepared by exporter & it acts as a excise document. This document contains details like: Description of package Marks and number on packages Gross weight Net weight Description of finished goods Value Invoice number and date Amount of rebate claimed under rule 18.

6) Bill of Exchange: A bill of exchange is also known as draft, which contains an order from the exporter to the importer to pay a specified amount to a person. To whom it is directed to pay is called maker of a bill means exporter. When the goods are shipped by Sea, the bills are drawn in sets and two mailed to the foreign correspondent through an authorized dealer for presentation to the importer. A bill of exchange is to two types:a) Sight Bill: When the importer makes the payment immediately after the draft presented to him. It is called a sight bill.

b) Usance Bill: When the exporter has agreed to give credit to the foreign buyer, he draws a bill, which is called usance bill. A usance bill is drawn for payment at a date later than the date of presentation. There is no aligned document for draft; the same can be prepared by the exporter in the usual format.(Bills of Exchange are not used in our factory.)

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7) Certificates of Origin The certificate of origin is a document certifying the country in which the product was manufactured, and in certain cases may include such information as the local material and labor contents of the product. Some importing countries require a certificate of origin to establish whether or not a preferential duty rate is applicable. A popular example of the certificate of origin is the Form A, which is often called the GSP Form A(given on next page).

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Sample Form: Form A

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8) SDF Form: A document submitted to customs authorities by exportersverifying that shipping bills are accurate and complete. An exporter confirms

on form SDF that the amount paid by the buyer is the same as the full export value stated declaration form. Sample SDF Form:
FORM SDF Shipping Bill No. ___________________ Date :____________ Declaration under Foreign Exchange Regulation Act, 1973 : 1. I/We hereby declare that I/We am/are the*SELLER/CONSIGNOR of the goods in respect of which this declaration is made and that the particulars given in the Shipping Bill no ______________ dated ________________are true and that, a)* The value as contracted with the buyer is same as the full export value in the above shipping bills. b)* The full export value of the goods are not ascertainable at the time of export and that the value declared is that which I/We, having regard to the prevailing market coniditions, accept to receive on the sale of goods in the overseas market. 2. I/We undertake that I/We will deliver to the bank named herein _______________ the foreign exchange representing the full export value of the goods on or before @ ___________________ in the manner prescribed in Rule 9 of the Foreign Exchange Regulation Rules, 1974. 3. I/We further declare that I/We am/are resident in India and I/We have place of Business in India. 4. I./We am/are Or am/are not in Caution list of the Reserve Bank of India. Date : For (Signature of Exporter ) Name:

on

the

shipping

bill.

Also

called statutory

26

9) Weight list: Not synonymous to a packing list. This document breaks down the shipment by weight. This is generally needed only if a certificate is required.

10)Exporters

Declaration:

Customs form completed and

submitted

by

an exporter at the port of export, it is meant to serve two major purposes: (1) to provide information on amount, nature, and value of exports to the statistical office for compilation of foreign trade data,and (2)to serve as an export

control document. In some cases, an export license and/or a certificate of origin is also required to be attached.

11)Shippers Letter of Instruction: The Shipper's Letter of Instruction is just that - a "letter" from the Shipper instructing the Freight Forwarder how and where to send the export shipment. Sample Shippers Letter of Instruction:
Shipper's Letter of Instructions We, M/s _______________________ situated at _____________________ have tendered _________________ number of packages of _________________ weight to M/s Blue Dart Express Limited for clearance against Regular Shipping Bill of Exports, under Airway Bill Number _____________________. We confirm that we have handed over : a. 6 copies of Export Invoice b. 6 copies of Packing List c. SDF Form in duplicate duly filled in, signed and stamped d. Quota Visa in original e. Quota Charge Statement (in case of Garments/Fabrics to USA) f. Single/Multiple Country Declaration duly filled in, signed and stamped (in case of Garments/Fabrics to USA) g. Negative Declaration duly filled in, signed and stamped (in case of Silk Items to the USA of over 70% silk) h. TSCA certificate i. AR4 Form/Gate Pass We confirm that we are registered with CUSTOMS EDI DEPARTMENT AT BOMBAY/

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We are not registered with Customs EDI Department at BOMBAY and attach herewith : a. Original IEC Certificate b. Annexure A Form duly filled in, signed and stamped We require ______________________ type of Shipping Bill to be filed. In case of Drawback Shipping Bill : a. Our Account Number with SBI, ACC, Mumbai is _____________________________ b. We are attaching herewith Annexure B Form, Appendix III Form and Appendix IV Form. c. Modvat Declaration (if applicable) In case of DEEC/DEPB Shipping Bills, we are attaching herewith the following documents; a. b. c. We certify that the Consignment is to be forwarded on FOB/CIF/C&F basis - if CIF/C&F we confirm having stated Freight/Insurance break-up separately on the Invoice. We confirm that our Bankers are __________________________ The AUTHORISED DEALER CODE of our Bankers is _________________ Our Account Number with the Bank where the Foreign Exchange proceeds are to be remitted is _____________________ All further correspondence as regards this shipment, if any, is to be done with the below-mentioned in our Company : 1.Name :_________________ /Designation :_________________ 2.Name :________________ /Designation :__________________ At Telephone Numbers : ____________________________ and/or Fax Numbers: ________________________

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12)ENS Declaration: Most goods brought into the customs territory of the European Community (EC) must be pre-notified in an electronic entry summary declaration (ENS), which is submitted to the customs Office of First Entry (OoFE) into the European Union for safety and security risk analysis purposes.It consists of particulars as number of items, consignor, consignee, weight etc. A sample of ENS Declaration is given on next page.

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30

31

DOCUMENT CONNECTED WITH TRANSPORTATION OF GOODS

Air Way Bill (AWB) Air consignment Note. The receipt issued by an airline or its agent for the carriage of goods is called airway bill or air consignment note. It is issued in terms and conditions of the contract of carriage of goods

Postal Parcel Receipt (PPR). Like the AWB, the PPR evidence merely the receipt of the goods to be exported to the buyer and is not a document of title.

Bill of Lading (B/L). A Bill of Lading is the most important document in Foreign Trade. It is generally issued by a shipping company. It services as a receipt from the shipping company who undertakes to deliver the goods at agreed destination on payment of freight in a prearranged manner and also a document of title to the goods.

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Ocean (Marine) Bills of Lading

The bill of lading (in ocean transport), waybill or consignment note (in air, road, rail or sea transport), and receipt (in postal or courier delivery) are collectively known as the transport documents. Please see the sample. The bill of lading (B/L) serves as a receipt for goods, an evidence of the contract of carriage, and a document of title to the goods. The carrier issues the B/L according to the information in a dock receipt, or in some cases according to a completed working copy of the B/L supplied by the customs broker. The B/L must indicate that the goods have been loaded on board or shipped on a named vessel, and it must be signed or authenticated by the carrier or the master, or the agent on behalf of the carrier or the master. The signature or authentication must be identified as carrier or master, and in the case of agent signing or authenticating, the name and capacity of the carrier or the master on whose behalf such agent signs or authenticates must be indicated. Unless otherwise stipulated in the letter of credit (L/C), a bill of lading containing an indication that it is subject to a charter party and/or that the vessel is propelled by sail only is not acceptable.

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Sample Document: Ocean Bill of Lading

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Stage-6th

Customs Clearance

Custom House Agent (CHA) and freight forwarders, who are known as clearing and forwarding agents, generally act on behalf of exporters for handling their export shipments or clearing their import consignments. They handle all documentation work through the customs & port authorities and other regulatory agencies

Documents required for customs clearance:

1) Shipping Bill: Shipping bill is the main document required by customs authority for allowing shipment. The exporter has to submit some documents for shipping bill which are as follows: SDF (GR Form) in duplicate for shipment. Four copies of packing list giving contents, quantity gross and net weight of each package

Four copies of invoice indicating all relevant particulars such as number of packages, quantity, unit rate, total FOB/CIF value, correct and full description of goods etc Purchase Order, Letter of Credit Inspection certificate 1) GR/SDF Form: GR/SDF form is filled and submitted by the exporter. The exporter give this form to his shipping agent to get it stamped from the customs office after clearance of goods from custom. GR/SDF form is prepared in duplicate. The original copy remains with authorities and they submit it to the Reserve Bank of India. Duplicate copy is submitted to Negotiating Bank, after mentioning the date of receipt of payment on GR/SDF form they also send it to RBI.
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Contents of GR Form: i) Name of advising bank (if exports is under L/C arrangement) ii) Name of bank through which payment is to be realized. iii) Customs assessable value.
iv) Quantity of goods.

3) Bill of Lading: The bill of lading is a document issued by the shipping company or its agent acknowledging the receipts of the goods mentioned in the bill for shipment on board and undertaking to deliver the goods in who like order and condition as received to the consignee or his order provided the freight and other charges specified in the bill of lading require will depend upon the terms of better of credit.

Stage-7th

Post-Shipment Operations

This document, also called as commercial invoice, is widely used in commercial transaction. The seller generates this after the shipment is done. It is the statement of account of sale rendered by the seller to the buyer and is prepared in a specific format. The invoice is usually made out for the full realization amount of goods. It is one of the documents required for negotiation. The post-shipment department is done for preparing this invoice, the bill of ladingnumber and date, shipping bill number and date, GR number and date, freight details, quota details and letter of credit or contract copy is required. This invoice is actually a commercial invoice. The major difference between pre and post invoices are as follow:The pre-shipment invoice is used for customs clearance while the other one is sent to the L/C opener/buyer for getting the realization through the bank.
36

The post shipment invoice may contain the discount or partial advance payment, if any, thereby reducing the bill amount compared to the preshipment.

Negotiation / Collection through Bank

Once the goods have been shipped and the necessary documents are dispatched to the importer, the next step is to collect the payment from the importer. It is obligatory for the exporter to submit the shipping documents to your bank with in 21 days of the shipment of goods for onwards dispatch to the overseas correspondent bank. Who will arrange the payment of the same to your bank describing the documents enclosed with it. 1) Documents sent to the Bank: The exporter presents the following documents to the bank for negotiation:Commercial Invoice No. Packing list Bill of Lading Customs Invoice No. Single Entry Declaration Weight List Original copy of Letter of Credit Additional Documents: Certificate of Origin: There are certain countries that require their importers to obtain certificate of origin from the exporter, without which clearance of goods is not allowed.

37

Generalized System of Performance (GSP Certificate): It is a document which is a special requirement of EEC member countries and a few other European countries. Under the GSP manufacturers and semi-manufacturers from developing countries including India are entitled to a consessional rate of import duty. When the documents are submitted to the bank, it is a request to the bank to negotiate the documents if the same are drawn under the letter of credit.

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FLOW CHART OF EXPORT PROCEDURE

RECEIPT OF INQUIRY FROM BUYER
UNDERSTANDING THE REQUIREMENT & ACCESSING THE CAPABILITIES & CAPACITIES
NO

ACCEPTENCE FOR SAMPLING SAMPLING PREPARATION SAMPLE APPROVED BY BUYER ORDER RECIVING & EXPORT CONTRACT FINALALIZING P.O. TO PRODUCTION INCHARGE SOURCING
(MARBLING,PROCESSING, LABELING FINISHING OF PAPERS) REVIEW BUYERS COMMENT NO

DISPATCHING
(TAGGING, FOLDING, PACKING, INSPECTION & TRANSPORTATION)

PREPARATION OF PRE-SHIPMENT DOCUMENTS

(PACKING LIST, PERFORMA INVOICE, WEIGHT LIST ETC)

CUSTOM CLEARANCE & SHIPPING

(SHIPPING BILL, BILL OF LADING ETC)

POST SHIPMENT OPERATIONS

( COLLECTION OF PAYMENTS THROUGH BANKS)

FEEDBACK

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MODES OF PAYMENT
An export transaction is deemed to be complete only after the final payment has been received. The payment is influenced by several factors such as government rules and practices, bankers, importers financial position and the prevailing trade practices in the industry. The exports managers must take the following factors into account while evolving their payment policies. a) The institutional aspect the operations of the mechanism and credit facibilities. b) Foreign exchange and its relation to export terms and receipt of the export proceeds. c) The methods of receiving payments. d) Other factors. i) Exporters knowledge of the buyer. ii) Buyers financial position. iii) Security of payment and risk factors. iv) Time taken for payment Methods of Payment in Exports Due to the significance of risks in exports payments, the methods of payment can be classified into following categories depending upon the risks associated: Payment in Advance. Open Account. Documentary Bills. Shipment on Consignment Basis. Documentary Credit under Letter of Credit.

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GOVERNMENT INCENTIVES FOR EXPORTS

1. Duty Drawback Scheme 2. Assistance to States for Infrastructure Development of Exports(ASIDE) 3. Maket Access Initiative(MAI) 4. Marketing Development Assistance(MDA) 5. Towns of Export Excellence(TEE) 6. Brand Promotion and Quality Duty Drawback Scheme Duty Drawback is a rebate given by a government on duties or taxes that were paid on imported goods that were used to create other goods,or repackaged and exported again.The Duty Drawback Scheme has been designed and developed in order to provide the relief to exporters on the Customs and Central Excise Duties,which they have paid/suffered on the inputs used in the manufacture of export product.

Assistance to States for Infrastructure Development of Exports(ASIDE) The objective of scheme is to establish a mechanism for involving the State Governments to participate in funding of infrastructure critical for growth of exports by providing export performance linked financial assistance to them. The activities aimed at development of infrastructure for exports can be funded from the scheme provided such activities have overwhelming export content and their linkage with exports is full established.

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Maket Access Initiative(MAI) Under MAI scheme, Financial assistance is provided for export promotion activities on focus country,focus product basis.Financial assistance is available for Export Promotion Councils(EPCs),Industry of State and Trade Commercial

Associations(ITAs),Agencies

Government,Indian

Missions(ICMs) abroad and other national level institutions/eligible entities as may be notified.

Marketing Development Assistance(MDA) Under MDA Scheme, financial assistance is provided for a range of export promotion activities implemented by EPCs and Trade Promotion Organizations on the basis of approved annual action plans.The scheme is administered by Department of Commerce.

Towns of Export Excellence(TEE) A number of towns have emerged as dynamic industrial clusters contributing handsomely to Indias exports.It is necessary to grant recognition to these industrial clusters with a view to maximizing their potential and enabling them to move higher in the value chain and tap new markets.Selected towns producing goods of Rs.750 Crore or more will be notified as TEE based on potential for growth in exports.However for TEE in Handloom,Handicrafts,Agriculture and Fisheries sector,threshold limit would be Rs.150 Crores. Brand Promotion and Quality DOC provides funds for capacity building for up-gradation of quality to national level institutions and EPCs to organize training progammes for the skill improvement of the exporters for quality up-gradation,reduction in rejection in
42

rejection,product improvement etc. as provided under the Market Access Initiative(MAI) Scheme of DOC.

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CONCLUSION
It is clear from the above study that the complexity of export business can be overcome easily by a systematic export procedure & fair documentation. This is only the documentation which safeguards the interests of Exporter, Importer, Banks, Governments, Transport Agencies and Inspection Agencies. Thus,the whole study concludes in brief

To survive & grow in todays international market for any export house, the systematic export procedure is compulsory.

To overcome any kind of error, bottleneck, fraud and mistake; the awareness and implementation of standardized rules-regulations & documentation is necessary.

The final indicator of success of any business is its financial viability and in exports, the inflow of funds from across the borders. Thus, mode of payment must be decided on the basis of best business suitability according to the Govt. & RBI policies.

Also, the Government of India has instituted many support programmes with a view to give thrust to our sectors. These programmes have been made to facilitate the exporters in their exports efforts at various stages of export process.

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BIBLIOGRAPHY
Web Sites www.wikipedia.com www.bluedart.com www.exportdoc.com www.challengecargo.com

Texts Export Management; D.C. Kapoor; Vikas Publications; New Delhi International Trade Operations; Dr.Ram Singh; Excel Books; New Delhi Foreign Exchange; C.Jeevanandam; Sultan Chand & Sons; New Delhi

Policy Foreign Trade Policy(2009-14); Published by DGFT; Ministry of Commerce; Government of India

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