STARTING EXPORT INTRODUCTION.

CHAPTER I INTRODUCTION
How to Start Export is a fair question that every first time exporter wants to ask. Export in itself is a very wide concept and lot of preparations is required by an exporter before starting an export business.

A key success factor in starting any export company is clear understanding and detail knowledge of products to be exported. In order to be a successful in exporting one must fully research its foreign market rather than try to tackle every market at once. he exporter should approach a market on a priority basis. !verseas design and product must be studies properly and considered carefully. "ecause there are specific laws dealing with International trade and foreign business# it is imperative that you familiari$e yourself with state# federal# and international laws before starting your export business. %rice is also an important factor. So# before starting an export business an exporter must considered the price offered to the buyers. As the selling price depends on sourcing price# try to avoid unnecessary middlemen who only add cost but no value. It helps a lot on cutting the transaction cost and improving the quality of the final products. However# before we go deep into &How to export '( let us discuss what an export is and how the )overnment of Indian has defined it. In very simple terms# export may be defined as the selling of goods to a foreign country. However# As per Section * +e, of the India -oreign rade Act +.//*,# the term export may be defined as 0an act of taking out of India any goods by land# sea or air and with proper transaction of money(. Exporting a product is a profitable method that helps to expand the business and reduces the dependence in the local market. It also provides new ideas# management practices# marketing techniques# and ways of competing# which is not

possible in the domestic market. Even as an owner of a domestic market# an individual businessman should think about exporting. 1esearch shows that# on average# exporting companies counterparts. are more profitable than their non2exporting

Why Need to Export here are many good reasons for exporting3 he first and the primary reason for export is to earn foreign exchange. he foreign exchange not only brings profit for the exporter but also improves the economic condition of the country. Secondly# companies that export their goods are believed to be more reliable than their counterpart domestic companies assuming that exporting company has survive the test in meeting international standards. hirdly# free exchange of ideas and cultural knowledge opens up immense business and trade opportunities for a company. -ourthly# as one starts visiting customers to sell one4s goods# he has an opportunity to start exploring for newer customers# state2of2the2art machines and vendors in foreign lands. -ifthly# by exporting goods# an exporter also becomes safe from offset lack of demand for seasonal products. 5astly# international trade keeps an exporter more competitive and less vulnerable to the market as the exporter may have a business boom in one sector while simultaneously witnessing a bust in a different sector. 6o doubt that in the age of globali$ation and liberali$ations# Export has became of the most lucrative business in India. )overnment of India is also supporting exporters through various incentives and schemes to promote Indian

export for meeting the much needed requirements for importing modern technology and adopting new technology from 768s through 9oint ventures and collaboration.

CHAPTER II Introduction
"efore starting an export# an individual should evaluate his company4s :export readiness(. -urther planning for export should be done only# if the company4s assets are good enough for export. here are several methods to evaluate the export potential of a company. he most common method is to examine the success of a product in domestic market. It is believed that if the products has survived in the domestic market# there is a good chance that it will also be successful in international market# at least those where similar needs and conditions exist. !ne should also evaluate the unique features of a product. If those features are hard to duplicate abroad# then it is likely that you will be successful overseas. A unique product may have little competition and demand for it might be quite high. !nce a businessman decides to sell his products# the next step is to developing a proper export plan. ;hile planning an export strategy# it is always better to develop a simple# practical and flexible export plan for profitable and sustainable export business. As the planners learn more about exporting and your company0s competitive position# the export plan will become more detailed and complete. !b<ective he main ob<ective of a typical export plan is to3

Identifies what you want to achieve from exporting. 5ists what activities you need to undertake to achieve those ob<ectives. Includes mechanisms for reviewing and measuring progress. Helps you remain focused on your goals.

-or a proper export planning following questions need to answered3

.. ;hich products are selected for export development' *. ;hat modifications# if any# must be made to adapt them for overseas markets' =. ;hich countries are targeted for sales development' >. In each country# what is the basic customer profile' ?. ;hat marketing and distribution channels should be used to reach customers' @. ;hat special challenges pertain to each market +competition# cultural differences# import controls# etc.,# and what strategy will be used to address them' A. How will the product0s export sale price be determined' B. ;hat specific operational steps must be taken and when' /. ;hat will be the time frame for implementing each element of the plan' .C. ;hat personnel and company resources will be dedicated to exporting' ... ;hat will be the cost in time and money for each element' .*. How will results be evaluated and used to modify the plan' -rom the start# the plan should be viewed and written as a management tool# not as a static document. !b<ectives in the plan should be compared with actual results to measure the success of different strategies. he company should not hesitate to modify the plan and make it more specific as new information and experience are gained. Some &Do0s and Don0ts of Export %lanning DO ensure your key staff members are Esigned on4 to the %lan. DO seek good advice F and test your Export %lan with advisers. DON T create a bulky document that remains static. DO review the Export %lan regularly with your staff and advisers. DO assign responsibility to staff for individual tasks. DON T use unrealistic timelines. 1eview them regularly F they often slip. DO create scenarios for changed circumstances F look at the :what ifs( for changes in the market environment from minor to ma<or shifts in settings. e.g. changes of government# new import taxes. DO develop an integrated timeline that draws together the activities that make up the Export %lan. DO make sure that you have the human and financial resources necessary to execute the Export %lan. Ensure existing customers are not neglected.

CHAPTER III Introduction

A key factor in any export business is clear understanding and detail knowledge of products to be exported. he selected product must be in demand in the countries where it is to be exported. "efore making any selection# one should also consider the various government policies associated with the export of a particular product. ;hether companies are exporting first time or have been in export trade for a long time 2 it is better for both the groups to be methodical and systematic in identifying a right product. It4s not sufficient to have all necessary data 0in your mind0 2 but equally important to put everything on paper and in a structured manner. !nce this <ob is done# it becomes easier to find the gaps in the collected information and take necessary corrective actions. here are products that sell more often than other product in international market. It is not very difficult to find them from various market research tools. However# such products will invariably have more sellers and consequently more competition and fewer margins. !n the other hand 2 a niche product may have less competition and higher margin 2 but there will be far less buyers. -act of the matter is 2 all products sell# though in varying degrees and there are positive as well as flip sides in whatever decision you take 2 popular or niche product. Gey -actors in %roduct Selection H he product should be manufactured or sourced with consistent standard quality# comparable to your competitors. IS! or equivalent certification helps in selling the product in the international market. H If possible# avoid products which are monopoly of one or few suppliers. If you are the manufacturer 2 make sure sufficient capacity is available in2house or you have the wherewithal to outsource it at short notice. imely supply is a key success factor in export business

H he price of the exported product should not fluctuate very often 2 threatening profitability to the export business. H Strictly check the government policies related to the export of a particular product. hough there are very few restrictions in export 2 it is better to check regulatory status of your selected product. H 8arefully study the various government incentive schemes and tax exemption like duty drawback and DE%". H Import regulation in overseas markets# specially tariff and non2tariff barriers. hough a ma<or non2tariff barrier +textile quota, has been abolished 2 there are still other tariff and non2tariff barriers. If your product attracts higher duty in target country 2 demand obviously falls. H 1egistrationISpecial provision for your products in importing country. his is specially applicable for processed food and beverages# drugs and chemicals. H Seasonal vagaries of selected products as some products sell in summer# while others in winter. -estive season is also important factor# for example certain products are more sellable only during 8hristmas. H Geep in mind special packaging and labeling requirements of perishable products like processed food and dairy products. H Special measures are required for transportation of certain products# which may be bulky or fragile or ha$ardous or perishable.

CHAPTER I! "#r$et Se%ection.

Introduction &orei'n "#r$et Re(e#rch &orei'n "#r$et Se%ection Proce((

Introduction After evaluation of company4s key capabilities# strengths and weaknesses# the next step is to start evaluating opportunities in promising export markets. It involves the screening of large lists of countries in order to arrive at a short list of four to five. he shorting method should be done on the basis of various political# economic and cultural factors that will potentially affect export operations in chosen market. Some factors to consider include3 ). Geo'r#phic#% &#ctor(
o o o

8ountry# state# region# ime $ones# JrbanIrural location logistical considerations e.g. freight and distribution channels

*. Econo+ic, Po%itic#%, #nd -e'#% En.iron+ent#% &#ctor(

o o o o

1egulations including quarantine# 5abelling standards# Standards and consumer protection rules# Duties and taxes

/. De+o'r#phic &#ctor(
o o o o o

Age and gender# Income and family structure# !ccupation# 8ultural beliefs# 7a<or competitors#

o o

Similar products# Gey brands.

0. "#r$et Ch#r#cteri(tic(
o o o

7arket si$e# Availability of domestic manufacturers# Agents# distributors and suppliers.

-oreign 7arket 1esearch Jnderstanding a market4s key characteristics requires gathering a broad range of primary and secondary research# much of which you can source without cost from the internet. %rimary research# such as population figures# product compliance standards# statistics and other facts can be obtained without any cost from international organi$ations like Jnited 6ations +J6, and ;orld rade !rgani$ations +; !,. Analysis of export statistics over a period of several years helps an individual to determine whether the market for a particular product is growing or shrinking. Secondary research# such as periodicals# studies# market reports and surveys# can be found through government websites# international organisations# and commercial market intelligence firms. -oreign 7arket Selection %rocess Step )1 )ather Information on a "road 1ange of 7arkets 7arket selection process requires a broad range of informations depending upon the products or services to be exported# which includes3 he demand for productIservice.

he si$e of the potential audience. ;hether the target audience can affords product. ;hat the regulatory issues are that impact on exports of product. Ease of access to this market F proximityIfreight.

Are there appropriate distribution channels for productIservice. he environment for doing business F language# culture# politics etc. Is it financially viable to export to selected market.

Kou can gather much of the first step information yourself from a variety of sources at little or no cost. Sources of information include3

alking to colleagues and other exporters. rade and Enterprise F web site# publications# call centre. he library. he Internet.

Step *3 1esearch a Selection of 7arkets In2Depth -rom the results of the first stage# narrow your selection down to three to five markets and undertake some in2depth research relating specifically to your product. ;hile doing so# some of the questions that may arise at this stage are3

;hat similar products are in the marketplace +including products that may not be similar but are used to achieve the same goal# e.g. the product in our sample matrix at the end of this document is a hair removal cream. As well as undertaking competitor research on other hair removal creams# we would also need to consider other products that are used for hair removal# i.e. ra$ors# electrolysis# wax,.

;hat is your point of difference' ;hat makes your product unique' ;hat are the key selling points for your product' How do people obtainIuse these products' ;ho provides them' Are they imported' If so from which countries' Is there a local manufacturer or provider' ;ho would your ma<or competitors be' ;hat are the key brands or trade names' ;hat is the market4s structure and shape' ;hat is the market4s si$e' Are there any niche markets# and if so how big are they' ;ho are the ma<or importersI stockists I distributors I agencies or suppliers'

;hat are the other ways to obtain salesIrepresentation' ;hat are the prices or fees in different parts of the market' ;hat are the mark2ups at different distribution levels' ;hat are the import regulations# duties or taxes# including compliance and professional registrations if these apply' How will you promote your product or service if there is a lot of competition' Are there any significant trade fairs# professional gathers or other events where you can promote your product or service' %ackaging F do you need to change metric measures to imperial# do you need to list ingredients' ;ill you need to translate promotional material and packaging' Is your branding F colours# imagery etc.# culturally acceptable'

&orei'n "#r$et Se%ection Entry Having completed the market selection process and chosen your target market# the next step is to plan your entry strategy. here are a number of options for entering your chosen market. 7ost exporters initially choose to work through agents or distributors. In the longer term# however# you may consider other options# such as taking more direct control of your market# more direct selling or promotion# or seeking alliances or agreements.

CHAPTER !
Introduction S;! analysis is a useful method of summaries all the information generated during the export planning. S;! stands for strengths# weakness# opportunities and threats# which helps to isolate the strong and week areas within an export strategy. S;! also indicates the future opportunities or threats that may exist in the chosen markets and is instrumental in strategy formulation and selection. o apply your own S;! analysis# start by creating a heading for each category F EStrengths4# E;eaknesses4# E!pportunities4# and E hreats4. Jnder each of these# write a list of five relevant aspects of your business and external market environment. Strengths and weaknesses apply to internal aspects of your businessL opportunities and threats relate to external research. Kour final analysis should help you develop short and long term business goals and action plans# and help guide your market selection process. Environmental factors internal to the company can be classified as strengths or weaknesses# and those external to the company can be classified as opportunities or threats. Stren'th( "usiness strengths are its resources and capabilities that can be used as a basis for developing a competitive2advantage. Examples of such strengths include3

%atents Strong brand names. )ood reputation among customers. 8ost advantages from proprietary know2how. Exclusive access to high grade natural resources. -avorable access to distribution networks.

We#$ne((e( he absence of certain strengths may be viewed as a weakness. -or example# each of the following may be considered weaknesses3

5ack of patent protection. A weak brand name. %oor reputation among customers. High cost structure. 5ack of access to the best natural resources. 5ack of access to key distribution channels.

Opportunitie( he external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include3

An unfulfilled customer need. Arrival of new technologies. 5oosening of regulations. 1emoval of international trade barriers.

Thre#t( 8hanges in the external environmental also may present threats to the firm. Some examples of such threats include3

Shifts in consumer tastes away from the firm0s products Emergence of substitute products. 6ew regulations. Increased trade barriers

Succe((2u% SWOT An#%y(i( Simple rules for successful S;! analysis3

"e realistic about the strengths and weaknesses of the organi$ation.

Analysis should distinguish between where the organi$ation is today# and where it could be in the future. "e specific. Always analyse in relation to your competition i.e. better than or worse than your competition. Geep your S;! short and simple.

A S;! analysis can be very sub<ective# and is an excellent tool for indicating the negative factors first in order to turn them into positive factors. !nce all the research and analysis is done its time to get registered with the various government authorities. Re'i(tr#tion 3ith Re(er.e 4#n$ o2 Indi# 5R4I6 %rior to .//A# it was necessary for every first time exporter to obtain IE8 number from 1eserve "ank of India +1"I, before engaging in any kind of export operations. "ut now this <ob is being done by D)- . Re'i(tr#tion 3ith Director Gener#% o2 &orei'n Tr#de 5DG&T6 -or every first time exporter# it is necessary to get registered with the D)- +Director )eneral of -oreign rade,# 7inistry of 8ommerce# )overnment of India. D)- provide exporter a unique IE8 6umber. IE8 6umber is a ten digits code required for the purpose of export as well as import. 6o exporter is allowed to export his good abroad without IE8 number. However# if the goods are exported to 6epal# or to 7yanmar through Indo27yanmar boarder or to 8hina through )un<i# 6amgaya# Shipkila or 6athula ports then it is not necessary to obtain IE8 number provided the 8I- value of a single consignment does not exceed Indian amount of 1s. *?# CCC I2. Application for IE8 number can be submitted to the nearest regional authority of D)- . Application form which is known as &Aayaat 6iryaat -orm 2 A6-*A& can also be submitted online at the D)- web2site3 http3IIdgft.gov.in.

;hile submitting an application form for IE8 number# an applicant is required to submit his %A6 account number. !nly one IE8 is issued against a single %A6 number. Apart from %A6 number# an applicant is also required to submit his 8urrent "ank Account number and "ankers 8ertificate. A amount of 1s .CCCI2 is required to submit with the application fee. his amount can be submitted in the form of a Demand Draft or payment through E- +Electronic -und ransfer by 6ominated "ank by D)- . Re'i(tr#tion 3ith Export Pro+otion Counci% 1egistered under the Indian 8ompany Act# Export %romotion 8ouncils or E%8 is a non2profit organisation for the promotion of various goods exported from India in international market. E%8 works in close association with the 7inistry of 8ommerce and Industry# )overnment of India and act as a platform for interaction between the exporting community and the government. So# it becomes important for an exporter to obtain a registration cum membership certificate +1878, from the E%8. An application for registration should be accompanied by a self certified copy of the IE8 number. 7embership fee should be paid in the form of cheque or draft after ascertaining the amount from the concerned E%8. he 1878 certificate is valid from .st April of the licensing year in which it was issued and shall be valid for five years ending =.st 7arch of the licensing year# unless otherwise specified. Re'i(tr#tion 3ith Co++odity 4o#rd( 8ommodity "oard is registered agency designated by the 7inistry of 8ommerce# )overnment of India for purposes of export2promotion and has offices in India and abroad. At present# there are five statutory 8ommodity "oards under the Department

of 8ommerce. hese "oards are responsible for production# development and export of tea# coffee# rubber# spices and tobacco. Re'i(tr#tion 3ith Inco+e T#x Authoritie( )oods exported out of the country are eligible for exemption from both Malue Added ax and 8entral Sales ax. So# to get the benefit of tax exemption it is important for an exporter to get registered with the ax Authorities.

CHAPTER !
Introduction An export license is a document issued by the appropriate licensing agency after which an exporter is allowed to transport his product in a foreign market. he license is only issued after a careful review of the facts surrounding the given export transaction. Export license depends on the nature of goods to be transported as well as the destination port. So# being an exporter it is necessary to determine whether the product or good to be exported requires an export license or not. ;hile making the determination one must consider the following necessary points3

;hat are you exporting' ;here are you exporting' ;ho will receive your item' ;hat will your items will be used'

C#n#%i(#tion 8analisation is an important feature of Export 5icense under which certain goods can be imported only by designated agencies. -or an example# an item like gold# in bulk# can be imported only by specified banks like S"I and some foreign banks or designated agencies. App%ic#tion 2or #n Export -icen(e o determine whether a license is needed to export a particular commercial product or service# an exporter must first classify the item by identifying what is called I 8 +HS, 8lassifications. Export license are only issued for the goods mentioned in the

Schedule * of I 8 +HS, 8lassifications of Export and Import items. A proper application can be submitted to the Director )eneral of -oreign rade +D)- ,. he Export 5icensing 8ommittee under the 8hairmanship of Export 8ommissioner considers such applications on merits for issue of export licenses. Export( &ree un%e(( re'u%#ted he Director )eneral of -oreign rade +D)- , from time to time specifies through a public notice according to which any goods# not included in the I 8 +HS, 8lassifications of Export and Import items may be exported without a license. Such terms and conditions may include 7inimum Export %rice +7E%,# registration with specified authorities# quantitative ceilings and compliance with other laws# rules# regulations.

Introduction ). "yth1 I A+ Too S+#%% to Export *. "yth1 I C#nnot A22ord to Export /. "yth1 I C#nnot Co+pete With -#r'e O.er(e#( Co+p#nie( 0. "yth1 Exportin' i( Too Ri($y 7. "yth1 Exportin' i( Too Co+p%ic#ted

CHAPTER !I
Introduction 7any first time exporters or firm managers believe the myths about exporting that it4s too difficult or too costly to sell their product in a foreign country. "ut given below the some of the important facts that will help a first time exporter to clear all his misconceptions. ). "yth1 I A+ Too S+#%% to Export On%y %#r'e 2ir+( 3ith n#+e reco'nition, #8und#nt re(ource(, #nd 2or+#% export dep#rt+ent( c#n export (ucce((2u%%y.

It is true that large firms typically account for far more total exports but the real fact is that vast ma<ority of exporting firms in most countries are small and medium2si$ed enterprises +S7Es,.

*. "yth1 I C#nnot A22ord to Export I don9t h#.e the +oney 2or hirin' ne3 e+p%oyee(, 2or +#r$etin' #8ro#d, or exp#ndin' production 2or ne3 8u(ine((. here are various low2cost ways to market and promote abroad# handle new export orders# and finance receivables. his does not require hiring new staff or setting up an export department. At little or no cost for example# you can receive product and country market research# worldwide market exposure# generate trade leads# and find qualified overseas distributors through various 8ommodity "oards and Export %romotion 8ouncils. /. "yth1 I C#nnot Co+pete With -#r'e O.er(e#( Co+p#nie( "y product( #re un$no3n #nd +y price( #re too hi'h 2or 2orei'n +#r$et(. If the product is known in the domestic market then it4s a plus point but even an unknown product can be exported in a foreign market. 5ow demand of a product doesn4t indicates that it will be also not accepted in the international market. %rice is also an important# but it is not the only selling point. !ther competitive factors play a large role including quality# service# and consumer taste 2 these may override price. Also prices of a product may not be relatively high in countries with a strong currency# as in the European Jnion. 0. "yth1 Exportin' i( Too Ri($y I +i'ht not 'et p#id. Selling anywhere has risks even in the domestic market# but it can be reduced with reasonable precautions. o assure you get paid# use 5etters of 8redit +5I8s,. A 5I8 is a letter from a bank guaranteeing that a buyer0s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase# the bank will be required to cover the full or remaining amount of the

purchase. %roper documentation can minimi$e the risk associated with the export business. 7. "yth1 Exportin' i( Too Co+p%ic#ted Exportin' i( too co+p%ic#ted: I 3on t under(t#nd the %#3( #nd docu+ent#tion re;uire+ent(. Kou don0t need to be an expert to export. here is an abundance of resources available online that helps the first time exporter about all ins and outs of the export operations. )overnment of India and its associated agencies like 8ommodity "oards and Export %romotion 8ouncils also provide guidelines to the exporters. Introduction Export Sales leads are initial contacts a seller or exporter seeks in order to finali$e a deal or agreement for export of goods and are considered as the first step in the entire sales process. After getting the first lead# a company should respond to that lead in a very carefully manner in order to convert that opportunity into real export deal. Gener#tin' S#%e( -e#d( Sales leads can be generated either through a word2of2mouth or internet research or trade show participation. <u#%i2yin' (#%e( %e#d( As the buyer is far away and sometimes communication process can be difficult# so it4s always better to make an extra effort to understand the exact need of the customer. Sendin' Ac$no3%ed'e+ent After receiving a lead it is quite important to acknowledge the enquirer within >B hours of receiving the enquiry either through e2mail or fax. Acknowledgement also gives an option to provide further detail about the product or to make an enquiry about the buyer.

Re(pondin' 3ith ;u#%ity product( Nuality products strengthen buyer seller relationship# so it4s always better to provide quality products to the buyers. &o%%o3 Up( Always try to be in touch with the buyer or customer. -or this purpose one can ask a phone number and a convenient time to call. It is always better to make the call in the presence of an Export Adviser. !ne should avoid high pressure call during follow up. T#8%e o2 Content( Introduction he foreign customer may ask for product samples before placing a confirmed order. So# it is essential that the samples are made from good quality raw materials and after getting an order# the subsequent goods are made with the same quality product. Extra care should be taken in order to avoid the risk associated in sending a costly product sample for export. Secrecy is also an important factor while sending a sample# especially if there is a risk of copying the original product during export. "efore exporting a product sample an exporter should also know the )overnment policy and procedures for export of samples. ;hile sending a product sample to an importer# it is always advised to send samples by air mail to avoid undue delay. However# if the time is not an issue then the product sample can also be exported through proper postal channel# which is cheaper as compared to the air mail. Sendin' Export S#+p%e( 2ro+ Indi# Samples having permanent marking as :sample not for sale( are allowed freely for export without any limit. However# in such cases where indelible marking is not available# the samples may be allowed for a value not exceeding JS O .C#CCC# per consignment.

-or export of sample products which are restricted for export as mentioned in the I 8 +HS, 8ode# an application may be made to the office of Director )eneral of -oreign rade +D)- ,. Export of samples to be sent by post parcel or air freight is further divided into following = categories# and under each category an exporter is required to fulfill certain formalities which are mentioned below 3 .. Samples of value up to 1s..C# CCC2 It is necessary for the exporter to file a simple declaration that the sample does not involve foreign exchange and its value is less than 1s. .C#CCC. *. Samples of value less than 1s. *?#CCC2 It is necessary for the exporter to obtain a value certificate from the authorised dealer in foreign exchange +i.e. your bank,. -or this purpose# an exporter should submit a commercial invoice certifying thereon that the parcel does not involve foreign exchange and the aggregate value of the samples exported by you does not exceed 1s. *?#CCC in the current calendar year. =. Samples of value more than 1s. *?#CCC2 It becomes necessary for the exporter to obtain )1I%% waiver from the 1eserve "ank of India Export S#+p%e( #'#in(t P#y+ent A sample against which an overseas buyer agrees to make payment is exported in the same manner as the normal goods are exported. Sample can also be carried personally by you while travelling abroad provided these are otherwise permissible or cleared for export as explained earlier. However# in case of precious <ewellery or stone the necessary information should be declared to the custom authorities while leaving the country and obtain necessary endorsement on export certificate issued by the 9ewelry Appraiser of the 8ustoms. Export o2 G#r+ent S#+p%e( As per the special provision made for the export of garment samples# only those exporters are allowed to send samples that are registered with the Apparel export %romotion 8ouncil +AE%8,. Similarly# for export of wool it is necessary for the exporter to have registration with the ;oolen Export %romotion 8ouncil.

Export o2 So2t3#re All kinds electronic and computer software product samples can only be exported abroad# if the exporter dealing with these products is registered with the Electronics and 8omputer Software Export %romotion 8ouncil +ES8, Similarly samples of other export products can be exported abroad under the membership of various Export %romotion 8ouncils +E%8, of India. Introduction %ricing and costing are two different things and an exporter should not confuse between the two. %rice is what an exporter offer to a customer on particular products while cost is what an exporter pay for manufacturing the same product. Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However# there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency. Deter+inin' Export Pricin' Export %ricing can be determine by the following factors3

1ange of products offered. %rompt deliveries and continuity in supply. After2sales service in products like machine tools# consumer durables. %roduct differentiation and brand image. -requency of purchase. %resumed relationship between quality and price. Specialty value goods and gift items. 8redit offered. %reference or pre<udice for products originating from a particular source. Aggressive marketing and sales promotion. %rompt acceptance and settlement of claims.

Jnique value goods and gift items.

Export Co(tin' Export 8osting is basically 8ost Accountant0s <ob. It consists of fixed cost and variable cost comprising various elements. It is advisable to prepare an export costing sheet for every export product. As regards quoting the prices to the overseas buyer# the same are quoted in the following internationally accepted terms which are commonly known as Incoterm. Introduction An exporter without any commercial contract is completely exposed of foreign exchange risks that arises due to the probability of an adverse change in exchange rates. herefore# it becomes important for the exporter to gain some knowledge about the foreign exchange rates# quoting of exchange rates and various factors determining the exchange rates. In this section# we have discussed various topics related to foreign exchange rates in detail. Spot Exch#n'e R#te Also known as &benchmark rates&# &straightforward rates& or &outright rates&# spot rates represent the price that a buyer expects to pay for a foreign currency in another currency. Settlement in case of spot rate is normally done within one or two working days. &or3#rd Exch#n'e R#te he forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date. 7ethod of Nuoting Exchange 1ates here are two methods of quoting exchange rates3

Direct <uot#tion3 In this system# variable units of home currency equivalent to a fixed unit of foreign currency are quoted. -or example3 JS O .P 1s. >*.A?

Indirect <uot#tion3 In this system# variable units of foreign currency as equivalent to a fixed unit of home currency are quoted. -or example3 JS O *.=/*P 1s. .CC

"efore .//=# banks were required to quote all the rates on indirect basis as foreign currency equivalent to 1S. .CC but after .//= banks are quoting rates on direct basis only. Exch#n'e R#te Re'i+e he exchange rate regime is a method through which a country manages its currency in respect to foreign currencies and the foreign exchange market.

&ixed Exch#n'e R#te A fixed exchange rate is a type of exchange rate regime in which a currency0s value is matched to the value of another single currency or any another measure of value# such as gold. A fixed exchange rate is also known as pegged exchange rate. A currency that uses a fixed exchange rate is known as a fixed currency. he opposite of a fixed exchange rate is a floating exchange rate.

&%o#tin' Exch#n'e R#te A -loating Exchange 1ate is a type of exchange rate regime wherein a currency0s value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. A -loating Exchange 1ate or a flexible exchange rate and is opposite to the fixed exchange rate.

-in$ed Exch#n'e R#te A linked exchange rate system is used to equlise the exchange rate of a currency to another. 5inked Exchange 1ate system is implemented in Hong Gong to stabilise the exchange rate between the Hong Gong dollar +HGD, and the Jnited States dollar +JSD,.

-orward Exchange 8ontracts A -orward Exchange 8ontract is a contract between two parties +the "ank and the customer,. !ne party contract to sell and the other party contracts to buy# one currency for another# at an agreed future date# at a rate of exchange which is fixed at the time the contract is entered into.

4ene2it( o2 &or3#rd Exch#n'e Contr#ct

8ontracts can be arranged to either buy or sell a foreign currency against your domestic currency# or against another foreign currency. Available in all ma<or currencies. Available for any purpose such as trade# investment or other current commitments. -orward exchange contracts must be completed by the customer. A customer requiring more flexibility may wish to consider -oreign 8urrency !ptions.

&orei'n Currency Option( -oreign 8urrency !ptions is a hedging tool that gives the owner the right to buy or sell the indicated amount of foreign currency at a specified price before a specific date. 5ike forward contracts# foreign currency options also eliminate the spot market risk for future transactions. A currency option is no different from a stock option except that the underlying asset is foreign exchange. he basic premises remain the same3 the buyer of option has the right but no obligation to enter into a contract with the seller. herefore the buyer of a currency option has the right# to his advantage# to enter into the specified contract. &%exi8%e &or3#rd( -lexible -orward is a part of foreign exchange that has been developed as an alternative to forward exchange contracts and currency options. he agreement for flexible forwards is always singed between two parties +the Ebuyer4 of the flexible forward and the 0seller0 of the flexible forward, to exchange a specified amount +the Eface value4, of one currency for another currency at a foreign exchange rate that is determined in accordance with the mechanisms set out in the agreement at an agreed time and an agreed date +the Eexpiry time4 on the Eexpiry date4,. he exchange then takes place approximately two clear business days later on the Edelivery date4,. Currency S3#p A currency swap which is also known as cross currency swap is a foreign exchange agreement between two countries to exchange a given amount of one currency for another and# after a specified period of time# to give back the original amounts swapped.

&orei'n Exch#n'e "#r$et( he foreign exchange markets are usually highly liquid as the world0s main international banks provide a market around2the2clock. he "ank for International Settlements reported that global foreign exchange market turnover daily averages in April was O@?C billion in .//B +at constant exchange rates, and increased to O../ trillion in *CC> Q.R. rade in global currency markets has soared over the past three years and is now worth more than O=.* trillion a day. he biggest foreign exchange trading centre is 5ondon# followed by 6ew Kork and okyo. Introduction Selling a product through an overseas agent is a very successful strategy. Sales agents are available on commission basis for any sales they make. he key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market. Sales agent also provides support to an exporter in the matter of transportation# reservation of accommodation# appointment with the government as and when required. It is# therefore# essential that one should very carefully select overseas agent. "erit( o2 Appointin' # S#%e( A'ent here are various types of merits associated with appointed a sales agent for export purpose are as follow3

Sales agent avoids the recruitment# training# time and payroll costs of using own employees to enter an overseas market. An agent is a better option to identify and exploit opportunities in overseas export market. An agent already have solid relationships with potential buyers# hence it saves the time of the exporter to build own contacts. An agent allows an exporter to maintain more control over matters such as final price and brand image 2 compared with the other intermediary option of using a distributor.

De+erit( o2 Appointin' # S#%e( A'ent here are also certain disadvantages associated with appointing a sales agent for export purpose which are as follows3

After2sales service can be difficult when selling through an intermediary. here is a risk for exporter to lose some control over marketing and brand image.

I+port#nt Point( Whi%e Appointin' # S#%e( A'ent1 Appointing right sales agent not only enhance the profit of an exporter but also avoid any of risks associated with a sales agent. So it becomes important for an exporter to take into consideration following important points before selection an appropriate sales agent for his product.

Si$e of the agent0s company. Date of foundation of the agent0s company. 8ompany0s ownership and control. 8ompany0s capital# funds# available and liabilities. 6ame# age and experience of the company0s senior executives. 6umber# age and experience of the company0s salesman. !her agencies that the company holds# including those of competing products and turn2over of each. 5ength of company0s association with other principal. 6ew agencies that the company obtained or lost during the past year. 8ompany0s total annual sales and the trends in its sales in recent years. 8ompany0s sales coverage# overall and by area. 6umber of sales calls per month and per salesman by company staff. Any ma<or obstacles expected in the company0s sales growth. Agent0s capability to provide sales promotion and advertising services Agent0s transport facilities and warehousing capacity. Agent0s rate of commissionL payment terms required. 1eferences on the agents from banks# trade associations and ma<or buyers.

So+e (ource o2 In2or+#tion on A'ent( i(1

)overnment Departments rade Associations. 8hambers of 8ommerce. "anks. Independent 8onsultants. Export %romotion 8ouncils. Advertisement Abroad.

A'ent . Di(tri8utor here is a fundamental legal difference between agents and distributors and an exporter should not confuse between the two. An agent negotiates on the behalf of an exporter and may be entitled to create a legal relationship between exporter and the importer A distributor buys goods on its own account from exporter and resells those products to customers. It is the distributor which has the sale contract with the customer not the exporter. In the case of distributor# an exporter is free from any kinds of risks associated with the finance. Introduction Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However# there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency. 5ike any business transaction# risk is also associated with good to be exported in an overseas market. Export is risk in international trade is quite different from risks involve in domestic trade. So# it becomes important to all the risks related to export in international trade with an extra measure and with a proper risk management. he various types of export risks involve in an international trade are as follow3

Credit Ri($ Sometimes because of large distance# it becomes difficult for an exporter to verify the creditworthiness and reputation of an importer or buyer. Any false buyer can increase the risk of non2payment# late payment or even straightforward fraud. So# it is necessary for an exporter to determine the creditworthiness of the foreign buyer. An exporter can seek the help of commercial firms that can provide assistance in credit2 checking of foreign companies.

Poor <u#%ity Ri($ Exported goods can be re<ected by an importer on the basis of poor quality. So it is always recommended to properly check the goods to be exported. Sometimes buyer or importer raises the quality issue <ust to put pressure on an exporter in order to try and negotiate a lower price. So# it is better to allow an inspection procedure by an independent inspection company before shipment. Such an inspection protects both the importer and the exporter. Inspection is normally done at the request of importer and the costs for the inspection are borne by the importer or it may be negotiated that they be included in the contract price. Alternatively# it may be a good idea to ship one or two samples of the goods being produced to the importer by an international courier company. he final product produced to the same standards is always difficult to reduce. Tr#n(port#tion Ri($( ;ith the movement of goods from one continent to another# or even within the same continent# goods face many ha$ards. here is the risk of theft# damage and possibly the goods not even arriving at all. -o'i(tic Ri($ he exporter must understand all aspects of international logistics# in particular the contract of carriage. his contract is drawn up between a shipper and a carrier +transport operator,. -or this an exporter may refer to Incoterms *CCC# I88 publication.

-e'#% Ri($( International laws and regulations change frequently. herefore# it is important for an exporter to drafts a contract in con<unction with a legal firm# thereby ensuring that the exporter0s interests are taken care of. Po%itic#% Ri($ %olitical risk arises due to the changes in the government policies or instability in the government sector. So it is important for an exporter to be constantly aware of the policies of foreign governments so that they can change their marketing tactics accordingly and take the necessary steps to prevent loss of business and investment.

Un2ore(een Ri($( Jnforeseen risk such as terrorist attack or a natural disaster like an earthquake may cause damage to exported products. It is therefore important that an exporter ensures a force ma<eure clause in the export contract. Exch#n'e R#te Ri($( Exchange rate risk is occurs due to the uncertainty in the future value of a currency. Exchange risk can be avoided by adopting Hedging scheme. Export Ri($ "#n#'e+ent P%#n 1isk management is a process of thinking analytically about all potential undesirable outcomes before they happen and setting up measures that will avoid them. here are six basic elements of the risk management process3 H Establishing the context H Identifying the risks H Assessing probability and possible consequences of risks H Developing strategies to mitigate these risks H 7onitoring and reviewing the outcomes H 8ommunicating and consulting with the parties involved A risk management plan helps an exporter to broaden the risk profile for foreign market. -or a small export business# an exporter must keep his risk management analysis clear and simple.

Export Ri($ "iti'#tion Export risk mitigations are the various strategies that can be adopted by an exporter to avoid the risks associated with the export of goods.

Direct Credit3 Export 8redit Agencies support exports through the provision of direct credits to either the importer or the exporter.
o o

Importer3 a buyer credit is provided to the importer to purchase goods. Exporter3 makes a deferred payment saleL insurance is used to protect the seller or bank.

Gu#r#ntee(
o

"id bond +tender guarantee,3 protects against exporter4s unrealistic bid or failure to execute the contract after winning the bid. %erformance bond3 guarantees exporter4s performance after a contract is signed. Advance payment guarantee +letter of indemnity,3 in the case where an importer advances funds# guarantees a refund if exporter does not perform. Standby letter of credit3 issuing bank promises to pay exporter on behalf of importer.

In(ur#nce
o

ransportation insurance3 8overs goods during transportL degree of coverage varies. 8redit Insurance3 %rotects against buyer insolvency or protracted defaults andIor political risks. Seller non2compliance +credit insurance,3 8overs advance payment risk. -oreign exchange risk insurance3 %rovides a hedge against foreign exchange risk.

Hed'in' Instruments used to Hedge %rice 1isk

o o o

Stabili$ation programs and funds. iming of purchaseIsale. -ixed price long2term contracts.

o o

-orward contracts. Swaps

Introduction An important stage after manufacturing of goods or their procurement is their preparation for shipment which involves packaging and labelling of goods to be exported. %roper packaging and labelling not only makes the final product look attractive but also save a huge amount of money by saving the product from wrong handling the export process. P#c$#'in' he primary role of packaging is to contain# protect and preserve a product as well as aid in its handling and final presentation. %ackaging also refers to the process of design# evaluation# and production of packages. he packaging can be done within the export company or the <ob can be assigned to an outside packaging company. %ackaging provides following benefits to the goods to be exported3

Phy(ic#% Protection F %ackaging provides protection against shock# vibration# temperature# moisture and dust. Cont#in+ent or #''%o+er#tion F %ackaging provides agglomeration of small ob<ects into one package for reason of efficiency and cost factor. -or example it is better to put .CCC pencils in one box rather than putting each pencil in separate .CCC boxes.

"#r$etin'3 %roper and attractive packaging play an important role in encouraging a potential buyer. H 8onvenience 2 %ackages can have features which add convenience in distribution# handling# display# sale# opening# use# and reuse.

Security 2 %ackaging can play an important role in reducing the security risks of shipment. It also provides authentication seals to indicate that the package and contents are not counterfeit. %ackages also can include anti2theft devices# such as dye2packs# 1-ID tags# or electronic article surveillance tags# that can be activated or detected by devices at exit points and require speciali$ed tools to deactivate. Jsing packaging in this way is a means of loss prevention.

-#8e%in' 5ike packaging# labeling should also be done with extra care. It is also important for an exporter to be familiar with all kinds of sign and symbols and should also maintain all the nationally and internationally standers while using these symbols. 5abelling should be in English# and words indicating country of origin should be as large and as prominent as any other English wording on the package or label. 5abelling on product provides the following important information3

Shipper0s mark 8ountry of origin ;eight marking +in pounds and in kilograms, 6umber of packages and si$e of cases +in inches and centimeters, Handling marks +international pictorial symbols, 8autionary markings# such as & his Side Jp.& %ort of entry 5abels for ha$ardous materials

5abelling of a product also provides information like how to use# transport# recyc%e, or dispose of the package or product. ;ith ph#r+#ceutic#%(, 2ood, +edic#%, #nd che+ic#% products# some types of information are required by governments. It is better to choose a fast dyes for labelling purpose. !nly fast dyes should be used for labeling. Essential data should be in black and subsidiary data in a less conspicuous colourL red and orange and so on. -or food packed in sacks# only harmless dyes should be employed# and the dye should not come through the packing in such a way as to affect the goods. In(pection Certi2ic#te( #nd <u#%ity Contro%. Introduction

ISI 8ertification Ag7mark 8ertification "enefits of ISI and Agmark 8ertification In2%rocess Nuality 8ontrol +I%N8,

Self 8ertification Scheme

Introduction An important aspect about the goods to be exported is compulsory quality control and pre2shipment inspection. -or this purpose# Export Inspection 8ouncil +EI8, was set up by the )overnment of India under Section = of the Export +Nuality 8ontrol and Inspection, Act# ./@=. It includes more than .CCC commodities which are organi$ed into various groups for a compulsory pre2shipment inspection. It includes -ood and Agriculture# -ishery# 7inerals# !rganic and Inorganic 8hemicals# 1ubber %roducts# 1efractoriness# 8eramic %roducts# %esticides# 5ight Engineering# Steel %roducts# 9ute %roducts# 8oir and 8oir %roducts# -ootwear and -ootwear %roducts. An important aspect about the goods to be exported is compulsory quality control and pre2shipment inspection. -or this purpose# Export Inspection 8ouncil +EI8, was set up by the )overnment of India under Section = of the Export +Nuality 8ontrol and Inspection, Act# ./@=. It includes more than .CCC commodities which are organi$ed into various groups for a compulsory pre2shipment inspection. It includes -ood and Agriculture# -ishery# 7inerals# !rganic and Inorganic 8hemicals# 1ubber %roducts# 1efractoriness# 8eramic %roducts# %esticides# 5ight Engineering# Steel %roducts# 9ute %roducts# 8oir and 8oir %roducts# -ootwear and -ootwear %roducts. ISI Certi2ic#tion Indian Standards Institute now known as "ureau of Indian Standard +"IS, is a registered society under a )overnment of India. "IS main functions include the development of technical standards# product quality and management system certifications and consumer affairs. -ounded by %rofessor %.8. 7ahalanobis in Golkata on .Ath December# ./=.# the institute gained the status of an Institution of 6ational Importance by an act of the Indian %arliament in ./?/. A'"+#r$ Certi2ic#tion Ag7ark is an acronym for Agricultural 7arketing and is used to certify the food products for quality control. Agmark has been dominated by other quality standards including the non manufacturing standard IS! /CCC. 4ene2it( o2 ISI #nd A'+#r$ Certi2ic#tion %roducts having ISI 8ertification mark or Agmark are not required to be inspected by

any agency. hese products do not fall within the purview of the export inspection agencies network. he 8ustoms Authorities allow export of such goods even if not accompanied by any pre2shipment inspection certificate# provided they are otherwise satisfied that the goods carry ISI 8ertification or the Agmark. In=Proce(( <u#%ity Contro% 5IP<C6 In2%rocess Nuality 8ontrol +I%N8, inspection is mainly done for engineering products and is applied at the various stages of production. Jnits approved under I%N8 system of in2process quality control may themselves issue the certificate of inspection# but only for the products for which they have been granted I%N8 facilities. he final certificate of inspection on the end2products is then given without in2depth study at the shipment stage. Se%2 Certi2ic#tion Sche+e Jnder the self 8ertification Scheme# large exporters and manufacturers are allowed to inspect their product without involving any other party. he facility is available to manufacturers of engineering products# chemical and allied products and marine products. Self28ertification is given on the basis that the exporter himself is the best <udge of the quality of his products and will not allow his reputation to be spoiled in the international market by compromising on quality. Self28ertification Scheme is granted to the exporter for the period of one year. Exporters with proven reputation can obtain the permission for self certification by submitting an application to the Director +Inspection and Nuality 8ontrol,# Export Inspection 8ouncil of India# ..th -loor# %ragati ower# *@ 1a<endra %lace# 6ew Delhi. ISO >??? he discussion on inspection certificate and quality control is incomplete without IS!2/CCC. Established in ./BA# IS! /CCC is a series of international standards that has been accepted worldwide as the norm assuring high quality of goods. he current version of IS! /CCC is IS! /CCC3*CCC. Introduction An exporter without any commercial contract is completely exposed of foreign exchange risks that arises due to the probability of an adverse change in exchange rates. herefore# it becomes important for the exporter to gain some knowledge about the foreign exchange rates# quoting of exchange rates and various factors determining

the exchange rates. In this section# we have discussed various topics related to foreign exchange rates in detail. Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification. Shippin' 4i%% @ 4i%% o2 Export Shipping "illI "ill of Export is the main document required by the 8ustoms Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties# included ship0s owner# seller# buyer and some other parties. -or each one represents a kind of certificate document. Documents 1equired for %ost %arcel 8ustoms 8learance In case of %ost %arcel# no Shipping "ill is required. he relevant documents are mentioned below3

Cu(to+( Dec%#r#tion &or+ 2 It is prescribed by the Jniversal %ostal Jnion +J%J, and international apex body coordinating activities of national postal administration. It is known by the code number 8%*I 8%= and to be prepared in quadruplicate# signed by the sender.

De(p#tch Note2 It is filled by the exporter to specify the action to be taken by the postal department at the destination in case the address is non2traceable or the parcel is refused to be accepted.

Co++erci#% In.oice 2 Issued by the exporter for the full realisable amount of goods as per trade term. Con(u%#r In.oice 2 7ainly needed for the countries like Genya# Jganda# an$ania# 7auritius# 6ew Sealand# "urma# Iraq# Ausatralia# -i<i# 8yprus# 6igeria# )hana# San$ibar etc. It is prepared in the prescribed format and is signedI certified by the counsel of the importing country located in the country of export.

Cu(to+( In.oice 2 7ainly needed for the countries like JSA# 8anada# etc. It is prepared on a special form being presented by the 8ustoms authorities of

the importing country. It facilitates entry of goods in the importing country at preferential tariff rate.

-e'#%i(ed @ !i(#ed In.oice 2 his shows the seller0s genuineness before the appropriate consulate or chamber or commerceI embassy. Certi2ied In.oice 2 It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufacturedI packed at a particular place and in accordance with specific contract. Sight Draft and Jsance Draft are available for this. Sight Draft is required when the exporter expects immediate payment and Jsance Draft is required for credit delivery.

P#c$in' -i(t 2 It shows the details of goods contained in each parcel I shipment. Certi2ic#te o2 In(pection F It is a type of document describing the condition of goods and confirming that they have been inspected. 4%#c$ -i(t Certi2ic#te 2 It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country+s,.

"#nu2#cturer9( Certi2ic#te 2 It is required in addition to the 8ertificate of !rigin for few countries to show that the goods shipped have actually been manufactured and is available.

Certi2ic#te o2 Che+ic#% An#%y(i( 2 It is required to ensure the quality and grade of certain items such as metallic ores# pigments# etc. Certi2ic#te o2 Ship+ent 2 It signifies that a certain lot of goods have been shipped. He#%th@ !eterin#ry@ S#nit#ry Certi2ic#tion 2 1equired for export of foodstuffs# marine products# hides# livestock etc. Certi2ic#te o2 Conditionin' 2 It is issued by the competent office to certify compliance of humidity factor# dry weight# etc. Anti;uity "e#(ure+ent F It is issued by Archaeological Survey of India in case of antiques. Shippin' Order 2 Issued by the Shipping +8onference, 5ine which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date.

C#rt@ -orry Tic$et 2 It is prepared for admittance of the cargo through the port gate and includes the shipper0s name# cartI lorry 6o.# marks on packages# quantity# etc.

Shut Out Ad.ice 2 It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter. Short Ship+ent &or+ 2 It is an application to the customs authorities at port which advises short shipment of goods and required for claiming the return.

In India custom clearance is a complex and time taking procedure that every export face in his export business. %hysical control is still the basis of custom clearance in India where each consignment is manually examined in order to impose various types of export duties. High import tariffs and multiplicity of exemptions and export promotion schemes also contribute in complicating the documentation and procedures. So# a proper knowledge of the custom rules and regulation becomes important for the exporter. -or clearance of export goods# the exporter or export agent has to undertake the following formalities3 Re'i(tr#tion Any exporter who wants to export his good need to obtain %A6 based "usiness Identification 6umber +"I6, from the Directorate )eneral of -oreign rade prior to filing of shipping bill for clearance of export goods. he exporters must also register themselves to the authorised foreign exchange dealer code and open a current account in the designated bank for credit of any drawback incentive. Re'i(tr#tion in the c#(e o2 export under export pro+otion (che+e(1 All the exporters intending to export under the export promotion scheme need to get their licences I DEE8 book etc. Proce((in' o2 Shippin' 4i%% = Non=EDI1 In case of 6on2EDI# the shipping bills or bills of export are required to be filled in the format as prescribed in the Shipping "ill and "ill of Export +-orm, regulations# .//.. An exporter need to apply different forms of shipping billI bill of export for export of duty free goods# export of dutiable goods and export under drawback etc. Proce((in' o2 Shippin' 4i%% = EDI1 Jnder EDI System# declarations in prescribed format are to be filed through the

Service 8enters of 8ustoms. A checklist is generated for verification of data by the exporterI8HA. After verification# the data is submitted to the System by the Service 8enter operator and the System generates a Shipping "ill 6umber# which is endorsed on the printed checklist and returned to the exporterI8HA. -or export items which are sub<ect to export cess# the 12@ challans for cess is printed and given by the Service 8enter to the exporterI8HA immediately after submission of shipping bill. he cess can be paid on the strength of the challan at the designated bank. 6o copy of shipping bill is made available to exporterI8HA at this stage. <uot# A%%oc#tion he quota allocation label is required to be pasted on the export invoice. he allocation number of AE%8 +Apparel Export %romotion 8ouncil, is to be entered in the system at the time of shipping bill entry. he quota certification of export invoice needs to be submitted to 8ustoms along2with other original documents at the time of examination of the export cargo. -or determining the validity date of the quota# the relevant date needs to be the date on which the full consignment is presented to the 8ustoms for examination and duly recorded in the 8omputer System. Arri.#% o2 Good( #t Doc$(1 !n the basis of examination and inspection goods are allowed enter into the Dock. At this stage the port authorities check the quantity of the goods with the documents. Sy(te+ Appr#i(#% o2 Shippin' 4i%%(1 In most of the cases# a Shipping "ill is processed by the system on the basis of declarations made by the exporters without any human intervention. Sometimes the Shipping "ill is also processed on screen by the 8ustoms !fficer. Cu(to+( Ex#+in#tion o2 Export C#r'o1 8ustoms !fficer may verify the quantity of the goods actually received and enter into the system and thereafter mark the Electronic Shipping "ill and also hand over all original documents to the Dock Appraiser of the Dock who many assign a 8ustoms !fficer for the examination and intimate the officers4 name and the packages to be examined# if any# on the check list and return it to the exporter or his agent. he 8ustoms !fficer may inspectIexamine the shipment along with the Dock Appraiser. he 8ustoms !fficer enters the examination report in the system. He then marks the Electronic "ill along with all original documents and check list to the Dock

Appraiser. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents and as seen in the physical examination# he may proceed to allow &let export& for the shipment and inform the exporter or his agent. Stu22in' @ -o#din' o2 Good( in Cont#iner( he exporter or export agent hand over the exporter4s copy of the shipping bill signed by the Appraiser :5et Export& to the steamer agent. he agent then approaches the proper officer for allowing the shipment. he 8ustoms %reventive !fficer supervising the loading of container and general cargo in to the vessel may give &Shipped on "oard& approval on the exporter4s copy of the shipping bill. Dr#3#% o2 S#+p%e(1 ;here the Appraiser Dock +export, orders for samples to be drawn and tested# the 8ustoms !fficer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the I8ESIE system. here is no separate register for recording dates of samples drawn. hree copies of the test memo are prepared by the 8ustoms !fficer and are signed by the 8ustoms !fficer and Appraising !fficer on behalf of 8ustoms and the exporter or his agent. he disposal of the three copies of the test memo is as follows32

!riginal F to be sent along with the sample to the test agency. Duplicate F 8ustoms copy to be retained with the *nd sample. riplicate F Exporter4s copy.

he Assistant 8ommissionerIDeputy 8ommissioner if he considers necessary# may also order for sample to be drawn for purpose other than testing such as visual inspection and verification of description# market value inquiry# etc. A+end+ent(1 Any correctionIamendments in the check list generated after filing of declaration can be made at the service center# if the documents have not yet been submitted in the system and the shipping bill number has not been generated. In situations# where corrections are required to be made after the generation of the shipping bill number or after the goods have been brought into the Export Dock# amendments is carried out in the following manners.

.. *.

he goods have not yet been allowed &let export& amendments may be permitted by the Assistant 8ommissioner +Exports,. ;here the &5et Export& order has already been given# amendments may be permitted only by the AdditionalI9oint 8ommissioner# 8ustom House# in charge of export section.

In both the cases# after the permission for amendments has been granted# the Assistant 8ommissioner I Deputy 8ommissioner +Export, may approve the amendments on the system on behalf of the Additional I9oint 8ommissioner. ;here the print out of the Shipping "ill has already been generated# the exporter may first surrender all copies of the shipping bill to the Dock Appraiser for cancellation before amendment is approved on the system. Export o2 Good( under C%#i+ 2or Dr#38#c$1 After actual export of the goods# the Drawback claim is processed through EDI system by the officers of Drawback "ranch on first come first served basis without feeling any separate form. Gener#tion o2 Shippin' 4i%%(1 he Shipping "ill is generated by the system in two copies2 one as 8ustom copy and one as exporter copy. "oth the copies are then signed by the 8ustom officer and the 8ustom House Agent. Introduction Invisible export is the part of international trade that does not involve the transfer of goods or tangible ob<ects# which mostly include service sectors like banking# advertising# copyrights# insurance# consultancy etc. invisible exort also known as invisible trade is basically associated with the person4s own skill and knowledge is what is 0sold0 rather than a piece of software or books. Invisible trade is composed of invisible imports and invisible exports. Since nothing tangible is transferred# the importer is defined as the person# group or country that receives the service. he exporter is defined as the supplier of the service. he net total of a country0s invisible imports and invisible exports is called the invisible balance of trade and is a part of the country0s balance of trade. -or countries that rely on service exports or on tourism# the invisible balance is particularly important.

Export Per2or+#nce o2 the Indi#n (er.ice Indu(try An analysis of the consultancy contracts secured by Indian pro<ect in the foreign market has been carried out by Exim "ank of India. As per the analysis# done during .//?2/@ to *CCC2C. indicates that consultancy contracts were secured largely in ;est Asia which accounted for =/T number wise and >@T value wise followed by South East Asia and %acific U South Asia. South East Asia constituted **T both by number and by value whereas South Asia was .BT number wise and .@T value wise. According to the *CC* data of the -ederation of Indian Export !rgani$ations +-IE!,# India0s share in global trade in services was about ..=T. India4s share of consultancy exports is about C.?T of global trade in services. Go.ern+ent Initi#ti.e( In the recent years the )overnment of India has take some important step for the improvement of service based export. he -oreign rade %olicy# *CC> F C/ is one of them# which has announced the setting up of Services Export %romotion 8ouncil for promoting the Indian service sector in the foreign market. )overnment of India has also introduced 7arket Development Assistance +7DA,# 7arket Access Initiative +7AI, scheme# proactive EVI7 %olicy and EVI7 "ank schemes. )overnment also provides exemption on service tax for export of consultancy services. However due to lack of clarity in the provisions in the present notification# consultancy export may be affected. Stren'th( #nd We#$ne((e( o2 Indi#n Con(u%tin' Indu(try

he ma<or strengths of Indian invisible export or invisible trade include professional competence# low cost structure# diverse capabilities# high adaptability and quick learning capability of Indian consultants.

he ma<or weaknesses of Indian invisible trade or invisible export include low quality assurance# low local presence overseas# low equity base# lack of market intelligence and low level of 1UD.

Introduction Established in ./B?# SAA18 or South Asian Association for 1egional 8ooperation is a group of eight countries including India# %akistan# Sri 5anka# Afghanistan# 7aldives# "hutan# "angladesh# and 6epal. hey all are neighbor countries that share a lot of similarities in terms of religion and culture. "ecause of this Indian has adopted a liberal trade policy with these countries. Apart from SAA1A8# India is also a member of "I7S E8 +"angladesh# India# 7yanmar# Sri 5anka# and hailand Economic 8o2operation,# International 7onetary -und +I7-,# the ;orld "ank and the Asian Development "ank +AD",. India is even a founding member of )A and the ;orld rade !rganisation +; !,.

South A(i#n &ree Tr#de Are# 5SA&TA6 he Agreement on South Asian -ree rade Area +SA- A, was signed at Islamabad during the welfth SAA18 Summit on @ 9anuary *CC>. he Agreement on South Asian -ree rade Area +SA- A, was signed by all the member states of the South Asian Association for 1egional 8ooperation +SAA18,# namely# India# "angladesh# "hutan# 7aldives# 6epal# %akistan and Sri 5anka. India# %akistan and Sri 5anka are categori$ed as 6on25east Developed 8ontracting States +65D8S, and "angladesh# "hutan# 7aldives and 6epal are categori$ed as 5east Developed 8ontracting States +5D8S,. Article A of the SA- A Agreement provides for a phased tariff liberali$ation programme + 5%, under which# in two years# 65D8S would bring down tariffs to *CT# while 5D8S will bring them down to =CT. 6on25D8S will then bring down tariffs from *CT to C2?T in ? years +Sri 5anka @ years,# while 5D8S will do so in B years. 65D8s will reduce their tariffs for 5.D.8. products to C2?T in = years. his 5% covers all tariff lines except those kept in the sensitive list +negative list, by the member states. Pre2erenti#% Tr#de A'ree+ent 5PTA6 %referential rade Agreement +% A, is a special type of agreement that gives access to only certain goods. %referential rade Agreement is done by reducing tariffs# but it does not abolish them completely. % A is established through trade pact and it is the weakest form of economic integration. Among the SAA18 countries# India en<oys

% A with the Afghanistan. !ther countries that have % A with India are 8hile and 7E18!SJ1 +a trading bloc in 5atin America comprising "ra$il# Argentina# Jruguay and %araguay,. Export to A2'h#ni(t#n India has a signed a %referential rade Agreement +% A, on 7arch @#*CC= with the Afghanistan# according to which preferential tariff is granted by the )overnment of Afghanistan on eight items exported from India including tea# medicines# sugar# cement. Export to 4#n'%#de(h "angladesh is one of the largest export markets for Indian trade. he bilateral trade between the two nations is carried out as per guidelines given in the "angladesh rade Agreement which provides beneficial arrangement for the use of waterways# railways and roadways passage of goods between two places in one country through the territory of the other. 7a<or items exported from India to "angladesh include wheat other cereals# dairy products# oils meals# cotton yarn# fabrics# made ups# petroleum crude and products# plastic and linoleum products rice machinery and instruments and primary and semi finished iron and steel# pulses transport equipments drugs pharmaceuticals and fine chemicals processed mineral manmade yarn# fabrics# made ups manufactures of metal and fresh fruits and vegetables. Export to 4hut#n he -ree rade Agreement between India and "hutan provides for free trade between the two countries. Jnder this agreement India also provides shipment facilities through Indian erritory for "hutan0s rade with third countries. All the export transactions are carried out in Indian 1upees and "hutanese 6gultrum. 7a<or items exported from India to "angladesh include metals machinery and instruments# machine tools transport equipments# electronics goods rice +other than basmati,# spirit and beverages# miscellaneous processed items primary and semi finished iron and steel and cereals. Export to Sri -#n$# After "angladesh# Sri 5anka is the biggest export market for India. rade between the

two countries is carried out as per guidelines mention in the Indo2Sri 5anka -ree rade Agreement +SA- A,. 7a<or items of export from India have been pulses# wheat# other cereal spices# oil meals# fresh vegetables# miscellaneous processed items# drugs pharmaceuticals and fine chemicals inorganicI organic agro chemicals rubber manufactured goods except footwear# glass # glassware ceramic and allied products paperIwood products plastic and linoleum products non ferrous metals manufactures of metals# machinery and instruments# iron and steel barIrod etc. primary and semi finished iron and steel# electronic goods# cotton yarn# fabric# made ups# and petroleum crude and products. Export to Nep#% India26epal rade reaty between India and 6epal is signed for the time period of five years. Jnder this trade agreement ma<or items exported from India include drugs # pharmaceuticals and fine chemicals# petroleum product# pulses# transport equipment# rice other than basmati# tobacco# manufactured# spices# oil meals fresh fruits and vegetables# miscellaneous processed items# ores and minerals glasswareIceramics# manufactures of metals# primary and semi finished iron and steel and cotton yarn fabrics made ups. Export to "#%di.e( rade between India and 7aldives is governed by the rules as mentioned in the Indo2 7aldives rade Agreement signed on =.st 7arch ./B.. Jnder this agreement Indian ma<or exports itmes to 7aldives include rice other than basmati# sugar# fresh vegetables# miscellaneous processed item# drugs# pharmaceuticals and fine chemicals plastic and linoleum products# manufactures of metals and machinery equipment. India and 7aldives also shares the status of :7ost -avored 6ation( with each other. Export to P#$i(t#n 6o trade agreement has been signed between India and %akistan till *CCA. Although India has granted the status of :7ost -avoured 6ation( to %akistan since .//@ but %akistan has yet to reciprocate by granting this status to India. Indian exports to %akistan are restricted to a list AA= items known as %ositive 5ist and include rice other than basmati# spices# oil meals# iron ore# drugs# pharmaceuticals and fine chemicals rubber manufactured products except footwear# plastic and linoleum products# manufactures of metals and petroleum crude and products.

Introduction 8ommonwealth of Independent States +8IS, was founded in .//. after the dissolution of the Soviet Jnion. At present the 8IS includes A$erbai<an# Armenia# "elarus# )eorgia# Ga$akhstan# Gyrgy$stan# 7oldova# 1ussia# a<ikistan# urkmenistan# J$bekistan and Jkraine. 1elations between India and countries of the 8IS 1egion have remained close and cordial since the Soviet era. However# bilateral trade and commercial relations of India have not grown commensurately with these newly formed countries. Due to the factors like distance# language barrier# inadequate transport facility# inadequacy of information about business opportunities 8IS only constitutes ..*T share in India0s total exports. "#Aor Tr#din' P#rtner( in the CIS Re'ion 1ussia# Jkraine# Ga$akhstan# J$bekistan# Gyrgy$stan# and "elarus are India0s ma<or trading partners# constituting more than /CT of India0s total bilateral trade with the 8IS countries. "#Aor Ite+( o2 Export( India0s ma<or items of export to this region are 3 cotton# drugs# pharmaceuticals coffee# tea tobacco machinery U instrument# processed mineral# plastic and 5inoleum products gem U <ewellery# transport equipment# etc. Indi# CIS Tr#de Re%#tion( = Ar+eni# Despite a trade agreement being signed# India0s trade with Armenia after independence has been not worth mentioning. Indian exports to Armenia in *CC* were worth JSO ?.@ million which mainly includes car batteries# chemical goods# pharmaceuticals# and electrical equipments. Indi# CIS tr#de re%#tion( B Geor'i# rade relations between India and )eorgia were established in .//*# according to which two countries agreed that there would be cooperation within the framework of Indian 8ouncil for 8ultural 1elations and Indian echnical and Economic 8ooperation. rade turnover between India and )eorgia in *CC@ was JSO *C#?*.#ACC. 5aws on tariffs have been simplified and so far the trend has been such that India0s exports to )eorgia have been more than )eorgia0s exports to India.

Indi# CIS Tr#de Re%#tion( B U$r#ine Jkraine is the second largest trade partner of India in the 8IS region# after the 1ussian -ederation. Diplomatic relations between India and Jkraine were established way back in the ./@Cs. In 7arch# .//* a treaty on friendship and cooperation was signed to strengthen bilateral trade. 7ore than .A bilateral Agreements have been signed between India and Jkraine# including agreements on 8ooperation in Science and echnology# -oreign !ffice 8onsultation# 8ooperation in Space 1esearch# Avoidance of Double axation and %romotion and %rotection of Investments. he amount of bilateral trade that took place between the two countries in *CC> was worth more than O?CC#CCC. India mainly exports pharmaceutical products to Jkraine. Indi# CIS Tr#de Re%#tion( B -#t.i# In .//.# diplomatic relations between the two countries were formed. "ilateral trade relations between these two countries are not very intense due to inaction on both sides. Import to 5atvia amounted to JSO .@#/?>#*./ and the export stood at JSO *#??>#=/* in *CC?. he ma<or export items from India include pharmaceuticals and healthcare products# telecommunications# I and software# developmentL heavy engineeringL export of textiles gems and <ewellery# chemicals and dyes# vegetables and fruits# leather and leather products and third country exports. Indi# CIS Tr#de Re%#tion( B E(toni# Diplomatic relations between the two countries were established in December# .//.. In *CC?# the total amount of bilateral trade that took place was W./.@ million. India mainly exports vegetables# chemical# and textile products to Estonia. Indi# CIS Tr#de Re%#tion( B -ithu#ni# In 9uly# .//= an Agreement on rade and Economic 8ooperation was signed between India and 5ithuania. India mainly exports pharmaceuticals# paper# and textiles items to 5ithuania. he ma<or items imported from India include pharmaceuticals# paper# and textiles. 5ithuania exports cement# metals# sulphur# and base metals. he total bilateral trade between the two countries stands at JSO >A.C@.

Indi# CIS Tr#de Re%#tion( B 4e%#ru( In *CC?# India0s trade turnover with "elarus amounted to around JSO ..B.= million. he export items from India include pharmaceuticals# tea# rice# pepper# yarn# organic dyes# machine and electrical equipments. Introduction In India there are a number of organisation and agencies that provides various types of support to the exporters from time to time. hese export organisations provides market research in the area of foreign trade# dissemination of information arising from its activities relating to research and market studies. So# exporter should contact them for the necessary assistance. Export Pro+otion Counci%( 5EPC6 Export %romotion 8ouncils are registered as non 2profit organisations under the Indian 8ompanies Act. At present there are eleven Export %romotion 8ouncils under the administrative control of the Department of 8ommerce and nine export promotion councils related to textile sector under the administrative control of 7inistry of extiles. he Export %romotion 8ouncils perform both advisory and executive functions. hese 8ouncils are also the registering authorities under the Export Import %olicy# *CC*2*CCA. Co++odity 4o#rd( 8ommodity "oard is registered agency designated by the 7inistry of 8ommerce# )overnment of India for purposes of export2promotion and has offices in India and abroad. here are five statutory 8ommodity "oards# which are responsible for production# development and export of tea# coffee# rubber# spices and tobacco. &eder#tion o2 Indi#n Export Or'#ni(#tion( 5&IEO6 -IE! was set up <ointly by the 7inistry of 8ommerce# )overnment of India and private trade and industry in the year ./@?. -IE! is thus a partner of the )overnment of India in promoting India4s exports. Addre((3 6iryaat "hawan# 1ao ula 1am 7arg# !pp. Army Hospital. 1esearch U 1eferral# 6ew Delhi ..CC?A

Indi#n In(titute o2 &orei'n Tr#de 5II&T6 he Indian Institute of -oreign rade +II- , was set up in ./@= by the )overnment of India as an autonomous organisation to help Indian exporters in foreign trade management and increase exports by developing human resources# generating# analysing and disseminating data and conducting research. Addre((1 "2*. Gutub Institutional Area# 7ehrauli 1oad# 6ew Delhi2..CC.@ Indi#n In(titution o2 P#c$#'in' 5IIP6 he Indian Institute of %ackaging or II% in short was established in ./@@ under the Societies 1egistration Act +.B@C,. Headquartered in 7umbai# II% also has testing and development laboratories at 8alcutta# 6ew Delhi and 8hennai. he Institute is closely linked with international organisations and is recogni$ed by the J6ID! +Jnited 6ations Industrial Development !rganisation, and the I 8 +International rading 8entre, for consultancy and training. he II% is a member of the Asian %ackaging -ederation +A%-,# the Institute of %ackaging %rofessionals +I!%%, JSA# the Insitute of %ackaging +I!%, JG# echnical Association of %J5% A6D %aper Industry + A%%I,# JSA and the ;orld %ackaging !rganisation +;%!,. Addre((1 "2*# 7ID8 Area# %.". />=*# Andheri +E,# 7umbai >CCC/@. Export In(pection Counci% 5EIC6 he Export Inspection 8ouncil or EI8 in short# was set up by the )overnment of India under Section = of the Export +Nuality 8ontrol and Inspection, Act# ./@= in order to ensure sound development of export trade of India through Nuality 8ontrol and Inspection. Addre((1 =rd -loor# 6D K78A# 8ultural 8entre "ldg.# .# 9ai Singh 1oad# 6ew Delhi2..CCC.. Indi#n Counci% o2 Ar8itr#tion 5ICA6 he Indian 8ouncil for Arbitration +I8A, was established on April .?# ./@?. I8A provides arbitration facilities for all types of Indian and international commercial disputes through its international panel of arbitrators with eminent and experienced persons from different lines of trade and professions. Addre((1 -ederation House# ansen 7arg# 6ew Delhi2..CCC.

Indi# Tr#de Pro+otion Or'#ni(#tion 5ITPO6 I %! is a government organisation for promoting the country4s external trade. Its promotional tools include organi$ing of fairs and exhibitions in India and abroad# "uyer2Seller 7eets# 8ontact %romotion %rogrammes# %roduct %romotion %rogrammes# %romotion through !verseas Department Stores# 7arket Surveys and Information Dissemination. Addre((1 %ragati "hawan %ragati 7aidan# 6ew Delhi2.CCC. Ch#+8er o2 Co++erce C Indu(try 5CII6 8II play an active role in issuing certificate of origin and taking up specific cases of exporters to the )ovt. &eder#tion o2 Indi#n Ch#+8er o2 Co++erce C Indu(try 5&ICCI6 -ederation of Indian 8hambers of 8ommerce and Industry or -I88I is an association of business organisations in India. -I88I acts as the proactive business solution provider through research# interactions at the highest political level and global networking. Addre((3 -ederation House# ansen 7arg# 6ew Delhi2..CCC. 4ure#u o2 Indi#n St#nd#rd( 54IS6 he "ureau of Indian Standards +"IS,# the 6ational Standards "ody of India# is a statutory body set up under the "ureau of Indian Standards Act# ./B@. "IS is engaged in standard formulation# certification marking and laboratory testing. Addre((1 /# 7anak "havan# "ahadur Shah Safar 7arg# 6ew Delhi2..CCC* Texti%e Co++ittee extile 8ommittee carries pre2shipment inspection of textiles and market research for textile yarns# textile machines etc. Addre((3 extile 8entre# second -loor# => %D# 7ello 1oad# ;adi "andar# "ombay2 >CCCC/

"#rine Product( Export De.e%op+ent Authority 5"PEDA6 he 7arine %roducts Export Development Authority +7%EDA, was constituted in ./A* under the 7arine %roducts Export Development Authority Act ./A* and plays an active role in the development of marine products meant for export with special reference to processing# packaging# storage and marketing etc. Addre((1 %." 6o.>*A* 7%EDA House# pannampilly Avenue# %arampily 6agar# 8ochin2@B*C=@ Indi# In.e(t+ent Centre 5IIC6 Indian Investment 8enter +II8, was set up in ./@C as an independent organi$ation# which is under the 7inistry of -inance# )overnment of India. he main ob<ective behind the setting up of II8 was to encourage foreign private investment in the country. II8 also assist Indian "usinessmen for setting up of Industrial or other 9oint ventures abroad. Addre((1 9eevan Mihar# >th -loor# %arliament Street# 6ew Delhi2..CCC. Director#te Gener#% o2 &orei'n Tr#de 5DG&T6 D)- or Directorate )eneral of -oreign rade is a government organisation in India responsible for the formulation of guidelines and principles for importers and exporters of country. Addre((1 Jdyog "hawan# H2;ing# )ate 6o.*# 7aulana A$ad 1oad# 6ew Delhi 2..CC.. Director Gener#% o2 Co++erci#% Inte%%i'ence St#ti(tic( 5DGCIS6 D)8IS is the %rimary agency for the collection# compilation and the publication of the foreign inland and ancillary trade statistics and dissemination of various types of commercial informations. Addre((1 I# 8ouncil House Street 8alcutta2ACCCC.#