PROJECT REPORT

ON “EXPORT PROCEDURE & DOCUMENTATION” AT

(SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF
MASTER’S DEGREE IN BUSINESS ADMINISTRATION)

UNDER THE GUIDANCE OF:
Mr. ANIL WATS (GM-EXPORTS) Mr. NANDA KUMAR (AGM- EXPORTS) Mr. MUKESH ARORA (DGM- LOGISTICS)

SUBMITTED BY:
CHAYAN MEHTA BHAGWANT DEEP SINGH

MANAV-RACHNA INTERNATIONAL UNIVERSITY FACULTY OF MANAGEMENT STUDIES

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ACKNOWLEDGEMENT

I am very thankful to all those involved who have enabled me to successfully complete my project on ‘Export Procedure & Documentation’. I would like to express my sincere gratitude to Mr. NANDA KUMAR and Mr. MUKESH ARORA without whose support and encouragement I would not have achieved what I have today. I am heartily thankful to the whole unit of LUCKY EXPORT for the warm response they had given me to complete my summer training. I am also thankful to Mr. ANIL WATS (GENERAL MANAGER – EXPORTS ) for giving me opportunity to undertake this project in his reputed organization. I would also like to express my humble thanks to my guides Mrs. ANINDITA CHATERJEE and Mr. MANISH SHARMA ( PROJECT MENTOR) for the invaluable time they devoted to me helping me to better understand the depth of the requirement of the project and elucidating my uncountable doubts.

TABLE OF CONTENTS
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S.No. 01. 02. 03. 04. 05. 06. 07. Acknowledgement Executive Summary Statement Of Obejective Focus Of The Study Company Profile Research Methodology

Particulars

Page No. 2 4 5 6 7 13 17 24 28 28 30 31 34 61 66 69 70 72 76 88 89 90

Procedure Of Exports and Its Documentation 1. Pre-Export Activities 2. Processing Of Export Order i. Stage 1st -- Confirmation of Export Contract ii. Stage 2nd – Sourcing of Export Order iii. Stage 3rd – Dispatching iv. Stage 4th – Pre Shipment Operations v. Stage 5th – Custom Clearance vi. Stage 6th – Post Shipment Operations 3. Work Flow Chart of Company Modes Of Payment Government Incentives For Exports Summary Conclusion Limitations of the Study Bibliography

08. 09. 10. 11. 12. 13.

EXECUTIVE SUMMARY
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modes of payment & incentives from Govt. it might be conclude that processing of export order can be a tedious and costly activity.. A fair documentation not only reduces the threats of frauds. STATEMENT OF OBJECTIVES 4|Page . Objective The main objective of the study is to formulate the overall procedure of export orders say ‘how to export’. The executive summary of the study describes.The present study is a comprehensive study of EXPORT DOCUMENTATION AND PROCEDURE .. Interviews and discussion with the supervisors and officials to get the root of the pre-determined objective and in order to outline the ‘a to z’ steps of processing export order. The research work is done in collaboration with LUCKY EXPORT to assess the overall export procedure & documentation. bottlenecks and risks but also enhances the business relationship between Exporters. A careful planning and implementation of appropriate procedure can reduce time and cost drastically. Research purpose is to discover answer to question through the procedure of scientific procedure. Research Methodology Research comprises defining and redefining problems. the maximum information is summed up sequentially. documentation. On concentrating the objective of project. Findings & Recommendations On the execution of the objective of study. Importers & Governments in the whole world. of LUCKY EXPORT.

Governments. Importer. Banks. Insurance Agencies and Inspection Agencies. information and payments. The documents safeguard the interests of Exporter. frauds and mistake for the awareness and implementation of standardized ruleregulations & documentation to contribute the integration of International Business up to any extent.The complexity of business operations greatly accentuate as businessmen cross the national boundaries. Documentation is definitely one of the prime specialized functions of international business. • • To study the standard modes of payment in export-import. documents. FOCUS OF THE STUDY 5|Page . To identify the incentives. A lot of formalities and modalities of several organizations have to be compiled to and as error can create bottle necks in the free flow of goods. Sub Objectives of the Study The sub objectives of the study were: • To study the department wise functions & sequential documentation for various operations in export orders adopted by LUCKY EXPORTS. discounts & duty drawbacks to exporters by the Government. bottleneck. Main Objective of the Study The main objective of the training was to study the systematic export procedure & documentation of a reputed export house say LUCKY EXPORT to overcome any kind of error. Transport Agencies.

Researcher analyzed the pre-export formalities and necessities for exportation. COMPANY PROFILE 6|Page . The project is an attempt to formulate the ‘how to export’ concept finally to contribute to national and international economy & business relationship. Focus was to outline the standard modes of payment for export houses. The focus of the study was on identifying the activities of different divisions and departments of LUCKY EXPORT having an impact on the export procedure of this unit.The focus of the study was the formulation the multifunction procedure of an export unit named LUCKY EXPORT.

3. Ethiopia. LIMITED LUCKY EXPORTS 7|Page . Delhi Chamber of Commerce Federation of Indian Export Organization Confederation on Indian Industry Federation of Indian Chamber of Commerce and Industry It is ISO 9001:2008 certified and Star Export House status holder from Government of India consecutively for the last 15 years. 2. Lucky Group of Companies. Procurement & Construction (EPC) company was established in the year 1990. Sharjah & Khartoum besides corporate office at Noida (India) and representative offices in various African countries like Ivory Coast. The Lucky Group Companies are: LUCKY EXPORTS EXPOTEC INTERNATIONAL LIMITED COPPICE TECHNOLOGIES PVT. It is affiliated with: 1. Senegal. Their offices are in Moscow. 50 Million. 4. an India based Engineering.Lucky Group is Government Recognized Trading House with diverse interest in trading. Their group turn over from export is approximately USD.

Medical. Dilawar Shaban Chairman of the Board Iqbal Shaban President Rafique Shaban Executive Director Raza Shaban Executive Director Saleem Shaban Executive Director 8|Page . Exporter Eng. This body controls and provides strategic direction to all Group companies.About the Company Business Type: Manufacturer Eng. BOARD OF DIRECTORS Lucky Group comprises of a Board of Directors perceptive to the dynamics of international business. Pharmaceutical. Plants. Goods. Medical. Goods. Pharmaceutical. Plants.

VISION AND MISSION VISION: 9|Page .

To become respected global trading company that provides best of business solution delivered by best-in-class people. MISSION: Our mission is to cater to the specific scrap metal needs of our customers and. at the same time. to expand our sourcing points by creating strategic alliances with our key suppliers to best create value for our clients. Engineering Projects Division Complete solutions to the Industrial sector through 10 | P a g e .

• • • • • • Consultancy Service Supply of Plants and Machinery Project Management Erection and Commissioning Training After Sale Services Small and Medium (SME) Industry • Food Processing Plants o Tomato Processing Plants o Potato Wafers Manufacturing Plants o Squash Manufacturing Plants o Pasta Making Plants o Bread Making Plants o Biscuit Making Plants o Fruit Processing Plants o Corn Flakes Making Plants o Milk Processing Plants (Yoghurt. Cheese) o Ice cream Plant o Honey Processing Plant o Rice Mill o Wheat Flour Mill • Printing and Stationery Industries o Paper Carry Bag Making Plant o Plastic Carry Bag Making Plant o Envelopes Making Plant 11 | P a g e .

o o o o Exercise Book Making Plant Chalk Manufacturing Plant Gem Clip Manufacturing Plant Staple Pin Manufacturing Plant Large Scale Industries • • • • • • • • • Refrigeration and Cold Storage Plants Packaging Plants Pharmaceuticals Plants Textile Mills Cement Plants Leather Processing Plants Steel Rolling Mills Effluent Treatment Plants Printing Presses Including Rehabilitation of old plants & Machinery in above sectors RESEARCH METHODOLOGY 12 | P a g e .

make deduction and research conclusion and careful testing the conclusion to determine whether they fit or not ”. unit weakness where the unit has to improve how they need to turn them into the opportunities. collection. formulation hypothesis or suggested solution. Research purpose is to discover answer to question through the procedure of scientific procedure. As in live studies on LUCKY EXPORT.Research in a common parlance refers to a search for knowledge. So research means careful investigation on inquiry especially through search for new fact in branch of knowledge. Objective of the Research Methodology 13 | P a g e . organizing and evaluating data. “Research comprises defining and redefining problem. Research helped to find out the problem faced by the unit. unit strength where they have competitive edge over the other competitors. The LUCKY EXPORT did the research work manually and intents to assess the overall potential and performance of this unit and desire. Research can also be defined as scientific and systematic search for pertinent information on the specific topic. Research is an academic activity and as such as term should be used in a technical sense. Research has helped to portray accurately the characteristic of a particular unit.

The assessment of potential. documentation and the analysis of LUCKY EXPORT demands a lot of time to be spent on observation of various activities and the process. procedures. 14 | P a g e . interviews and discussion with the supervisors and officials to get to the root of problem and in order to suggest corrective measure to LUCKY EXPORT . The research design utilized for this specific study has been explained as follows….The main objective of the research methodology of this in-house training project is to evaluate the Export Procedure and Documentation Operations of an Export Oriented Company. the unit engage into. RESEARCH DESIGN The study is descriptive and empirical in nature with applied bias.

In this. 15 | P a g e .Descriptive Study: Descriptive studies are utilized when the researcher attempts to describe the state of affairs without controlling the variables causing change. Interviews were taken of the executive and various kinds of facts were sought by this. Collection of Data The study has utilized both primary as well as secondary data for analyzing export performance. It is the data research coming up with the conclusion which is capable being verified by observation and experiment. the observation was done to find the export procedure & documentation problem and the weakness. In this the fact were taken into hand from LUCKY EXPORT at their source and is then utilized to infer desired information. This study includes the survey and fact finding inquires of different kind. procedure & documentation of LUCKY EXPORT. Empirical Studies: An empirical research relies on experience or observation alone often without due regard for system and theory. help of various departments was taken to observe the working and to deduce conclusion to suggest course of action to . As in case of. the functional activities and procedure adopted and the working of LUCKY EXPORT. The major purpose of descriptive research was description of the state of affairs that exists in LUCKY EXPORT.

Secondary Data: It was collected through scanning. There were no additional statistical and technical tool were considered for suitability of the procedure & problem in order to achieve the desire objective. searching and disseminating information through company research profile and company maintained data also in search information for export procedure and export market related data was collected through the data compiled by Government Manual. the use various statistical and mathematical and graphical techniques was not required.Primary Data: The primary data was collected through the interview techniques & personnel meeting where the Heads of different functional departments. various executive are interviewed and pretended information were collected pertaining to various aspects of export activities. RBI exchange control Manual and other organization that compile data for various export oriented activities and documentation. The study was of the qualitative aspect not the quantitative. All the data was collected through interviews a secondary data so not tool were used 16 | P a g e . Analysis Pattern The nature of the project is of the subjective nature so for the analysis of the available data. Export Import policy of DGFT. customs and excise manuals.

Export Procedure & Its Documentation GATEWAYS TO GLOBAL MARKETS 17 | P a g e .

The trade surplus and deficit is analogous to one person's fortune is another person's misfortune. To be successful in exporting and importing. prosperity. The remedy to beat the trade imbalance is to understand foreign cultures and business practices. Germany and other countries (areas) is not a miracle. success cannot be rushed by hard work. South Korea. A trade retaliation will be faced with a counter-retaliation. In layperson's parlance. The trade barrier will be confronted with a trade retaliation. 18 | P a g e . Dangers of Imbalance in International Trade Trade surplus---favorable balance of trade---is an excess of exports over imports. and the power to influence. It is a good practice to diversify export markets. peace. they help create jobs. and to provide competitive products and services. just like football players do the ball. Concentrating exports to only a few markets poses imminent danger to an exporting country. the effect to the economy of the exporting country and the livelihood of its people can be devastating. A country with a record trade deficit is usually faced with the internal social upheaval. Rather. However. The imposition of trade barriers. The success of an export business is often attributed to luck. is not a solution to meeting the international challenge. A country with a record trade surplus is often threatened with sanctions and trade barriers from a deficit-ridden importing country. the trade surplus means earn more and spend less. Japan.Exports are key to the economic survival of a nation. Trade deficit---unfavorable balance of trade---is an excess of imports over exports. The export success of Taiwan. In case the importing country imposes sanctions. it comes incrementally. It is important that employees' responsibilities are clearly spelled out and that systems of operation are flexible in order to accommodate the rapidly changing needs of world markets. The danger is imminent in either situation. It is not unusual to see colleagues kicking responsibilities back and forth. it is the result of hard work. such as import quotas and higher duties. Success cannot be rushed by high hopes. The conflict will not end if an agreement is not reached. The events in a large number of export offices worldwide are comparable to the events in a football game. Too much export concentration in a market usually invites protectionist trade laws from the importing country. Exports not only help a country earn foreign exchange. it helps to know why so many export and import businesses do not succeed. Work harder and there will be more luck. China. while the trade deficit means spend more and less. The business miracle will not happen without working hard.

which is estimated at a rate of 1. It can undermine the economic progress of a nation. the earth has become a more peaceful place to live.  Effects of Social Upheaval and Recession Any form of instability in a country can ruin its economy and may place its international trade in disarray. an alarming occurrence is the growing number of permanent lower class in numerous countries. Vigorous export promotions.  Increased Worldwide Competition There can be no growth without competition. dreams of a lifetime shatter. and the letter carrier is the postman. New trading alliances are shaping. but it is a term that is unheard of in some countries. New economic blocks have been formed.  Use of Terminology in Different Countries The use of terminology differs from country to country. the accounting assistant is the bookkeeper. World trade grew in volume at an average of 5% annually over the past 25 years. the flat is the apartment. and the lower class increases. The term salesperson is easy to decipher as the salesman or saleswoman. With the end of cold war. The account manager is the sales representative. the buyer is the purchaser. more resources worldwide are geared towards exporting. businesses sink. Exports are key to the economic survival of a nation. increase in exports. New markets have been opened with the end of cold war.7% annually. The task is not easily done. the more recognition and respect it will earn. However. a new way of thinking and approach to doing business is necessary in order to survive in the fast changing economy. There is an urgent need to stop the growing number of the lower class. the chop is the stamp. Exporting becomes more challenging with continued population growth and the addition of new exporters. A nation that exports more will grow stronger. including in developed nations. The task requires a concerted effort from the government and people. The stronger a nation is. the motor carrier is the trucking company. With the end of cold war. and diversification of export markets can help reduce the number of the lower class. The export business has become more competitive. more products and services are needed. Business people worldwide are keenly competing to fill these needs. The adverse effect of social upheaval is paramount. As the world population grows. 19 | P a g e . Inevitably. The effect of recession is immense.Changing Global Marketplace and Meeting Challenges The world markets have changed enormously in the past decade. the human resources department is the personnel department.

you have a roll of paper. The export business was lucrative due to much less competition. the number of items was few and the quantity of each item was large. As time progressed. that is. The Role of Export-Traders and Buying Trend Export-traders play a crucial role in international trade. the problem of quality remains a nightmare to some importers. Many foreign buyers deal directly with the manufacturers to save commission or fees and/or markups of export-traders. Therefore. The nature of the order then normally was fewer items and more volume. But instead of a computer screen. However. known as indirect exporting. aside from appearing on the paper roll. Each character that was keyed (typed) will instantly appear at the receiver's end. The manufacturers competed on providing better quality products and lowering prices. Telex was the 'e-mail of yesteryear'. as long as the line is 'on'. triplicate or quadruplicate. competition built. At that time. The export-traders changing the source of supply of similar products from one manufacturer to the other became inevitable. With new technology on hand. either carbonless or the much older type having a carbon paper in between the sheets. is simultaneously translated and stored in a paper tape in coded form in a series of punched holes. which may come in duplicate. The 'final' tape is rerun to send the message out or make additional copies of the message. that is. where the messages are typed. like a fax (facsimile) or an e-mail (electronic mail). Or. Keying a wrong character may mean retyping the message from the beginning. there was a significant increase in the number of manufacturers who export directly. where the outgoing and incoming messages appeared. During the oil crisis of the late 1970's. foreign buyers relied on export-traders for product sourcing and pre-shipment inspections. The manufacturers needed to survive and direct exporting was the solution. Prior to the 1970's when export product quality was a common problem in many less developed countries. Export product quality in general improved markedly in the late 1970's.  Tools of Export-Import Communication The telecommunication technology 'explosion' in the past decade has changed the way people interact around the world. The telex. The foreign buyers then did not have many export sources from which to compare an offer. the sender and 20 | P a g e . The price war made the traditional practice of single source of supply difficult for exporttraders to maintain. thus they relied upon export-traders for exporting. And instead of saving the typed message in a computer disk or hard drive. some of our prime tools of export communication. The advantage of having a 'final' tape is to save the transmission time and cost. each alphanumeric character that was keyed (typed) in a telex. have become obsolete. uses a telephone line in transmitting the messages. for example telex (teletype exchange or teleprinter and exchange). Many manufacturers started exporting directly in the mid-1970's. There were far fewer exporters worldwide before the 1970's. many manufacturers did not know how to export. you can send the message directly.

the receiver can 'talk' over the telex. the fax remains as an important tool of export communication in many countries. that is. exchange messages over the telex while the line is 'on'.Although the e-mail is popular nowadays. STARTING AN EXPORT BUSINESS 21 | P a g e .

rough strategies are often used by some exporters in order to win contracts. Fear of the unknown. small and medium-sized companies are the leading source of job creation in many countries. quality. involves risks. It is a war of price. It is necessary to prepare for the challenges and the consequences. It is a fight for the company's survival---profits and growth. Exporting. who have been selling their products entirely to the foreign markets. The size of a company is not static. Contrary to a belief that only large companies can export. in fact there are more small and medium-sized companies than large companies in the world that are engaged in exporting. is one of the reasons that many businesses that are doing well nationally are reluctant to engage in exporting.  Export Phobia Fear comes naturally to anyone new to exporting. Engaging in exporting is akin to engaging in a war. In practice. Most large companies at one time were small companies.  Export Mindset The business ground is a battleground. Exporting is not for large companies only. notably in Asia. Not to mention. There are many successful export-traders and export-manufacturers. It is a battle for the business orders.In exporting. delivery and service. it is not a prerequisite for a business to sell to its domestic market before selling abroad. like any other business. or lack of information. TYPES OF EXPORT BUSINESSES 22 | P a g e .

freight forwarders or consolidators. buying agents. sourcing agents. the export-trader buys from exportmanufacturers and adds a markup to the export price. producers. In the commission/fee basis. the export-trader collects a commission or fee from the export-manufacturer or the foreign importer. The export-trader operates on a buy-and-sell basis or a commission/fee basis.  Export-Manufacturers Export-manufacturers include the manufacturers. assemblers and processors of export goods. insurance companies. export representatives. and manufacturers' representatives. Service-exporters provide services to export-traders and export-manufacturers.Export businesses are mainly classified into export-traders. Export-manufacturers either directly export the goods or indirectly export the goods through the export-traders. buying offices.  Service-Exporters Service-exporters include the banks. trucking companies. PRE-EXPORT ACTIVITIES 23 | P a g e . ocean shipping (steamship) companies. or a combination of these two. export-manufacturers and serviceexporters. consulting firms. and miscellaneous service companies. rail carriers. or from both of them without adding a markup to the price. air cargo companies or airlines. purchasing agents.  Merchant Exporters (Traders) The export-traders include the export companies known as trading houses. In the buy-and-sell basis. export distributors. export agents. resident buyers. trading companies. export management companies (EMCs).

Obtaining I/E Code Number. 1924 Foreign exchange regulations act.1962 Carriage of goods by sea act. Registration D. A careful study of these as a pre-requisite of exports while the rules governing exports will vary with commodity and importer country’s regulation. A) Study Of Govt. 1973 (now being replaced by FEMA and Money Laundering Bills) e) Schedule of charges of goods in respect of the port of shipment B) Identifying Parties And Liasioning With Them 24 | P a g e . Study Of Government Rules And Regulations B. Rules And Regulations International trade is governed by a plethora of rules and regulations of various government bodies of exporter and importer. 1992 Customs act. Identifying Various Parties And Liasion C. The pre-export activities can be divided into the following sets of activities: A.The planned group work for export order processing can greatly facilitate subsequent operations and avoid the hassles associated with the process. 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.

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. C) Registration 25 | P a g e . Export Promotion Council. Concor. other parties may also be associated depending on the nature of commodity and rules guiding the export of the same. Ministry of Agriculture etc. Examples of these bodies can be Inspection Agencies.

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. 26 | P a g e .For stepping in the field of an export business.10  A copy of PAN No.6000. The main role of the EPC is to Project India’s image abroad as a reliable supplier of high quality goods. They organize Trade Fairs with in India and Abroad. They encourage the members registered with them to participate in Trade Fairs and advertise their products in whole world. it is compulsory for a company to get registered with Export Promotion Council related to the main product line with which they are dealing. issued by income tax authorities duly  Import Export Code Number  Sales Tax Copy  Bank draft of Rs. 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.

from the Regional Licensing Authority concerned (Director General of Foreign Trade). 27 | P a g e . It is compulsory quote this Code Number in the relevant Bill of Entry / Shipping Bill. Custom authorities shall not allow clearance of goods to an importer or exporter who does not posses IEC No.  Permanent Account No (PAN).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. 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.D) Importer/Exporter Code Number Every person / firm / company engaged in export business in India is required to obtain ImportExport Code(IEC) No.

The specifications stipulated by the importer in the export order and the L/C such as delivery schedule. Product. packing. According to section 4(1) of the Sale of Goods Act. as described above. must be strictly adhered to. The documents required by the foreign buyer must be prepared and submitted to the negotiating bank in the exact specified form and manner.PROCESSING OF EXPORT ORDER Stage-1st Confirmation of Export Contract The exporter scrutinizes the export order with reference to the term & conditions of the contract. Quantity 3. 1930. this Act includes both a ‘Sale’ and an ‘Agreement to sell’.. determine the exact point at which the title and/or risk change from seller to buyer. Documents against Acceptance. Documents of Payment. ELEMENTS OF EXPORT CONTRACT An export contract. This is the most crucial stage. It should be ensured that the contract has been entered into in accordance with the prevalent export promotion policies of the country and the foreign exchange regulations. should be as clear as possible. All subsequent actions and reactions will depend on the terms and conditions of the export contract.” therefore. Standards and Specifications 2. The various elements of it should clearly define the duties and responsibilities of the parties. The various elements of an export contract are as follow: 1. inspection. The export order must specify the mode of the payment in unmistakable terms such as letter of Credit. Inspection 28 | P a g e . marking. etc. etc.” A contract of sale of goods is a contract whereby the seller transfer or agree to transfer the property in goods to the buyer for a price.

Besides these main elements. an export contract may contain other elements desired by the parties to the contract. Force Majeure or Excuse for Non-Performance of Contract 16. Export order should be confirmed by the exporter only after the terms and conditions of the L/C have been found to be in order. Mode & Currency 10. Documentary Requirement 14. 29 | P a g e . Terms of Payment-Amount.4. Taxes. Total Value of the Contract 5. Packing Labeling and Marking 9. Remedies. Guarantee 15. Discounts and Commissions 11. Period of Delivery Shipment/Part Shipment etc 8. Arbitration. Terms of Delivery/Commercial Terms 6. Insurance 13. Licenses and Permits 12. 17. Duties and Charges 7.

however.Stage-2nd Sourcing of Export Order Upon confirmations of the export order preparations for the dispatch of goods are started. merchant exporter has to lay down clear cut specifications of quality norms because the ultimate accountability to the buyer is of the exporter only. weight etc) 30 | P a g e . Sourcing of export order in LUCKY EXPORTS is based upon quality production system. remain the same. This is what the manufacturers. The specifications and instructions to be intimated to the supplier of export goods shall. the date by which the necessary formalities must be completed. While sourcing the goods from suppliers. After receiving the export order. merchandiser orders a production order to Production Manager in written form. This note should contain the description of the goods as has been given in the export order. the requisite time margins to be given and the shipment must be clearly intimated to Works manager.O. size. A ‘Delivery Note’ (in duplicate) or ‘Production Order’ is sent to the Work Manager or the Factory manager. The date by which the goods must be manufactured. In case of poor quality. This production order contains the following entities:  P. Number  Invoice Number  Product Name  Product Specifications ( colour . along with a copy of the instructions given by the importer. Merchandiser finals the export contract with his correspondent buyer and receives an export order via fax. the exporter may not be in position to get repeat order from the foreign customers who have wide choice of the exporters in the world market. e-mail or courier.

bale or pair-packing) 2) Labeling Specific marketing and labeling is used on report shipping cartons & containers to: i) Meet shipping regulations ii) Ensure proper handling 31 | P a g e . Quantity  Instructions(stitching. labeling etc)  Dispatch Date Required quantity is produced in fully by production unit after the recommendation of production samples in accordance with order sample. Stage-3rd Dispatching As the Production unit delivers the goods to Packing Department. clipping etc) ii) Tagging & Folding(according to importer’s instructions) iii) Packing(Cartoon. the following procedures are to be followed in order to dispatch the goods:- 1) Packing The Packing Incharge receives the importer’s instructions for packing from the Merchandiser and covers the following operations: i) Final finishing of the goods(final passing. Produced quantity is delivered to Packing Department for dispatching operations.

he issues Inspection Certificate. otherwise. Exporters need to put the following markings on cartons to be shipped:  Shipper’s mark  Country of origin  Weight marking(in Lbs or Kgs)  No. That means importer sends his own agency to inspect the goods. 32 | P a g e . packing list and desired quality scale. Many markings may be needed for shipment. If he finds any defect he can send these goods for processing again. The inspector has right to open any of the carton or bale to verify the goods in accordance with invoice.iii) Conceal the identity of contents iv) Help receivers identify shipments In overseas buyer usually specifies export marks that should appear on the cargo for easy identification by receivers. This certificate can be helpful to suit against importer in case of disputers or undue rejection of goods by importer. of packages & size of cases  Cautionary markings such as ‘this side up ’ or ‘use no hooks’ (In English and in language of country of destination)  Port of entry 3) Inspection After packing and labeling. If buyer demands handloom certificate then exporter ask textile committee to inspect the consignment and provide them handloom inspection certificate. goods are inspected by the inspection agent or buying agent on behalf of importer.

the excise seal along with the seal of shipping line on the container and endorse the excise invoice. il. Normally containers having following dimensions are used in handloom field:i) 20 ft. strong enough for the repeated use. 54 cbm iii) 30 ft. 26 cbm ii) 40 ft. 5) Locking of Containers Before locking the container. The main check point in the excise documents are: Name & Address of Consignee  Destination  Description of goods & Specifications  FOB value of goods  Quantity  Movements of goods(from -.to --)  Container no. & Truck no. 60 cbm (high cube) LUCKY EXPORTS makes use of container of 20 & 40 ft. to facilitate handling and carriage of goods by one or other modes of transport. After examination of cargo. gate-pass etc. excise authorities select 10% of rolls as samples and inspect them. 33 | P a g e . The samples are sent for further sub-mission to customs. AR-2 form.(according to the goods to be dispatched).4) Containerization A container is an article of transport equipment.

which primarily includes shipment advice from. invoice. showing the list of documents enclosed with it. and in the ports of destination where theft and pilferage of the imported goods is rampant.. On linking the bales by packing department. 34 | P a g e . In case of any shortage reported by the buyer and when a claim is required to be filled. invoice instructions are given the packing department packs the rolls depending on these instructions. the doors of container are locked with the iron rods with seals. On the basis of this contract. in transit. excise endorsed documents play extremely crucial role. for example within the Asian countries where the goods may arrive at the port of destination before the shipping documents. The shipping advice is particularly important in short-sea trades. the pre-shipment documents are generated. invoice. the validation of above instructions are done by pre-shipment department. For additional security of goods. It also contains some other details like Lorry Receipt No. RBI Code No. Identification marks & Excise no. packing includes shipment advice from. B/L particulars etc. packing list etc. Stage-4th Pre-Shipment Operations Documents used for Pre-Shipment The singed with the buyer defines the specification of the goods to the supplied. 1) Shipment Advice Form: It is a sort of covering letter.

meaning that redeeming the letter of credit will pay an exporter. used primarily in trade finance. The letter of credit can also be source of payment for a transaction. for deals between a 35 | P a g e . commercial letter of credit is a document issued mostly by a financial institution. which usually provides an irrevocable payment undertaking. Letters of credit are used primarily in international trade transactions of significant value.2) Letter of credit: A standard.

the issuing bank and the confirming bank. Suite 707 Export-City and Postal Code Dear Sirs: We have been requested by The Sun Bank. cannot be amended or canceled without prior agreement of the beneficiary. NO. Almost all letters of credit are irrevocable. i.) will be built. Sunlight City.e. MB-5432 ISSUING BANK REF. Import-Country to advise that they have opened with us their irrevocable documentary credit 36 | P a g e . and the advising bank of whom the beneficiary is a client. etc. if any.supplier in one country and a customer in another. sidewalks. EXPORT-CITY AND POSTAL CODE EXPORT-COUNTRY OUR ADVICE NO. storm water ponds.. They are also used in the land development process to ensure that approved public facilities (streets.. the issuing bank of whom the applicant is a client. The parties to a letter of credit are usually a beneficiary who is to receive the money. & DATE SBRE-777 January 26. Sample document LC: THE MOON BANK INTERNATIONAL OPERATIONS 5 MOONLIGHT BLVD. 2001 TO UVW Exports 88 Prosperity Street East.

Import- 37 | P a g e .00) available by your draft(s) drawn on at invoice value us sight for full accompanied by the following documents: 1. Sunlight City. Full set 3/3 clean on board ocean bill of lading. issued to order of The Sun Bank. Sunlight City. Import-Country. Export-Country Country Partial shipment Prohibited Transshipment Permitted Shipment from Special conditions: to Sunny Port.000. Covering: 100 Sets 'ABC' Brand Pneumatic Tools. Institute War and Strike Clauses. Dollars (US$25. 2001. complete with hose and quick couplings. Signed commercial invoice in five (5) copies indicating the buyer's Purchase Order No. dated latest March 19. 4. Import-Country in your favor for the amount of not exceeding Twenty Five Thousand U. and showing documentary credit number. 3.number SB-87654 for account of DEF Imports. plus two (2) non-negotiable copies. 1/2" drive. Insurance policy in duplicate for 110% CIF value covering Institute Cargo Clauses (A). Packing list in five (5) copies. evidencing that claims are payable in Import-Country. CIF Sunny Port Moonbeam Port.S. DEF-101 dated January 10. marked "freight Prepaid". 7 Sunshine Street. 2. 2001. notify the above accountee.

All documents indicating the Import License No. International Chamber of Commerce Publication No. 2001. if presented at this office on or before March 26. All charges outside the Import-Country are on beneficiary's account. 2001 Very truly yours. 1993 Revision. 2001 or 15 days after the date of shipment. Letter of Credit Particulars: a) Latest Negotiation Date The latest negotiation date is the last day of the period of time allowed by the letter of credit (L/C) for the presentation of documents and/or draft(s) to the bank. dated January 26. this Credit is subject to the Uniform Customs and Practice for Documentary Credits. SB-87654 of The Sun Bank. In the sample letter of credit the latest negotiation date can be March 26. 2. Authorized Signature Unless otherwise expressly stated. The latest negotiation date is not necessarily the L/C expiry date. Draft(s) drawn under this credit must be marked 15 days after the date of Drawn under documentary credit No. Documents must be presented for payment within shipment. Sunlight City.1. 38 | P a g e . 500. Import-Country. IP/123456 dated January 18. whichever comes first. 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.

strikes. 2001 and the place for presentation of document is Export-City. d) Draft(s) Drawn At The draft(s) drawn at answers the question "The draft is drawn at what terms?" It can be a sight draft (i. e) Draft(s) Drawn Under The draft(s) drawn under answers the question "The draft is drawn under which credit and the credit is of which bank?" In the sample letter of credit. acceptance or negotiation. c) Draft(s) Drawn On The draft(s) drawn on answers the question "Which bank or who is the drawee (the payer) of the draft?" The draft is most often drawn on the confirming bank or the issuing bank. Such extension. In case the expiry date and/or the latest negotiation date falls on a day on which the bank is closed for reasons not including the acts of God. its validity starts from the issuance date of L/C by the issuing bank.e. In the sample letter of credit the expiry date is March 26. civil commotions. In the sample letter of credit the draft is drawn at sight. but does not specify the date from which the time is to run. however. payment on demand or on presentation) or a term draft (i. but on or before the L/C expiry date. which is The Moon Bank.. the L/C requires that the draft(s) be marked "Drawn under documentary credit No. Sunlight City. Import-Country. The bank normally discourages stating the L/C validity in a period of time. the expiry date and/or the latest negotiation date is extended to the succeeding first day on which the bank is opened. does not extend the latest date of shipment. insurrections. In case the validity of an L/C is stated in a period of time. In the sample letter of credit the draft is drawn on the confirming bank. it is within 21 days after the date of issuance of the transport documents. lockouts. wars or any other causes beyond the bank's control. 39 | P a g e . for example "this credit is valid for three months" or "this credit is available for two months" or "this credit is good for one month". 2001" (please see the completed sample draft).In case the L/C does not stipulate the latest negotiation.. In some cases. which is the beneficiary's city. payment at a fixed or determinable future time). the draft is drawn on the applicant. SB-87654 of The Sun Bank. b) Expiry Date and Place The expiry date and place is the last day of validity of the credit and the place allowed by the letter of credit (L/C) for the presentation of documents and/or draft(s) for payment. dated January 26.e. riots.

. 2001. to ..." "carriage from . to ... Some of the expressions that may appear in the letter of credit (L/C) indicating the origin and the destination are: "shipment from . dispatch or taking in charge. to ."       In the sample letter of credit the origin is Moonbeam Port. 40 | P a g e ... for transportation to .f) Latest Shipment The latest shipment---latest date of shipment or last date for shipment---is the last day of the period of time allowed by the letter of credit (L/C) for shipment." "forward from ... The port or point of destination is the port or place of discharge or delivery..." "dispatch from . to ... to . In the sample letter of credit the latest shipment date is March 19...... Import-Country... Export-Country and the destination is Sunny Port." "delivery from ..... dispatch or taking in charge. g) Port or Point of Origin and Port or Point of Destination The port or point of origin is the port or place of loading." "taken in charge at .

and in Spanish to Mexico and Venezuela. Invoice is a bill for itemized goods or services. or translated to. The pre-shipment invoice is a shipment detailing the transaction. or the foreign government trade office concerned in the exporting country. which is done by The Consulate or The Commercial Section of the Embassy of the importing country. the government external trade department. The content of a typical declaration includes a sworn statement from the exporter indicating that the goods in question are manufactured in the exporting country. The exporter may check the wording with the customs broker. which usually is performed by the local Chamber of Commerce of the exporting country. and that the amount shown in the invoice is the true and correct value. for example. The certification and legalization are most often satisfied with a stamp or a seal on the invoice and payment of a fee. in French for shipment to France. The certification.3) Commercial Invoice: The commercial invoice is a record or evidence of transaction between the exporter and the importer. The description of merchandise as given in the commercial invoice must correspond to the description in the L/C and other documents must contain the similar description are: Specific Language Requirements in the Commercial Invoice Certain importing countries may require that the commercial invoice and the packing list be made out in. It is one of the most important documents prepared and signed by exporter with whose help other documents are prepared. is to verify that the invoice is correct. is to confirm that the invoice and declaration (in the invoice) are correct. The processing time may take one week 41 | P a g e . the language of the importing country. Certification and/or Legalization of Commercial Invoice The letter of credit (L/C) from certain importing countries. requires the certification and/or legalization of the commercial invoice. in particular from the Middle East. Declaration on Commercial Invoice The declaration on the commercial invoice for some countries must be in a specified wording. in Italian to Italy. The legalization.

Shipping Marks & Numbers • Quantity If the letter of credit (L/C) does not stipulate the quantity in a stated number of units (i. it does not state in units such as piece. "approximately". but not over 100 sets as the total amount will exceed the L/C amount of US$25. or gross).e.250 or more.. • Unit Price If the letter of credit (L/C) unit price is indicated using the words "about". the unit price in the invoice cannot exceed 10% more or 10% less than the unit price indicated in the L/C. If the L/C quantity is indicated using the words "about". For example. the description can be in general terms provided it is not inconsistent with the description in the L/C. set. "circa" or similar expressions. box.Signature and/or stamp The commercial invoice and packing list need not be signed. provided the total amount does not exceed the amount of the L/C. In the sample L/C the stated quantity is 100 Sets. the exporter may ship between 95 and 105 sets. If such sample L/C does not state the quantity.000. 42 | P a g e . "circa" or similar expressions. if the L/C unit price is "about US$250". a tolerance of 5% more or 5% less quantity is permitted. thus the quantity in the invoice must be 100 Sets. the original and the copy of the commercial invoice and packing list are often signed. provided the total amount does not exceed the amount of the L/C. For example. the quantity in the invoice can be any quantity between 90 sets and 110 sets. In practice. the quantity in the invoice cannot exceed 10% more or 10% less than the quantity indicated in the L/C. "approximately". In all other documents. provided the total amount does not exceed the amount of the L/C. unless otherwise stipulated in the letter of credit (L/C). if the L/C quantity is "about 100 sets". dozen. the unit price in the invoice can be any unit price between US$225 and US$275. the UVW Exports can ship between 95 sets and 100 sets of pneumatic tools. If such L/C does not state the quantity and the L/C amount is US$26. Description of Goods The description of the goods in the commercial invoice must correspond with the description in the letter of credit (L/C). or unless the L/C stipulates that the quantity of the goods specified must not be exceeded or reduced.

Explanations: Fields in the Preamble of the Commercial Invoice " For account and risk of Messrs. enter "IP/123456" and "January 18.. It is used to address a business firm in a formal manner. stands for Messieurs in French meaning gentlemen. It is the identification number of the store or branch of a chain store. For example. " Date " and " Issuing Bank " Referring to the sample L/C. or Miss is used to address a person. enter "DEF-101" and "January 10.) or contract number.• Amount Unless otherwise stipulated in the letter of credit (L/C).000". the amount of the invoice cannot exceed 10% more or 10% less than the amount indicated in the L/C. thus UVW Exports may choose not to enter it in the documents. " and " Date " The letter of credit may require the documents to show the purchase order (P. " Buyer's P. including bill of lading and insurance policy. Referring to the sample L/C. Mrs.). 2001" in the respective fields in the documents.000 and US$11. The sample L/C does not stipulate indicating this information in the documents except the draft(s). " The department or store number is often required when dealing with the chain stores. The title Messrs. 43 | P a g e . " . "circa" or similar expressions. if the L/C amount is "approximately US$10. the same way the title Mr. 2001" in the commercial invoice and all other documents. but there is no harm if it is entered in the documents. " Enter the complete name and address of the importer (the consignee) in the field (For account and risk of Messrs. The store number is used in the routing of goods by the chain store. It identifies the store that places the order or to which branch (of the chain store) the goods will be delivered. 2001" and "The Sun Bank" in the respective fields in the documents. " Import Permit/License No. the amount of invoice can be any amount between US$9. "approximately". enter "SB-87654".000. If the L/C amount is indicated using the words "about". "January 26.O. " and " Date " Referring to the sample L/C.O. or Contract No. " Buyer's Department / Store No. " Letter of Credit No. the amount must not exceed the amount permitted by the L/C.

which is often the consignee's place (city). Referring to the sample L/C. Import-Country" as the destination in the fields. " For Transhipment To " For transhipment to is the final destination in the onward routing or carriage. ExportCountry" as the origin and "Sunny Port." Shipment on or about " Shipment on or about is the ETD (estimated time of departure) or the ETS (estimated time of sailing). 44 | P a g e . dispatch or taking in charge is often regarded as the ETD. " Via (Tranship At) " The via (tranship at) refers to the transhipping port or point in a transhipment. Pakistan" in the field. enter "Karachi. In practice. " From (Port of Loading) " and " To (Port of Discharge) " The port of loading is the port or point of origin and the port of discharge is the port or point of destination. enter "Moonbeam Port. if a consignment destined for landlocked Afghanistan has to tranship at Karachi. the date of loading on board. For example. Pakistan.

. that is. From the sample L/C... provided it is not inconsistent with the marks and numbers on the master cartons. enter "C/No. (44. It contains almost all the information provided in invoice along with details of packing like:  No.. ..) Measurement (Meas. . of bales or cartons  Gross weight  Net weight  Dimensions etc.) " Package No.W. 1 and up.. it is assumed that the pneumatic tools in the sample L/C contain the following data: The catalogue or item number of the pneumatic tools is A380 Each set is in an inner box and there are two boxes in an export master carton.W.. from package No.4) Packing List: It is a document showing the details of goods contained in individual packages.. x 61 cms. .).) Gross Weight (G. " The entries preferably arranged in sequence from the lowest number to the highest...) 61 cms. x 30. (2' x 2' x 1') 45 | P a g e . For the purpose of explaining other fields in the packing list. or a total of 50 cartons for the 100 sets Each master carton: Net Weight (N.1 lbs.. 1-50" or the like in the field (Package No.) 23 kgs. 20 kgs.7 lbs.) 0. which helps customs authorities and receives in identifying the contents of specific package. (50.5 cms..113 CBM (4 cft.

" Item No. " and " Description of Goods " The description of the goods in the packing list can be in general terms, provided it is not inconsistent with the description in the L/C. From the sample L/C and data of the pneumatic tools above, entering "A380" and "'ABC' Brand Pneumatic Tools" in the fields will satisfy the requirements. " Quantity " It shows the total quantity within a stated range of the package number and the breakdown in each package. The stated range is C/No. 1-50, enter: 100 Sets 2 Sets/Ctn. or 100 Sets 2 Sets @ Ctn. or the like in the field. The / and @ used here stands for per or each. " Weight " It shows the total weight within a stated range of the package number and the weight of each package. The stated range is C/No. 1-50, enter: 1,150 Kgs. 23 Kgs./Ctn. or 1,150 Kgs. 23 Kgs. @ Ctn. or the like in the field and put a notation "Gross Weight". As far as the carrier is concerned, the gross weight or measurement of a consignment is needed to calculate the freight. In case the goods are assessed in the importing country or exported on the net weight basis, it is necessary to show the net weight and gross weight in the packing list. The entry may appear as: N.W. 1,000 Kgs. G.W. 1,150 Kgs.

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" Measurement " Ocean shipments are most often charged by the cubic meter (CBM or cbm). Enter: 5.65 CBM 0.113 CBM/Ctn. in the field (Measurement). Sometimes, it is necessary to include the size or dimensions (length-width-height) of the master package. The entry may appear as: 5.65 CBM 0.113 CBM/Ctn. @ 61 x 61 x 30.5 Cms. The @ stands for at or each. Some carriers may calculate the freight on a cubic feet (cft. or cu. ft.) basis. In the case of an irregular shaped cargo, take the three widest dimensions that describe the smallest cubic space enclosing the cargo to determine the measurement. " Signature and/or Stamp " The packing list and commercial invoice need not be signed, unless otherwise stipulated in the letter of credit (L/C). In practice, the original and the copy of the packing list and commercial invoice are often signed.

Summary of Totals in a Consignment
Total Number of Packages For example a consignment where the range of the carton number is as follows: - Product 1-8 A 9-17 - Product B 18-23 - Product C 24-30 - Product 31-42 D 43- Product E - Product F put a summary "Total 50 Cartons" in a succeeding row after the "C/No. 43-50". C/No. C/No. C/No. C/No. C/No. C/No. 50

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Total Quantity If a consignment consists of different units, preferably show all the units used in the summary of totals. For example, a shipment includes: - Product 100 dozen A 200 dozen - Product B 300 boxes - Product C 400 boxes - Product D as such the total shows "300 Dozen and 700 Boxes". Total Weight and Total Measurement If the net weight and gross weight are used in the breakdown, the summary must show the total net weight and the total gross weight. If kgs., lbs., CBM and cft. are used in the breakdown, the summary must show the total of kgs., lbs., CBM and cft.. Under certain circumtances, such as in a consignment consisting of a few master cartons where each carton contains several small items of different sizes, it is necessary to show the breakdown of the quantity of each item. There is no need to show the breakdown of the weight and measurement of each carton. Simply entering the total weight and the total measurement of the consignment in the summary row would satisfy the export requirements.

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5) ARE-1 Form: This document is prepared by exporter & it acts as a excise document. 6 copies of this document are prepared which are as follows: (1) Original (White) (2) Duplicate (Buff) (3) Triplicate (Pink) (4) Quadruplicate (Green) (5) Quintuplicate (Blue) (6) Sixtuplicate (Yellow) - - is sent with container is sent with container to excise authority after proof shipment is obtained kept for office record to control excise authority 49 | P a g e . 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.

The UVW Exports may issue a draft drawn on The Moon Bank as follows: Sample Instrument: Draft 50 | P a g e . A usance bill is drawn for payment at a date later than the date of presentation. the same can be prepared by the exporter in the usual format. which is called usance bill. Drafts Drawn On the Bank In the sample L/C the draft is drawn on the confirming bank. When the goods are shipped by Sea. b) Usance Bill: When the exporter (LUCKY EXPORTS) has agreed to give credit to the foreign buyer.6) Bill of Exchange: A bill of exchange is also known as draft. There is no aligned document for draft. 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. To whom it is directed to pay is called maker of a bill means exporter (LUCKY EXPORTS). which contains an order from the exporter LUCKY EXPORTS to the importer to pay a specified amount to a person. which is The Moon Bank. he draws a bill.

the government levy a heavy tax on drafts. The 'availed' term draft can be readily discounted. When the documents are presented to the negotiating bank. if any is issued. thus providing the exporter with immediate funds. the bank issues a letter of undertaking indicating when and where the money will be paid. it is not uncommon that two drafts are drawn on the drawee bank in a letter of credit (L/C) to ensure that at least one draft reaches the drawee when they are dispatched separately. Blank drafts are available at the paying bank. At times even three drafts may be drawn on the drawee bank. In the second draft.The "No. In contrast. The sample draft shown above is the first draft. The issuance of more than one draft in a letter of credit follows the same logic as in the issuance of bill of lading in more than one original. First of Exchange (Second Unpaid) and Second of Exchange (First Unpaid) In practice. In such a circumstance. normally one draft (sola bill) is issued in a documentary collection where the draft is drawn on the importer. is marked "Second of Exchange (First Unpaid)" and the number "2". The Parties in the Collection of Drafts 51 | P a g e . 'Availed' Term Drafts The word "aval" in French means endorsement. The exporter may arrange to have the accepted draft to be 'availed' by the importer's bank---the bank adds its endorsement as guarantee of payment. this practice was not uncommon before in certain countries. hence it is not readily accepted for discounting or as collateral in a loan. Some drafts may not be numbered "1" or "2". The Letters of Undertaking Instead of the Drafts In certain exporting countries. marked "First of Exchange (Second Unpaid)" and the number "1". instead of accepting a draft drawn by the exporter." (number) in the above sample draft may be used for the exporter's reference number. A term draft accepted by the importer does not guarantee payment on maturity. the exporter may request the importer to specify in his/her letter of credit (L/C) application that "No drafts be issued".

which is the acceptor and the payer of the draft. or could be the bona fide holder (the bearer) of the draft. The drawer is the seller (the exporter) and the payee of the draft. shipping documents and documentary collection instructions. if any. The drawee is the buyer (the importer). In a letter of credit the drawee most often is the confirming bank or the issuing bank. and thereafter releases the shipping documents to the importer in accordance with the instructions of the exporter---is called the collecting bank or the presenting bank. 7) Certificates of Origin The certificate of origin is a document certifying the country in which the product was 52 | P a g e .• Drawer The drawer is the party who issues the draft and to whom the payment is made. • Drawee The drawee is the party who owes the money or agrees to make the payment and to whom the draft is addressed (made out). Collecting Bank (Presenting Bank) The bank in the importer's country (the importer's bank usually) involved in processing the collection---presents the draft to the importer for payment or acceptance. receives the shipping documents. the acceptor and the payer of the draft in a documentary collection. • Remitting Bank The exporter's bank to whom the exporter sends the draft. and who subsequently relays them to the collecting bank in a documentary collection is called the remitting bank. The payee could be another party rather than the exporter. The term remitting bank as used under a letter of credit may refer to a nominated bank from whom the issuing bank or the confirming bank.

produced or manufactured. Sample Form: Form A 53 | P a g e . splitting and sorting may not be considered as sufficient operations to confer origin. Certain operations such as packaging. Exporter's Certificate of Origin. Some importing countries require a certificate of origin to establish whether or not a preferential duty rate is applicable. The country of origin is the country where the goods are grown. The manufactured goods must have been substantially transformed in the exporting country as the country of origin. The C/O is based on the rules of the country of origin. which is often called the GSP Form A.manufactured. to their present form ready for export. The certificate of origin (C/O)is an alternative to the declaration or the certification and/or legalization of the commercial invoice. import practice. and Free Trade Market Certificate of Origin. The certificate of origin includes the Form A. and in certain cases may include such information as the local material and labor contents of the product. and letter of credit (L/C) stipulation determine the type of C/O needed. Chamber of Commerce Certificate of Origin. The trade agreement. A popular example of the certificate of origin is the Form A.

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Denmark. The certificates require endorsement by the customs of the exporting country. Iceland. The form is available at the customs office. Italy. Finland. Netherlands. Spain. is used in the European Community. Ireland. Canada. EFTA countries consist of Austria. France. Movement Certificates Different Movement Certificates are being used in the European Union (EU)---EC (European Community) and EFTA (European Free Trade Association) countries. It is issued by the Chamber of Commerce of the exporting country. USA and Mexico). and United Kingdom. Norway.e. Germany. usually with payment of a fee.. Sweden. and Liechtenstein.Free Trade Market Certificates of Origin NAFTA Certificate of Origin The North American Free Tree Agreement (NAFTA) Certificate of Origin is used within the NAFTA countries (i. 55 | P a g e . EC Certificate of Origin The European Community (EC) Certificate of Origin. Portugal. Switzerland. Greece. Luxembourg. It is self-certified by the exporter. as its name implies. EC countries consist of Belgium.

All the originals are duly signed by the master of ship or the agent of the steamship company and all the originals are equally valid for taking the delivery of goods and once one original copy is utilized the other originals become full and void. It is issued in terms and conditions of the contract of carriage of goods. Generally AWB is issued in three copies. B/L is nor a negotiable instrument in terms of Negotiable instrument Act. 56 | P a g e . The receipt issued by an airline or its agent for the carriage of goods is called airway bill or air consignment note.DOCUMENT CONNECTED WITH TRANSPORTATION OF GOODS • Air Way Bill (AWB) Air consignment Note. It is generally issued by a shipping company. • Bill of Lading (B/L). • Postal Parcel Receipt (PPR). the PPR evidence merely the receipt of the goods to be exported to the buyer and is not a document of title. It is not a document of title and it is not issued in a negotiable form. it is a practice to call the original copies as negotiable copies. B/L is generally made out in the sets of two or three originals. Like the AWB. However. 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. A Bill of Lading is the most important document in Foreign Trade. viz. for the carrier. for the consignee and for the consignor.

the name and capacity of the carrier or the master on whose behalf such agent signs or authenticates must be indicated. The B/L must indicate that the goods have been loaded on board or shipped on a named vessel. The signature or authentication must be identified as carrier or master. and it must be signed or authenticated by the carrier or the master.Ocean (Marine) Bills of Lading The bill of lading (in ocean transport). road. rail or sea transport). waybill or consignment note (in air. or the agent on behalf of the carrier or the master. The bill of lading (B/L) serves as a receipt for goods. and in the case of agent signing or authenticating. The carrier issues the B/L according to the information in a dock receipt. 57 | P a g e . and receipt (in postal or courier delivery) are collectively known as the transport documents. Unless otherwise stipulated in the letter of credit (L/C). or in some cases according to a completed working copy of the B/L supplied by the customs broker. Please see the sample Ocean Bill of Lading below. 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. an evidence of the contract of carriage. and a document of title to the goods.

Sample Document: Ocean Bill of Lading 58 | P a g e .

C etc. It gives full details of all the risks covered. destination. • Insurance Policy This is a basic legal document-evidencing contract of insurance between the insurer and insured. It is stated that particular subject are placed under insurance and certificate/policy of insurance will be issued later on. Unless the insurance certificate gives details of the conditions of cover it is not so much value to third party who negotiate the shipping documents. Insurance policies are issued in different forms like floating policy. as broker acts for the insured and cannot compel insurer to accept the proposal of insurance.INSURANCE DOCUMENTS • Letter of insurance. The coverage of risks is classified into categories like A. This is analogous to cover note issued by the broker. An open cover /policy is valid for a given period of time or permanently open. The relevant details like name of the vessel. A specific policy covers specific shipments and such policy is readily available for submitting with the export documents. Marine or transit insurance policies can be assigned by the insured merely by endorsement and delivery. the details of which are not finalized when the contract of insurance is conclude. is therefore required to be declared subsequently and endorse in the policy. As per this policy the insurer undertakes to insure all the shipments for which the details are already intimated to the insurer. • Broker’s Certificate This is also not acceptable as broker issues the same. open policy or cover. and the insurance policies are issued accordingly. B. description of cargo etc. 59 | P a g e . • Insurance Certificate The insurance on “open cover” or “floating” policy covering all shipment on certain terms and subjects to conditions laid down. specific policy etc… A floating policy is a contract of insurance for covering a number of shipments.

Babarpur etc. 60 | P a g e . APL. The ICD used by may be Parparganj.) 7) P & O. depending on the contract with the importer. Contship (Vessel Owners) The above documents along with cargo are sent to ICD by road. Parties involved in Pre-Shipment: 1) Marketing Department 2) Pre-shipment 3) Warehouse 4) Excise department 5) Clearing and forwarding agent 6) Inland Container Depot (Parparganj. tuglakabad or any other.

 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. correct and full description of goods etc  Purchase Order. Letter of Credit  Inspection certificate 61 | P a g e . unit rate. The exporter (LUCKY EXPORT) has to submit some documents for shipping bill which are as follows:  SDF (GR Form) in duplicate for shipment.Stage-5th Customs Clearance Custom House Agent (CHA) and freight forwarders. generally act on behalf of importance and exporters for handling their export shipments or clearing their import consignments. total FOB/CIF value. quantity. 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. who are known as clearing and forwarding agents.

because the company has no dealing with EOUs. because the company has no dealing with EOUs. iii) Dutiable (Yellow in colour): Used where the exported goods are manufactured in bond (EOU Goods). iv) Bond (Pink in colour): Used where the exported goods are manufactured in bond (EOU goods).Each shipping bill set consist of following copies”i) Original ii) Duplicate iii) Triplicate iv) Quadruplicate v) Quintuplicate vi) Sixtuplicate Retained by customs Exporter’s certificate Drawback copy/DEEC copy to excise department Export Promotion Copy Exchange Control Copy * Exchange control copy is also called GR Form/SDF Form. ii) Drawback (Green in colour): Used in cases where the exported goods attract the benefit under drawback rules. Types of Shipping Bills: i) Free (White in colour): Used in cases where exported goods do not get any export benefits. Such type of shipping bill is not used in LUCKY EXPORTS. Such type of shipping bill is not used in LUCKY EXPORTS. 62 | P a g e .

The original copy remains with authorities and they submit it to the Reserve Bank of India. The exporter give this form to his shipping agent to get it stamped from the customs office after clearance of goods from custom. 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. 63 | P a g e . 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.2) GR/SDF Form: GR/SDF form is filled and submitted by the exporter. iv) Quantity of goods. v) 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. GR/SDF form is prepared in duplicate. iii) Customs assessable value.

the movement of containers is extended to the interior parts of the country and • Door to Door-the movement of containers is further extended right to the factory gates of the manufacturer/exporter to the door of the importer’s warehouse in a foreign country. Ensuring original quality of goods. The container system of transportation involves bulking of the break-bulk cargoes by putting them in containers of standard sizes shown below: Length Streadth Height 10’ X 8’ X 8’ 20’ X 8’ X 8’-81/2’-9’-91/2’ 30’ X 8’ X 8’ 40’ X 8’ X 8’ The movement of containers would progress in the following phases: • From port to port (Pier to Pier). Simplification of documents & procedures. Reduction in pilferage. • From Inland Container Depot (ICD) in one country to ICD in another country. Thus the container transportation system through effective co-ordination of international movements operates on a much wider scale and endeavors to provide maximum convenience to cargo owners. Likewise the container technology has brought in the cellular ships to carry general cargo in containers to reduce cargo-handling cost and promote faster movements.CONTAINERISATION Modern ship building technology has brought forth dry cargo bulk carriers and tankers to reduce per unit cost of transportation in tramp shipping. The system aims at: • • • • • • • • Faster and reliable delivery of goods. Better protection of fragile & containable cargoes. Reduction in the Packing cost of the cargo. Reduction in cargo handling cost & ship’s time at ports. 64 | P a g e .the carriage of containers is confined to the scalage of journey. Physical separation of dirty cargoes.

length 40cm and the depth 30cm. Vol. = 50cm x 40cm x 30cm = 10 Kgs 6000 Stage-6th 65 | P a g e Post-Shipment Operations .Volumetric Calculation of Weight for charging: When shipping lightweight and bulky packages. For example If the width is 50cm. use the following formula to help you determine their volumetric weight: Multiply the width by the length by depth of your shipment and divide the total by 6000. Wt.

The post-shipment department is done for preparing this invoice.This document. also called as commercial invoice. thereby reducing the bill amount compared to the pre-shipment. is widely used in commercial transaction.  The post shipment invoice may contain the discount or partial advance payment. This invoice is actually a commercial invoice. It is one of the documents required for negotiation. the bill of lading-number and date. It is the statement of account of sale rendered by the seller to the buyer and is prepared in a specific format. 66 | P a g e . freight details. Who will arrange the payment of the same to your bank describing the documents enclosed with it. the next step is to collect the payment from the importer. shipping bill number and date. The invoice is usually made out for the full realization amount of goods. The seller generates this after the shipment is done. 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. 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. if any. Negotiation / Collection through Bank Once the goods have been shipped and the necessary documents are dispatched to the importer. quota details and letter of credit or contract copy is required. GR number and date.

without which clearance of goods is not allowed.1) Documents sent to the Bank: The exporter presents the following documents to the bank for negotiation: Commercial Invoice No.  Single Entry Declaration  Weight List  Original copy of Letter of Credit 5 copies 7 copies 2 orig. When the documents are submitted to the bank.+ 1 copy Additional Documents:  Certificate of Origin: There are certain countries that require their importers to obtain certificate of origin from the exporter. Under the GSP manufacturers and semimanufacturers from developing countries including India are entitled to a cocsessional rate of import duty. it is a request to the bank to negotiate the documents if the same are drawn under the letter of credit. 67 | P a g e . + 4 copies 1 copy 10 orig.  Packing list  Bill of Lading  Customs Invoice No.  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. + 3 copies 10 orig.

After that the second set is also sent by the second airmail for the confirmation of first set. c) A duplicate copy of GR form is transmitted to the exchange control department of Reserve bank of India on receipt of payment from abroad.The bank examines all the documents in a process which is as follows: a) The bank examined all the terms and conditions are according to the original order and also that of letter of credit. 2) Documents sent to the Party: Bill of Lading  Commercial Invoice  Packing list  Special Customs Invoice  Single Entry Declaration  Weight List 3 Copies 5 Copies 5 Copies 5 Copies 2 Copies 2 Copies 68 | P a g e . d) The original copy of the bank certificate as applied for by exporter along with attested copies of commercial invoice is returned to the exporter. b) The set of all these documents is sent to the importer bank by the first airmail.

FLOW CHART OF EXPORT PROCEDURE 69 | P a g e .

CUTTING.O. INSPECTION & TRANSPORTATION) PREPARATION OF PRE-SHIPMENT DOCUMENTS (PACKING LIST. LABELING FINISHING OF PRODUCTS) REVIEW BUYER’S COMMENT NO DISPATCHING (TAGGING. PACKING. COLLECTION OF PAYMENTS THROUGH BANKS) FEEDBACK MODES OF PAYMENT 70 | P a g e . AR-2 FORM. STITCHING. BILL OF LADING ETC) POST SHIPMENT OPERATIONS (NEGOTIATING DOCUMENTS. FOLDING.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. COMMERCIAL INVOICE. BILL OF EXCHANGE ETC) CUSTOM CLEARANCE & SHIPPING (SHIPPING BILL. TO PRODUCTION INCHARGE SOURCING (DYING.

Managerial functions tend to become more and more complicated as the operations of a company cross the boundaries of the nation in which it is operating. Exports finance is no exception to this generalization. The risk dimension accentuates significantly as soon as the goods are sold to a buyer outside the country. Some of the risk factors are inadequate personal knowledge about the foreign buyers, possible restrictions on transfer of funds from importer’s country, fluctuations in rates of exchange, obstacles to payments for reasons such as wars, political disturbances payment delays and a lot of other socio political factors. It may be appreciated that these risk factors originate out of one common reason i.e. the business operations are done in different of business environment. The final indicator of success any business is its financial viability and in exports the inflow of funds is from across the borders. So, 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, Om Policies, importer’s financial position and the prevailing trade practices in the industry. The payment can influence other factors of marketing mix, price being the most significantly affected. 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) Exporter’s knowledge of the buyer. ii) Buyer’s financial position. iii) Security of payment and risk factors.

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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
Benefits for Export House/Trading House/Star Trading House/Super Star Trading House: a) Off shore trading /merchanting with advance payment to suppliers. b) Membership of Policymaking open bodies and business delegations. c) Self declared pass scheme. d) Duty exemption scheme with legal undertaking instead of B/C. e) E.P.C.G. scheme with legal undertaking instead of B/G (Bank Guarantee). f) Import of cars as one time facility once in five years against their valid status. g) No prior approval required for opening offices abroad. h) Foreign equity can be raised up to 51%. i) Marketing development assistance through FIEO. j) Higher Entitlements for foreign exchange for foreign travel. k) EEFC funds utilization for setting up offices abroad.

Duty Drawback
The duties suffered on the raw material used in the final export product, whether imported or procured indigenously, are refunded to the exporter through duty drawback scheme. The cost/duty figures supplied by all industries are used arrive at duty drawback rates, which are published as all industry rates. In case exporter is not satisfied with this rate, he has an option of getting a special band rate. The current scheme does not allow drawback, if the exporter has already audited MODVAT credit.

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The exporter has to undertake an export obligation in terms of value and quantity. Director General of Foreign Trade. The license could be two types:  Quantity based Advance License  Value based Advance License The exporter has twelve months time to fulfill export obligation. This book has two separate parts for exports and imports. Duty Entitlement Pass Book Scheme (DEPB): A manufacturer.exporter or an exporter granted an EH/TH/STH/SSTH certificate shall be eligible to avail the benefits of this scheme. II. DEPB Under this scheme. monitors the export obligation.Duly Exemption Scheme I. I. The transaction under the license as to be logged by customs in a book called DEEC book. Non-fulfillment of the obligation attracts the duty waired easier on the imports of raw material plus interest plus penalties. II. The licensing authority. 74 | P a g e . This scheme shall apply only for the export of the product where standard input-output norms have been published in hand book of procedures. DEEC. Duty Exemption Entitlement Certificate (DEEC): exporter is given license to import raw material without payment of duty. This license is called an Advance License.

The capital goods shall include jigs. dies and molded spares may also be imported under the scheme up to 20% of CIF value of capital goods. the same export obligation shall be required to be fulfilled over a period of 12 years. A person holding an EPCG license may source the capital goods from domestic manufacturers supplying capital goods to EPCG license holders shall be eligible for deemed export benefit. fixtures. 75 | P a g e .  Pass book shall be issued quantity based only. Exports Promotion Capital Goods Scheme (EPCG Scheme) The scheme allows import of new capital goods as well as computer software systems at 5% customs duty subject to export obligation equivalent to 5 times CIF value of capital goods to be fulfilled over a periods of 8 years reckoned from the date of issuance of license over a period of 8 years. In pass book scheme exporter have to first export the goods and get the credit in pass book then one can import utilizing the credit.100 crore or over.   Pass book will be valid for a period of two years from the date of issue. The export goods shall not be eligible for drawbacks on the inputs for which credit is taken in pass book. in export of EPCG license for Rs. However.

An application for grant of an EPCG license shall be made in APPENDIX 9 of the Handbook of procedure along with documents prescribed there in. 76 | P a g e .Period from the date of Issuance of license 1) Block of 1st & 2nd year 2) Block of 3rd & 4th year 3) Block of 5th & 6th year 4) Block of 7th & 8th year Proportion of total export obligation Nil 15% 35% 50%.100 crore or more. duly certified by Chartered Accountant to the concerned licensing authority. However. In respect of license of Rs. The licensee holder shall submit a yearly report on progress made in fulfillment of export obligation in Appendix 9A & 9B of Handbook of procedures. the export obligation of particular block of year may be set off by the excess exports made in the proceeding block of the year. the export obligation shall be fulfilled over a period of 12 years in the following proportions:- Period from the date of issue Of license 1) Block of 1st & 5th year 2) Block of 6th & 8th year 3) Block of 9th & 10th year 4) Block of 11th & 12th year Proportion of total export obligation Nil 15% 35% 50%.

SUMMARY OF EXPORT PROCEDURE 77 | P a g e .

if other than the issuing bank. Seller's draft is honored. 4. 9. usually in Seller's country. Buyer applies to his issuing bank. 8. 5. and usually to confirm. sends the documents and draft to the issuing bank. Issuing bank requests another bank. Bank examines the documents and draft for compliance with credit terms. 3. Seller prepares goods and documentation.PROCEDURE: 1. and arranges delivery of goods to carrier. Advising bank. Bank examines the documents and draft for compliance with credit terms. If credit terms and conditions conform to sales contract. bank will pay. 2. Seller presents documents evidencing the shipment and draft (bill of exchange) to paying. or any bank willing to negotiate under the terms of credit. to advise. 7. with method of payment usually by letter of credit (documentary credit). Seller and Buyer conclude a sales contract. 6. If complied with. usually in Buyer's country. forwards letter of credit to Seller informing about the terms and conditions of credit. If complied with. for letter of credit in favor of Seller (beneficiary). accept or negotiate. Bank. usually a correspondent bank in Seller's country. accepting or negotiating bank named in the credit (the advising bank usually). 78 | P a g e . the credit.

10. Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order. COST FACTOR OF EXPORT-IMPORT GOODS 79 | P a g e . or on other terms agreed between the bank and Buyer.Documents release to Buyer after payment. 11.

COST FACTORS OF EXPORT-IMPORT GOODS 80 | P a g e .

drayage) and/or rail freight Routing costs (canal and inland waterway links) Uninsured damages Theft and pilferages Handling charges Demurrage 5 • • Brokerage fees Export levies 81 | P a g e . labor and overhead Custom packagings Inspection fees Licensing fees Royalties 2 • • Buying agent's commissions Trader's markups 3 • • • • • • • • • Bank charges and commissions Overseas agent's commissions Freight forwarder's charges Documentation charges Insurance premiums Export license fees Certification fees Consular fees Advertising 4 • • • • • • Road freight (cartage.1 • • • • • Materials.

g.6 • • Insurance premiums Air freight 7 • • • • • • • Theft and pilferages Overtime charges Handling charges Warehousing Loading fees Demurrage Wharfage 8 • • • Insurance premiums Ocean freight Lighterage 9 • • Uninsured damages (e. war and acts of God) Pilferages 10 • Lighter age 11 • • • • • • • Theft and pilferages Quarantine charges Overtime charges Handling charges Unloading fees Warehousing Demurrage 82 | P a g e .

drayage) and/or rail freight Routing costs (canal and inland waterway links) Theft and pilferages Uninsured damages Handling charges Demurrage 14 • • • Warehousing Interest charges Advertising 83 | P a g e .• Wharf age 12 • • • • Import duties and taxes Bank charges and commissions Import license fees Brokerage fees 13 • • • • • • Road freight (cartage.

INTERNATIONAL COMMERCIAL TERMS (INCOTERMS) 84 | P a g e .

They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices 85 | P a g e .INTERNATIONAL COMMERCIAL TERMS EXW FAS FCA FOB CFR CIF CIP CPT DAF DDP DDU DEQ DES Ex Works Free Alongside Ship Free Carrier Free On Board Cost and Freight (The former acronym of Cost and Freight was C&F) Cost. Insurance and Freight Carriage and Insurance Paid To Carriage Paid To Delivered At Frontier Delivered Duty Paid Delivered Duty Unpaid Delivered Ex Quay Delivered Ex Ship Incoterms or international commercial terms are a series of international sales terms. published by International Chamber of Commerce (ICC) and widely used in international commercial transactions.

but risk passes when the goods are handed over to the first carrier. CIF – Cost. cost and risk being divided at ship's rail. The seller must clear the goods for export. CIP – Carriage and Insurance Paid (To) (named place of destination) The containerised transport/multimodal equivalent of CIF. including carriage by air. Suitable for maritime transport only. However. In this case the seller allows a deduction of sum equivalent to the carriage by ship from the air carriage. CPT – Carriage Paid To (named place of destination) The general/containerized/multimodal equivalent of CFR. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. this changed in the 2000 version of the Incoterms. FOB – Free on board (named loading port) The seller must load the goods on board the ship nominated by the buyer. Group C – Main carriage paid CFR or CNF – Cost and Freight (named destination port) Seller must pay the costs and freight to bring the goods to the port of destination. The passing of risk occurs at the frontier. into the custody of the first carrier (named by the buyer) at the named place. but risk passes when the goods are handed over to the first carrier. Maritime transport only. Maritime transport only. DES – Delivered Ex Ship (named port) 86 | P a g e . Maritime transport only. The seller pays for transportation to the named place of delivery at the frontier. The seller pays for carriage to the named point of destination. risk is transferred to the buyer once the goods have crossed the ship's rail. FAS – free alongside Ship (named loading port) The seller must place the goods alongside the ship at the named port. Group D – Arrival DAF – Delivered At Frontier (named place) This term can be used when the goods are transported by rail and road. Seller pays for carriage and insurance to the named destination point. cleared for export. and containerized / multi-modal transport. The seller must clear the goods for export. It also includes Air transport when the seller is not able to export the goods on the schedule time mentioned in the letter of credit. rail.Group F – Main carriage unpaid FCA – Free Carrier (named place) The seller hands over the goods. road. Insurance and Freight (named destination port) Exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. This term is suitable for all modes of transport.

The most comprehensive term for the buyer. unloading and subsequent delivery beyond the place of destination. Unlike CFR and CIF terms. but also Risk and Title up to the arrival of the vessel at the named port. taxes. if the buyer wishes the seller to bear cost and risks associated with the import clearance. taxes such as (but not limited to) VAT and excises should not be considered prepaid being handled as a "refundable" tax. the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The buyer is responsible for the costs and risks for the unloading.and where the seller either owns or has chartered. the seller has agreed to bear not just cost. Costs for unloading the goods and any duties. grain. 87 | P a g e .Where goods are delivered ex ship. DDP – Delivered Duty Paid (named destination place) This term means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty. duty and any subsequent delivery beyond the place of destination. but the passing of risk does not occur until the goods have been unloaded at the port of destination. DDU – Delivered Duty Unpaid (named destination place) This term means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale. However. Also used interchangeably with the term "Free Domicile".. then this all needs to be explicitly agreed upon in the contract of sale. The goods are not cleared for import or unloaded from any form of transport at the place of destination. their own vessel. such as coal. A commonly used term in shipping bulk commodities. In most of the importing countries. duty. Therefore VAT and excises usually are not representing a direct cost for the importer since they will be recovered against the sales on the local (domestic) market. etc are for the Buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement. dry chemicals . DEQ – Delivered Ex Quay (named port) This is similar to DES.

it would be the seller.SUMMARY OF INCOTERMS For a given term. Unlo Unload Entr ad Landi Landin onto Entry . CFR) then insurance for transport is the responsibility of the buyer or the seller depending on who owns the cargo at time of transport.duty ort to truck charge ort to charges rt to Insuran from ms es ms truc payme exporte at the s at importe at destinati ce the clearan and k nt r's port origin origin' r's port importe on importe ce Taxe 's s port r's port rs' port s port EXW No No No No No No No No No No No No FCA Yes Yes Yes No No No No No No No No No FAS Yes Yes Yes Yes No No No No No No No No FOB Yes Yes Yes Yes Yes No No No No No No No CFR Yes Yes Yes Yes Yes Yes Yes No No No No No CIF Yes Yes Yes Yes Yes Yes No No No Yes No No CPT Yes Yes Yes Yes Yes Yes No No No No No No CIP Yes Yes Yes Yes Yes Yes No No No Yes No No DAF Yes Yes Yes Yes Yes Yes No No No No No No DES Yes Yes Yes Yes Yes Yes No No No No No No DEQ Yes Yes Yes Yes Yes Yes Yes No No No No No DDU Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No DDP Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes 88 | P a g e .y Loa Export Transp from ng Transp g Transpo trucks Custo Duti Incoter d to . "No" indicates it is the buyer's responsibility. In the case of CFR terms. "Yes" indicates that the seller has the responsibility to provide the service included in the price. If insurance is not included in the term (for example. it would be the buyer while in the case of DDU or DDP terms.

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Thus the whole study concludes in brief … • To survive & grow in today’s international market for any export house.CONCLUSION It is clear from the above study that the complexity of international import-export business can be overcome easily by a systematic export procedure & fair documentation. the awareness and implementation of standardized rule-regulations & documentation is necessary. Governments. fraud and mistake. bottleneck. Banks. • The final indicator of success any business is its financial viability and in exports the inflow of funds is from across the borders. the systematic export procedure is compulsory. 90 | P a g e . Importer. Insurance Agencies and Inspection Agencies. Transport Agencies. This is only the documentation which safeguards the interests of Exporter. & RBI policies. Thus mode of payment must be decided on the basis of best business suitability according to the Govt. • To overcome any kind of error. These programmes have been made to facilitate the exporters in their exports efforts at various stages of export process. • Also the Government of India has instituted many support programmes with a view to give thrust to our sectors.

 All the findings are based on the information from Seller/Exporter side only.  Primary data is analyzed though interview of executives and they may not be available and may not be part of research.  Less sufficient response of executives & supervisors in respect to information related to securities & weakness matter of unit.  Export Rules. Regulations & Compliances are too wide to cover thoroughly in short term project.  No direct knowledge of the operations of Forwarding Agents. 91 | P a g e .LIMITATIONS OF THE STUDY  Partial information of negotiable documents because of securities reasons.

com indiandata.BIBLIOGRAPHY • WEBPAGES export911.luckygroupcompanies.com Superindian.com • HOW TO EXPORT A NABHI PUBLICATION • NEW IMPORT-EXPORT POLICY A NABHI PUBLICATION • EXPORT-IMPORT ANSWER BOOK -2010 • LUCKY EXPORT • COMPANY WEB SITE • COMPANY BROCHURE NEWSLETTER by: AJAY SRIVASTAVA www.net 92 | P a g e .

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