EXPORT

The term "export" is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to an "exporter" who is based in the country of export whereas the overseas based buyers referred to as an "importer". In International Trade, "exports" refers to selling goods and services produced in home country to other markets. In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export goods or services are provided to foreign consumers by domestic producers. Export of commercial quantities of goods normally requires involvement of the customs authorities in both the country of export and the country of import. The advent of small trades over the internet such as through Amazon and e-Bay have largely bypassed the involvement of Customs in many countries because of the low individual values of these trades. Nonetheless, these small exports are still subject to legal restrictions applied by the country of export. An export's counterpart is an import. The definition of Export is when you trade something out of the country. In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade.

Barriers to Export
Trade barriers are generally defined as government laws, regulations, policy, or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products. While restrictive business practices sometimes have a similar effect, they are not usually regarded as trade barriers. The most common foreign trade barriers are government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services.

the usual return on export sales may not be tremendous. If the company and its products are equipped with ownership advantage and internalization advantage. companies that have low levels of ownership advantages either do not enter foreign markets. . and the ability to develop either low-cost or differentiated products within the contacts of its value chain. An exporter usually resides far from the end consumer and often enlists various intermediaries to manage marketing activities. Exporting requires significantly lower level of investment than other modes of international expansion.Advantages of exporting Ownership advantages are the firm's specific assets. As you might expect. This leads to more transparency. but neither is the risk. selling goods and services to foreign markets seems to be more difficult than serving the domestic market. such as FDI. international experience. but nearly two-third of them sells in only to one foreign market. cultural differences. The lack of knowledge for trade regulations. the lower risk of export typically results in a lower rate of return on sales than possible though other modes of international business. they enter through low-risk modes such as exporting. Communication technologies improvement: The improvement of communication technologies in recent years enable the customer to interact with more suppliers while receiving more information and cheaper communications cost at the same time like 20 years ago. Internationalization advantages are the benefits of retaining a core competence within the company and threading it though the value chain rather than obtain to license. or sell it. In other words. In relation to the Eclectic paradigm. The locational advantages of a particular market are a combination of market potential and investment risk. Indeed there are some SME's which are exporting. like poor selection of oversea agents or distributors or chaotic global organization. Management mistakes: The management might tap in some of the organizational pitfalls. maintenance or more delivery services. Disadvantages of exporting For Small-and-Medium Enterprises (SME) with less than 250 employees. outsource. The following assumption shows the main disadvantages: Financial management effort: To minimize the risk of exchange-rate fluctuation and transactions processes of export activity the financial management needs more capacity to cope the major effort Customer demand: International customers demand more services from their vendor like installation and startup of equipment. The vendor is in duty to follow the real-time demand and to submit all transaction details. Exporting allows managers to exercise operation control but does not provide them the option to exercise as much marketing control. different languages and foreignexchange situations as well as the strain of resources and staff interact like a block for exporting.

"Imports" also means the economic value of all goods and services that are imported. tariffs and trade agreements. typically for use in trade. When the "imports" are the set of goods and services imported.g. a commodity) or service brought in from one country to another country in a legitimate fashion. Import of goods normally requires involvement of the customs authorities in both the country of import and the country of export and are often subject to import quotas. usually one year. The buyer of such goods and services is refered to an "importer" who is based in the country of import whereas the overseas based seller is refered to as an "exporter". It is a good that is brought in from another country for sale. Thus an import is any good (e. form the basis of international trade.IMPORT The term "import" is derived from the conceptual meaning as to bring in the goods and services into the port of a country. An import in the receiving country is an export to the sending country. The macroeconomic variable usually stands for the value of these imports over a given period of time. along with exports. Import goods or services are provided to domestic consumers by foreign producers. . Imports.

Transportation of goods Customs clearance of goods Any other purpose. an exporter can developed 14 out of 16 commercial documents. The 2 commercial documents that are not developed because they have not been standardized include Bills of Exchange and Shipping Order.g. 2) Element of convenience: ADS has made it simpler and convenient to complete and process export-import documents. Moreover. Documents pertaining to export trade are printed on uniform length and standard A-4 size of paper.. Exporter should use such standard forms while preparing various export documents. common information required to be incorporated in all the relative documents. Aligned Documentation System (ADS) In India since 1991 new standardized documents are introduce by the government under Aligned Documentation System (ADS). The documents are aligned to one another.Export and Import Documents Documents are used to be prepared before the shipments of goods while some others are required while completing customs formalities. references top right. all the documents are printed in the same size of paper. ADS facilitate easy entry of data and enables quick reading. Moreover. shipper top left. With the help of master document 1. Advantages of ADS: 1) Uniformity of documents: The preparation of commercial and regulatory documents is made easier when Master document have been updated. The purposes of preparing these documents are: Declaration of export as per exchange control regulation: In the Statutory Control every exporter has to submit the declaration on specified form supported by evidence as and when required. etc. ADS have simplified export documentation procedure. signatures at bottom right. This new system is based on the UN layout key. This gives convenience to all concerned parties. Objectives of ADS: The main objective of ADS is to provide benefits to every party associated with international trade. Initially. It is possible to use the Master documents as common . is entered in this lots at the same locations. The common items information on documents have uniform positioning e. such standard forms are now used in more than hundred countries. From this documents. All such documents are useful for completing the procedure of exporting and are called Shipping Documents. some documents are issued by the shipping company. In addition. Adoption of ADS simplifies trade documentation on the global level thereby helping all parties involved in the trade. information is entered in master document 1 and master document 2.

Commercial Documents: These documents need to be prepared in order to help export-import trade. 2) Regulatory Documents. 1) Commercial Documents. 5) Computer ± aid: Computerized export documentation has helped parties all over the worlds to carry their business with ease. Commercial documents include commercial invoice. Paper size & specifications: Paper Size Margins A4 Length Width Top Left Right Bottom 297 mm 210 mm 10 mm 20 mm 6 mm 7 mm Classification of documents: ADS has classified documents into two categories viz. cost is reduced & mistakes are removed.positions are used for data items. bill of lading. . it expedites the realization of payments on export bills.. Commercial documents have the following objectives: A) To facilitate transfer of title of goods and property from the exporter to the importer. Another area of improvement includes transport. 14 documents have been standardized and aligned with one another. B) To ensure safe transfer of goods from the country of the exporter to the country of the importer. convenience and without errors. Office staff dealing with export documents learns about the details in various documents without difficulty. Banking formalities has been made uniform & simple. C) To help the exporters to realize payments without problem & delay. certificate of inspection. Out of 16 commercial documents. 3) Overall benefits: When documents comply with UN alignment standard. Using a photocopier it is possible to prepare a large number of documents. 4) Improving efficiency: When ADS is adopted by export firms it certainly improves the corporate image as the office efficiency multiplies. Their training on the job becomes simplified. It is very simple to check alignment documents. etc. certificate of origin. Documents are processed quickly.

Shipping Bill. ARE 1 Form. Out of regulatory documents 4 have been standardized. custom formalities etc. Common regulatory documents are Form GR. etc.Regulatory Documents: Regulatory documents are needed under the law as they are prescribed by various government departments and bodies covering foreign exchange regulations. . export inspection.

Insurance Certificate 15. Discounts.PP Form 14. but it can provide detailed information that buyers need in order to legally import the product. Proforma invoices basically contain much of the same information as the formal quotation. Estimated shipping date 11.Airway Bill EXCHANGE CONTROL DOCUMENTS 10.Bill Exchange of MISCELLANEOUS DOCUMENTS 13. if applicable 8. Terms of payment 10. A proforma may not be a required shipping document. Invoice 1) Proforma Invoice: A proforma invoice is a quote in an invoice format that may be required by the buyer to apply for an import license.Proforma Invoice 4. contract for pre-shipment inspection. The invoices inform the buyer and the appropriate import government authorities details of the future shipment.Export Documents INVOICE CERTIFICATE CUSTOMS DOCUMENTS of 6. Buyer¶s name and address 3. Terms of sale or Incoterm used (include delivery point) 9.Commercial Invoice 3.Combined certificate of Origin and Value 9. Items quoted 5.Health Certificate PAYMENT DOCUMENTS 12. open a letter of credit or arrange for transfer of hard currency. Seller¶s name and address 2. and in many cases can be used in place of one. Buyer¶s reference 4. It should give the buyer as much information about the order as possible so arrangements can be made efficiently.Mate Receipt 8.Certificate Origin A. meaning the only object of the .Bill Of Lading 2. Validity date For example. country A does not require person X to have a visa before entering the country but person X is in country B which requires a visa from country A in order to allow X to depart. In that case country A may issue a pro-forma visa to X.GR Form 11. changes should not be made without the buyer¶s consent.Marine Insurance Policy 1.Shipping Bill TRANSPORT DOCUMENTS 7.Consular Invoice 5. As mentioned for the quotation. the points to be included in the proforma are: 1. Weights and dimensions of quoted products 7. Prices of items: per unit and extended totals 6.

. but "originate" in a CO does not mean the country the goods are shipped from. In various international agreements. A consular invoice. It traditionally states from what country the shipped goods originate. and a signature. 2) Commercial Invoice: A commercial invoice is document used in foreign trade. This raises a definition problem in cases where less than 100% of the raw materials and processes and added value are not all from one country. Although there is no standard format. An often used practice is that if more than 50% of the sales price of the goods originate from one country. obtained from the consul of the importing country at the point of shipment. B. that country is acceptable as the country of origin (then the "national content" is more than 50%). 3) Consular Invoice: Certification by a consular or government official covering an international shipment of goods. This document certifies not only the origin of goods but also the value of goods.visa is to satisfy the formal requirement for X to have a visa and not any real requirement by country A. A commercial invoice must also include a statement certifying that the invoice is true. A commercial invoice is primarily used to calculate tariffs. and the Harmonized System codes for those goods. the country of manufacture. 5) Combined Certificate of Origin And Value: This Document is applicable to commonwealth countries only. other percentages of national content are acceptable. but the country where their goods are actually made. the goods being transported. insures that the exporter's trade papers are in order and the goods being shipped do not violate any laws or trade restrictions. It is used as a customs declaration provided by the person or corporation that is exporting an item across international borders. the document must include a few specific pieces of information such as the parties involved in the shipping transaction. Certificate 4) Certificate Of Origin: A Certificate of Origin (often abbreviated to CO or COO) is a document used in international trade.

4 copies of the packing list mentioning the contents. It is required by the custom authorities for granting permission for the shipment of goods.f. Inspection/ Examination Certificate./ c.i. 4 copies of invoices which contains all relevant particulars like number of packages. Purchase Order of the overseas buyer.For the goods which are cleared by Land Customs. yellow & pink) is required instead of Shipping Bill. Note: . value. Bill of Export (also of 4 types white.o. The formats presented for the Shipping Bill are as given below: y y y y White Shipping Bill in triplicate for export of duty free of goods. quantity. Contract. Usually the Shipping Bill is of four types and the major distinction lies with regard to the goods being subject to certain conditions which are mentioned below: y y y y y Export duty/ cess Free of duty/ cess Entitlement of duty drawback Entitlement of credit of duty under DEPB Scheme Re-export of imported goods The following are the documents required for the processing of the Shipping Bill: y y y y y y GR forms (in duplicate) for shipment to all the countries. gross and net weight of each package. AR4 (both original and duplicate) and invoice. correct & full description of goods etc. Blue Shipping Bill in 7 copies for exports under the DEPB scheme. . L/C. Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment.C. unit rate. Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback. green. Yellow Shipping Bill in triplicate for the export of dutiable goods.b. total f. Customs Documents 6) Shipping Bill: It is the main custom document. quantity.

and owner of the goods. it governs all the legal aspects of physical carriage. however it binds the carrier to its terms. This matches everyday experience in that the contract a person might make with a commercial carrier like FedEx for mostly airway parcels. and. An acknowledgement of cargo receipt signed by a mate of the vessel.D. An archaic practice. Types of Bill of Lading Straight bill of lading: This bill states that the goods are consigned to a specified person and it is not negotiable free from existing equities. and It is also a document of transfer. exists. it may be endorsed affecting ownership of the goods actually being carried. is separate from any contract for the sale of the goods to be carried.e. irrespectively of who the actual holder of the B/L. whereas the long form of a bill of lading (connaissement intégral) issued by the carrier sets out all the terms of the contract of carriage). and from the banker's point of view this type of bill of lading is not safe. The possessor of the mate's receipt is entitled to the bill of lading. Although. and it may incorporate the full terms of the contract between the consignor and the carrier by reference (i. or a chartering contract. A through bill of lading involves the use of at least two different modes of transport from road.e. . being freely transferable but not a negotiable instrument in the legal sense. the short form simply refers to the main contract as an existing document. if the endorser wrongfully failed to disclose the charge. like a cheque or other negotiable instrument. Transport Documents 7) Mate Receipt: A declaration issued by an officer of a vessel stating that certain goods have been received on board his vessel. air. or B/L) is a document issued by a carrier to a shipper. the endorsee will have a right to claim damages for failing to transfer an unencumbered title.e. if the carrier or another holds a lien over the goods as security for unpaid debts. and sea. The standard short form bill of lading is evidence of the contract of carriage of goods and it serves a number of purposes: y y y It is evidence that a valid contract of carriage. for example. A bill of lading can be used as a traded object. may be at a specific moment. i. the endorsee is bound by the lien. any endorsee acquires no better rights than those held by the endorser. i. in exchange for that receipt. The term derives from the verb "to lade" which means to load a cargo onto a ship or other form of transportation. Also known as a non-negotiable bill of lading. 8) Bill of Lading: A bill of lading (sometimes referred to as a BOL. acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified. So. It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (a bill will be described as clean if the goods have been received on board in apparent good condition and stowed ready for transport). rail.

it is possible to arrange payment on a COD (cash on delivery) basis and consign the goods directly to the importer. The goods in the air consignment are consigned directly to the party (the consignee) named in the letter of credit (L/C). The AWB must indicate that the goods have been accepted for carriage. Therefore. the AWB is non-negotiable. Hence. Unless the goods are consigned to a third party like the issuing bank.Order bill of lading: This bill uses express words to make the bill negotiable. The 2nd copy by the receiving carrier or their appointed agent. it states that delivery is to be made to the further order of the consignee using words such as "delivery to A Ltd. it can be endorsed by A Ltd. e. Surrender bill of lading: Under a term import documentary credit the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. unless a cash payment has been received by the exporter or the buyer's integrity is unquestionable. For air consignment to certain destinations. 9) Airway Bill: Air Waybill (AWB) or air consignment note refers to a receipt issued by an international courier company for goods and an evidence of the contract of carriage. This direct liability is called Surrender Bill of Lading (SBL). consigning goods directly to the importer is risky. Bearer bill of lading: This bill states that delivery shall be made to whosoever holds the bill. or to order or assigns". i. when we hand over the bill of lading we surrender title to the goods and our power of sale over the goods. The 3rd copy is used as Proof Of Delivery (POD). Consequently. . The AWB has a tracking number which can be used to check the status of delivery. and current position of the shipment. The number consists of a three digits airline prefix issued by IATA and an 8 digit number. and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. or the right to take delivery can be transferred by physical delivery of the bill accompanied by adequate evidence of A Limited¶s intention to transfer. but it is not a document of title to the goods. the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor.e. A bearer bill can be negotiated by physical delivery. The first copy is retained by the issuing carrier or their appointed agent. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB. The first three copies are classified as originals.g.

. In some cases a bill is marked "not negotiable". the drawee. It is used in place of form GR when goods are exported by post parcel. The party in whose favor the bill is drawn or is payable is called the payee. It is essentially an order made by one person to another to pay money to a third person. The parties need not all be distinct persons. He is the person to whom the bill is addressed and who is ordered to pay. This is what is meant by saying that a bill is negotiable. and so on indefinitely. regardless of any counterclaims that may have disabled the previous payee or endorser from doing so. 11) PP FORM: It is also an exchange control document. He becomes an acceptor when he indicates his willingness to pay the bill. A common type of bill of exchange is the cheque. In that case it can still be transferred to a third party. who may in turn endorse it to a fourth. but the third party can have no better right than the transferor. Bills of exchange are used primarily in international trade. A bill of exchange may be endorsed by the payee in favour of a third party. F. and the payee. They are not used as often today. He gives the order to pay money to third party.E. A bill of exchange is an unconditional order in writing addressed by one person to another. defined as a bill of exchange drawn on a banker and payable on demand. The person who draws the bill is called the drawer. Thus. EXCHANGE CONTROL DOCUMENTS 10) GR FORM: It is an exchange control document which is to be submitted to the RBI after clearance from the customs authorities. The party upon whom the bill is drawn is called the drawee. It is designed mainly to furnished guarantee to the RBI to remit the foreign exchange earned from the export shipment within 180 days from the date of export. The "holder in due course" may claim the amount of the bill against the drawee and all previous endorsers. the drawer may draw on himself payable to his own order. signed by the person giving it. PAYMENT DOCUMENTS 12) Bill of exchange: A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. Prior to the advent of paper currency. and are written orders by one person to his bank to pay the bearer a specific sum on a specific date. A bill of exchange requires in its inception three parties--the drawer. bills of exchange were a common means of exchange. requiring the person to whom it is addressed to pay on demand or at fixed or determinable future time a sum certain in money to order or to bearer.

and any transport or property by which cargo is transferred. though Marine also includes Onshore and Offshore exposed property (container terminals.G. Hull. MISCELLANEOUS DOCUMENTS 13) MARINE INSURANCE: Marine Insurance covers the loss or damage of ships. This certificate is issued by the health department of the exporting country certifying that these items are free from infection and contamination. cargo. pipelines). 14) Certificate of Insurance: A document issued by an insurance company/broker that is used to verify the existence of insurance coverage under specific conditions granted to listed individuals. the document lists the effective date of the policy. terminals. Cargo insurance²discussed here²is a sub-branch of marine insurance. and Marine Liability. . etc. acquired. ports. Marine Casualty. seeds. More specifically. the type of insurance coverage purchased. animal meat products. a company wishes to hire a driver from a temp agency. The company will most likely ask the agency to show them a certificate of insurance that proves that certain liabilities will be covered by insurance in the event the driver causes problems. A certificate of insurance is often demanded in situations where liability and large losses are a concern. For example. or held between the points of origin and final destination. such as incurring damages from driving the company¶s vehicles. and the types and dollar amount of applicable liability. 15) HEALTH CERTIFICATE: It is required for export of food products. oil platforms.

Many nations have specific laws about how bills of entry should be formatted and presented. The bill of entry is examined by customs officials to confirm that the contents of a shipment conform to the law. and to determine which taxes. and in the case of objects with import and export quotas. with many companies hiring a clerk specifically to handle the process of preparing bills of entry. Once a bill of entry has been reviewed and the shipment has been inspected. A typical bill of entry includes a description of the goods in the shipment. and discrepancies can be grounds for legal proceedings. This is designed to prevent the illegal sale and trade in priceless cultural artifacts. and spoilage or destruction of the goods in others. Works of art. goods may also need additional supporting paperwork. . they need to be able to track the movement of shipments. tariffs. to make sure that these quotas are not exceeded. for example. or goods can be held up in customs. along with an estimate of their value.IMPORT DOCUMENTS 1. This paperwork is also used in the preparation of statistics which are designed to shed light on a nation's economic health and trade balance with other nations. will not hold up through a lengthy retention by customs while details of the shipment are worked out. Archaeological artifacts also need to be accompanied by paperwork indicating that their release has been approved by the government. and restrictions may apply to the shipment. a shipment of fruit. Customs officials reserve the right to inspect the shipment to determine whether or not it is consistent with the bill of entry. BILL OF ENTRY: A bill of entry is a formal declaration describing goods which are being imported or exported. for example. These forms are also used by customs officials to track the type of goods being moved over their borders. This document must be prepared by the importer or exporter. If there is a problem. This can cause an inconvenience in some cases. It is important to have accurate documentation. Companies keep copies of their bills of entry on record as part of their financial paperwork. customs may opt to confiscate the goods. including details and the quantity of the goods. it can be cleared for sale or transfer. In addition to a bill of entry. may need to be accompanied by certificates of provenance. and describing the purpose for which the artifacts are being moved across international borders.

FREIGHT DECLARATION: When the importer agrees to pay the freight or the overseas supplier pays the freight. When freight is charged on the basis of weight. The export-manufacturer also uses such a report in the inspection of its own productions. The export-trader uses such a report in the inspection of goods purchased from a manufacturer. . Serious complications will arise in the certificate from the exporter. length. the weight declared by the exporter is accepted. breadth. In case an inspection certificate is required. 3. 4. in both the cases freight declaration is needed from the overseas supplier. 5. depth. the exporter can obtain certificate of measurement either from the Indian chamber of commerce or any other approved organization and submitted to the shipping company for calculation of applicable freight. Please see the sample Inspection Report. Unless his certificate is provided the cargo will not be allowed to enter into their countries.2. The certificate will enable importers easy clearance of goods. The label bears the number and date of the corresponding report of findings issued by the foreign government engaged surveyor. the importer may stipulate in the letter of credit (L/C) to use a specific independent surveyor. of the packages. The certificate contains detail like name of the vessel. quantity. CERTIFICATE OF INSPECTION: Inspection report or report of findings is required by some importers and/or importing countries. However. etc. the report of findings can be in the form of a security label attached on the invoice. which is stipulated in the L/C. on the basis of weight or measurement.e. description of goods. FUMIGATION CERTIFICATE: In order to ensure safety against spread of harmful virus importer insist on fumigation certificate where the cargo includes plants & weeds. In the case of a foreign government required pre-shipment inspection. The exporter is responsible to carry out fumigation & also obtain a certificate from the prescribed agency. port of destination. CERTIFICATE OF MEASUREMENT: There are two ways how freight can be charged i.

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