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Chapter-1

INTRODUCTION
Before 1947 India was colonial and basically agricultural and the trade was confined mainly to commonwealth countries and UK. After 1947 and one plan after another, there is a remarkable increase in the volume and value of foreign trade from traditional items to manufactured goods, capital goods. The direction of India’s trade also diversified to developed countries such as USA Germany Canada, exUSSR, Japan etc. through trade bilateral agreements. India has a mission to capture 2% of the global share of trade by 2010, up from the present level of less than 1%. Export is one of the lucrative business activities in India. The government also provides various promotional schemes to the exporters for earning valuable foreign exchange for the country and for meeting their requirements for importing modern technology and essential inputs. Besides, the income from export business is also exempted to the specified extent under the Income Tax Act, 1961, Refund of Central Excise and Custom Duty on export is also made under the Duty Drawback Scheme of the Government. There is no Sales Tax on products meant for exports. n the last five years, our exports witnessed robust growth to reach a level of around US$ 185 billion in 2008–09 from US$ 63 billion in 2003–04. Our share of global merchandise trade was 0.83% in 2003; it rose to 1.45% in 2008 as per WTO estimates. Our share of global commercial services export was 1.4% in 2003; it rose to 2.8% in 2008. India’s total share in goods and services trade was 0.92% in 2003; it increased to 1.64% in 2008. Despite the fact that India has not been affected to the same extent as other economies of the world, yet our exports declined since October 2008 significantly due to less demand in the markets like US, Europe, Japan, etc. owing to global economic slowdown and the reduced international prices of commodities. As a result, India’s exports in dollar terms declined during 2008–09 with a growth rate of 13.6% as compared to 29% during 2007–08. To counter the negative fall out of the global slowdown on the Indian economy, the Government/RBI responded by providing carefully designed and calibrated stimulus packages in the form of fiscal, monitory and export promotion measures from time to time, to provide support, particularly to employment intensive sectors.

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HCL Infosystems is India’s premier information enabling company. Leveraging its 3 decades of expertise in total technology solutions, HCL Infosystems offers value-added services in key areas such as system integration, networking consultancy and a wide range of support services. It is one or another way helping India’s growth, Here we come to know about the procedure of export/import business of HCL infosystem. HCL is mainly involve in importing the hardware component from the various destination and doing assembly work in Indian centres. India has a mission to capture 2% of the global share of trade by 20010, up from the present level of less than 1%. Export is one of the lucrative business activities in India. The government also provides various promotional schemes to the exporters for earning valuable foreign exchange for the country and for meeting their requirements for importing modern technology and essential inputs. Besides, the income from export business is also exempted to the specified extent under the Income Tax Act, 1961, Refund of Central Excise and Custom Duty on export is also made under the Duty Drawback Scheme of the Government. There is no Sales Tax on products meant for exports. Exports can be of goods which can be moved physically from one country to another or can be of service rendered. Detailed list of services are given in the Foreign Trade Policy covering more than 160 items e.g. Insurance, Hospital, Postal and Telecommunication etc.

Chapter-2

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2.1 COMPANY PROFILE
HCL Infosystems is India’s premier information enabling company. Leveraging its 3 decades of expertise in total technology solutions, HCL Infosystems offers value-added services in key areas such as system integration, networking consultancy and a wide range of support services. HCL Infosystems is among the leading players in all the segments comprising the domestic IT products, solutions and related services, which include PCs, Servers, Imaging, Voice & video solutions, Networking Products, TV and FM Broadcasting solutions, Communication solutions, System Integration, ICT education & training, Digital lifestyle Solutions and Peripherals. HCL has a direct sales, channel sales and retail sales network pan India. Continuously meeting the ever increasing customer expectations and applications, its focus on integrated enterprise solutions has strengthened the HCL Infosystems’ capabilities in supporting installation types ranging from single to large, multilocation, multi-vendor & multi-platform spread across India. HCL Infosystems, today has a direct support force of over 3000+ members, is operational at 360+ locations across the country and is the largest such human resource of its kind in the IT business in India. HCL Infosystems has pan India presence across metros and non-metros. HCL Infosystems' manufacturing facilities are ISO 9001 & ISO 14001 certified and adhere to stringent quality standards and global processes. With the largest installed PC base in the country, four indigenously developed and manufactured PC brands - 'Infiniti', 'Busybee' 'Beanstalk' and ‘Ezeebee’ - and its robust manufacturing facilities, HCL Infosystems aims to further leverage its dominance in the PC market. It has been consistently rated as Top player in PC industry by IDC. The 'Infiniti' line of business computing products is incorporated with leading edge products from world leaders such as Intel. Constant innovation to meet the customized requirements of its customers has enabled HCL to create the trusted ICT infrastructure platforms, powerful value adds like HCL Embedded Control & Continuity (HCL EC2) technology and the future generation of digital lifestyle enablers.

The Channel Business of HCL Infosystems has an extensive network of

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over 3000+ resellers across 900 locations. It has actively promoted the penetration of PCs in the home and the small office/home office (SOHO) segments. HCL Infinet Ltd, 100% owned subsidiary of HCL Infosystems Ltd. is a class A ISP focusing on providing the corporate networking services like Virtual Private Network, Broadband Internet Access, Internet Telephony Hosting & Co-location services, designing & deploying Disaster Recovery Solutions & Business Continuity solution, Application Services, Managed Security Services & NOC Services over its state-ofthe-art IP / MPLS network and end-to-end contact center solutions.

Vision A global corporation enriching lives and enabling business transformation for our customers, with leadership in chosen technologies and markets. Be the first choice for employees and partners, with commitment to sustainability. Mission Enable business transformation and enrichment of lives by delivering sustainable world class technology Products, Solutions & Services in our chosen markets thereby creating superior shareholder value. Core Values • • • • Uphold the dignity of the individual Honor all commitments Committed to quality innovation and growth in every endeavor Responsible corporate citizens

2.1.1 Evolution of HCL Infosystems Ltd.

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he is worth some US$ 3 billion. as chairman and CEO of HCL Technologies. This office was finally converted into a wholly owned subsidiary 1998 on July 1. Shiv Nadar was 22 when he saw his first city. 2004. a firm he co-founded in August 1976 and which includes HCL Infosystems. certification training etc. HCL Infosystems Limited announced that it has recommended 100% 2007 final dividend on the paid up share capital of the Company for the financial year ended June Page 5 30. HCL Infosystems Ltd (HCL Insys). Sun India has been growing at twice the industry average for the last 5 years. services. India's premier Information 2004 enabling company. Shiv Nadar is chairman and CEO of HCL Technologies. For over quarter of a century. May 29. HCL Infosystems Limited Announces Allotment Of Equity Shares Under ESOS. . today announced its un-audited results for the quarter ended December 31. Now.HCL Infosystems Ltd is one of the pioneers in the Indian IT market. 1998.With an aim to make the most compelling digital music phenomenon more accessible to Indian consumers across the country. a subsidiary of Hindustan Computers Limited (HCL). 2006 New Delhi. 1976 with its origins in 1976.and Apple today formed a strategic alliance to develop a joint go to market and support strategy for Apple iPods in India. Sun has adopted a business model of working in partnership with key Indian partners to deliver all products and services such as hardware platforms. Year after year we have been consistently rated number one in India in UNIX systems revenue and unit market share (IDC). across a range of technologies in India. 2006 -. HCL Infosystems Ltd. 2007. We have been in the forefront in introducing new technologies and solutions. we have developed and implemented solutions for multiple market segments. About HCL Securities Ltd HCL Security is a 100% subsidiary of HCL . according to a Forbes magazine estimate last year.nation's premier information enabling and integration company .

HARSH CHITALE CEO Harsh Chitale joined HCL Infosystems as Chief Executive Officer in 2010 and heads the overall business strategy and operations of HCL Infosystems. Ajai has been conferred the DATAQUEST ‘IT Man of the Year 2007’ Award amongst other awards. J V RAMAMURTHY President and Chief Operating J V Ramamurthy is President and Chief Page 6 . as President and CEO in 1994.1. He brings a wealth of experience as a senior business leader with rich business management experience in both Indian and global companies. Harsh is a recipient of the Director’s Gold Medal at IIT Delhi. the flagship company of the group. He was appointed the Chairman of HCL Infosystems in November 1999. In recognition of his contribution in championing the cause of the domestic Indian IT industry. Ajai Chowdhry is one of the six founder members of HCL and took over the reins of HCL Infosystems. from where he completed his Electrical Engineering.2 OUR EXECUTIVE MANAGEMENT TEAM AJAI CHOWDHRY Chairman An engineer by training.2.

A technocrat and a man of broad vision. a BE graduate and alumni of IIM Bangalore. Page 7 . He heads the Distribution and Marketing Services and Retail business division for HCL. he has spearheaded company’s entry into number of new verticals and partnerships. With two decades of industry experience. He is well respected amongst colleagues & customers for his financial acumen and management skills. HCL Infosystems Ltd.Officer Operating Officer.. GEORGE PAUL EVP George Paul. He brings 3 decades of diverse Industry experience and leadership to the company. has been instrumental in building up the largest retail network for digital life style products in the country. an engineering graduate. He heads the Marketing Function along with HCL R&D. a graduate in Electronics & Telecommunications joined HCL in 1983. RAJEEV ASIJA EVP Rajeev. HARI BASKARAN EVP Hari. he heads the Enterprise Solutions & services of HCL. SANDEEP KANWAR CFO & EVP Sandeep Kanwar joined HCL in 1988 and in a span of eight years progressed to the position of Chief Financial Officer at the young age of 35. joined HCL in 1983.

partnering with HCL Infosystems will help you succeed. he heads the HR function for the company. By working on every aspect of the ICT industry. we have the experience to create world class products and services to help you give the best to your customers.M CHANDRASEKARAN Sr. An engineer by profession with over two decades of industry experience in various functions.2 Advantage HCL • • HCL's labs . 2. Networking Solutions & Distribution Company • • 3 decades of expertise in technology solutions Partners with leading global players to provide the best of solutions to end users Page 8 . support and marketing. l PRODUCTS l SERVICES l INVESTORS Relationship Programme HCL strongly believes in the power of relationships and partnership No matter the size of your business. it’s our commitment to help you be as successful as possible.Pioneers in design. he heads the office automation products business for HCL. Leveraging over three decades of experience in total technology solutions. development and building ICT products India's largest Hardware. We provide you access to HCL’s innovative technologies. VP M Chandrasekaran joined HCL in 1984. With over two decades of industry experience in sales. System Integration. Credited with innovative HR initiatives that have made HCL among the best companies to work for. marketing strategies and value added services. VIVEK PUNEKAR VP HR Vivek joined HCL in 1986.

we offer a reliable IT backbone to our partners. We have pioneered the home PC market of India we designed India’s first Multimedia-enabled Beanstalk Media Centre PC for home users.000 towns Benefits from a Proven Commitment from HCL Infosystems At HCL Infosystems. We offer differentiated technology and dedicated service support infrastructure as per the needs and requirements of your customers. We provide a one stop shop for meeting end-to-end IT requirements. HCL combines technical innovation with built-in reliability to keep your business running. partnerships are lifelong relationships that mutually benefit each other. We can help to enhance your business and reap the rewards of our mutual success. Reliable IT Backbone In a world where the right technology infrastructure is a prerequisite. designed to deliver a price to performance advantage to help you provide increased benefits to your customers. enjoying music or movies or connecting to the Page 9 . Whether gaming. digital lifestyle product distribution and retail network Extensive service network that reach out to 4. Our high-quality products and services give you means to work in a smarter way and be more productive and competitive. We have constantly innovated to offer a range of products to cater to different requirements of the customers. thus offering a smooth ICT management. we offer industry leading technology. Differentiated Product Access At HCL we understand that different customers have different needs. we have developed Ezeebee and Busybee PCs and ME Laptops for personal productivity.• • • The largest manufacturer of PCs and Laptops in India Largest direct sales. Additionally. We provide technology specializations that map to areas of significant business growth for your business and your customers.

Internet. Oracle. CISCO. we have formed Alliances and Partnerships with leading IT companies worldwide. EMC. CA. Ericsson. SAP. HCL's manufacturing facilities are ISO 9001 . Microsoft. For our Enterprise & SMB customers who buy directly from us. These alliances on one hand give us access to best technology & products as well enhancing our understanding of the latest in technology. HCL Infosystems has alliances with global technology leaders like Intel. Enterprises have unique needs for their computing platforms and HCL’s range of business Desktops and Laptops come with unique features that enhance productivity while reducing TCO. As market leaders in ICT arena we offer our partners the best of options. Toshiba. Leveraging on three decades of expertise in total technology solutions. On the other hand they enhance our product portfolio. ultra-efficient manageability and maximum productivity for a smart business landscape. Page 10 . Veritas. Sun Microsystems. Scansoft. 2.2000 & ISO 14001 certified and adhere to stringent quality standards and global processes. We bring this exciting range of Desktops and Laptops through our vast network of neighborhood partner outlets for buying convenience of the customers. Samsung and Novell. HCL Desktops and Laptops are manufactured and marketed specially to withstand unique Indian terrain and conditions. Infocus. AMD. Duplo. IBM. and enable us to be one stop shop for our customers. these systems offer ease of use that transcends to greater performance and more satisfaction for the individual user be for work or home. HCL business Desktops and Laptops offers increased security. Bull. or through Enterprise Rate Contracts or through our vast network of Strategic Business Partners we offer customized built to order range of ME Business Laptops and Infiniti Desktops. Further these products are backed by HCL’s 24X7 Consumer Support Helpline. SCO. Nokia. NVIDIA. Citrix. RedHat. HCL commits to manufacture “Green” PCs and Laptops that are RoHS compliant and adhere to stringent environment management standards.3 Alliance & Partnership To provide world-class solutions and services to all our customers.

Country's first Media Center PC. Using our own R&D we have: • • • • Created our own UNIX & RDBMS capability (in 80s). Developed firewalls for enterprise & personal system security. Country's first Pentium 4 based PC at sub 40k price point.One of the key elements to HCL's success is its never-ending pursuit of superior quality in all its endeavors.BusyBee in 1985. the first time. Launched our own range of networking products. Philosophy of Quality "We shall deliver defect-free products. every time. Launched our own range of enterprise storage products. This is one of the key ingredients that go into our strategic advantage. Country's first branded home PC . Right from our inception we have attempted to pioneer the technology introductions in the country either through our R&D or through partnerships with the world technology leaders. organizations need to adopt and implement a continuous improvement-based quality policy. HCL Infosystems has to its claim several technology pioneering initiatives." To exist as a market leader in a globally competitive marketplace. Some of them are: • • • • Country's first DeskTop PC .Technology Leadership HCL Infosystems is known to be the harbinger of technology in the country. We strive to understand the technology from the view of supporting it post installation as well. services and solutions to meet the requirements of our external and internal customers.Beanstalk in 1995. Page 11 .

State of the art IT systems in MRP.19. TS 16949-2002 TUV-Accredited certified. Inland Container Depots. and Noida Manufacturing Units now ISO 9001:2008 Certified . All 3 factories are ISO 9001:2000 and ISO 14001. . 1 at Chennai & 1 at Uttranchal. Over the last 32 years. HCL Infosystems Ltd. The plant located in Puducherry are situated 165 kms south of Chennai on the coast of the Bay of Bengal with proximity to Chennai Air/Sea port. ERP. ISO 13485:2003. Online configurations enables this latest unit of HCL (Rudrapur) to leverage the power of IT in delivering optimum efficiency. Uttarakhand.2003.makes Puducherry an ideal place for business. ft The infrastructure is state of the art. PMO was also Awarded MAIT Level 2 .with only Unit 1 . Puducherry. one of the best & largest in India. special policies for Industries of local Govt. Manufacturing HCL's computer hardware manufacturing plants include 4 facilities.HCL INFOSYSTEMS believes in the Total Quality Management philosophy as a means for continuous improvement. HCL was also awarded ELCINA's (Electronic Component Industries Association) Quality Award for the year 2002. The plant is networked & online with HCL branch and head offices. total employee participation in quality improvement and customer satisfaction. attractive power and labour rates .it now has 4 Units with a built up area of 4.by European Foundation for Quality Management in the year 2001. leading to customer and employee satisfaction. processes and products.000 sq. we have adapted to newer and better Quality standards that helped us effectively tie Quality with Business Goals. Started in 1996 . Its concept of quality addresses people. 2 at Puducherry. The Pondicherry plant has its own Product Page 12 .

services and solutions to meet the requirements of our external and internal customers. HCL promises to deliver defect free products. Storage Solutions Offering an entire range of storage solutions." 2. Networking Products Enjoy fast data transfer with our exclusive range of Networking Products. right from the commencement of the relationship. Driven by a strong Manufacturing Objective "We shall deliver defect-free products. Software Licenses Enjoy benefits of genuine software licenses through HCL Infosystems. Offering an entire range of Digital Lifestyle Products and Solutions for Page 13 . Display Products Introducing great display products that you would love setting your eyes on. every time.Engineering Group (PEG) and R&D teams constantly engaged in developing new products and solutions. Businesses and Small to Large Setups. services and solutions to meet the requirements of its external and internal customers.4 Our Products Computing Products Offering an entire range of Computing Products for Corporate. the first time. Driven by a strong manufacturing objective.

Software Solutions Bringing to you world class software solutions that you can depend on Page 14 . KIOSK. Customer Service Counter Products Offering an entire range of POS products and solutions.entertainment and business. Office Automation Telecom & AVSI Solutions Introducing world class telecom products and AVSI solutions to meet business requirements. Digital Lifestyle Products & Solutions Office Automation Imaging & Printing Solutions Introducing world class imaging products and solutions to meet business requirements. POS.

the Bill of exchange must be correctly endorsed by the payee. a sum certain in money to. sec 1 as an unconditional order in writing. Defined by Bills of Exchange Act 1882. Page 15 .” 3. So I have gone through all the procedures and documentation system mainly what company is following. addressed by one person (the drawer) to another (the drawee and afterwards acceptor). Bill of Exchange forms may be purchased from printers or stationers. the payment problems have been ruled out. The bill of exchange must conform exactly to the terms of the Letter of Credit. or to the order of. Many of the buyers of the company prefer shipment through sea than air.1 Export documentation HCL Infosystems Ltd. Taiwan. with the sum specified not exceeding the amount of the LC. mainly trades with China. or at a fixed or determined future time. USA. As it is maintaining strong relationship with all its buyers.Chapter-3 Exports Management “A management process which ensures the coordination and Integration of all activities involved with export process. So it mainly trades with terms of Documents against goods or Documents against sight or Documents against payment. When being presented for payment. Hong Kong. It is thus. Unless the Documentary Letter of Credit stipulates that Bills of Exchange are required to be in duplicate. requiring the person to whom it is addressed to pay on demand. a specified person or to bearer (payee). concerned with securing export orders and achieving their successful completion in time as per the requirement specified by the foreign buyers. Some of the most used and most important documents of exports are as follows: Bill of Exchange The Documentary Letter of Credit will stipulate when payment is to be made and the bill of exchange must be drawn up accordingly. a single Bill of Exchange will be acceptable. or they may be drawn on a company’s notepaper or even a blank sheet of paper. Thailand and Malaysia. signed by the person giving it.

Product descriptions should be consistent with the buyer’s purchase order.” Page 16 . Often used for selects and timbers where a grade mark would not show. In general there is no standard form for a commercial invoice although they tend to contain many of the following features:  Seller’s contact information  Buyer’s contact information  Consignee’s contact information (if it is different from the buyers)  Invoice date  A unique invoice number  Sales terms (usually in incoterm format)  Payment terms  Currency of sale  Full quantities and description of merchandise (Generally this includes unit price and total price. Commercial invoices are utilized by customs officials to determine the value of the goods in order to assess customs duties and taxes.Certificate of inspection A document issued by a grading agency that assures the buyer that the shipment of lumber has been examined by a qualified inspector and that the lumber in the shipment is of the grade indicated. Commercial Invoice A commercial invoice is a bill of goods from the seller to the buyer.)  Certification that the invoice is correct (Standard language is “We certify that this invoice is true and correct. Including the Harmonized System commodity codes can be helpful. especially in countries that are WTO members. or where one would affect the use of the piece.

It verifies that a certain insurance policy is in effect for stated amounts and coverage and names those insured. Certificate of origin A certificate. Par Value the official fixed exchange rate between two currencies or between a currency and a specific weight of gold or a basket of currencies. Certificate of inspection A document issued by a grading agency that assures the buyer that the shipment has been examined by a qualified inspector. a notarized certificate of the country of origin may significantly lower the taxes levied. Combined Transport Document When goods are transported using more than one mode of transport. is typically required for international shipments. information the buyer of the terms of sale.Packing List A Packing List gives details of the contents of all the packages making up the consignments and is required by Custom’s authorities if the packing information is not shown on the invoice. In select countries. and that the goods in the shipment are of the grade indicated. the issuer of the Collection takes responsibility for the whole of the journey through a combined transport document. Pro forma invoices are often used in foreign trade as the buyer’s proof of future sale when applying for import licenses and foreign exchange through government agencies. Performa invoice An invoice received before a sale is consummated. The Packing List is usually attached to the invoice. Certificate of insurance A certificate issued by an insurance company or its agent. which identifies the country of origin. Page 17 . Certain countries may entirely bar shipments from certain other countries.

g.     Buyer meaning Importer. Accountee or Accreditor. may be payable: at sight. If the documents are not presented exactly as specified in the Letter of Credit. providing that the Exporter presents documents. payment will not be made unless the Importer gives their authority to waive or amend the specified condition. in any freely traded currency. Seller meaning Exporter or Beneficiary The Issuing or Opening Bank (Importers Bank) The Advising/Confirming Bank – usually a bank in the Exporters country. A fundamental principle of Letters of Credit is that banks deal with documents and not with the goods to which the documents refer. e. These parties can be referred to by a number of terms. which means as soon as a compliant set of documents are presented to the paying bank. Page 18 . after a specified term. For example. and. at 30. which comply with the terms laid down in the Letter of Credit.  Parties involved in a Letter of Credit transaction  Types of Letter of Credit Parties involved in a Letter of Credit transaction In the process of a Letter of Credit transaction. 90 or 180 days of sight or Bill of Lading date.Documentary Letters of Credit A Documentary Letter of Credit (LC) is a written undertaking given by a bank on behalf of an Importer to pay the Exporter a given sum of money within a specified time. or. outlined below. Letters of Credit can be for any amount. which may or may not be the Exporters Bank. there are essentially four parties involved. if the Importer is not happy with the quality of the goods but the documents comply with the terms and conditions of the letter of credit. Applicant. subject to the presentation of compliant documents. 60. the Importer’s bank is obliged to pay the Exporter.

A Collection takes one of the following forms: Documents against Payment The Collection documents are presented to the Importer and released in exchange for immediate payment (payment ‘at sight’). non-negotiable copies also exist. Normally Bills of Lading are made out to order. The goods will only be released to Consignee. any one of which can give title to the goods. It is a document of title to the goods. which are not documents of title. but are used for record purposes. Unsigned. Acceptance is signified by the Importer’s signature on the bill of exchange or other payment authority enclosed in the Collection. Two or three signed sets of the original copies of the Bill of Lading are usually made out. Documents against Acceptance This applies with a Tenor Bill of Exchange and describes the situation where the Collection documents are released after the Importer has ‘accepted’ them. unless the documents are made out to the Importer as the Consignee of the goods. Bill of Lading A Bill of Lading is a receipt given by the shipping company upon shipment of the goods and is evidence of a contract of carriage. and as such is required to enable them to clear the goods at the port of destination. which are sent to the Importer’s bank along with a Collection Schedule and usually a bill of exchange. Page 19 . Payment will be made at a fixed or determinable future date.Documentary Collections A Documentary Collection would normally comprise a set of commercial documents relating to the goods being exported. A set of documents containing a Bill of Lading would normally allow the holder to take possession of the goods. These are known as ‘negotiable copies’.

insurance Page 20 .Types of Bills of Lading:  ‘Shipped’ or ‘shipped on board’. costs of special documentation. consular fees. These agents are familiar with the import rules and regulations of foreign countries. Export freight forwarders are licensed by the International Air Transport Association (IATA) to handle air freight and the Federal Maritime Commission to handle ocean freight. (Issued to cover all stages of the journey if both ocean and overland transport is used). with a shortened version of the provisions of the policy under which it is issued. An insurance policy may only be issued by the insurer and is usually in standard form covering the customary risks for any method of transport (Lloyd’s MAR policy is normally used). This certificate must contain the same details as the policy.  ‘Combined Transport’. Several copies of the document are produced as are required by customs. All details in the invoice need to be exactly the same as specified in the LC or in other documents. Insurance: The Letter of Credit will indicate what insurance cover is required. Individual insurance certificates are issued for each shipment by either the insurers and/or the Exporter. Regular Exporters can organize an open policy to cover all exports during a specific period. the methods of shipping. and the documents related to foreign trade.  ‘Received for shipment’. Freight Forwarders An international freight forwarder is an agent for the exporter in moving cargo to an overseas destination. Invoice An invoice gives details of the goods involved in the transaction between the Importer and the Exporter. Freight forwarders assist exporters in preparing price quotations by advising on freight costs. (Indicates that the goods have been received on ship). excise authorities overseas etc. port charges. but they have not been placed on board the vessel). and will state whether an insurance policy or a certificate is needed. (Signifies that the ship owner has taken delivery of the goods.

freight forwarders should be reviewing all documents to ensure that everything is in order. train. aircraft. A customs broker is an individual or company that is licensed to transact customs business on behalf of others. a. freight etc. or truck. They recommend the packing methods that will protect the merchandise during transit or can arrange to have the merchandise packed at the port or containerized. and their handling fees. Incoterms – International Commercial Terms These are the terms seller and buyer negotiate for cost. Ex-Works: 'Ex-works' means that responsibility is to make goods available to the buyer at works or factory. c. Once the order is ready for shipment. This term thus represents the minimum obligation for seller. Page 21 . or to a paying bank. 'On board' means that a 'Received for Shipment' B/L (Bill of Lading) is not sufficient. these terms decides who have to bear the risk or whom to transfer the risk.costs. insurance. they can route the documents to the seller. If the exporter prefers. They may also prepare the bill of lading and any special required documentation. freight forwarders can reserve the necessary space on a vessel. Free Alongside Ship (FAS): Once the goods have been placed alongside the ship. b. the buyer. The buyer has to bear all costs and risks of loss or damage to the goods hereafter. After shipment. Free on Board (FOB): Exporters’ responsibility ends the moment the contracted goods are placed on board the ship. free of cost to the buyer at a port of shipment named in the sales contract. Freight forwarders can also make arrangements with customs brokers overseas to ensure that the goods comply with customs export documentation regulations. seller obligations are fulfilled and the buyer notified. The buyer has to contract with the sea carrier for the carriage of the goods to the destination and pay the freight. Such B/L if issued must be converted into 'Shipped on Board B/L' by using the stamp 'Shipped on Board' and must bear signature of the carrier or his authorized representative together with date on which the goods were 'boarded'. The full cost and risk involved in bringing the goods from port of shipment to the desired destination will be borne by the buyer.

rail and inland waterways. Seller has to bear the full cost and risk involved in bringing the goods there. In case the buyer desires to insure the goods till the destination. Cost Insurance Freight (CIF): The term is basically the same as C&F. the point of delivery is fixed to the ship's rail and the risk of loss or of damage to the goods is transferred from the seller to the buyer at that very point. Seller have to contract for the carriage of the goods to the agreed destination named in the contract of the sale and pay freight. Seller’s obligation is fulfilled before the customs border of the foreign country and it is for the buyer to obtain necessary import license at his own risk and expense. EXS/EX-Ship: This is an arrival contract and means that make the goods available to the buyer in the ship at the named port of destination as per sales contract. g. Cost and Freight (C&F): sellers’ own risk and not as an agent of the buyer.d. Therefore. but they have now been moved one step further -. contract for the carriage of the goods to the port of destination named in the sale contract and has to pay the freight. As in the term 'Ex-Ship' the points of division of costs and risks coincide. f. Freight or Carriage Paid (DCP): While C&F is used for goods which are to be carried by sea. after crossing the customs border at destination.from the ship into the quay or wharf i. h. This being a shipment contract. Page 22 . but with the addition that you have to obtain insurance at your cost against the risks of loss or damage to the goods during the carriage. Seller’s obligations are fulfilled when the goods are delivered to the first carrier and not beyond. in addition to arranging for carriage and paying freight and insurance seller have to bear the cost of unloading the goods from the ship. he would add 'including insurance' before the word 'paid in Freight' or 'Carriage Paid to'.e. including national and international transport by road. e. EXQ/Ex-Quay: Ex-Quay means that make the goods available to the buyer at a named quay. the term "DCP" is used for land transport only.

in case of CIP seller have additionally to procure transport insurance against the risk of loss or damage to the goods during the carriage. Without the buyer's approval delivery at a town terminal outside the airport is not sufficient. transport document or Warehouse Warrant) will have to be made available to the buyer to enable him to take delivery of goods. he has to follow prescribed procedures and submit necessary papers. j. Seller fulfills his obligation by delivering the goods to the air carrier at the airport of departure. Free Carrier (Named Point) FRC: The principle on which the term is based is same as applicable to FOB except that the seller or the exporter fulfils his obligations when he delivers the goods into the custody of the carrier at the named point. seller have not fulfilled his obligation till such time that the goods are made available at his risk and cost to the buyer at his premises or any other named destination. In the latter case necessary documents (e. FAO/FOB Airport: 'FOB Airport' is based on the same main principle as the ordinary FOB term. Freight Carriage and Insurance Paid (CIP): The term is similar to 'Freight or Carriage Paid to'. However. He has to make endorsement of Page 23 . m. fees and charges. Delivered at Frontier (DAF): Exporter’s obligations are fulfilled when the goods have arrived at the frontier. seller’s obligations with respect to costs and risks do not extend to the arrival of the goods at the destination. The term 'duty' includes taxes.g. Duty Drawback Formalities If the exporter intends to claim duty drawback on his exports. Delivery Duty Paid (DDP): This term may be used irrespective of the type of transport involved and denotes your maximum obligation as opposed to 'Ex-Works'.i. but before the 'Customs border' of the country named in the sales contract. k. l.

packing. processing. the Banks adjust the preshipment advance. MCC prefers largely Post shipment credit and so I learnt the procedure and mechanism of it.2 Export Finance Financial assistance to the exporters is generally provided by Commercial Banks. if any. Explanation for post and pre – shipment finances are given below - The following diagram depicts the export business cycle: Page 24 . “G R” stands for ‘Guaranteed Receipt’ form. before shipment as well as after shipment of the said goods. [Proviso to rule 12(1) (a) of Duty Drawback Rules]. While doing so. The later is done by the Banks by purchasing or negotiating the export documents or by extending advance against export bills accepted on collection basis. If he fails to do so due to genuine reasons. Preshipment finance is given for working capital for purchase of raw-material. G R / SDF / SOFTEX Form under FEMA Reserve Bank of India has prescribed GR / SDF form under FEMA. SDF form is to be used where shipping bills are processed electronically in customs house. while GR form is used when shipping bills are processed manually in customs house. Commissioner of Customs can grant exemption from this provision. of the goods meant for export. Post-shipment finance is provided for bridging the gap between the shipment of goods and realization of export proceeds. transportation. ware-housing etc. 3. while SDF stands for 'Statutory Declaration Form’. The assistance provided before shipment of goods is known as pre-shipment finance or packing credit and that provided after the shipment of goods is known as post-shipment finance.shipping bill that claim for duty drawback is being made. already granted to the exporter.

It is provided in the following forms: Purchase of Export Documents drawn under Export Order Purchase or discount facilities in respect of export bills drawn under confirmed export order are generally granted to the customers who are enjoying Bill Purchase/Discounting limits from the Bank. in order to enhance security. Page 25 . DA bills are thus unsecured. as well as that of the exporter or the beneficiary. drawee-wise limits are generally fixed for individual customers. Export financing has been designed to take care of these needs. generally opt for ECGC policies and guarantees which are issued in favour of the exporter/banks to protect their interest on percentage basis in case of non-payment or delayed payment which is not on account of mischief. Post Shipment Finance Post-shipment finance is the finance provided against shipping documents. I. It is also provided against duty drawback claims. The two types of export financing are:   Pre-Shipment Finance. the importer. Banks. At the time of purchasing the bill bank has to ascertain that this drawee limit is not exceeded so as to make the bank ineligible for claim in case of non-payment. The documents dawn on DP basis are parted with through foreign correspondent only when payment is received while in case of DA bills documents (including that of title to the goods) are passed on to the overseas importer against the acceptance of the draft to make payment on maturity.Financing at two stages – initially. depending upon the stage of ‘export activity’ at which the finance is availed. the security offered under L/C by way of substitution of credit-worthiness of the buyer by the issuing bank is not available. mistake or negligence on the part of exporter.e. As in case of purchase or discounting of export documents drawn under export order. i. The bank financing against export bills is open to the risk of non-payment. to process the order and then to bridge the gap between the time you ship the goods to the time you actually receive the payment. Post-Shipment Finance. Export finance can be broadly classified into two categories. the bank financing is totally dependent upon the credit worthiness of the buyer. Within the total limit of policy issued to the customer.

Advance against such bills is granted by way of a 'separate loan' usually termed as 'post-shipment loan'. Advance against Goods Sent on Consignment Basis When the goods are exported on consignment basis at the risk of the exporter for sale and eventual remittance of sale proceeds to him by the agent/consignee. However.shipment advance and is sanctioned by the bank on the same terms and conditions as applicable to the facility of Negotiation/Purchase/Discount of export bills.Advances against Export Bills Sent on Collection It may sometimes be possible to avail advance against export bills sent on collection. not very popular and most of the advances against export bills are made by the bank by way of negotiation/purchase/discount. which should be within the prescribed date even if according to the practice in certain trades a bill for part of the estimated value is drawn in advance against the exports. bank may finance against such transaction subject to the customer enjoying specific limit to that effect. however. whichever is earlier surrender Page 26 . Banks do finance against the undrawn balance if undrawn balance is in conformity with the normal level of balance left undrawn in the particular line of export subject to a maximum of 10% of the value of export and an undertaking is obtained from the exporter that he will. to be ascertained after approval and inspection of the goods. weight. A margin of 10 to 25% is. another form of post. This facility is. Advance against Undrawn Balance In certain lines of export it is the trade practice that bills are not to be drawn for the full invoice value of the goods but to leave small part undrawn for payment after adjustment due to difference in rates. however. chargeable on this facility are also governed by the same rules. stipulated in such cases. The rates of interest etc. within 6 months from due date of payment or the date of shipment of the goods. the bank should ensure while forwarding shipping documents to its overseas branch/correspondent to instruct the latter to deliver the document only against Trust Receipt/Undertaking to deliver the sale proceeds by specified date. In such cases the export bills are sent by the bank on collection basis as against their purchase/discounting by the bank.. quality etc. This type of facility is. in fact.

Page 27 . Against the specific prior approval from Reserve Bank of India the percentage of undrawn balance can be enhanced by the exporter and the finance can be made available accordingly at higher rate. Chandigarh. If such advances extend beyond one year. Drawback in relation to goods manufactured in India and exported means a rebate of duties chargeable on any imported materials or excisable materials used in manufacture of such goods in India or rebate on excise duty chargeable under Central Excises Act. Since the actual amount to be realized out of the undrawn balance. 1995'. 1944 on certain specified goods. where settlement is not possible under the simplified procedure exporters may obtain advances against claims of duty drawback as provisionally certified by customs. no separate claim of duty drawback is to be filed by the exporter. which is payable within one year from the date of shipment. Calcutta.balance proceeds of the shipment. and Hyderabad have evolved a simplified procedure under which claims of duty drawback are settled immediately after shipment and no funds of exporter are blocked. Advance against Retention Money Banks also grant advances against retention money. at a concessional rate of interest up to 90 days. it is necessary to keep a margin on such advance. As per the present procedure. may be less than the undrawn balance. The Duty Drawback Scheme is administered by Directorate of Duty Drawback in the Ministry of Finance. A copy of the shipping bill presented by the exporter at the time of making shipment of goods serves the purpose of claim of duty drawback as well. Chennai. This claim is provisionally accepted by the customs at the time of shipment and the shipping bill is duly verified. Customs Houses at Delhi. Mumbai. However. The claim is settled by customs office later. Advances against Claims of Duty Drawback Duty Drawback is permitted against exports of different categories of goods under the 'Customs and Central Excise Duty Drawback Rules. they are treated as deferred payment advances which are also eligible for concessional rate of interest. As a further incentive to exporters. The claims of duty drawback are settled by Custom House at the rates determined and notified by the Directorate.

The transit period so fixed by FEDAI is known as 'Normal Transit Period' and mainly depends on geographical location of a particular country. whether it is a demand bill or usance bill.a.e. The concept of this transit period is that an export bill should normally be realized within that period.g.a. wherever applicable: a. Beyond 90 days and up to six 12% p. receivable. Like pre-shipment. Beyond six months from the 20% date of Shipment (Minimum) Against duty drawback etc.S. Usance Bills (for total period comprising usance period of ex-port bills. an export bill in US $ drawn on a place in U. i. e. b.months from the date of shipment. an export bill in US $ drawn on a place in Japan. if the currency of the bill in which it is drawn is different than the currency of the country on which it is drawn. e.. it is termed as indirect bill.Not receivable from Government covered by adding 10%ECGC guarantees (up to 90 days) p. post-shipment finance is also available at concessional rate of interest.a. However. c. Present Rates of interest are as under: Demand Bills for transit period Not exceeding (as specified by FEDAI) 10% p.g.a.Rates of Interest The rate of interest depends on the nature of the Bills. Against undrawn balance (up to 90 days) and Against retention money payable within one year from the date of shipment (upto90 days) Normal Transit Period Foreign Exchange Dealers Association of India (FEDAI) has fixed transit period for export bills drawn on different countries in the world.. transit period as specified by FEDAI and grace period. Up to 90 days 10% p. .A. Direct and Indirect Bill If the currency of the bill is the same as the currency of the country on which it is drawn. The normal transit period fixed for indirect bill is on higher side as compared to transit period fixed for direct bills. it is termed as direct bill. Notional Due Date Page 28 .

I.a. II . has instructed the banks to grant pre-shipment advance at a concessional rate of interest.To determine the due date of an export bill we have to consider the following 3 components: (1) Normal transit period as fixed by FEDAI (2) Usance period of the bill (3) Grace period if applicable in the country on which the bill is drawn. Pre-shipment advance for a further period of 90 days is given at the concessional rate of 13% p. Where it is not available. Copy of a valid RCMC (Registration-cum-Membership Certificate) held by you and/or the Export/Trading/Star Trading House Certificate. Grace period is applicable only in the case of usance bills. An undertaking that the advance will be utilized for the specific purpose of procuring/manufacturing/shipping etc. in original.. Appropriate policy/guarantee of the ECGC.a. an undertaking to the effect that the same will be produced to the bank within a reasonable time for verification and endorsement should be given. Copies of Income Tax/Wealth Tax assessment Order for the last 2-3 years in the case of sole proprietary and partnership firm. Page 29 . for pre-shipment advance upto an initial period of 180 days. Pre-Shipment Finance An application for pre-shipment advance should be made by exporter to his banker along with the following documents: Confirmed export order/contract or L/C etc. If you are a sub-supplier and want to supply the goods to the Export/Trading/Star Trading House or Merchant Exporter. R. Banks are free to determine the interest rate for advances beyond 270 days and upto 360 days.B. an undertaking from the Merchant Exporter or Export/Trading/Star Trading House stating that they have not/will not avail themselves of packing credit facility against the same transaction for the same purpose till the original packing credit is liquidated. The present rate of interest is 10% p. The notional due date of an export bill may thus be calculated after adding all the above 3 components. Any other document required by the Bank. Copy of Exporter's Code Number (CNX). of the goods meant for export only. For encouraging exports. The concessional rate of interest is chargeable up to the notional due date subject to a maximum of 90 days. as stated in the relative confirmed export order or the L/C.

term finance for export production and export development. project exports. finance for export marketing and bulk import finance to commercial banks. lines of credit. i. Eligible Borrowers All SSI units and Export / Trading houses sourcing their requirements from SSIs with Page 30 . The EXIM Bank also extends non-funded facility to Indian exports in the form of guarantees. 1989 (39 of 1989)) is offering the International Finance schemes whose main objective is to enable small-scale industries to raise finance at internationally competitive rates to fulfil their export commitments. pre-shipment credit. SIDBI Finance The Small Industries Development Bank of India (established under Small Industries Development Bank of India Act. export finance is also made available by the EXIM bank. overseas investment finance. re-lending facility. The diversified lending programme of the EXIM Bank now covers various stages of exports. export bills re-discounting. IV. exports of technology. services and export of computer software. The EXIM bank provides financial assistance to promote Indian exports through direct financial assistance. independent of foreign currency limits. Post-Shipment Credit on Foreign Currency (EBF)/Rupee (PSCR) Purpose To provide post-shipment credit in foreign currency at internationally competitive rates of interest by discounting of usance export bills / purchase of sight/demand export bills and negotiation of bills under LCs. EXIM Bank Finance Besides commercial banks. from the development export markets to expansion of production capacity for exports.e. production for export and post shipment financing. The financial assistance is being offered in USD and Euro currencies. The EXIM Bank's focus is on export of manufactured goods. Assistance in Rupees is also considered.III. finance for computer software exports. refinance to commercial banks.

Assistance in rupees is also considered independent of FC limits.As per RBI guidelines and the score chart introduced by SIDBI. Eligible Borrowers Industrial concerns in the small scale sector and Government recognized Export / Trading Houses sourcing their requirement for export from SSI sector with a. Norms For PSCR .100 lakh Need based limit. depending on the normal trade terms and credit period given to overseas buyers by exporters not exceeding 180 days. profit making units with proven track record in exports for last three years and sound financial position b. requirement of export finance assistance of at least Rs. Rate For EBF Not exceeding of 0. Pre-Shipment Credit in Foreign Currency (PCFC)/ Rupee (PCR) Purpose To enable small scale industries to raise finance at internationally competitive rates as per Reserve Bank of India guidelines to fulfil their export commitments. profit making units with proven track record in exports for last three years and sound financial position Page 31 .a.75% over 6 Month interestLIBOR.

b.3 FINANCIAL RISKS INVOLVED IN FOREIGN TRADE Page 32 . 3.75% over 6 Month LIBOR. with a Bank in India.100 lakh Pre-shipment Credit in Foreign Currency (PCFC) is being extended in USD & EURO Currencies. Quantum .As per RBI guidelines and the score chart introduced by SIDBI. Assistance in Rupees is also considered independent of FC limits.minimum 10% and maximum 25% Repayment . Amounts that can be credited to this account cannot exceed 50% of inward remittances from the export transactions (70% in the case of 100-pct EOUs or units located in export processing zones). Period of Credit .Not exceeding 0.by discounting / negotiation of Export bills within a maximum period of 180 days Rate of interest For PCFC . An additional benefit that an exporter can avail of relates to the ‘ Exchange Earners Foreign Currency Account’ (EEFC).linked to production cycle (Maximum 180 days) Norms Margin . requirement of export finance assistance of at least Rs. expressed in foreign currency and titled EEFC account. For PCR . All these measures were taken by Government of India and Reserve Bank of India to promote exports and especially SSIs. This is a facility by which an exporter can maintain an account.need based linked to working capital gap.

Currency Risks: As regards covering the currency risk. Page 33 . The major risks which you have to undergo are as follows: • • • • Credit Risk Currency Risk Carriage Risk Country Risk Credit Risks: You can cover your credit risk against the foreign buyer by insisting upon opening a letter of credit in your favour. Carriage Risk: The carriage risk can be covered by taking an appropriate general insurance policy. you encounter various types of risks. due to the exchange rate fluctuations. A specific insurance cover can also be obtained from ECGC (Exports Credit & Guarantee Corporation) to cover your country risk besides covering credit risk. Alternatively one can avail of the facility offered by various credit risk agencies. Country Risk: ECGC provides cover to protect the exporter from country risks. you can request your banker to book a forward contract.As an exporter while selling goods abroad.

Chapter-4 4.Authorized dealer code  Registration of company– Registration Under Companies Act  Duty Drawback Account Number  SALE TAX REGISTRATION Page 34 .Current account number  AD CODE.Permanent account number  BANK A/C.1 BASIC LEGAL REQUIREMENTS FOR IMPORTER  IEC CODE – Importer Exporter Code Number  PAN NUMBER.

3 GLOBAL TENDERING  Register as an importer/export with Global tendering  Attending various enquires regarding requirements from global sellers/buyers  Getting samples from the Suppliers  Testing Samples through – PEG Team  Negotiation of Rates  Finalizing the rates  Order Placing 4.4 INCO TERMS CONDITONS / PAYMENTS  FOB  CIF .Service Tax Department 4.EX.FACTORY  L/C . SERVICE TAX REGISTRATION 4.FREE ON BOARD .Account Holding Bankers  Registration – office of the companies Registration  Duty Drawback account – Account Holding Bankers  SALE TAX REGISTRATION-Sale Tax Department  SERVICE TAX REGISTRATION.COST INSURANCE FREIGHT  EX-WORKS .Office of the Joint Director General of Foreign Trade  PAN.LETTER OF CREDIT Page 35 .Office of the Income Tax  Bank account – Any Nationalized / Private Banks  AD CODE .2 WHERE TO APPLY FOR THE LEGAL REQUIREMENT  IEC.

4.1 RESPONSIBILITES AGAINST TERMS  FOB – Freight Forwarder to be Fixed by the Importers  CIF – Freight forwarder to be fixed by either supplier or the Buyer but the freight cost to be paid by the supplier. DA  SD  TT AD- .4.3 RESPONSIBILITIES OF CUSTOM HOUSE AGENT  Retrieving Documents From The Importers Page 36 .  EX-WORKS – Supplier will handover the consignment at their Factory.SIGHT DRAFT ADVANCE TELEGRAPIC TRANSFER 4.4.2 RESPONSIBILITES OF FREIGHT FORWARDER Pickup Of Consignments From The Suppliers End  Arranging Container From The Shipping lines To Load The Consignment  Booking Space For The Particular Vessel  Executing House Bill Of Lading/House Airway bill  Manifesting The Shipping Documents With Loading And Unloading Port Customs Authorities  Providing Sailing Schedule To The Supplier And Importer  Issuing Cargo Arrival Notice And Shipment Status Report  Delivery Order Releasing 4. the importer nominated Freight forwarder to pickup the consignment at supplier factory upto Delivery Port the cost to be bear by the nominated Freight forwarder . 4.DIRECT ACCEPTANCE .

4.5 TYPES OF BILL OF ENTRIES  Bill of entry for warehouse  Bill of entry for home consumption  Provisional assessment bill of entry  Final assessment bill of entry  Exbond bill of entry  Kachaa bill of entry Page 37 .4 CUSTOMS PORT CFS INDIAN CUSTOMS Processing the Import and Export consignment BOE and shipping Bills  Checking the Value of the Import and Export and Verifying the Notification Benefit Claim Genuineness  Collection of Custom Duty / Cess Duty payment against Import / Export shipments  Detailed Examination of Import / Export consignments at various customs nominated Cfs / Port 4. Scrutinizing The Documents  Checking The Vessel Arrival  Preparing Checklist For Bill Of Entry And Getting Approval From The Importers Before Filing Of Boe With Customs  Intimating The Duty Amount And The Duty Interest  Processing The Bill Of Entry With Customs (Assessment. Inspection And Delivery)  Transportation Of Consignment To Importers Factory 4.

level of experience willingness to train. Broker needs Power of Attorney  Give information in writing • • • . product line experience  Define the relationship -.1 Responsibilities  Diligent Supervision of Employees  Record of Transactions  Retention of Records  Record Confidentiality (Other than to Customs)  Subject to Audit  Diligence in Correspondence & Page 38 .Contact for additional information . new sources.  Expect and plan for improvement in performance.7 The Importer/Customs Broker Relationship  Select carefully.4.6 SCHEMES OF IMPORT  100% EOU  EPCG  DEPB  DEEC  DFRC  PROJECT IMPORTS 4.in writing.Minute detail . 4.New products. .7.Contact if Customs Service calls  Anticipate change. Note: Under general agency/partnership rules. there is a difference ability. new factories  Establish procedures for ongoing audits and periodic review.

Organic chemicals.9 General Rules of Interpretation Classification of goods in the tariff schedule shall be governed by the following principles. The table of contents. fresh or chilled. or 3923. The first four digits. which is in use in more than 100 countries worldwide. and Slide projectors. The first six digits. Lavatory seats and covers. and Printed circuits.  Chapter  Heading  Subheading  Tariff item - The first two digits. Newspapers. classification shall be determined according to the terms of the headings and any relative section Page 39 . Anything greater than six digits. Supervision of Money  Must maintain copies of all Powers of Attorney – authorized appointment of other brokers 4. The HTSUS is derived from the Harmonized System. and titles of sections. journals and periodicals. 4. or 3923 in the example.  Subheading: Examples include Rice wine or sake. chapters and subchapters are provided for ease of reference only. or HTSUS.  Heading: Examples include Potatoes. alphabetical index.1 Harmonized Tariff Schedule  Chapter: Examples include live animals. 4. for legal purposes.8 Tariff Classification  An item’s tariff classification is determined based on the Harmonized Tariff Schedule of the United States. and Lead and articles thereof.8. or 39 in the example.50 in the example.

incomplete or unfinished. provided such headings or notes do not otherwise require. When. musical instrument cases. shall be classified with Page 40 . It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule). the following rules shall apply in respect of the goods referred to therein: (a) Camera cases. suitable for long-term use and entered with the articles for which they are intended. 2(a) Any reference in a heading to an article shall be taken to include a reference to that article. and goods put up in sets for retail sale . those headings are to be regarded as equally specific in relation to those goods. when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale. classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. even if one of them gives a more complete or precise description of the goods. as entered the incomplete or unfinished article has the essential character of the complete or finished article. entered unassembled or disassembled 3. 3(c) When goods cannot be classified by reference to 3(a) or 3(b). which cannot be classified by reference to 3(a). prima facie. according to the following provisions. drawing instrument cases. In addition to the foregoing provisions. by application of rule 2(b) or for any other reason. 3(b) Mixtures. However. provided that. specially shaped or fitted to contain a specific article or set of articles. insofar as this criterion is applicable. goods are. gun cases. they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. necklace cases and similar containers. shall be classified as if they consisted of the material or component which gives them their essential character. classifiable under two or more headings. 5. composite goods consisting of different materials or made up of different components.or chapter notes and.

must thereafter notify of actual costs. this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use. the relative section. on the understanding that only subheadings at the same level are comparable. however. then must deduct. 6. packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. To exercise reasonable care. For the purposes of this rule. apply to containers which give the whole its essential character. 5 (b) subject to the provisions of rule 5(a) above. Non-Sales  Gifts.such articles when of a kind normally sold therewith. the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and. then must enter at full value and notify of inclusion of Page 41 . but learn before liquidation. chapter and subchapter notes also apply. For legal purposes. then must enter at full value and notify of inclusion of freight costs. However. unless the context otherwise requires. This rule does not.  If purchase on CIF/DDP terms and can't discern actual freight costs.  If purchase on CIF/DDP terms but don't know actual freight costs but learn before liquidation. samples and promotional items  Merchandise which is imported under consignment  Goods imported under a hire or lease contract  Goods supplied on loan which remain the property of the sender Foreign Inland Freight  If purchase on CIF/DDP terms and know actual freight costs. to the above rules. mutatis mutandis.

freight costs. and  If recurring use of CIF/DDP terms. Therefore. To exercise reasonable care. must provide statement of inability to discern actual costs. must thereafter notify of actual costs. To exercise reasonable care. company adopting the caution note should select credible who have got the reputation in the market. Page 42 . then must enter at full value and notify of inclusion of freight costs.  If purchase on CIF/DDP terms and can't discern actual freight costs. then may use reconciliation Chapter-5 CONCLUSION • It is very clear that the common channel with export market is through agents. therefore the success of the export business heavily depends on the credibility of the agent and his capability of dealing with export orders.

it is recommended that the company must operate on Letter of Credit accepted by Bank or a Document on payment. • A hide bound approach must be selected in choosing the export orders because the wrong selection of orders would be suicidal for the organization. which is considered to be the safest mode. Jeevanandam C. it must first look into its financial capabilities and should then expand the operation based on it. Ltd. Sultan Chand & Sons. “Export Management”. Prentice Hall of India Pvt.. BIBLIOGRAPHY AND WEBLIOGRAPHY Bibliography • • Khurana P. 2006 . 2010. • Document on Acceptance is not advisable for any new entrant due to the lack of exposure in the export market. • For many prospective entrants. Webliography Page 43 .K.• Any company planning to explore the export market. • The common mode of payment in export leading as evident from the survey is the Letter of Credit. New Delhi.. “ Foreign Exchange”. New Delhi.

com 12.blogspot.com Page 44 .gov 4.com 11. www.hcl.export.in 2.1.com 5. www.eximbankindia.idrc.ecgc. www. www. www.indiamart.dgft.indiandata. www.hclinfosystems.gov.finance.in 9. www.marketingpractice.in 3. www.com/export_import 6.com 7.indianindustry. www.com 8. www. www.itcportal.com 10. www.