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Export Procedures and Contract

Presented by: Nikita Trivedi SYBMS Roll no-73

Definition of Export u/s 2e of Foreign Trade Act, 1992: export means taking out of India any goods by land, sea, air.

Benefits of Exports 1. Earning Foreign Exchange 2. Better profits 3. Improving quality of good products 4. Entering new markets

Steps in Export Procedure

Export Procedure

Preliminary stage

Pre-Shipment stage

Shipment stage

Post-Shipment stage

Procedures in Preliminary Stage

1. i. ii. iii. 2. i. ii. iii. iv. v.

Selection of an Organization Sole proprietary Partnership firm Joint stock company Registration with various Authorities Director General of Foreign Trade (DGFT) for Importer Exporter Code (IEC) number. I-T authorities for PAN. Export Credit and Guarantee Corporation of India (ECGC) Export Promotion Council (EPC) for Registration-cumMembership Certificate. (RCMC) Chambers of Commerce, Federation of Indian Export Organization (FIEO), Indian Institution of Foreign Trade (IIFT), National Productivity Council (NPC), Indian Trade Promotion Organization (ITPO) etc.

3. Selection of Method of Exporting

i. Direct or Indirect ii. In Direct export Appointing agents Appointing travelling salesman Orders through direct contact with foreign buyers iii. In Indirect export there are intermediaries Merchant exporters Export houses Trading houses etc.

Procedures in Pre-shipment Stage

4. Approaching Foreign Buyers 5. Confirmation of Order 6. Opening Letter of Credit 7. Pre-shipment Finance 8. Production or Procurement of Goods 9. Packing and Marking 10. Pre-shipment Inspection 11. Central Excise Clearance 12. Obtaining Insurance Policy 13. Appointment of C & F Agent

Procedures in Shipment Stage

14. Reserving Shipping space 15. Arranging for transportation of goods upto the port of shipment 16. Preparation & Processing of Shipping Documents 17. Physical Examination of Goods 18. Obtaining Let ship order 19. Obtaining Mates Receipt & Bill of Lading

Procedures in Post Shipment Stage

20. Submission of Documents by the C & F agent to the Exporter 21. Shipment Advice to Importer 22. Presenting documents to the Bank 23. Sending of documents by the exporters bank to the importers bank 24. Bill of Exchange 25. Receiving Export Payment 26. Obtaining Export Incentives

Export Contract

In international trade, the buyer is in one country and the seller is in another country, so there is a need to prepare a written document called Export contract An export contract is a legal agreement between two or more parties (buyer and seller), relating to export of goods It contains clearly the terms and conditions of the contract so that both the parties keep their promises. Export contract helps in avoiding disputes and it clearly mentions the rights and duties of the buyer and the seller.

Steps in Export Contract

Step I - The buyer sends a query or the seller sends an offer to sell certain goods to the buyer. Step II - The buyer accepts the offer and sends a purchase order to the exporter. Step III - The exporter accepts the purchase order and confirms the order with the buyer. Step IV - The export contract takes place.

Some common elements of Export contract

Name and address of exporter Name and address of importer Products name The description of the product The price per unit The quantity needed The terms of delivery and payment Date of order Date of delivery

Kind of packaging needed Kind of Marking needed Kind of labeling needed Discounts and commissions Insurance instructions Guarantee Signature of the parties