What is Export?

The word Export is very famous in the business world & even among the youngsters as a career option. Export provides good amount of opportunities The Foreign Trade (Development & Regulation) Act 1992 defines export as taking out of India any goods by land, sea or air. Export is completed once the goods are cleared, loaded and have left the territorial waters of India. Export means to send or to transport goods abroad for Trade or Sale. In order to qualify a transaction of exports, there are 2 main criterias. A. Goods / services must go out of India. B. Foreign exchange must come into India. Export is very essential for the country and therefore government always encourages export activities. STEP 1 - WHY EXPORTS? 10 Good Reasons 1. Unique product/service expect limited competition abroad 2. Product more suited to one/more foreign countries as against local market because of price/quality/suitability/demand reasons. 3. Too much competition in domestic market 4. Follow competition into new markets 5. Local market saturation - looking for new markets to increase production turnover, sales & profits 6. Stagnation in Technological/product development partnering with foreign players helps to stimulate this 7. Sell over-production 8. Use spare capacity 9. Achieve EOS & so reduce costs through increase in production 10. Portfolio diversification 5 Bad Reasons . 1. 2. 3. 4. 5. Personal ambition Corporate prestige Travel National interest Subsidies

STEP 2 DO YOU HAVE THE RESOURCES? 1. Management/Organisation Motives Attitude Qualification Experience Know-how Structure Time Talent 2. Production Capacity

Flexibility

Time/Costs

3. Finance Capital Loan Capacity

STEP 3 SET UP APPROPRIATE BUSINESS ORGANISATION KINDS OF BUSINESS ORGANISATIONS : - Sole Proprietary - Partnership - Company ( Pvt or Public)

STEP 4 CHOOSING APPROPRIATE MODE OF OPERATION You can choose any of the following modes of operations : 1) Manufacturer exporter, i.e. manufacturing the goods yourself for exports

2) Merchant Exporter, i.e. he is a trader who buys the goods from the market or from a manufacturer and then selling them to foreign buyers 3) Sales Agent / Commission Agent i.e. acting on behalf of the seller and charging commission 4) Buying Agent i.e. acting on behalf of the buyer and charging commission 5) Service Provider i.e. providing service from India to another country. STEP 5 NAMING THE BUSINESS SELECTION OF NAME To start any business, the first thing we have to do is to select the name of the new firm The name and style should be soft, attractive, short and meaningful. The name may give the idea of the product of the firm. Examples: a) Quality Garments: This type of name is mostly selected by the manufacturer exporter. From his name, one can come to know the products in which the exporter is dealing. b) Quality Exports: This type of name is mostly selected by a merchant exporter. The name only reflects export activities without specifying any products name. LOCATION / ADDRESS The next thing is to decide the address of the firm, i.e. the place from where the business will be conducted. As it is said that People are known by dress & address, so mostly the firm or the office address must be in a good locality. The office should be located preferably in a commercial complex, in clean and workable surroundings. DESIGNING TRADE NAME AND LOGO GETTING OFFICE STATIONERY PRINTED After selecting the name and address, you have to get your letterhead, visiting cards, envelopes and other kinds of stationery printed. The letterhead should be of A4 size and should be aligned to the envelopes and business cards

The letterhead should include the name and preferable the logo and the full address of the companys registered office, head office, corporate office, including the name of the country, all telephone numbers, fax, email & website details.

STEP 6 OPENING A BANK A/C Next a bank account is to be opened. There are three types of banks in India: 1. Local Co-operative Bank: These banks do not deal directly in Foreign Exchange. These banks are suitable for local business and therefore not recommended for exporters. Foreign Banks: These banks are extremely suitable for international business. These banks have good global network. Indian Nationalized Banks: These banks deal in foreign exchange directly. It is better to open an account with a bank that handles foreign exchange directly.

2. 3.

STEP 7 APPLYING FOR PAN Next, you are required to open a Permanent Account Number (PAN) with the Income Tax Authorities who have jurisdiction in your area. In short, after all the above things are over you are ready with a firm or a company for doing business. STEP 8 EXPORTER IMPORTER CODE NUMBER (IEC) Every Importer & Exporter is required to obtain the IEC. The Custom authorities will not allow anybody to import & export goods into or from India unless he holds a valid IEC number. Every person/firm/company engaged in export business in India is required to obtain the IEC number from the regional office of the Directorate General of Foreign Trade (DGFT) as required under the Foreign Trade Policy. To apply for the IEC, an application in duplicate in the prescribed form (3) has to be filled in. the following documents are also required along with the application form:

i. ii. iii. iv. v. vi.

Photocopy of PAN card. Application Fee Rs. 1000/Three copies of Passport size photographs. A bank certificate in the prescribed format in duplicate on the banks letterhead Declaration on the letterhead giving full particulars of whether there is any NRI interest in the applicants firm and whether it is with full repatriation of benefits. A declaration should be given on the applicants letterhead about the non involvement of any company or partner that has been caution listed by the RBI/DGFT.

The IEC number will be allotted by the Regional Licencing Authority within 10 days from the date of the application. This IEC number will have 10 digits. There is no expiry date for this IEC number. It is valid until revoked or surrendered. Once this number is obtained you can export or import any products. STEP 9 - SELECTING THE PRODUCT According to the marketing theory, a product is something that fulfils the needs and desires of the buyer. That buyer, customer or consumer, is prepared to pay money for that fulfillment if he (or she) expects that your product will justify the expense. Having bought it, the customer will hopefully - experience a certain satisfaction that will outweigh the sacrifice of its price. That feeling is what it is all about. And that is why marketers are constantly busy with achieving satisfaction. If realized, your customer will be inclined to buy your product over and over again. PRELIMINARY VERIFICATIONS Studying the trends of export of different items from India Check with the Indian Trade Classification (Harmonised System) Classification for Export & Import Items [ITC (HS)] Classification Book whether the items selected by you are permitted for export or not. Getting conversant with Government Policy and regulations in respect of the product selected for export. Should also know import regulations in respect of such commodities by the importing countries.

YOUR PRODUCT OR SERVICE SHOULD BE SPECIAL (USP) When looking at your product to decide if it will be a good export product, your second task will be to assess its competitiveness. In most foreign markets, your kind of product is already available; it is offered by your

competitors, whom you have to fight in order to gain market share. This is when looking through the eyes of the buyer truly pays off: can you make your product look different, better than your competitors? The product must ideally have a unique selling proposition (USP). What makes your product special? What gives your product that special identity? The answer is: almost anything, as long as the customer or consumer recognizes it as such. Always comparing it with competitive products, this could be: For consumer products: a better flavour or taste, design, colour or shape a lower price easier handling, more practical or faster a better availability (a Just-in-Time delivery, sufficient stocks in the store) For industrial products: a better performance easier handling, installing, maintenance continuous innovations flawless delivery, always on time 24 hrs communication etc. etc. a better performance (it works better) a longer durability or easier maintenance a better or more attractive packaging a better service, etc. etc.

longer durability, zero defects minimal tolerance in specifications an extensive range of product options free and fast repairs

In short: a better buy than the competitors product. Your chances in the export market greatly increase when your product or your overall proposition has a USP. You could make it special by adding a special value. To find out how you could improve your product or make it more special, you should check all possibilities along the lines of the product benefits. Product benefits are, as you know by now, the product characteristics that respond best to the buying motives of the customer. They are the reasons why the consumer buys your product in the first place. PRODUCT ADAPTATION The needs and wants of markets abroad differ from your home customers. That means that you may have to change your product (or service) to adapt it to the foreign customers wishes. In marketing terms: you have to make your product match with the market. Possible reasons for product adaptation To make your product just as good as the competitors. This is called imitation, a loco, or me-too. It leaves only your price as an instrument to beat the competition with (and the lawyers to fight over patent rights)

 To make your product better or more special than your competitors. This way you create a unique selling proposition (USP). That makes comparing your product with the competition more difficult for the buyer. He may think that your product has so much more added value that he accepts to pay a higher price for it. He will also stay loyal to it longer. To conform to local rules and regulations. There are many of such regulations: on consumer health and safety, on standardization of size and weight. In Europe you know them by their acronyms: CE marking, CEN/CENELEC, ETSI norms etc. To make the product better and more easily transportable. Packing your product efficiently may save money on the shipping bill, or keep your product from being damaged To fit into lower import rates Last, but not least: because your customer explicitly wants you to change the product, in order to suit his particular needs. This occurs for industrial and consumer products alike, where buyers may have their own technical specifications. Increasingly, those suppliers may involve you in the designing process, using your know-how to improve product and production. Such opportunities for innovation are important, because they could mean adding value that the buyer could not do or has not thought about.

BUYING DECISIONS

Sacrifice Functional, Rational Motives Emotional Motives

Satisfaction A buyer is willing to buy when, considering rational and emotional motives. He expects that the satisfaction derived from the products use is greater than the sacrifice of paying its price.

STEP 10 REGISTRATION OF EXPORTERS

I. REGISTRATION WITH RESERVE BANK OF INDIA NO MORE REQUIRED Prior to 1.1.1997 it was compulsory for every exporter to obtain an exporters code number from the RBI before engaging in export. This has since been dispensed with and registration with the licensing authorities is sufficient before commencing export or import. II. REGISTRATION WITH REGIONAL AUTHORITIES OF DIRECTOR GENERAL OF FOREIGN TRADE (OBTAINING IMPORTEREXPORTER CODE NUMBER) The Customs Authorities will permit you to import or export goods into or from India only if you are holding a valid Importer-Exporter Code Number (IEC Number). However, if you are exporting goods to Nepal or to Myanmar through IndoMyanmar Border areas or to China through Gunji port in Uttaranchal and Namgaya, Shipkila in Himachal Pradesh and Nathula port in Himalayas, you are not required to obtain IEC Number provided the CIF value of a single consignment does not exceed Indian Rs. 25000/- (Rs. 1,00,000 in case of Nathula port) III. REGISTRATION WITH EXPORT PROMOTION COUNCILS/ COMMODITY BOARDS/AUTHORITIES In order to enable you to obtain benefits/concession under the Foreign Trade Policy, you are required to register yourself with the concerned Export Promotion Council or Commodity Board or Authority by obtaining the registration-cum-membership certificate (RCMC). The basic objective of Export Promotion Councils is to promote and develop the exports of the country. Each council is responsible for the promotion of a particular group of products, projects and services. An exporter desiring to obtain a Registration-cum-Membership Certificate (RCMC) shall declare his main line of business in the application which shall be made to the Export Promotion Council (EPC) relating to that line of business. However, a status holder has the option to obtain RCMC from Federation of Indian Exporters Organization (FIEO). The service exporters (except software service exporters) are required to obtain RCMC from FIEO. In respect of exporters having their head office/registered office in the State of Orissa, RCMC is issued from FIEO office in Bhubaneshwar irrespective of the product being exported by them. IV. REGISTRATION WITH VALUE ADDED TAX AUTHORITIES

Goods which are to be shipped out of the country for export are eligible for exemption from both Value Added Tax and Central Sales Tax. For this purpose, you should get yourself registered with the Value added Tax Authority of your State after following the procedure prescribed under the Value Added Tax Act applicable to your State. V. REGISTRATION WITH CENTRAL EXCISE AUTHORITIES Goods meant for exports are exempt from Central Excise duty. For this purpose the manufacturer and merchant exporters have two options. Either they can deposit central excise duty at the time of clearance from factory and later on take refund or avail the procedure for export of goods without payment of duty. STEP 11 SELECTING THE OVERSEAS MARKETS Overseas markets are identified as traditional, potential and new. Target markets should be selected after careful consideration of various factors like political relations of India with the importing country, scope of exporters selected product, demand stability, preferential treatment to products from developing countries, market penetration by competitive countries and products, distance of potential market, transport problems, language problems, tariff and non-tariff barriers, distribution infrastructure, size of demand in the market, expected life span of market and product requirements, sales and distribution channels. For this purpose you should collect adequate market information before selecting one or more target markets. The information can be collected from various sources like Export Promotion Councils (EPCs)/ Commodity Boards, Federation of Indian Export Organization (FIEO), Indian Institute of Foreign Trade (IIFT), Indian Trade Promotion Organisation (ITPO), Indian Embassies and High Commissions Abroad, Foreign Embassies and High Commissions in India, Import Promotion Institutions Abroad, Overseas Chambers of Commerce and Industries, Various Directories, Journals, Market Survey Reports etc. STEP 12 SELECTING PROSPECTIVE OVERSEAS BUYERS Various Marketing Tools to Identify the Buyers: The first thing that you should do is find out if you have any friends or relative settled abroad, i.e. in the country that you wish to export to. As a matter of fact 30% of the export transactions that take place from India to USA are conducted via relatives. starting off personally then later describing your product and business

Friends & Relatives: A letter should then be written to the friend or relative. It should be a cordial letter,

proposal. You should explain your present activities and then ask for their assistance and support. If your letter does not get a reply, write again, but if there is still no reply then you must telephone him. Talk to the person, ask for his opinions and find out about his ideas and interests as regards your business proposal. There are 3 outcomes after having communicated with your friend or relative. i) The person you contacted has no connection or knowledge regarding your product and business, hence your source fails and you have to look for an alternative. ii) The person you contact is in the import business but not the same product you propose to export. He can give you some contact who is dealing in your proposed line. You should take a lead from this information and contact the concern person. iii) The last possibility is that your friend or relative is in the same field as you wanted to enter in. This will be the best situation. Your chances to get the entry in the market through your relative will be very easy provided you both can agree to business proposition. Doing business with friends and relatives has many advantages and disadvantages. One advantage would be that you would have an individual rapport with the person on the other side. He knows who you are, what kind of a person you are, your background and your limitations. He will trust you and believe that will not cheat him/her. With an unknown person you have to introduce yourself. Another advantage would be that a friend or relative would understand you better. To convince him will not be very difficult. With an unknown person, you have to try very hard and make them believe about yourselves and your products. A disadvantage of involving a friend or relative in a business is that if something goes wrong, then your relationship can end. There are many chances of misunderstanding during the business, which will lead, to a strained relationship.

Correspondence / Internet:

Before writing a letter to a buyer you have to have addresses of prospective buyers. These addresses can be obtained from the following sources.

i. FIEO, Export Promotion Councils, Commodity Boards. ii. Organizations in the importing countries. iii. Overseas directories such as yellow pages. iv. Internet. v. Consulates will give you a list of buyers without showing any preferences. vi. Publications such as magazines and newspapers. Once you have obtained the addresses you can write to all of them or if there are many then you have to choose. You should rearrange the addresses to suit you. While selecting the addresses you should select geographically, i.e. consider the area in which the buyer is situated and look at the PO Box Number. You should not go for vague far off addresses. Look out for the number of telephone numbers the buyer has listed, whether there is a fax number or an e-mail address. You should use your initiative and logically decide to whom you should write to. If you write about 100 letters you might only hear from 5. Normally about 5% of the buyers reply. This is to be considered as normal. However better percentage of response can be obtained if the drafting of the letter is excellent and the letter is carrying sufficient enclosures, catalogue and samples. The source from where you had got the addresses directly reflects the number of replies you receive. For example if you have a list from the councils and if the same is not updated, then your letter writing will results in waste of time and money. Hence ensure that when you get the addresses they are updated addresses. Sometimes the reason for some of your letters to be returned can be due to the fact that certain countries have quick exit policies therefore factories and businesses can quickly shutdown or move to new addresses. Correspondence is the oldest and well-accepted method of communication. The advantage of this kind of communication is that you can reach people preliminarily, by introducing yourself. It announces your activities and your aims. It is a very cost-effective way to reach people. It is the perfect form of communication because of the fact that you can write in detail and whatever you write will be remembered by the buyer; i.e. it has long retention value. There is also scope for presentation, which will give the buyer an idea of how you think and present yourself and how creative you are. The only drawback of letter writing is that it takes a long time for the letter to reach to the buyer. Some people consider it as an out-dated mode of communication. In todays age when the latest modes of communications are available, it would be much quicker to send an e-mail to the buyer. Letter

writing has also lost its punch and so does not create much of an impact due to its overuse. Drafting a good letter is the most important thing. You have to convince the buyer that you can fulfill his/her needs with the utmost dedication. The buyer will not be interested in your prolong background but will be interested what you can offer him. Wording has to be correct. Overseas buyers usually look out for someone who is a reliable seller and will be dedicated to his business. You have to create an impression on his mind. The following points should be considered: i. ii. iii. iv. v. vi. Limit the letter to one page only and keep it to the point. You should start off with a short introduction of the company. You should then write about the business aspects, you must touch upon his profit sense. Then write about the product and by selecting the correct wordings try and convince him to buy your product. The letter should include all information necessary for the buyer, i.e. the price, the packaging, the delivery etc. You must also enclose a catalogue and a sample. If you can afford to go abroad then a personal visit is the best option. This is because you can meet the buyer in person and convince him. You can get a chance to find what he likes and dislikes. You can get an insight into the way he thinks & behaves. Meeting the buyer personally gives you tremendous scope because you can try and convince him on the spot. You can change your talk depending on what he says. The most hard-core business comes from personal visits. It is the best way. The only disadvantage of a personal visit is the high cost that is involved for airfare, accommodation and travel permits. It is especially not suitable for someone who is conducting his business alone, as a sole proprietor with fund constrain. There would not be anyone to take care of business at home when he is on overseas tour. An agent is a middle man who brings buyer and seller together. A key to successful export business is the selection and appointment of right agent.

Personal Visit:

Agent:

Successful, well established agents are very selective about additional product line. They are cautious about dealings with firms that are inexperienced in exporting. It will take a superior selling effort to convince them. Of course, if your product is unique, you wont have problems.

The agent who says he is interested in your line may not have the contracts or track record to sell your product. Another trade-off is large versus small. The large firm will have many salesmen, but your product may get lost among hundreds of other lines. A smaller firm can devote more time to your products but it may lack the resources needed for full market coverage. An agent is your extended arm in overseas market. He represents you. He collects the information, market intelligence and sell your product to the prospective buyer. Between principal and an agent, a document known as Agency Agreement is required to be signed. Reserve Bank of India permits 12.5% of FOB as commission without prior approval. There are certain countries, where appointing an agent is the most important aspect without which is difficult to do the business e.g.: Saudi Arabia. Exhibitions are a very good launch pad, if you are trying to introduce a new product. You can reach the buyers from many countries, under one roof, without having to go to all the countries personally. You may even come across buyers whom you may not have thought of approaching earlier. It also gives you a good opportunity to know who your competitors are.

Exhibitions:

If you decide to take part in an exhibition you must consider the fact that the buyers who visit will be comparing your products and prices with that of your competitors. Therefore your pricing has to be the best. You must convince the buyer since there will be severe competition from others. The disadvantages of participating in an exhibition is the high costs that are charged for the space and a stall. It can only be to your advantage if you can afford to pay for the space and have enough money to spend on display. You are there to attract buyers so your stall has to be outstanding enough to attract attention. Due to the fact that it is such an extremely competitive environment you have to make sure that your stall stands out from the rest. It should have a great impact on the buyer, inviting him/her to the stall. Advertisements are announcements for a particular product. Advertisements are made to achieve three things:

Advertising:

To create general awareness for consumer product. To introduce your product to a buyer. To introduce your products to an agent.

For advertisements that are targeted a consumers the common media such as newspapers and magazines should be used. This should be written in the local language spoken. For advertisements that are for buyers you should advertise in business related newspapers such as the Business Times, technical directories and publications that a buyer will read. It should be written in the terms of the trade and language used should be English. When advertising to attract agents all the above points should be considered along with the advantages for the agent himself. Delegations consist of people who are officially visiting out country to represent interest of their company for the purpose of buying or selling. They come to India regularly. If it is not possible for an exporter to go abroad then visiting a foreign delegation would be the next best thing. These visits, by foreign delegations are usually advertised in newspapers such as The Economic Times. You can also find out from the FIEO.

Delegations:

Meeting the delegations requires registration or payment of fees as the case may be. Many a times these meetings are on Free of cost basis. The delegations are here to find out about new contracts. This gives the exporter an excellent opportunity to get direct contracts. Visiting a delegation can be very informative too, since you can find out about all the finer points that your need to know about their country. An exporter can also join a delegation organized by the FIEO. This a meeting organized by the FIEO / Export Promotion Councils (EPC) / Commodity Board (CB) for the buyers and exporters. By extensive research FIEO/EPC/CB identifies potential importers in other countries who are not BSM previously dealing with India. The list is narrowed down to 10 prospective (Buyer Seller buyers who have the capability of buying a sizable amount. These 10 buyers are invited at FIEO/EPC/CBs cost to visit India. Meet): FIEO/EPC/CB then approaches its members and informs them about the buyers visit along with the list of the products required by the buyer. Generally merchant exporters are not allowed to participate in BSM. Only those exporters who have manufacturing units or factories are called to participate in BSM. These manufactures/exporters are then screened and identified. FIEO/EPC/CB usually select a mixed variety of manufacturers, i.e. a couple of small-scale companies, a couple of companies with large turnovers (Rs. 20 crore and above) and a couple of companies from Mumbai. Once you enroll for the BSM you may have to pay participation fees. Similarly, Indian companies are also taken abroad for BSMs. Electronic Commerce (E-Commerce) is one of the most powerful tools in the present world. The future trends in the world indicate that E-Commerce and EBusiness will become an integral part of world business. The scope is immense and billions of dollars business will be possible with the help of Internet. Company of every size, any industry or service will see the future in Ecommerce.

E-Commerce & Internet:

There are several sites available where you may get the list of the buyers and list of sellers for particular products. Visiting these sites provide live inquiries. e.g. www.alibaba.com / www.ec21.com / www.ec51.com are some of the active site

STEP 13 INQUIRY AND OFFER Hopefully, having put a lot of effort into marketing your product abroad, you will receive an enquiry from a potential foreign customer - the importer. An inquiry is a request from a prospective importer about description of goods, their standard or grade, size, weight or quantity, terms of payments, etc. The importer will almost certainly ask you to quote on a particular order. On getting an inquiry, the exporter must process it immediately by making an offer in the form of quotation / proforma invoice and send it to the importer STEP 14 CONFIRMATION AND PROCESSING OF EXPORT ORDER If your offer is acceptable, the importer will come back to you with an order. More likely, however, is that the importer will come back to you asking for better terms and you will then go through a negotiation process before you come to some sort of agreement. Once the negotiations are completed and the terms and conditions are finalized, the exporter sends three copies of proforma invoice to the importer for the confirmation of order. The importer signs these copies and sends back two copies to the exporter. After confirmation of the export order, in the meanwhile, you should proceed to enter into a formal export contract with the overseas buyer. STEP 15 ENTERING INTO EXPORT CONTRACT In order to avoid disputes, it is necessary to enter into an export contract with the overseas buyers. For this purpose, export contract should be carefully drafted incorporating comprehensive but in precise terms, all relevant and important conditions of the trade deal. There should not be any ambiguity regarding the exact specifications of goods and terms of sale including export price, mode of payment, storage and distribution methods, type of packaging, port of shipment, delivery schedule etc. The different aspects of an export contract are enumerated as under : i) Product, Standards and Specifications ii) Quantity iii) Inspection iv) Total value of the contract v) Terms of Delivery vi) Taxes, Duties and Charges vii) Period of Delivery/Shipment viii) Packing, Labelling and Marking ix) Terms of Payment Amount / Mode & Currency x) Discounts and Commissions xi) Licenses and Permits xii) Insurance xiii) Documentary requirements xiv) Arbitration STEP 16 OPENING LETTER OF CREDIT

The Documentary or Irrevocable letter of credit is the most appropriate and secured method of payment adopted to settle international transactions. On finalization of the export contract, the importer opens a letter of credit in favour of the exporter, if agreed upon in the contract. STEP 17 ARRANGEMENT OF PRE-SHIPMENT FINANCE On securing the letter of credit, the exporter procures a pre-shipment finance from his bank for procuring raw materials and other components, processing and packing of goods and transfer of goods to the port of shipment. STEP 18 PROCURING/MANUFACTURING GOODS FOR EXPORT & THEIR INSPECTION BY GOVERNMENT AUTHORITIES I. Procuring / Manufacturing Goods

On securing the pre-shipment finance from the bank, the exporter either arranges for the production of the required goods or procures them from the domestic market as per the specifications of the importer. II. Compulsory Quality Control & Preshipment Inspection

An important aspect about the goods to be exported is compulsory quality control and pre-shipment inspection. Under the Export(Quality Control and Inspection) Act, 1963, about 1000 commodities under the major groups of Food and Agriculture, Fishery, Minerals, Organic and Inorganic Chemicals, Rubber Products, Refractoriness, Ceramic Products, Pesticides, Light Engineering, Steel Products, Jute Products, Coir and Coir Products, Footwear and Footwear Products / Components are subject to compulsory pre-shipment inspection. At times, foreign buyers lay down their own standards / specifications which may or may not be in consonance with the Indian standards. They may also insist upon inspection by their own nominated agencies. These issues should be sorted out before confirmation of order. Specific provisions have also been made for compulsory inspection of textile goods. Products having ISI Certification mark or Agmark are not required to be inspected by any agency. These products do not fall within the purview of the export inspection agencies network. The Customs Authorities allow export of such goods even if not accompanied by any pre-shipment inspection certificate, provided they are otherwise satisfied that the goods carry ISI Certification or the Agmark. Depending upon the nature of products, goods meant for export are inspected for quality in the following manner: Consignment to Consignment Inspection Each

individual consignment is inspected by the Export Inspection Agency, Commodity Board and certificate of inspection is issued. The application for inspection for goods has to be submitted well in advance before the expected date of shipment of the consignment. Inspection of the consignment is generally carried out either at the premises of the exporter, provided adequate facilities exist therein for inspection, or at the port of shipment. The export inspection agency has a right to exercise supervision of inspected consignment(s) at any place or time. The application should be made in duplicate in the new prescribed form 'Intimation for Inspection' as per standardised pre-shipment export documents to the nearest office of the respective Export Inspection Agency along with the following documents : Particulars of the consignment intended to be exported. A crossed cheque/draft for the amount of requisite inspection fees or an Indian Postal Order.
o o o o

Copy of the Commercial Invoice. Copy of letter of credit. Details of packing specifications. Copy of the export order/contract, indicating inter alia the buyer's requirement that goods are strictly according to the prescribed specifications, or as per samples etc.

After satisfying itself that the consignment of exportable goods meets the requirements stipulated in the export contract/order, the inspection agency issues, generally within four days of receipt of intimation for inspection, the necessary certificate of inspection to the exporter in the prescribed proforma in five copies. The certificate is issued in the standardised form which is aligned pre-shipment export document. (Three copies for exporter, original copy for customs use, the second copy for the use of the foreign buyer and the third copy for the exporter's use, fourth copy for Data Bank, Export Inspection Council, New Delhi and the fifth copy is retained with the agency for their own office record). In-Process Quality Control (IPQC) Certain products like chemicals or engineering goods are subject to this control. The inspection is done at various stages of production. The exporter has to get his unit registered as "Export Worthy" and keep record of processing and production. Inspection by the officers of Export Inspection Agency is done from time to time. The certification of inspection on the end-products is then given without in-depth study at the shipment stage. Under this system, export is allowed on the basis of adequacy of inprocess quality control and inspection measures exercised by the manufacturing units themselves. The certificates of inspection in favor of the units approved under the scheme are issued by the Export Inspection Agencies (EIAs) in the normal course. However, these units are kept under surveillance by the EIAs and random spot checks of the consignments are carried out by them.

Self Certification Scheme Large manufacturers/exporters, export houses/trading houses are allowed the facility of Self-Certification on the theory that the exporter himself is the best judge of the quality of his products and will not allow his reputation to be spoiled in the international market by compromising on quality. The industrial units having proven reputation and adequate testing facilities have to apply to the Director (Inspection and Quality Control), Export Inspection Council of India, 11th Floor, Pragati Tower, 26 Rajendra Place, New Delhi-110008. They are granted a certificate valid for a period of one year, allowing them self-certification facility. The facility is available to manufacturers of engineering products, chemical and allied products and marine products. During this period the exporter can issue a certificate signed by himself or by a person authorised by him. The certificate has to indicate the number and date of EIA's reference for registration under Self-Certification Scheme. It has to be issued in the aligned format as per new standardised pre-shipment documents. III. ISO 9000 The discussion on quality control and preshipment inspection will be incomplete without saying a few words about ISO 9000.The ISO-9000 Series of Standards evolved by the International Standards Organisation has been accepted worldwide as the norm assuring high quality of goods. The ISO-9000 is also the hallmark of a good quality- oriented system for suppliers and manufacturers. It identifies the basic principles underlying quality, and specifies the procedures and criteria to be followed to ensure that what leaves the manufacturer / supplier's premises fully meets the customers requirements. The ISO-9000 series of standards are basically quality assurance standards and not product standards. ISO-9000 spells out how a company can establish, document and maintain an effective and economic quality control system which will demonstrate to the customer that the company is committed to quality. The series of Standards aims the following:
o o o o o o

Increased customer confidence in the company Shift from a system of inspection, to one of quality management Removing the need for multiple assessments of suppliers Gaining management commitment Linking quality to cost-effectiveness Giving customers what they need

The implementation of ISO-9000 Standards involves:

o o o o o o

Management education Writing quality policy Nominating a quality representative Identifying responsibilities Identifying business processes Writing a quality manual

o o

Writing procedures Writing work instructions

It is thus clear that the ISO-9000 series of standards constitute of concept of Total Quality Management (TQM). STEP 19 LABELING, PACKAGING, PACKING AND MARKING GOODS An important stage after manufacturing of goods or their procurement is their preparation for shipment. This involves labeling, packaging, packing and marking of export consignments. Labeling requirements differ from country to country and the same should be ascertained well in advance from the buyer. The label should indicate quality, quantity, method of use etc. Packaging fulfills a vital role in helping to get your export products to the market in top condition, as well as in presenting your goods to the overseas buyer in an attractive way. While packaging, quality should not be compromised merely to cut down costs, packaging should also be in conformity with the instructions issued by the importer. Packing refers to the external containers used for transportation . The shape of packing cases play a very important role in packing the cargo, and the nature of packing material to be used will depend upon the items exported As regard specification for the size, weight and strength care must be taken to ensure that the weight of standard case does not exceed 50 Kg. for easy handling of the cargo. Before packing and sealing the goods, it should be ensured that all the contents are properly placed in the case and the list of contents of packing notes should be prepared so that the buyer, the Customs authorities and the Insurance authorities can easily check the contents of each and every case. Marking means to mark the address, number of packages etc. on the packets. It is essential for identification purpose and should provide information on exporters' mark, port of destination, place of destination, order number and date, gross, net and tare weight and handling instructions. If required assistance can be taken from the Indian Institute of Packing (IIP) STEP 20 PREPARATION OF VAROIUS EXPORT DOCUMENTS NEEDED The export process is made more complex by the wide variety of documents that the exporter needs to complete to ensure that the order reaches its destination quickly, safetly and without problems.