A Report on

Export Process & Documentation

Submitted By K. Raj kumar

Y12IB20022 Integrated M.B.A (IB), 3th Year (3/1 SEM)

In partial fulfilment for the award of the degree Of Master of Business Administration
(International Business) Acade ic Year (2013!201")

Under the Guidance of N. Prasanna Kumar.

B.co , MBA, #h.$. Asst. #ro%essor

Department of International Business studies

A !AR"A NA#AR$%NA %NI&ER'I("

&agar'una &agar, (untur!)22)10

DE )ARA(I*N

I here*+ declare that the ,ro'ect re,ort entitled a stud+ on +Export Documentation in MADDI )AK'!MAIA! & original -or. su* itted *+ *.)(D., is an

e in ,artial %ul%il ent %or the a-ard o%

degree o% ) +ear Integrated M.B.A o% Achar+a &agar'una /ni0ersit+, (untur and has not *een su* itted earlier to this uni0ersit+ or to an+

other institution %or the a-ard o% an+ degree , di,lo a, certi%icate or an+ other title.

A KN*-)ED#EMEN( 1i%e o% hu an *eings is %ull o% interactions. &o one is sel%!su%%icient *+ hi sel% -hene0er an+one is doing so e serious and i ,ortant -or. a lot o% hel, %ro the ,eo,le concerned is needed 2 one less s,eciall+ o*liged to-ards the . I cannot %orget ac.no-ledging the in %e- -ords as -ithout the guidance 2 co!ordination o% the in + ,ro'ect re,ort -ould not ha0e *een ,ossi*le. A large nu *er o% indi0idual contri*uted to this ,ro'ect. I a than.%ul to all o% the %or their hel, and encourage ent. M+ -riting in this ,ro'ect re,ort has also *een in%luenced *+ a nu *er o% -e*sites and standard te3t*oo.s. As %ar as ,ossi*le, the+ ha0e *een %ull+ ac.no-ledged at the a,,ro,riate ,lace. I e3,ress + gratitude to all o% the . 4irst o% all I o-e + heart%elt gratitude to + guide Dr.N.PRA'ANA K%MAR. Asst.professor. International Business 'tudies, %or his no*le guidance throughout the co ,letion o% the #ro'ect. I -ould li.e to e3tend + heart%elt than.s to Mr B.BABU RAO Personal Officer, MADDI LAKSHMAIAH& CO.LTD, an !"nt"r %or gi0ing e an o,,ortunit+ to -or. on this ,ro'ect. 1ast *ut not least, also gi0e + sincere than.s to all the ,eo,le to directl+ indirectl+ ha0e hel, and encourage e in %inding the -a+ to e in collecting the re5uisite in%or ation and co ,leting the ,ro'ect e%%ecti0el+ and ti el+.

6. 7A8 6/MA7 MBA (IB) ! III Year 7oll &o. Y11IB20022

#%IDE ER(I/I A(E

(* -!*ME'*E&ER I( MA" *N ERN

9his is to certi%+ that the ,ro'ect re,ort titled #Export Process and Documentation$ :%%ered *+ Ethnic 9o*acco India 1i ited, (untur has *een ,re,ared *+ K. RA$ K%MAR, Roll No. Y11IB20022, a student o% MBA (Master o% Business Ad inistration), session (2012!201;) -ith +International Business 'tudies, as a'or area o% s,eciali<ation.

9he stud+ -as conducted -ith s,ecial re%erence to Et0nic (o1acco India )imited. #untur. I reco end this ,ro'ect %or e0aluation.

#lace= (untur SI(&A9/7E $ate= #7:8E>9 (/I$E= $r.&.#7ASA&A 6/MA7

'erial no 2. 4.

(itles
0apter323 Introduction 0apter343 :*'ecti0es and ethodolog+ &eeds o% stud+ Methods o% stud+ :*'ecti0es o% stud+ 1i itations o% stud+ 0apter353 co ,an+ ,ro%ile 0apter363 Indian to*acco industr+ 0apter373 I ,ortance o% e3,ort docu ents in trade 0apter383 9heoretical %ra e-or. o% e3,ort ,rocedure

5. 6. 7. 8. 9. :. ;.

0apter393 E3,ort docu entation 0apter3:3 >onclusion 0apter3;3 Bi*liogra,h+

Chapter- 1 Introduction

Importance of foreign trade

All countries need goods and ser0ices to satis%+ -ants o% their ,eo,le. #roduction o% goods and ser0ices re5uires resources. &o countr+ can ,roduce all the goods and ser0ices that it re5uires. It has to *u+ %ro other countries -hat it cannot ,roduce or can ,roduce less than its re5uire ents. Si ilarl+ it sells to other countries the goods -hich it has in sur,lus 5uantities. Foreign trade is exchange of capital, goods, and services across international borders or territories. It refers to export of goods and services by a firm to a foreign-based buyer (importer). In most countries, it represents a significant share of gross domestic product (GD ). !hile international trade has been present throughout much of history its economic, social, and political importance has been on the rise in recent centuries. Industriali"ation, advanced transportation, globali"ation, multinational corporations, and outsourcing are all having a ma#or impact on the international trade system. Increasing international trade is crucial to the continuance of globali"ation. International trade is a ma#or source of economic revenue for any nation that is considered a $orld po$er. !ithout international trade, nations $ould be limited to the goods and services produced $ithin their o$n borders.

Foreign trade is typically more costly than domestic trade. %he reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated $ith country differences such as language, the legal system or culture. :n the e0e o% Inde,endence in 1?"@, %oreign trade o% India -as t+,ical o% a colonial and agricultural econo +. 9rade relations -ere ainl+ con%ined to Britain and other >o E3,orts consisted chie%l+ o% raon-ealth countries. aterials and ,lantation cro,s

-hile i ,orts co ,osed o% light consu er goods and other anu%actures. :0er the last ;0 +ears, IndiaAs %oreign trade has undergone a co ,lete change in ter s o% co ,osition and direction. 9he e3,orts co0er a -ide range o% traditional and non!traditional ite s -hile i ,orts consist ,roducts, raainl+ o% ca,ital goods, ,etroleu eet the e0er!increasing aterials, and che icals to

needs o% a de0elo,ing and di0ersi%+ing econo +. 4or a*out "0 +ears (1?)0!?0), %oreign trade o% India su%%ered %ro strict *ureaucratic and discretionar+ controls. Si ilarl+, %oreign e3change transactions -ere tightl+ controlled *+ the (o0ern ent and the 7eser0e Ban. o% India. 4ro 1?"@ till id!1??0s, India, -ith so e e3ce,tions, al-a+s %aced de%icit in its *alance o% ,a+ ents, i.e. i ,orts al-a+s e3ceeded e3,orts. 9his -as characteristic o% a de0elo,ing countr+ struggling %or reconstruction and odernisation o% its econo +. I ,orts gallo,ed *ecause o% ,roducts, and raaterials. E3,orts re ained relati0el+ increasing re5uire ents o% ca,ital goods, de%ence e5ui, ent, ,etroleu

sluggish o-ing to lac. o% e3,orta*le sur,lus, co ,etition in the international ar.et, in%lation at ho e, and increasing ,rotectionist ,olicies o% the de0elo,ed countries. Beginning id!1??1, the (o0ern ent o% India introduced a series

o% re%or s to li*eralise and glo*alise the Indian econo +. 7e%or s in the e3ternal sector o% India -ere intended to integrate the Indian econo + -ith the -orld econo +. IndiaAs a,,roach to o,enness has *een cautious, contingent on achie0ing certain ,reconditions to ensure an orderl+ ,rocess o% li*eralisation and ensuring acroecono ic sta*ilit+. 9his a,,roach has *een 0indicated in recent +ears -ith the gro-ing incidence o% %inancial crises else-here in the -orld. All the sa e, the ,olic+ regi e in India in regard to li*eralisation o% the %oreign sector has -itnessed 0er+ signi%icant change. 9he 4oreign 9rade ($e0elo, ent and 7egulation)Act,1??2.An Act to ,ro0ide %or the de0elo, ent and regulation o% %oreign trade *+ %acilitating i ,orts into, and aug enting e3,orts %ro India and %or atters connected there-ith or Incidental thereto. Be it enacted *+ #arlia ent in the 4ort+!third Year o% the 7e,u*lic o% India. Since then has destination. 9he econo + o% India is the %ourth largest in the -orld, -ith a ($# o% B3.;3 trillion, and is the tenth largest in the -orld -ith a B;?1.? *illion at 200" /S$ e3change rates and has a real ($# gro-th rate o% ;.2C.E3,ort re0enues %ro the sector ha0e gro-n %ro BD ade a re ar.a*le change in its trade to di%%erent

*illion in 2003 to B"; *illion in 200@. IndiaAs %oreign e3change reser0es are o0er /SB 102 *illion and e3ceed the %oreign e3change reser0es o% /SA, 4rance, 7ussia and (er an+. 9his has strengthened the 7u,ee and *oosted in0estor con%idence greatl+. Boosted *+ the ra,id ,ace o% the econo ic ,rogress, ,ro%ita*le in0est ent regi e, %le3i*le ,rocedural ,olicies -ith the rela3ations introduced in 0arious sectors, has in turn ,ro0es to *e the horde %or the international .e+ ,la+ers in %inding the ne- in0est ent o,,ortunities in India. 7ising trend o% the %oreign direct in0est ent is also signalling to-ards the ,i0otal role ,la+ing *+ the %oreign direct in0est ent in the gro-th o% the econo +. 9he %acts are also standing high as in the +ear 200@!0D, %oreign direct in0est ent in India has crossed the ar. o% /SB2) *illion, -hich -as ); ,er cent ore than -hat it -as in 200;!0@, i.e., /SB1).@ *illion.

In the %irst hal% o% the %inancial +ear, 200D, IndiaEs %oreign direct in0est ent -as registered to *e /S B3"1 *illion. It has *een ,ro'ected that during the ti e ,eriod o% 200D!0?, the 4$I o% the countr+ could attract /SB3) *illion. More %lo- o% the %oreign direct in0est ent has *een seen in the s.ill intensi0e and high 0alue added ser0ice industries, es,eciall+ those -hich are related to the %inancial ser0ices and in%or ation technolog+. 4urther ore, India has co e out as the international ser0ice industr+ -ith the 4$I, ,ro0iding the ore attraction o% ore unassaila*le lo- cost o,,ortunities, the

,re0alence o% high technolog+ and language s.ills and the high

su,,orti0e go0ern ent ,olicies. >o ,anies %ro

across the -orld unication,

are no- *us+ in e0incing their interest into 0arious sectors such as construction, energ+, electrical e5ui, entAs, teleco auto o*iles etc. 4ro 4$I. 9he %oreign trade ,olic+ o% India hel,s in deter ining the trade relations o% the countr+ in a signi%icant -a+. 4or the %irst ti e, the go0ern ent ter inated the %i0e!+ear E3i #olic+, 2002!0@ and o% %i0e!+ear re,laced it -ith 4oreign 9rade #olic+ (49#) %or a ter last 10 +ears, IndiaEs go0ern ent has

undergone co ,lete change in its outloo. -hen it co es a*out the

starting the %iscal +ear on the 31st August 200". It ta.es an integrated 0ie- o% the o0erall de0elo, ent o% the countr+As %oreign trade.

Strategy
9he o*'ecti0e o% 4oreign 9rade #olic+ is o% t-o!%old= i. ii. 9o a.e IndiaEs ,ercentage share o% glo*al erchandiser

trade dou*le *+ 200?F and 9o act as an e%%ecti0e instru ent o% econo ic gro-th *+ gi0ing a thrust to e ,lo+ ent generation, es,eciall+ in se i! ur*an and rural areas. 9he .e+ strategies are o% 49# are= i. ii. /nshac.ling o% controlsF >reating an at os,here o% trust and trans,arenc+F

iii.

Si ,li%+ing the ,rocedures and *ringing do-n transaction costsF

i0.

Ado,ting the %unda ental ,rinci,le that duties and le0ies should not *e e3,ortedF

0.

Identi%+ing and nurturing di%%erent s,ecial %ocus areas to %acilitate de0elo, ent o% India as a glo*al hu* %or anu%acturing, trading and ser0ices.

4oreign trade o% India has ,ro0ed to *e the *ac. *one %or its econo + and has ,ro,elled the countr+As trade relations to higher ,osition. It has sho-n a re ar.a*le change %ro ,ast %e- decades contri*uting %or the de0elo, ent o% the countr+As trade.

Role of Exports in Indian Economy

9he e3,ort sector o% Indian econo + ade co ,rehensi0e ,rogress o0er the last decade. 9he e3,onential gro-th o% the e3,ort sector o% Indian econo + can *e attri*uted to the li*eral (o0ern ent o% India econo ic ,olic+. Indian e3,orts had an a *itious target o% /S 1;0 *illion in 200@!0D. 9he achie0e ent ca e to the Indian e3,orts in the last %iscal des,ite the odds against the e3,orts, gains. In the %irst t-o ini i<ing the onths o% 200@!0D e3,orts gre- *+ 20.3C, India greoderatel+ *+

-hich -as a little lo-er than the ,re0ious +ear o0er the sa e ,eriod a +ear ago. Manu%actured goods %ro last %iscal +ear. Gigh 0alue co 1)C in the %irst 5uarter o% 200@!200D as co ,ared to 21.2C in the odities li.e engineering goods and rice registered 0er+ high gro-th rate in the 1st 5uarter o% this %iscal against the sa e ,eriod last +ear. 9he o0erall e3,orts suggest that

the Indian e3,orts gre- considera*l+ across all

a'or e3,orting

destinations. 9he Indian e3,orts to #a.istan, /AE and Ital+ sho-ed re ar.a*le gro-th in the %irst 5uarter o% the current %iscal +ear. 9he astrono ical gro-th o% the Indian e3,ort sector -as led *+ the %ollo-ing industries !

In%or ation 9echnolog+ 9eleco unications hard-are Electronics and hard-are #har aceutical and *iotechnolog+ ,roducts >onsu er dura*les 9e3tiles >onstruction achiner+

#o-er e5ui, ent 4ood grains Iron and steel >he icals and %ertili<ers

9he ro*ust o0erall gro-th o% e3,ort sector o% Indian econo + led to secondar+ gro-th o% the %ollo-ing econo ic ,ara eters !

IndiaEs econo + gre- at ?.3C in 5uarter A,ril!8une and it -as dri0en *+ anu%acturing, construction and ser0ices sector and agriculture sector

($# %actor %or the %irst 5uarter o% 200@!0D -as at 7s.@,23,132 crore, registering a gro-th rate o% ?.3C o0er the corres,onding 5uarter o% ,re0ious +ear

E3,orts gre- *+ 1D.11C during the 1st 5uarter o% 200@!200D and the i ,orts shoot u, *+ 3".30C during the sa e ,eriod

IndiaEs 4:7EH reser0es (e3cluding (old and S$7s) stood at B21?.@) *illion at the end o% 8ul+ E 0@

9he annual in%lation rate -as ".")C %or the -ee. ended 8ul+ 2D, 200@

IndiaEs Balance o% #a+ ents is e3,ected to re ain co %orta*le

Merchandise E3,orts recorded strong gro-th According to re,orts, ,roducti0it+ gro-th rate o% Indian econo + is esti ated to *e around DC and a*o0e until 2020

At this stu,endous gro-th o% the e3,ort sector o% Indian econo +, it is e3,ected that India -ill *eco e the second largest econo + in the -orld a%ter >hina. E3,ort Sector o% Indian Econo + has i ,ro0ed i goods e3,orted %ro goods and so on. India has de0elo,ed *usiness relations -ith a nu *er o% %oreign countries li.e the e *er countries o% SAA7>, so e Eastern Euro,ean countries as -ell as A%rican countries, Me *ers o% E/. 9he i ,ressi0e list o% countries includes= India ensel+ o0er the

+ears and has earned /S B 12) *illion in the current %iscal +ear. 9he ainl+ include -ide 0ariet+ o% agricultural ,roducts, che icals, 'e-eller+, gar ents, and leather

7ussia /AE /SA Gong 6ong /6 8a,an (er an+ Singa,ore Belgiu Mala+sia &etherlands Bangladesh Ital+ 9hailand 4rance Australia

9he e3,ort sector o% Indian econo + has al-a+s delineated i ,ressi0e gro-th in all the areas o% e3,ort, li.e the che ical industr+ in the %inancial +ear 200)!0; recorded /S B 12;@@.21 illion %ro e3,orts, -hereas the e3,ort earnings %ro

ge s and 'e-eller+ -as /S B 13@0)."" illion in the sa e %iscal. 9he engineering industr+ has *een ,er%or ing consistentl+ o0er the +ears in the arena o% e3,orts as it secured the second ,osition in ter s o% the earnings %ro e3,orts in 200"!0), a ounting to /S B 10)1;.") illion, -hich increased to /S B 1")D@.3@ illion in the ne3t %iscal. 9he ,er%or ance o% te3tile industr+ has %luctuated a

little as the earning o% the te3tile industr+ %ro do-n to /S B 1201@."; illion in 200)!0;.

e3,orts in the

%inancial +ear 200"!0) -as /S B 1220".@1 illion -hich ca e /SA has turned out to *e the earned a,,ro3i atel+ /S B 132;).;0 Indian earnings %ro ost signi%icant

e3,ort ,artner o% India and the e3,ort sector o% Indian econo + illion in 200;!0@. /AE has stood second onl+ to /SA as /AE contri*uted ?.@ out o% the total e3,orts in 200;!0@. /6 and >hina has e3changed their ,ositions in the current +ear as >hinaEs share a ong the e3,orts %igure in India in 200;!0@ has i ,ro0ed *+ ;.3 C in co ,arison to 200)!0;. In 200"!0) Belgiu su*stantiall+ to the earnings %ro B 2""2.0? illion and /S B 21;0.D3 and Ital+ contri*uted e3,orts, -ith a contri*ution o% /S illion res,ecti0el+.

Products and sectors engaged in International Trade

9here are three a'or sectors o% Indian Econo +

Agriculture
Agriculture and allied sectors li.e %orestr+, logging and %ishing accounts %or 2)C o% the ($#. It e ,lo+s al ost )DC o% the total -or. %orce. It is the largest econo ic sector and ,la+s a signi%icant role in the o0erall socio!econo ic de0elo, ent o% India. $ue to stead+ i ,ro0e ent in irrigation, technolog+, tre endousl+. odern agricultural ,ractices the +ield ,er unit area o% all cro,s has increased

Industry
Inde3 o% industrial ,roduction -hich easures the o0erall industrial

gro-th rate -as 10.1C in :cto*er 200" as co ,ared to ;.2C in :cto*er 2003. 9he largest sector here holds the te3tile industr+. Auto o*ile sector has also de onstrated the inherent strength o% Indian la*our and ca,ital. 9he three ining 2 5uarr+ing, ain su* sectors o% industr+ 0i< anu%acturing, and electricit+, gas 2 -ater

su,,l+ recorded gro-ths o% )C, D.DC and @.1C res,ecti0el+.

Services
9he ser0ice sector is the %astest gro-ing sector. It has the largest share in the ($# accounting %or a*out "DC in 2000. Business ser0ices, co unication ser0ices, %inancial ser0ices, co unit+ ser0ices, hotels and restaurants and trade ser0ices are a ong the %astest gro-ing sectors.

Composition of Trade

E3,ort gro-th has increased in 2003!0" due to contri*ution %ro anu%acturing sector. eat and E3,ort o% -heat, 0egeta*les and %ruits, ,re,aration has accelerated.

a'or eat

E3,orts o% ,roducts such as

arine ,roducts, cashe- nuts,

s,ices ha0e declined during 2003!200".

Yet the o0erall e3,ort gro-th has -itnessed a record surge in IndiaAs e3,ort.

9he

,roducts

ost

co

onl+

e3,orted

toda+

are

anu%acturing goods, che ical ,roducts, ge s and 'e-eller+, agricultural ite s and te3tiles.

9he rise in i ,orts is also *road *ased. 9he ,roducts i ,orted include gold and sil0er, consu er goods, ca,ital goods, %ood and allied ,roducts oil. ainl+ edi*le

4or the ,eriod A,ril!&o0e *er 200"!0) i ,orts -ere 0alued at /S B ;"2;).@? illion re,resenting an increase o% 3"."@C o0er the le0el o% i ,orts.

9he a'or e3,ort ,roducts o% India hail %ro the %ollo-ing di0isions -ithin the e3,ort sector o% Indian econo + li.e= Engineering (oods Agricultural #roducts

>he icals Marine #roducts #etroleu ,roducts

1eather (oods 9e3tiles

A ong the agricultural e3,orts o% India include Indian rice, racotton, cashe-, sugar, to*acco, s,ices, co%%ee, -heat and tea ha0e *eco e 0er+ ,o,ular in the international ar.et on account o% their 0ariet+ and e3cellent 5ualit+. 9he engineering industr+ ser0es to

e3,ort electronic goods, trans,ort e5ui, entAs, iron and steel, and 0arious achineries and the te3tile industr+ is engaged in the e3,ort o% read+ ade gar ents, 'ute, cotton +arn, car,ets, -oollen +arn, coir, arti%icial %a*rics and so on. :ther signi%icant e3,ort ,roducts include ,aints, ru**er, iron ore, ,lastic, ,har aceuticals etc. 9he e3,ort *arriers in India ha0e *een ha ,ering Indian e3,orts to a great e3tent and ost o% such *arriers ha0e *een announced *+ the ost signi%icant -hich is the Euro,ean /nion regarding certi%ication re5uire ents, a,,lication o% ,esticides, du ,ing o% -aste ,roducts. But the e3,ort *arrier %aced *+ the Indian e3,orters is red ta,is

ostl+ acco ,anied *+ corru,tion. Go-e0er, the go0ern ent o% India has considered ,lans to li*erate the Indian e3,orters %ro cu *erso e ,a,er -or.s and si ,li%+ the re5uired ,rocedures. E3,ort 9ari%%s in India %ollo-s the regulations o% the >usto s 9ari%% Act and a su*stantial nu *er o% e3,ort goods are su*'ected to tari%%s ,resentl+, such as=

Manganese :re >hro iu :res Blac. #e,,er Silli anite 7a- Iool (roundnut 9ea and so on odities o% E3,ort

Ma'or >o

(e s 2 8e-eller+ 9e3tiles 7ead+ ade gar ents $rugs, #har a 2 %ine che icals Machiner+ 2 Instru ents Manu%acturer o% Metals :res 2 inerals

#ri . 2 se i %in iron 2 steel 1eather 2 leather anu%actures

9rans,ort e5ui, ent #lastic 2 linoleu Electronic goods Marine #roducts $+es 2 Inter ediates 7u**er anu%actured ,roducts ,roducts

Balance of Payments
9he trade *alance is o%ten a a'or deter inant o% the ,a+ ents itigated *alance. 9rade de%icit has o%ten caused *alance o% ,a+ ents de%icits %or India. Go-e0er, the e%%ects o% trade de%icit ha0e *een to a considera*le e3tant *+ the in0isi*les sur,lus. :ne o% the i ,ortant reasons %or the recent *alance o% ,a+ ents (B:#) ,ro*le has *een the decline in the role o% the in0isi*les sur,lus in %inancing the trade de%icit. E3,ect %or the *rie% ,eriods, IndiaAs B:#

has sho-n de%icit. India e3,erienced B:# ,ro*le s o% 0ar+ing intensit+ in ost o% the +ears until the earl+ 1??0s.

Shrinking foreign trade

INDIA&s trade deficit during the first three months of current fiscal year ('(()-*() on a balance of payments (+, ) basis $as large due to the steeper decline in the pace of exports than that of imports %he trade deficit on a +, basis in -* (./0 '1.( billion) $as, ho$ever, less than that in -* of '((2-() (./0 3*.4 billion). %he 5ey features of India&s +, fiscal '(()-*( $ere6 (i) %he decline in exports $hich started since ,ctober '((2 continued during the first 7uarter of '(()-*(. Import payments, on a +, basis, also continued its declining trend mainly due to lo$er oil import bill8 (ii) rivate transfer receipts remained buoyant and increased by ).4 per cent to ./0 *3.3 billion during -* of '(()-*(. 9xports of soft$are services, ho$ever, declined during -* of '(()*(8 (iii) Despite net invisibles surplus at ./0 '(.' billion, the large trade deficit (./0 '1.( billion) mainly on account of sharp decline in exports that emerged in -* of

led to a current account deficit of ./0 :.2 billion in -* of '(()-*( (./0 ).( billion during -* of '((2-())8 (iv) !ith the revival in capital inflo$s to India, particularly foreign investments, the capital account sho$ed a turnaround from a negative balance in last t$o 7uarters of '((2-() to a positive balance of ./0 1.; billion during -* of '(()-*(8

(v)

ortfolio

investment

$itnessed

sharp

turnaround from net outflo$s of ./0 '.; billion

Major (US$

Items

of

India's

Balance

of

Payments million)

<4==93=:> <PR> Ex orts Im orts !rade Balance In"isi#les$ net %&rrent Acco&nt Balance %a ital Acco&nt' *11*13 ':;;2) -)*1'1 ;4:)'

<4==:3=;> <P> *;:*24 ')4:2; -**)4(3 2):2;

April3$une April3$une <4==:3=;> <4==;32=> <PR> <P> 4)*'( 2(:4: -3*4': ''4(1 32;2) 14;;: -':)21 '(*;)

-*;(34

-')2*;

-)(*)

-:2(2

*()*)2

);3;

**':4

:)'3

%(an)e in *eser"es+ (, indicates -)'*14 increase-. indicates decrease)

'((2(

-''3:

-**:

in -4 of '((2-() to net inflo$s of ./0 2.3 billion during -* of '(()-*(8

(vi)

<=I deposits also $itnessed higher inflo$s reflecting the positive impact of the revisions in the ceiling interest rate on <=I deposits8

(vii) %here $as a marginal increase in reserves on +, basis (i.e., excluding valuation) during -* of '(()-*(. >o$ever, the foreign exchange reserves including valuation increased by ./0 *3.' billion during -* of '(()-*( implying that the increase in reserves during this period $as mainly due to valuation gains as the ./ dollar has depreciated against ma#or currencies.

Invisi les
(i) During -* of '(()-*(, invisibles receipts declined marginally, $hile invisibles payments recorded a positive gro$th. In net terms, the invisibles balance at ./0 '(.' billion $as lo$er than that in the corresponding period of the previous year (./0 ''.4 billion), though higher than that in -4 of '((2-() (./0 *).3 billion).

Invisi les Receipts

(i) Invisibles receipts registered a marginal decline of (.; per cent in -* of '(()-*( (as against a higher gro$th of 3(.3 per cent in -* of '((2-()) on account of a decline in almost all categories of services except insurance and financial services and a decline of '(.3 per cent in

investment

income

receipts.

(ii) 9xports of soft$are services declined by **.: per cent during -* of '(()-*( as against an increase of 3;.1 per cent in -* of '((2-(). ?ccording to the <?//@,A, soft$are services exports are pro#ected to gro$ by 4 to ; per cent to ./0 42 to :( billion during year '(()-*(. (iii) %ravel receipts at ./0 '.3 billion during -* of '(()-*( declined by 2.; per cent as against an increase of *).) per cent in -* of '((2-() reflecting a slo$do$n in tourist arrivals in the country since <ovember '((2. ?ccording to the data released by the Ainistry of %ourism, foreign tourist arrivals declined by *.2 per cent in -* of '(()-*(. the financial

Invisi lesPayments
(i) Invisibles payments recorded a positive gro$th of **.) per cent in -* of '(()-*( (*3.: per cent in -* of '((2-()) mainly due to gro$th in payments under services and income account. In the services account, ho$ever, payments '(()-*(. under travel, transportation, G.<.I.9. and soft$are services recorded a negative gro$th in -* of

(ii) Investment income payments (include mainly the interest payments on commercial borro$ings, external assistance and non-resident deposits, and reinvested earnings of the foreign direct investment (FDI) enterprises operating in India) increased marginally to ./0 4.4 billion during -* of '(()-*( (./0 4.* billion in -* of '((2-()) mainly due to increased reinvested earnings of FDI companies in India.

Invisi lesBalance
(iii) ? combined effect of decline in invisibles receipts and increase in invisibles payments led to marginally lo$er net invisibles (invisibles receipts minus invisibles payments) at ./0 '(.' billion in -* of '(()-*( than that in the corresponding period of the previous year (./0 ''.4 billion). ?t this level, ho$ever, the invisibles surplus financed about ;;.; per cent of trade deficit during -* of '(()-*( (;*.3 per cent during -* of '((2-()).

Current Account !eficit

i) Despite net invisibles surplus, the large trade deficit mainly on account of sharp decline in exports led to a current account deficit of ./0 :.2 billion in -* of '(()-*( (./0 ).( billion during -* of '((2-()).

Capital Account and Reserves

i) %he gross capital inflo$s to India revived during -* of '(()-*( as compared to the last t$o 7uarters of '((2-() manifesting confidence in India&s long-term gro$th prospects. %he gross inflo$s $ere, ho$ever, at ./0 ;2.: billion as compared to ./0 )(.) billion in -* of '((2-() mainly led by inflo$s under FIIs, FDI and <=I deposits. Gross capital outflo$s during -* of '(()-*( stood lo$er at ./0 ;*.2 billion as against ./0 ;).; billion in -* of '((2(). (ii) !ith the revival in capital inflo$s to India, particularly foreign investments, the capital account sho$ed a turnaround from a negative balance in last t$o 7uarters of '((2-() to a positive balance of ./0 1.; billion during -* of '(()-*( (./0 **.* billion in -* of '((2-()).

(iv)<et FDI inflo$s (net in$ard FDI minus net out$ard FDI) amounted to ./0 1.2 billion in -* of '(()-*( (./0 ).( billion in -* of '((2-()). <et in$ard FDI stood at ./0 ).: billion during -* of '(()-*( (./0 **.) billion in -* of '((2-()). <et out$ard FDI stood at ./0 '.1 billion in -* of '(()-*( as compared $ith ./0 '.) billion of '((2-(). in -*

(v) During -* of '(()-*(, FDI to India $as channeled mainly into manufacturing sector (*).' per cent), real estate activities (*:.1 per cent), financial services (*:.4 per cent),

construction (*'.' per cent) and business services (**.; per cent). Aauritius continued to be the ma#or source of FDI during -* of '(()-*( $ith a share of 42.) per cent follo$ed by (vi) ./? at *'.2 per cent.

ortfolio investment primarily comprising foreign

institutional investors& (FIIs) investments and ?merican Depository =eceipts (?D=s)BGlobal Depository =eceipts (GD=s) $itnessed a sharp turnaround from net outflo$s of ./0 '.; billion in -4 of '((2-() to net inflo$s of ./0 2.3 billion during -* of '(()-*(. During '(()-*(, the sharp increase in FII inflo$s could be attributed to the recovery of domestic stoc5 mar5et in line $ith international stoc5 mar5ets, better corporate performance, political stability and comparatively better gro$th prospects.

(vii) %he tightness in li7uidity in the overseas mar5ets continued during -* of '(()-*(. %he approvals of external commercial borro$ings (9@+s) $ere very lo$ in the first t$o months of '(()-*(8 ho$ever, it recovered during Cune '((). In addition, repayments of 9@+s $ere higher at ./0 '.* billion during -* of '(()-*( (./0 *.* billion during -* of '((2-()) resulting in net outflo$s of ./0 (.4 billion under 9@+s (inflo$s of ./0 *.: billion in -* ()). (viii) %he gross disbursements of short-term trade credit of '((2-

$as ./0 *(.* billion during -* of '(()-*( almost same in -* of '((2-(). %he repayments of short-term trade credits, ho$ever, $ere very high at ./0 *3.' billion in -* of '(()*( (./0 ;.2 billion in -* of '((2-()). ?s a result, there $ere net outflo$s of ./0 3.* billion under short-term trade credit during -* of '(()-*( (inflo$s of ./0 '.4 billion in -* of '((2-()).

(ix) +an5ing capital mainly consists of foreign assets and liabilities of commercial ban5s. <=I deposits constitute ma#or part of the foreign liabilities. +an5ing capital (net), including <=I deposits, $ere negative at ./0 3.4 billion during -* of '(()-*( as against a positive net inflo$ of ./0 '.; billion during -* of '((2-(). ?mong the components of ban5ing capital, <=I deposits $itnessed higher inflo$s of ./0 *.2 billion in -* of '(()-*( (net inflo$s of ./0 (.2 billion in -* of '((2-()) reflecting the positive impact of the revisions in the ceiling interest rate on <=I deposits.

(x) ,ther capital includes leads and lags in exports, funds held abroad, advances received pending for issue of shares under FDI and other capital not included else$here. ,ther capital recorded net outflo$s of ./0 *.1 billion in -* of '(()-*(.

"erchandise Trade
Exports
(i) %he decline in exports $hich started since ,ctober '((2 continued during the first 7uarter of '(()-*(. ,n a +, basis, India&s merchandise exports recorded a decline of '*.( per cent in -* of '(()-*( as against an increase of 43.( per cent in -* of '((2-().

(ii) ?s per the data released by the Directorate General of @ommercial Intelligence and /tatistics (DG@ID/), merchandise exports declined by '1.4 per cent in -* of '(()-*( as against a higher gro$th of 3;.4 per cent in -* of '((2-(), reflecting fall in demand $orld$ide due to the global economic crisis.

INDIAAs cu ulati0e 0alue o% e3,orts %or the ,eriod A,ril! August, 200? -as /SB ;"12? illion (7s. 311@1) crore) as against /S B ?2?)? illion (7s. 3?1D"1 crore) registering a negati0e gro-th o% 31 ,er cent in $ollar ter s and 20." ,er cent in 7u,ee ter s o0er the sa e ,eriod last +ear. >u ulati0e 0alue o% i ,orts %or the ,eriod A,ril! August 200? -as /SB 102300 illion (7s. "?@10D crore) as against /SB 1)3;?1 illion (7s. ;"D0"1 crore) registering a negati0e gro-th o% 33." ,er cent in $ollar ter s and 23.3 ,er cent in 7u,ee ter s o0er the sa e ,eriod last +ear. :il i ,orts during A,ril! August, 200? -ere 0alued at /SB 2D2@) illion -hich -as "@." ,er cent lo-er than the oil i ,orts o% /S B )3@"2 illion in the corres,onding ,eriod last +ear.

&on!oil i ,orts during A,ril! August, 200? -ere 0alued at /SB @"02" illion -hich -as 2).? ,er cent lo-er than the le0el o% such i ,orts 0alued at /SB???"? illion in A,ril! August, 200D. 9he trade de%icit %or A,ril! August, 200? -as esti ated at /S B3D1@1 illion -hich -as lo-er than the de%icit o% /S B ;0@32 illion during A,ril!August, 200D

EH#:79S

IM#:79S

(A,ril!August,

4Y

200?!10)

In B Million E3,orts including re!e3,orts 200D!0? 200?!10 ?2?)? ;"12?

In 7s >rore

3?1D"1 311@1)

(ro-th 200?! 10/200D!200? !31.0 (,ercent) I ,orts 200D!0? 200?!10 1)3;?1 102300

!20."

;"D0"1 "?@10D

(ro-th 200?! 10/200D!200? !33." (,ercent) 9rade Balance

!23.3

200D!0? 200?!10

!;0@32 !3D1@1

!2);200 !1D)3?3

4igures

%or

200D!0?

and

200?!10

are

,ro0isional

9he trade de%icit %or A,ril! 8une, 200? -as esti ated at B 1))0" illion -hich -as lo-er than the de%icit at B 2D;"2 illion during A,ril! 8une, 200D.

Imports
(i) Import payments, on a +, basis, also continued its declining trend. Imports declined by *).1 per cent in -* of '(()-*( as against a positive gro$th of 4'.) per cent in -* of '((2-().

(ii) ?ccording to the data released by the DG@ID/, the decline in imports is mainly attributed to the sharp fall in oil import payments due to lo$er crude oil prices during -* of '(()-*( (./0 13.) per barrel in -* of '(()-*( as against ./0 **) per barrel in -* of '((2-()). ,E imports recorded a sharp decline of :1.) per cent during -* of '(()-*( as against a sharp increase of ;4.' per cent during -* of '((2-(). ?s per the data released by the Ainistry of etroleum D <atural Gas, Government of India, ,E imports sho$ed a decline of 4:.* per cent during -*

of '(()-*( despite a 7uantity gro$th of *( per cent mainly due to lo$er crude oil price. (iii) ?ccording to the DG@ID/ data, out of the total decline in imports of ./0 '1.; billion in -* of '(()-*( over the corresponding previous 7uarter, oil imports declined by ./0 *1.2 billion (share of 13.* per cent in the decline in total imports during -* of '(()-*( as against :).2 per cent share in total increase in imports during -* of '((2-()), $hile non-oil imports decreased by ./0 ).2 billion (share of 31.) per cent in the decline in total imports during -* of '(()-*( as against 4(.' per cent share in total increase in imports during -* of '((2-()).

Inflo/s 0 1&tflo/s from N*I De osits and 2ocal 3it(dra/als (In $ million) Inflo?s 4==83=9 <R> 4==93=: <PR> 4==:3=; <P> 4==:3=; <PR> <@2> 2;;26 4;6=2 59.=:; ;=85 *utflo?s 277;5 4;444 54.9;; :46; )ocal -it0dra?als 254=: 2:;2; 4=.829 7279

4==;32= <P>

<@2>

22294

;576

778:

#ariation in

Reserves

(i) %he increase in foreign exchange reserves on a +o basis (i.e., excluding valuation) $as ./0 **: million in -* of '(()-*( (as against an accretion to reserves of ./0 ','3: million in -* of '((2-()). >o$ever, the foreign exchange reserves including valuation increased by ./0 *3.' billion during -* of '(()-*( implying that the increase in reserves during this period $as mainly due to valuation gains as the ./ dollar has depreciated against ma#or currencies. F? ress =elease on the sources of variation in foreign exchange reserves is separately issuedG. (ii) ?t the end of Cune '((), outstanding foreign exchange reserves stood at ./0 '1:.* billion

4E5 INDI%A!1*S PA5MEN!S

16

INDIA'S

BA2AN%E

16

$%%&'%( "erchandi.e Trade

$%%('%)

$%%('%) $%%)',% *+,- *PR- *+,- *P-

Ex orts ($ on BoP 28.9 #asis) 7ro/t( *ate

5.4

43.0

-21.0

( ercent) Im orts ($ on BoP #asis) 7ro/t( *ate 35.2 ( ercent) %r&de 1il Prices$ Per 79.2 Barrel (Indian Bas8et) !rade #illion)
Invisi les -19.6

14.3

42.9

82.4

118.8

63.9

Balance

($

-91.6

-119.4

-31.4

-26.0

Net In"isi#les Billion)

($

74.6

89.6

22.4

20.2

Net In"isi#les S&r l&s9!rade Deficit 81.4 (Percent) In"isi#le *ecei ts9%&rrent *ecei ts (Percent) Ser"ices *ecei ts9%&rrent *ecei ts (Percent) Pri"ate !ransfers9%&rrent *ecei ts (Percent)

75.0

71.3

77.7

47.2

48.1

44.2

49.9

28.6

30.0

26.2

28.9

13.8

13.7

13.8

17.2

Current Account

%&rrent Billion)

*ecei ts

($

314.8

337.7

88.1

77.5

%&rrent Payments ($ 331.8 Billion) %&rrent Acco&nt -17.0 Balance ($ Billion)

Capital Account

367.6

97.1

83.3

-29.8

-9.0

-5.8

7ross %a ital Inflo/s 433.0 ($ Billion) 7ross %a ital 325.0 1&tflo/s ($ Billion) Net %a ital 6lo/s ($ 108.0 Billion) Net 6DI9Net %a ital 14.3 6lo/s (Percent) Net Portfolio In"estment9Net ca ital 27.4 6lo/s (Percent) Net E%Bs9Net ca ital 21.0 6lo/s (Percent)

302.5

90.9

78.5

293.3

79.7

71.8

9.1

11.1

6.7

191.3

80.5

101.4

-153.4

-37.8

122.7

89.2

13.2

-5.3

Reserves

Im ort %o"er of 14.4 *eser"es (In mont(s) 1&tstandin) *eser"es as at end eriod ($ 309.7 Billion)

10.3

13.3

11.4

252.0

312.1

265.1

#ross

apital

Inflo?s

and

*utflo?s

<In

Million>

#ross Inflo?s !EAD' April3Marc0 4==:3 =; P /oreiBn Direct InCestment 4==:3 =; <@2> <PR> 1213@ 4==;32= <@2> <P>

#ross *ut flo?s April3Marc0 4==:3 =; P 4==:3 =; <@2> <PR> 31@0 4==;3 2= <@2> <P> 2@@?

3;2)D

?;12

1D@;2

Portfolio InCestment External Assistance

12D;)1 "0@;" ),0"2 ?0?

3D;2) D21

1"2;D) ""?@) 2,"0" ))D

303)@ @3@

External ommercial 1),3D2 Borro?inBs NRI Deposits BankinB capital excludinB NR Deposits '0ort3term trade redits 3@,0D?

2@;0

20?2

@,22"

12?3

2""D

?0;3

111@2

32,@?? D2"?

?3)"

2@,?0?

12DD?

""0)

3))?;

1100@

?)DD

3?,@3"

101@;

1012;

"))2?

@@@?

13211

Rupee De1t 0 'erCice *t0er apital (*(A) 12,3?1 5=4.67 8

0 21@; ;=9:6

0 1;3; 9:6:;

101 D210

30 2;@D

23 32); 92975

4;552= 9;95;

Business Item

'erCices 7ecei,ts April3Marc0

<In

A #a+ ents

Million>

April3Marc0 4==:3 4==93 4==83

4==:3 4==93 4==83=9

=; P (rade Related

=: PR

=; P

=: PR

=9 R

2,00D 2233 132)

1,;"2 22D) 1D01 3,)12 3;)3 3"D"

Business & ManaBement ",D"@ ""33 ""@; onsultancD Arc0itectural. EnBineerinB 1,@)? 31"" 3")@ & ot0er (ec0nical Maintenance 2,?D0 2D;1 2;3D of *ffices *t0ers (*(A) ",;)@ "100 2;"D 28.47 2899 26766 2 2

3,10; 31@3 302)

3,2D3 3,"?; ",032 3,@2; ",10D 3,)22 27.48 2892 27:88 ; 7

Need for exports & imports

I ,orts and E3,orts o% goods do inate the interde,endence o% countries in the -orld econo +. E3,orts are the ,art o% a countr+As do estic ,roduction that is sold to residents o% other countries. I ,orts are the ,art

o% a countr+As do estic consu ,tion and/or in0est ent that is ,urchased %ro %oreign ,roducers. uch necessar+ %or a countr+. Because i% a

An e3,ort and i ,ort is 0er+

countr+ had no i ,ort or e3,ort, the+ -ouldnEt *e a*le su,,ort the sel0es. I ,ort is -hen a countr+ *rings things in that the+ canEt su,,l+. And e3,ort is -hen a countr+ gets ,aid to gi0e a-a+ e3tra stu%% the+ ha0e. Iithout i ,ort and e3,ort, a countr+ -ould onl+ ha0e -hat the+ could su,,l+ on their o-n. In order to de0elo, countr+As econo +, it has to i ,ort -hat it doesnAt ,roduce. 9he ,a+ ent %or all these i ,orts can *e done onl+ through e3,orting the ,roducts and earnings through 0alua*le %oreign e3change.

NEED */ IMP*R(' IN INDIA

:n the i ,orts side, India has *een in a disad0antageous ,osition, ad0anced countries -hich are ca,a*le o% ,roducing and selling al ost e0er+ co co ,etition. I ,orts are essential to ,rotect do estic industries and to ,ro ote industrial de0elo, ent. Since inde,endence, the go0ern ent o% India has *roadl+ restricted %oreign co ,etition through a 'udicious use o% i ,ort licensing, i ,ort 5uotas, i ,ort duties and in e3tre e cases, e0en *anning i ,ort o% s,eci%ic goods. odit+ at lo- ,rices. 9his eant that India could %oreign not de0elo, an+ industr+ -ithout ,rotecting it %ro

NEED */ EEP*R(' IN INDIA

9o ,a+ %or its i ,orts and to %or e3,orting= 9he %irst and the ,ri ar+ reason %or e3,orting are to earn %oreign e3change. 9he %oreign e3change not onl+ *rings ,ro%it %or the e3,orter *ut also i ,ro0es the econo ic condition o% the countr+. ini i<e de,endence on %oreign countries, an+ good reasons e3,ansion o% e3,orts -as 0er+ essential. 9here are

9he co ,anies that e3,ort their goods are *elie0ed to *e e3,orting co ,an+ has sur0i0e the test in standards. 4ree e3change o% ideas and cultural .no-ledge o,ens u, i *usiness and trade o,,ortunities %or a co ,an+.

ore

relia*le than their counter,art do estic co ,anies assu ing that eeting international

ense

:ne starts 0isiting custo ers to sell oneAs goodsF he has an o,,ortunit+ to start e3,loring %or ne-er custo ers, state!o%!the!art achines and 0endors in %oreign lands.

Chapter-2 Objectives & Methodology

*1jectiCe of studDF
Pri%ar& O'(ecti)e

9he ain o*'ecti0e o% stud+ is to loo. a%ter the ,attern o% to*acco e3,orting ,rocess in India and to ha0e a *rie% .no-ledge on e3,ort docu entation ,rocedure. Secon ar& O'(ecti)e 9o understand a*out the organi<ations su,,orting the to*acco industr+ and to get %a iliar -ith 0arious ter s, a**re0iations, and other ter inolog+ used in the e3,ort ,rocess.

Met0od of studDF
9he data collection has in0ol0ed in t-o ste,s

Pri%ar& ata
9he ,ri ar+ data -as collected *+ interacting -ith the e3ecuti0es and ,ri ar+ sta%%ing ,eo,le in the co ,an+.

Secon ar& ata

9he secondar+ data -as collected %ro 'ournals, internet, *oo.s, ne-s ,a,ers and so e others ,rescri*ed *oo.s as suggested.

'cope & limitations of t0e studDF

9his ,ro'ect -or. is %ocussed and con%ined to understanding acti0ities in0ol0ed in the to*acco e3,ort ,rocess and related e3,ort docu entation.

Stud+ on the organi<ations su,,orting the to*acco industr+ and e3,ort trade is ini i<ed to gi0e ore i ,ortance to the E3,ort 2 $ocu entation ,rocess.

Chapter-3 Company profile

Chapter-4 Indian Tobacco industry

Indian (o1acco IndustrD

Introduction

7ight %ro the *eginning o% 1@th centur+, 9o*acco has *een ,la+ing an i ,ortant role in the %ield o% international trade. 9o*acco is one o% the ain co ercial cro, o% India, to*acco consu ,tion is 0er+ high throughout the -orld as -ell as the de and o% to*acco is ulti ate. to eet the de and o% consu ers, an+ countries as India, >hina, Bra<il are ,roducing huge a ount o% to*acco e0er+ +ear. India is the third largest ,roducer and eighth largest e3,orter o% to*acco and 9o*acco ,roducts in the -orld. Ihile IndiaAs share in the -orldAs area under to*acco cro, has risen %ro ?C to 11C in the last 3 decades, its share in ,roduction has inched u, %ro DC to ?C in to*acco Industr+. Asia and A erica, together account %or @)C o% -orldAs ,roduction o% to*acco. >hina, /SA and India are the three leading to*acco!,roducing nations in the -orld.

Production area
Andhra #radesh, (u'arat and 6arnata.a account %or the a'or ,ortion (D0C) o% ra- to*acco ,roduction in India. 9hese states ,roduce 4>J to*acco, *idi to*acco, natu to*acco, cigar to*acco, cheroot to*acco and snu%% to*acco. :ther states -hich anu%acture to*acco is Maharashtra, :rissa, 9a il &adu, Iest Bengal, /# and Bihar.

#ro?t0 promotional actiCities

4>J (4lue cured Jirginia) to*acco ,roduction and is regulated *+ 9he 9o*acco Board. A*out 0.@) n gro-ers are engaged in to*acco ,roduction. Eas+ a0aila*ilit+ o% to*acco has hel,ed de0elo, ent o% cottage industr+ %or anu%acture o% che-ing to*acco, cigar, cheroot, %lu3 etc. Bidi industr+ ,ro0ides e ,lo+ ent to "." n rural ,eo,le, ostl+ -o en and the cigarette industr+ ,ro0ides e ,lo+ ent to 0.)) n ,eo,le. 9he to*acco industr+ in India ainl+ co0ers anu%acturing o% cigarettes, *idis, cigars, cheroot, hoo.ah, snu%% and other che-ing to*acco li.e <arda, gut.ha, and ,an asala.

(Dpes of (o1acco
9o*acco is ainl+ concentrated in the states o% Andhra #radesh, 6arnata.a, (u'arat, Maharashtra, Bihar, 9a il &adu, and Iest Bengal etc. >igarette to*acco is ainl+ culti0ated in Andhra #radesh and 6arnata.a -hereas Bedi to*acco is gro-n in (u'arat, 6arnata.a, and Maharashtra. >igar and cheroot to*acco are also gro-n in the states o% 9a il &adu, Andhra, and -est Bengal. -hereas che-ing to*acco is gro-n in 9a il &adu, (u'arat , Bihar, -est Bengal, and utter #radesh. Goo.ah to*acco is gro-n in utter #radesh and -est Bengal.

(o1acco mainlD exists in t?o tDpesF

4lue cured to*acco= &on %lue cured to*acco= 1) 4lue cured Jerginia = 9his .ind o% to*acco is ostl+ used in the ,re,aration o% cigarettes. Most o% the countries are concentrating to ,roduce 4>J to*acco due to high de and in it. 2) &on %lue cured to*acco= 9his .ind o% to*acco is generall+ used %or anu%acturing *idis, cigars, ,an asala, snu%% and che-ing to*acco. 9here ha0e *een signi%icant i ,ro0e ent in the ar.eting o% 4>J to*acco -ith the esta*lish ent o% 9o*acco Board in India. E3cluding 4>J to*acco the ethod o% ar.eting o% to*acco in India di%%ers %ro t+,e to t+,e and state to state.

In the case o% 4>J to*acco the go0ern ent o% India and the 9o*acco Board announces ini u su,,ort ,rice e0er+ +ear at the *eginning o% the to*acco ar.eting season -ith an o*'ecti0e o% ,rotecting the interest o% the gro-ers o% 4>J to*acco in India.

Different tDpes of / & to1acco Carieties

'*I) 9Y#ES! (Its characteristics, 'urisdiction, a0erage +ield, e3,ort ,otential, cro, season) a'or 0arieties gro-n,

In India, 4>J (4lue >ured Jirginia) 9o*acco is culti0ated ainl+ in the states o% A# 2 6arnata.a %ollo-ed *+ :rissa 2 Maharashtra in s all areas in 0arious soil <ones under 0aried rain%all conditions. And0ra Prades0F ! (including :rissa 2 Maharashtra regions) Nort0ern Black 'oils <NB'> 9he *lac. soils located in the districts o% 6ha a , 6ari nagar, Iarangal, East and Iest (oda0ari constitutes the &orthern Blac. soils. 9he cro, is gro-n under rain %ed conditions ,resentl+ in around 2)00 hectares. 9he cro, is generall+ ,lanted in :cto*er and har0ested in $ec! 4e*. Iith culti0ation o% high +ielding 0arieties ,er hectare +ields are u, to 1)00!1@00 6gs. 9he suita*le 0arieties %or culti0ation in this soil <one are Ge a, and J911)D. 9he to*acco ,roduced is good *odied -ith length+ lea%, le on orange %lash+ in colour -ith ediu nicotineAs. 9he to*acco is ostl+ ,re%erred *+ >IS and Eastern Euro,ean Mar.ets. 9he do estic cigarette industr+ uses 0er+ little 5uantit+ o% to*acco %ro this region. entral Black 'oils < B'> 9he *lac. soils e3isting in 6rishna and (untur districts o% Andhra #radesh and (adchiroli district o% Maharashtra state constitute the central *lac. soils. 9he ain 0arieties gro-n are (o-ta i, Ge a, and J911)D. 9he cro, is ,lanted in :ct!&o0 and har0ested in $ec!4e*.

9he cro, is gro-n under rain %ed conditions ,resentl+ in around 2D00 hectares. 9he +ields are u, to 1)00 to 1;)0 6gs/Ga. 9he to*acco ,roduced in this tract is al ost si ilar to that o% &orthern *lac. soils. #re%erred %or e3,orts ostl+ to >IS, Eastern Euro,ean and Iest Asia 2 &orth A%rican ar.ets, 8a,an also used to i ,ort si<a*le 5uantities o% to*acco %ro select areas o% this region in the ,ast. 9he do estic cigarette industr+ also uses si<ea*le 5uantit+. Go-e0er, the area under 4>J 9o*acco culti0ation is graduall+ decreasing as gro-ers are s-itching o0er to alternati0e cro,s %or 0arious reasons. 'out0ern Black 'oils <'B'> 9he *lac. soils ,resent in #ra.asa and &ellore districts nearer to the coast constitute the Southern *lac. soils. #resentl+ the cro, is culti0ated

in a*out 30,000 hectares. 9he cro, is ,lanted in :ct!&o0 and har0ested in $ec!4e*. 9he ,o,ular 0arieties gro-n are Ge a, J911)D and Siri. 9he a0erage +ields are around 1)00 6gs/ha. Iith the culti0ation o% high +ielding 0arieties, the a0erage ,roducti0it+ le0els are on increase at a*out 1)00!1;00 .gs ,er ha. 9he to*acco ,roduced is le on to le on orange in colour and ediu *odied. 9his to*acco is rated *etter in 5ualit+ than the &BS/>BS to*accos. It is highl+ a ena*le %or *lending -ith other st+les o% to*acco in >igarette anu%acturing and hence ,re%erred %or e3,ort to Iest Asia, &orth A%rican countries (Eg+,t and 1i*+a), &e,al and to >IS countries. Si<ea*le 5uantities are also e3,orted to Iest Euro,e. Gal% o% the ,roduction goes %or do estic cigarette anu%acturing. 'out0ern )iB0t 'oils <')'> 9he light soils e3isting in #ra.asa and &ellore districts constitute the southern light soils (S1S). #resentl+ this cro, is culti0ated in a*out ;),000 hectares. 9he soils are suita*le %or gro-ing good 5ualit+ to*acco as a se i onsoon cro,. 9he suita*le 0arieties are 8a+ashree, Ge a and J9!11)D. 9he cro, is ,lanted in Se,te *er!:cto*er and har0ested in $ec!8an.

9he +ields are around 1000 .gs/ha. Erratic rain%all and drought situations generall+ a%%ect +ields in this <one. 9he lea% is le on to le on orange in colour, thin to ediu *odied, ri,e and o,en grain -ith good aro a and lo- in nicotine. 9his cro, is ,re%erred %or e3,ort to /6, South East Asia and other EE> countries. All the M&>s ,re%er this to*acco. 9he do estic anu%acturers use su*stantial 5uantities o% this region to*acco %or ho e consu ,tion. Nort0ern )iB0t 'oils <N)'> 9he light soils e3isting in East and Iest (oda0ari and ,arts o% 6ha a districts constitute the &orthern light soils (&1S). #resentl+ this cro, is culti0ated in a*out 2),000 ha. 9he soils are sand+ to sand+ loa . 9he cro, is raised -ith the hel, o% @!D irrigations, ,roducing se i %la0our%ul to*acco. 9he cro, is ,lanted in Se,t!:ct and har0ested in $ec! 4e*. 9he +ields are ranging *et-een 1D00!2000 .gs/ha de,ending on stage o% to,,ing. 9he suita*le 0arieties are 632;, 1;/103, M>&air!12, (old Strea. and &1S!". 9he lea% is ediu to hea0+ *odied, ri,e o,en grained, orange to dee, orange in colour and %lu%%+ in nature. Mostl+ e3,orted to /6 2 other Euro,ean countries 2 South East Asia. All the M&>s ,re%er this to*acco. Si<ea*le 5uantities are also used in do estic

anu%acturing. 9he 1ight soils e3isting in the 7a+agada district o% :rissa and Ji'a+anagara district o% Andhra #radesh constitute Eastern 1ight Soils and to*acco is culti0ated in an area o% around 200 ha. And the characteristics o% to*acco ,roduced is al ost si ilar to that o% &orthern 1ight Soils o% Andhra #radesh. KARNA(AKA Karnataka )iB0t 'oils <K)'> 9he light soils e3isting in M+sore, Gassan, Shi oga, $a0angere, >oorg, >hi..a agalore and >hitradurga districts constitute the light soils o% 6arnata.a. 9he cro, in this transitional <one is raised as a onsoon cro, -ith su%%icient rain%all during the cro, gro-th ,eriod. #resentl+ the cro, is gro-n in a*out D)000 hectares. 9he cro, is ,lanted in the last -ee. o% A,r!Ma+ and har0ested in 8ul+!Aug. #er ha +ields are around 12)0 .gs. 9he 0arieties under culti0ation are 6anchan, Bha0+a, 632;, 7atna and 6S9!1?. 9he to*acco ,roduced is light to ediu *odied, le on orange to orange in colour, so%t in nature, o,en grained -ith nicotine o% 1.) to 2.2C. Iest Euro,ean, so e A%rican, Middle East and South East Asian countries ostl+ ,re%er this to*acco.
Different tDpes of / & to1acco Carieties

Brie% note 9his to*acco is on the t+,e o% neutral o% 9o*acco character and *lends -ell -ith an+ to*acco #lantation

It is ri,e 9his to*acco is to*acco, se i! a good %iller lo%la0our%ul to -ith nicotine and %la0our%ul -ith good aro a and *lends -ell -ith e3cellent aging an+ to*acco. ,ro,erties Se,te *er :cto*er

9his is lonicotine, good neutral %iller and *lends -ell -ith an+ to*acco.

Mar.eting

Mid :cto*er to Earl+ :cto*er %irst -ee. o% &o0e *er in Andhra #radesh. Earl+ Ma+ in 6arnata.a 4e*ruar+ to 4e*ruar+ to 8une 8une in Andhra #radesh. Se,te *er to 4e*ruar+ in

to Earl+ Ma+

8anuar+ to 8une

Se,te *er 4e*ruar+

to

6arnata.a #h+sical >haracteristics >olor = 1ea% si<e = #ore Jolu e ( l/gra ) = 4illing Jalue (cc/gra ) = &icotine = 7educing Sugars = >hloride (C) = 1e on Mediu 1arge 0.13 to 0.1) 2.; to 2.D 1e on!:range to :range to 1arge 0.13 to 0.1) 2.; to 3.) 1e on!:range to :range S all Mediu 0.13 to 0.1) 2.; to 3.) = 1e on! :range to :range to 1arge 0.13 to 0.1@

2.? to 3.D

>he ical >haracteristics 1.) to 2.2 10 to 1D = 0.) to 0.? 1.) to 2.2 10 to 1D 0.) to 1.) 1.) to 2.2 10 to 1D 0.) to 0.? 1.2 to 2.) 10 to 23 0.2 to 0.;

(o1acco IndustrD
9o*acco industr+ in India contri*utes in an uni5ue anner to se0eral i ,ortant %acets o% the Indian econo ic co0ering re0enue, e3,ort, e ,lo+ ent and ($# gro-th. Iorld to*acco de and is e3,ected to increase until the +ear 2010 due to ,o,ulation and inco e gro-th, *ut at lo-er rates than in the ,ast, according to a ne- stud+ ,u*lished *+ 4A: toda+. Ihile in de0elo,ed countries to*acco s o.ing is set to continue to decline, in de0elo,ing countries consu ,tion -ill increase, the re,ort said (#ro'ections o% to*acco ,roduction, consu ,tion and trade to the +ear 2010). Iorld to*acco ,roduction is ,ro'ected to reach o0er @.1 illion tonnes o% to*acco lea% in the +ear 2010, u, %ro ).? illion tonnes in 1??@/??. 9his is lo-er than the record to*acco ,roduction o% 1??2 o% @.) illion tonnes.

9he nu *er o% s o.ers is e3,ected to gro- %ro 1.1 *illion in 1??D to around 1.3 *illion in 2010, according to the re,ort. 9his is an increase o% a*out 1.) ,ercent annuall+. $es,ite the o0erall increase o% to*acco use, 4A: e3,ects consu ,tion ,er adult to decline *+ around 10 ,ercent *+ 2010, and indi0idual consu ,tion -ill ,ro*a*l+ *e around 1." .g ,er +ear (%ro around 1.; .g in 2000). A,,l+ing an aggressi0e anti!s o.ing and anti!to*acco ,olic+, to*acco consu ,tion ,er ,erson could e0en dro, *+ 20 ,ercent, 4A: said. >onsu ,tion ,er ,erson is declining in de0elo,ed, and odestl+ declining in de0elo,ing countries, including >hina. >igarette s o.ing is the ost ,re0alent t+,e o% to*acco consu ,tionF anu%actured and hand rolled cigarettes account %or a*out D) ,ercent o% all to*acco consu ed -orld-ide. Iith around 320 illion s o.ers, >hina is the -orldAs a'or cigarette consu er. A*out 100 countries ,roduce to*acco, the a'or ,roducers are >hina, India, Bra<il, the /S, 9ur.e+, Ki *a*-e and Mala-i, -hich together ,roduce o0er D0 ,ercent o% the -orldAs to*acco. >hina alone accounts %or o0er 3) ,ercent o% -orld ,roduction.

(o1acco onsumption
B+ 2010, the share o% de0elo,ed countries in -orld to*acco consu ,tion is ,ro'ected to *e onl+ 2? ,ercent (1??D= 3" ,ercent), the share o% de0elo,ing countries -ill *e @1 ,ercent. 9he o0erall ,attern o% to*acco consu ,tion is in%luenced *+ t-o di0ergent trends. 9o*acco de and in de0elo,ed countries is declining slo-l+ and -ill reach a*out 2.0) illion tonnes in 2010. 9his is 10 ,ercent lo-er than 2.23 illion tonnes consu ed in 1??D. 9his can *e attri*uted to a slo-er ,o,ulation and inco e gro-th. In addition, in de0elo,ed countries and increasing a-areness o% the da aging health e%%ects o% s o.ing, together -ith the anti!s o.ing easures o% go0ern ents including intensi%ied anti!s o.ing ca ,aigns,

the *anning o% ad0ertising and increased ta3ation, ha0e had a strong negati0e e%%ect on consu ,tion o% to*acco ,roducts, the re,ort said. But ore to*acco -ill *e s o.ed in de0elo,ing countries, -here to*acco consu ,tion is e3,ected to gro- to ).0? illion tonnes *+ 2010 ( %ro ".2 illion 1??@/??). 9his is an a0erage annual gro-th rate o% 1.@ ,ercent *et-een 1??D and 2010, signi%icantl+ lo-er than the 2.D ,ercent rate o*ser0ed in de0elo,ing countries *et-een 1?@1 and 1??D. A a'or ,art o% the ,ro'ected increase in de and is e3,ected to *e in the 4ar East, ,articularl+ in >hina. 9he share o% >hina in total -orld to*acco de and is li.el+ to re ain around 3@ ,ercent in 2010. In India, the second ost i ,ortant to*acco consu er, s o.ing o% con0entional cigarettes accounts %or onl+ 2) ,ercent. Most ,eo,le consu e to*acco in the %or o% non!cigarette ite s such as hand!rolled *idis, che-ing etc. 9otal de and %or to*acco in India is li.el+ to continue to increase, *ut ore slo-l+ than in the ,re0ious decades. In 1atin A erica, to*acco use in 1??D -as a*out 0."D illion tonnes, o% -hich 'ust o0er hal% -as in Bra<il. $e and in the region is e3,ected to increase odestl+ until 2010, and ost o% the increase -ill occur in Bra<il. In A%rica, total to*acco de and increased in the 1??0s -ith record gro-th o% 3.) ,ercent ,er +ear. (ro-th %or the ,eriod to 2010 is e3,ected to continue at a si ilar rate. In the &ear East, the de and %or to*acco is e3,ected to gro- at 0."2C, a gro-th rate a little lo-er than e3,erienced in the 1?? >he-ing to*acco has *een a tradition in India %or centuries. :% the total a ount o% to*acco ,roduced in the countr+, around "DC is in the %or o% che-ing to*acco, 3DC as *idis, and onl+ 1"C as cigarettes. 9hus, *idis, snu%% and che-ing to*acco (such as gut.a, .haini and <arda) %or the *ul. (D;C) o% IndiaAs total to*acco ,roduction. In the rest o% the -orld, ,roduction o% cigarettes is ?0C o% total ,roduction o% to*acco related ,roducts. 9he ,er ca,ita consu ,tion o% cigarettes in India is erel+ a tenth o% the -orld a0erage. 9his uni5ue to*acco consu ,tion ,attern is a co *ination o% tradition and ore i ,ortantl+ the ta3 i ,osed on

cigarettes o0er the last 2 decades. >igarette s o.ers ,a+ al ost D)C o% the total ta3 re0enues generated %ro to*acco. India is the second largest ,roducer o% to*acco in the -orld a%ter >hina. It ,roduced )@2 .gs o% to*acco in 4Y03. Go-e0er, India holds a eagre 0.@C share o% the /S B 30 *n glo*al trade in to*acco, -ith cigarettes accounting %or D)C o% the countr+As total to*acco e3,orts. $es,ite *eing the second largest ,roducer, India is onl+ the ninth largest e3,orter o% to*acco and to*acco ,roducts in the -orld. :ut o% the total to*acco ,roduced in India, onl+ one!third is %lue!cured to*acco suita*le %or cigarette anu%acturing. Most o% the to*acco ,roduce is suita*le %or the anu%acture o% che-ing to*acco, *idis and other chea, to*acco ,roducts, -hich ha0e no de and outside the countr+. In India, three a'or >igarette ,la+ers do inate the ar.et, ,ri aril+ I9> -ith @2C ar.et share, (od%re+ #hilli,s -ith 12C and JS9 -ith DC share o% the ar.et.

Chapter-5 Importance export documents in trade of

(0e Importance of Export Documents in (rade

9rade o0erseas needs the su,,ort o% e3,ort docu ents. :,erations -ith %oreign countries are ade 0er+ co ,le3, the sellers ust e3,lain -hat the+ are selling and the *u+ers ust .no- -hat the+ are *u+ing. 4or that reason, -e use the %ollo-ing e3,ort docu ents= So e o% e3,ort docu ents are used %or co ercial ,ur,oses li.e *ills, notes and -eight ,ac.ing. 9here are also docu ents to guarantee the 5ualit+ o% -hat is *eing e3,orted. Insurance docu ents certi%+ -hat is co0ered *+ insurance. Bills o% lading are e3a ,les o% trans,ort docu ents. 9here are di%%erent e3,ort docu ents that do not o%%er the sa e *ene%its to each user. 1etters o% credit are an instru ent that guarantees to the seller that he or she -ill *e ,aid %or the erchandise sent -hen it atches the criteria set in the contract *+ the i ,orter. Most are irre0oca*le and con%ir ed, -hich eans that the+ cannot *e odi%ied *ut -ith the consent o% the ,arts in0ol0ed. Additionall+, these docu ents relie0e the e3,orter %ro an+ -orr+ a*out non!,a+ ent. 9he e3,ort docu ents can *e re0oca*le or irre0oca*le, con%ir ed or noti%ied.

7e0oca*le docu ents gi0e the holder the a*ilit+ o% odi%+ing the -ithout the consent o% the other ,arts. Ban.s a+ also reser0e the right to gi0e or re%use ,a+ ent. Irre0oca*le= the *an. cannot re0erse its co it ent, -hate0er the changing circu stances o% his client, unless the agree ent o% all ,arties concerned. &oti%ied docu ents gi0e ,rotection to the e3,orter *ut onl+ to a certain degree. 9he+ -ill not co0er %or natural, ,olitical or trans%er!related ,ro*le s. >on%ir ed, -here the co it ent o% the *an.er o% the i ,orter is su,,orted *+ a *an.er in the countr+ o% the e3,orter. 9he e3,orter ust %ull+ res,ect its o*ligations and it is guaranteed to *e ,aid. E3,orters run a series o% ris.s -hen 0enturing into ne- lands. 4irst o% all, the+ ris. not *eing ,aid *+ the i ,orter in the %oreign countr+.

Secondl+, i% the+ do not .no- the ,olitical and econo ic situation o% the countr+ the+ are e3,orting to, the+ ris. losing their one+. Another ris. the+ ta.e is related to the e3change rates. E3,ort docu ents e3ist to relie0e these ris.s. E3,ort docu entation is i ,ortant, as it co0ers all areas o% shi,,ing ite s, %ro ,ac.ing and la*elling to insuring the goods. I ,ortant ite s are *eing shi,,ed *+ rando carriers to %ar!o%% custo ersF itEs necessar+ to %ile accurate ,a,er-or. to ensure deli0er+.

EEP*R( IN EN(I&E'

9he go0ern ent o% India has %ra ed se0eral sche es to ,ro ote e3,orts and to o*tain %oreign e3change. 9hese sche es grants incenti0e and

other *ene%its. 9he %e- i ,ortant e3,ort incenti0es, %ro 0ie- o% indirect ta3es are *rie%ed *elo-=

the ,oint o%

1. 4ree 9rade Kones (49K). 2. Electronic Gard-are 9echnolog+ #ar./ so%t-are technolog+ ,ar.s. 3. Ad0ance 1icense / $ut+ e3ce,tion Entitle ent sche e($E4>) ". E3,ort #ro otion >a,ital (oods Sche e (E#>().

INDIAN EEP*R('

Indian e3,orts ha0e gro-n at a rate o% nearl+ 22C. So e co IndianAs e3,orts are

odities ain

ha0e en'o+ed %aster e3,ort gro-th than others. So e o% the

Exports

= B1)) *illion %.o.* (200? est.)

#oods exported

F So%t-are, ,etroleu ,roducts, te3tile goods, ge s and 'e-eler+, engineering goods, che icals and leather anu%actures.

Main export partners

F /S 12.3C,

/AE ?."C,

>hina ?.3C (200D)

Imports

F B232.3 *illion %.o.* (200? est.)

Import Boods

F crude oil,

achiner+, ge s, %ertili<er, che icals

So%t-are, 9o*acco, >otton, 9e3tiles, 8ute good, tea, >o%%ee, 7ice, Iheat, >ocoa ,roducts, 8a s 8uices 2 ,reser0ed 0egeta*les etc. India e3,orts its goods to so e o% the leading countries o% the -orld such as= /SA BE1(I/M 7/SSIA >GI&A

RE'ER&E' */ /*REE
9he %oreign e3change %inancial ar.et (4:7EH) is a -orld-ide decentrali<ed ar.et %or the trading o% currencies. 4inancial centres around

the -orld %unction as anchors o% trading *et-een a -ide range o% di%%erent t+,es o% *u+ers and sellers around the cloc. -ith the e3ce,tion o% -ee.ends. 9he %oreign e3change 0alues o% di%%erent currencies. 9he ,ri ar+ ,ur,ose o% the %oreign e3change ar.et is to assist ar.et deter ines the relati0e

international trade and in0est ent, *+ allo-ing *usinesses to con0ert one currenc+ to another currenc+. 4or e3a ,le, it ,er its a /S *usiness to i ,ort Euro,ean goods and ,a+ Euros, e0en though the *usinessAs inco e is in /S dollars. It also su,,orts s,eculation, and %acilities the carr+ trade in -hich in0estors *orro- lo-!+ielding currencies and lend (in0est in) high!+ielding currencies and -hich co ,etiti0eness in so e countries. a+ lead to loss o%

Chapter-6

THEORETICAL FRAMEWORK OF EXPORT PROCEDURE

(!E*RE(I A) /RAME-*RK */ EEP*R( PR* ED%RE

EEP*R( PR* ED%RE

>hoosing the *u+er. 7e5uire ent o% license. Sa ,ling. &egotiations. Indication letter. 4inancial arrange ents. #urchase o% to*acco. Insurance. >lassi%ication o% to*acco 9hreshing ,rocess. 4u igation. Ins,ection. Shi,,ing instructions. Shi, ents.

9hese are the ste,s in0ol0ed in e3,ort ,rocedure. 1et us see into a *rie% detail=

!**'IN# (!E B%"ER=

Be%ore entering into trade the su,,lier has to choose the *u+ersA -here their ,roducts ha0e

ar.et

ore de and. 9he trader has to .no- the aintain trade

geogra,hical, ,olitical and social situation o% the countr+. I% the trader satis%ies -ith the conditions o% the countr+, then the+ -ill relations -ith that countr+.

RE@%IREMEN( */ )I EN EF

A%ter selecting the

ar.et -e ha0e to ta.e license to e3,ort goods %ro 4or e3,ort o% goods the %ollo-ing

one countr+ to another countr+. license should *e needed.

1) E3,ort 2 I ,ort license. 2) 9o*acco Board license. 3) 7A9 (sale ta3) license.

'AMP)IN#F

According to the re5uire ent o% the *u+er the e3,orter ha0e to see the ,ractical a0aila*ilit+ o% the ,roduct. 9he 5ualit+ o% the ,roduct ust *e .no-n to the *u+er through sa ,ling. 9he ,ac.ed sa ,les are sending to the *u+er %or %uture e0idence. 9he sa ,les are send to *u+er, agent. :ne

sa ,le

ust *e -ith the e3,orter -hich is use%ul to chec. the 5ualit+ o%

e3,orting goods. $e,ending u,on the re5uire ent o% the *u+er sa ,les -ith che istr+ (nicotine, sugars 2 chlorides) ust *e dis,atched in lo-er 5uantit+ (2)0g s) through air cargo, E! ail or *+ sending ,hotos as grade -ise and *+ .ee,ing a counter sa ,le -ith us. ounter 'ampleF3Ga0ing a sa ,le o% the e3,orted ,roduct -ith us and the sa e sa ,le -ith the i ,orter .e,t in the dee, %ridge to 5ualit+ -e send in *ul. to the i ,orter. atch the

A sa ,le -ith us sa e sa ,le -ith >usto er

NE#*(IA(I*N'=

:nce the sa ,les are acce,ted then negotiation o% ,rice 2 ,a+ ent conditions is done. Ie -ill get indication letter in ter s o% grades. In general negotiations re%ers to

#rice #ac.ing details >o ercial in0oice

Ieight list

A#REEMEN(F

A%ter the a,,ro0al o% ,a+ ent ter s, a contract is

ade -ith the

custo er according to his ter s and conditions. In order to a0oid dis,utes, it is necessar+ to enter into an e3,ort contract -ith the o0erseas *u+er. 4or this ,ur,ose, e3,ort contract should *e care%ull+ dra%ted incor,orating co ,rehensi0e *ut in ,recise ter s, all rele0ant and i ,ortant conditions o% the trade deal. 9here should not *e an+ a *iguit+ regarding the e3act s,eci%ications o% goods and ter s o% sale including e3,ort ,rice, and distri*ution schedule etc. ode o% ,a+ ent, storage ethods, t+,e o% ,ac.aging, ,ort o% shi, ent, deli0er+

#roduct, Standards and S,eci%ications. Luantit+, Lualit+. Ins,ection. 9er s o% deli0er+. #eriod o% deli0er+. 9a3es, $uties 2 >harges. 9otal 0alue o% contract. #ac.ing, 1a*eling 2 Mar.ing.

 9er s o% ,a+ ent.

/INAN IA) ARRAN#EMEN(F

4or the sa.e o% e3,orts -e need so e ca,ital. 9hough the ca,ital %or s are di%%erent, the *an.s are *eco ing ain source to ,ro0ide ca,ital %or e3,orts. &or all+ a *an. allo-s %inance %or e3,orts at D.@)C interest %or the encourage ent o% e3,orts. 9he insurance co0erage %or e3,orts is a*out 1D0da+s. Ban. loan is gi0en -ith suret+ -hich is called M>:11E9E7A1 ASS/7A&>EN.

P%R !A'E */ (*BA

9o*acco is ,urchased %ro ,lat%or acce,ts

*F
9:BA>>: B:A7$ through auction illion .gs. 9he to*acco *oard auction %or s *+

,lat%or s. 9he ideal 5uantit+ o% to*acco to *e handled in an auction in Indian conditions is ) to ; ore than 10 illion 6gs. A ong the 0arieties the trader has to

select the de anded 0ariet+. #urchase o% to*acco %ro sending M9E>G&I>A1 B/YE7SN.

)A''I/I A(I*N */ (*BA

(rading o% to*acco 9hreshing o% to*acco Storage in -arehouses 4u igation

*F

<2> #radinBF !
(rading is done as ,er the re5uire ent o% the custo ers. A%ter the *ales are *rought their ,osition are -atched and according to their condition the+ are re o0ed %ro .ee, the *ales and i% the+ are dried -ater to oisture the lea0es is s,rin.led o0er the lea% and gunn+ *ags are ,laced o0er the -et, -hen the+ are ha0ing ,ro,er

are graded as ,er classi%ication. 9hen the+ are se,arated (and the+ are) ,ac.ed and ta.en to threshing ,lant. 9o ha0e a *rie% idea, so e o% the grades are as %ollo-s

#radinB Process
(*BA * PR* E''IN#

9here are 0arious %or s o% to*acco ,rocessing threshing is the ain

ethods. 9i,,ing and ost co on idri*

ethod in use toda+. 9his is the each indi0idual lea% (la ina).

,rocessing techni5ue -here the o*'ecti0e is to re o0e the (*ac.*one ste ) %ro

<I> (!RE'!IN# PR*

E''=

9he ,rocess o% threshing to*acco is co ,lete and in0ol0es a series o% ste,s -here the ,roduct is conditioned -ith heat and oisture to hel, the ,roduct *eco e so%t and ,lia*le. 9he threshers hel, se,arate the idri* %ro the la ina *+ a tearing action -hich is created *+ rotors -ith *oth %i3ed and rotar+ .ni0es ,laced a*o0e a sha,ed *as.et o% di%%erent ,atterns and si<es. :nce this is

done 0arious air se,aration de0ices, .no-n as classi%iers, are used to se,arate the lights, the la ina %ree o% ste la ina still attached to the ste . $ue to the nature o% to*acco lea% not all la ina is re o0ed on a single ,ass o% threshing and se,arating. 9here%ore this ,rocess occurs as ti es as re5uired through the ,rocessing line to ensure an+ a3i u %ro the Mhea0iesN, the

re o0al o% la ina in as large as ,ossi*le si<es -ith as least da age and stress to the la ina as ,ossi*le. 9he industrial standard %or this is nor all+ through ) stages o% threshing -ith a 0ar+ing nu *er o% classi%ier to achie0e a3i u e%%icienc+.

:nce threshing is co ,leted all the ,roducts ,ass through a dr+ing ,rocess -here the co ,lete %lo- o% ,roduct is su*'ected to heated air %lo-s, %ro *oth a*o0e and *elo- the ediu o% trans,ort o% the oisture -ithin each ,roduct .no-n as an a,ron. Gere the contained the ,articles to a

indi0idual ,article -ill, through os osis, intentionall+ *e dri0en out o% easured ,ercentage re aining in the collecti0e oisture le0el. 9his is done oisture content. ,articles and should a0erage out at an e0en %or ,recise control o% %inal

A%ter the ,rocess the ,roducts are ,ac.ed into s,eci%ic ,ac.ages and ar.ed accordingl+ *e%ore shi, ent to custo ers.

@%A)I(" *N(R*)F

9here are " stages o% 5ualit+ test. 9he+ are 1) #article si<e distri*ution stage (#S$). 2) Ste test 3) %i*re ProcessF A sa ,le o% 3.g %ro redr+er is collected 2 the+ are dro,,ed into ,article si<e distri*utor, -here it distri*utes the la ina into res,ecti0e *o3es according to its la ina si<es. 9here are ) t+,es o% si<es in -hich 1 inch, O inch, P inch, and 1/D inch torn/dust. 9he total ti e ta.en in this stage is @.) in .-eights o% each *o3 is ta.en and noted

'tem testF 9he total ti e esti ated is " in. here the sa ,le is dro,,ed into the thresher -here the ste and -eight is noted. /i1reF In the 1st *o3 there threshing control. I% ste s ore ste ust not *e an+ ste s, i% there are control an+ ste s the 2 la ina gets se,arated. 9he+ are ,assed ,assed do-n is collected through >4> -here la ina is *lo-n u, 2 ste

ust *e sto,,ed. 9he ste

ainl+ de,ends on 5ualit+

are a,,earing than the target -eight then the

5ualit+ in charge instructs to increase cutting the lea% 2 to chec. %or less

)a1oratorDF

In the ,rocess o% threshing sa ,les %ro are grinded into ,o-der *+ grinding

dri%t ,laces are collected 2 the+ achine. 10g s o% each sa ,le is in the+ are ta.en out 2 the

ta.en into s all *o3es ha0ing holes on to, and -eight is noted. 9hen the+ are .e,t in B7ABE&$E7. A%ter 30 -eight is also noted. 9he reduction in -eight is due to decrease in oisture content. 9he re aining is %i*re content 2 to i ,ro0e 5ualit+ that the in charge suggests the redr+ing o,erator. 9hose *o3es are .e,t in :0enAs roo , results can *e %ound in 2" hrs. At the end o% the threshing ,rocess, the lea0es that -e *ought a%ter grading are utili<ed %or di%%erent ,ur,oses, e3ce,t &97M. A%ter all the ,rocess is o0er the %loor is neatl+ s-i,ed and the scra, collected is also sold to do estic *u+ers and is also e3,orted, B+ this -e can sa+ that nothing is -asted in this threshing ,rocess. A%ter the retr+ing ,rocess, the stri,s are ,ressed into *ales, t+,icall+ si<ed %or >"D cases, occasionall+ %or hogsheads or other si<es. 'crap & 'tem= 9he scra, that is o*tained a%ter threshing is also ,ac.ed and sold in the do estic #an etc., ar.et %or the usage o% ,roducing Beedis and

<ii> '(*RA#E IN -ARE!*%'E'=

A -arehouse is a co are used *+

ercial *uilding %or storage o% goods. Iarehouses

anu%acturers, i ,orters, e3,orters, -holesalers, trans,ort

*usinesses. >usto s, etcQQ Gere, the threshed to*acco is stored in the -arehouses until the+ are e3,orted.

<iii> /%MI#A(I*NF

4u igation is a

ethod o% ,est control that co ,letel+ %ills an area -ith

gaseous ,esticides or %u igants to su%%ocate or ,oison the ,ests -ithin. It is utili<ed %or control o% ,ests in *uildings soil, grain, and is also used during ,rocessing o% goods to *e i ,orted or e3,orted to ,re0ent trans%er o% e3otic organis s. 9he %u igated containers should *e enclosed %or a*out @2hrs o% e3,orting.

IN'PE (I*N=

7ando l+ chec.ing o% the ,ac.ed cartons in <eroes or ones to 0eri%+ the 5ualit+ -hether the+ are atched -ith the sa ,le or not.

Ins,ection *+ custo er -hich is called as M#7E!SGI#I&(N ins,ection. :ne technical ,erson and custo er ca e to co ,an+ and ins,ect the storage aterials rando l+. Ge a+ as. an+ che istr+ details. 9he a.ing achine to chec. the trader has to ,ossess a sa ,le cigarette

le0els o% chlorides ordered *+ *u+ers. 9his is called MSM:6E 9ES9N.

Pre3s0ipment Inspection & s0ippinB instructionsF !

7e,resentati0e o% the custo er -ill 0isit the consign ent i.e., is called. I% the sa ,le atches -ith the consign ent, then he allo-s %or the e3,orts. 9hen onl+ he can issue the shi,,ing instructions.

'!IPPIN# IN'(R% (I*N'=

Luantit+ &u *ering $estination address Ban.er address 4inal destination address #a+ ent ter s

9he docu ents are arranges according to the shi,,ing instructions.

*N(RA ( /*R #**D'

At the ti e o% deli0ering the ,roduct, a docu ent is signed *+ the *u+er and e3,orter i.e.., *oth the ,arties. 9he trader should get the ,er ission %ro custo s agenc+ %or clearance.

EEP*R(F 3

As ,er the contract esti ated ti e le%t %or the deli0er+, the e3,orter tal.s to a liner -ho ,la+s a 9here are t-o ain role in loo.ing a%ter the %urther acti0ities. ain acti0ities

1. 4:B (4ree on Board)

2. >I4 (>o

ission Insurance 2 4reight)

/*B </ree on Board>= ! 9his is an acti0it+ -here the e3,orter has the res,onsi*ilit+ o0er the goods u,to recei0ing the *ill o% lading (B/1). I/ < ommission Insurance & /reiB0t>= ! 9his is an acti0it+ -here the e3,orter has the res,onsi*ilit+ o0er the goods till the+ reach the i ,orter. According to our order the liner ,ro0ides the loading o% cartons %ro eans o% trans,ort %or the

the -are house into the container and *ring the dut+ is to chec. the container -hether odit+, 5uantit+ 2 then he seals 2 declaration %or . a.e the

to Inland container Area (I>A). 9his area is under the control o% the custo s de,art ent. 9he custo it is ,er%ect or not as ,er the grades, co

the container 2 issues the Shi,,ing *ill, S$4 %or

9hen the container is %or-arded to liner -ho gi0es the *ill o% 1ading (B/1). Be%ore issuing the B/1, it is the dut+ o% the liner to container sure that container has recei0ed the %ollo-ing certi%icates.

1. 8$ Board o% ser0ices 2. 4u igation >erti%icate 3. >erti%icate o% :rigin. $D Board of serCices= ! >hec.s the container ,ro,erl+ -hether >ontainer has no s ell, holes, 2 ,ro,erl+ ,ac.ed, 2 then issues a certi%icate according to it. /umiBation ertificate= ! 9his de,art ent ,roduces a certi%icate that the container is %ree %ro aintained. *eetles, 2 the oisture content is ,ro,erl+

ertificate of *riBin= ! 9his certi%ies that the goods in the cartons are %ro the res,ecti0e origin countr+ -here the+ are originated.

4inall+ the containers are ,laced in the 0essel, and then all the certi%icates are send to e3,orter. 9hen the e3,orter ,re,ares the re aining docu ents as ordered *+ the *u+er. Examples= ! a) #h+to sanitar+ *) (S# %or %or to*acco e3,orts, i% necessar+ as.ed *+ the *u+er.

9hen *+ adding those docu ents e3,orter ,re,ares re5uired docu ents as >o the ercial In0oice, Sight dra%t etc., then %inall+ a%ter ,lacing all the docu ents in the order e3,orter su* it those docu ents to the *an. %or one+. ainl+ loo.s %or >o ercial in0oice, Sight $ra%t, EH

Gere the *an. gi0e the

co,+ o% shi,,ing *ill ,roduced *+ the custo s de,art ent, later the+ one+ re5uired.

Post s0ipment Inspection= !

A%ter reaching the ,ort, the re,resentati0e o% custo er chec.s -hether the to*acco is as ,er the sa ,le or not, ,ercentage o% the &97M in to*acco 2 the ,ercentage o% ,ests (*eetles) in the to*acco. I% the *eetles are ore than %i3ed a ount then he a+ as. %or legal clai or return the goods.

M*DE */ PA"MEN(
4inancial assistance to the e3,orters are generall+ ,ro0ided *+ >o ercial Ban.s, *e%ore shi, ent as -ell as a%ter shi, ent o% the said

goods. 9he assistance ,ro0ided *e%ore shi, ent o% goods is .no-n as ,er!shi, ent %inance and that ,ro0ided a%ter the shi, ent o% goods is .no-n as ,ost!shi, ent %inance. #re!shi, ent %inance is gi0en %or -or.ing ca,ital %or ,urchase o% ra-! aterial, ,rocessing, ,ac.ing, trans,ortation, -are!housing etc. o% the goods eant %or e3,ort. #ost! shi, ent %inance is ,ro0ided %or *ridging the ga, *et-een the shi, ent o% goods and reali<ation o% e3,ort ,roceeds. 9he latter is done *+ the Ban.s *+ ,urchasing or negotiating the e3,ort docu ents or *+ e3tending ad0ance against e3,ort *ills acce,ted on collection *asis. Ihile doing so, the Ban.s ad'ust the ,re!shi, ent ad0ance, i% an+, alread+ granted to the e3,orter.
*. 1etter o% >redit (1>) '. $ocu ents Against #a+ ent ($#)

)etter of

redit (1>)=! letter of credit is a docu ent issued

ostl+ *+

a %inancial institution, used ,ri aril+ in trade %inance, -hich usuall+ ,ro0ides an irre0oca*le ,a+ ent underta.ing. 9his is 1> is again o% t-o t+,es! a) 100C 1> *)@0!D0C1>

IN'%RAN E
Be%ore e3,orting goods the trader has to ,re%er to ta.e insurance co0er %or e3,orting the goods *ecause M4/9/7E IS /&>E79AI&N. Business should *e ris. %ree. 9o ensure this Insurance is ,aid to goods those are i ,orted. 9here are di%%erent t+,es o% insurances na el+ 1. 9ransit Insurance 2. :0erseas 9ransit Insurance 3. #re!shi, ent Insurance ". #ost! shi, ent

9he 4irst t-o insurances are chec.ed a%ter the e3,orters 2 i ,orters. 9he re aining t-o insurances are loo.ed a%ter (o0ern ents. 1. (ransit Insurance= ! 9he insurance that is ,aid %or trans,ortation on roads is 9ransit insurance. 9his insurance is co onl+ .no-n as Insurance on -heels 2. *Cerseas Insurance= ! 9he insurance that is ,aid %or trans,ortation in -ater. 9he #re 2 #ost shi, ent insurances are loo.ed a%ter E3,ort >redit (uarantee >or,oration (E>(>) 3. Pre3s0ipment Insurance= ! 9he insurance ,aid *e%ore the goods trans%erred into the shi,. ". Post3s0ipment Insurance= ! 9he insurance ,aid a%ter the goods loaded into the shi, and *e%ore reaching the i ,orter.

Documents reGuired
9he docu ents re5uired %or the e3,orts are as %ollo-s= 1. >ontract 2. In0oice cu 3. >o ,ac.ing list

ercial in0oice

". Ieight list ). #ac.ing list ;. Sight dra%t @. #h+tosanitar+ certi%icate D. >erti%icate o% authenticit+

?. Shi,,ing *ill 10. Bill o% lading

*rBanisations related to t0e Indian to1acco IndustrD

As 9he 9o*acco Board, 9he >entral 9o*acco 7esearch Institute, and 9he Indian 9o*acco Association are ,la+ing a'or roles in ,rotecting the interests o% 9he 9o*acco trade, a *rie% anal+sis on the a*o0e three organi<ations is gi0en here.

(o1acco Board
>onsidering the (ro-ing si<e o% the 9o*acco >ro,, (o0ern ent o% India esta*lished the 9o*acco Board to cater to the interests o% the 9o*acco 9rade. A *rie% note on the 9o*acco, and %or ation o% 9o*acco Board is gi0en *elo- co0ering the acti0ities o% the 9o*acco Board also. 9o*acco Board -as %or ed in the +ear 1?@;, under Ministr+ o% >o erce, (o0t. o% India, -ith Gead 5uarter (untur. 9o*acco auctions s+ste -as introduced in 1?D", -ith an o*'ecti0e o% cro, regulation %or Jirginia 9o*acco and one+ guarantee to registered gro-ers. 9o*acco Board collects Ser0ice >harge R 1C %ro gro-er and 1C %ro trader.

B*ARD *B$E (I&E' */ (*BA

4or 4ar er concern

>ro, regulation *ased on re5uire ent, *+ allotting 5uantit+ to registered gro-ers. Su,,l+ing re5uired %ertili<er to registered gro-ers on loan *asis. 4acilitating loan arrange ent through *an.s. 7ight ,rice %or right 5ualit+ to gro-ers. For rader concern 9rader 9rader ust register -ith to*acco *oard to ,artici,ate in auctions. ust #roduce Ban. guarantee.

(o1accoF

9o*acco is an i ,ortant co ercial cro, gro-n in India. It occu,ies the third ,osition in the -orld -ith an annual ,roduction o% a*out @2) Million 6gs. :% the di%%erent t+,eAs gro-n, %lue!cured to*acco, countr+ to*acco, *urle+, *idi, rustica and che-ing to*acco are considered i ,ortant. India, as an e3,orter o% to*acco, ran.s si3th in the -orld ne3t to Bra<il, >hina, /SA, Mala-i and Ital+. 9o*acco and to*acco ,roducts earn a -ho,,ing annual su o% a*out 7s.102@1 crores to the national e3che5uer *+ -a+ o% e3cise re0enue, and 7s.2022 >rores (200;!0@) *+ -a+ o% %oreign e3change. 4urther ore, to*acco is a source o% gain%ul e ,lo+ ent. Se0eral la.hs o% ,eo,le thri0e on this -eed cro,. 4lue!cured gro-th, -ith an annual ,roduction o% a*out 300 illion 6gs, is the singular t+,e, -hich contri*utes huge a ount o% %ore3 and e3cise earnings. More or less, )0C o% the 4>J to*acco ,roduced is consu ed do esticall+ -hile the rest is e3,orted to ore than 100 countries across the glo*e. :ther to*acco t+,eAs 0i<., Burle+, >ountr+ to*acco, >he-ing to*accos (1al cho,adia, 8udi and 7ustica) are also e3,orted -hereas *idi to*acco ! a ,oor anEs s o.e ! is consu ed onl+ -ithin the countr+. 4lue!cured Jirginia to*acco is the ,rinci,al t+,e gro-n in the states o% Andhra #radesh and 6arnata.a under 0aried agro!cli atic conditions. It is gro-n in the light soils o% 6arnata.a as rain!%ed cro, and in the hea0+ soils o% Andhra #radesh under conser0ed oisture in the a%ter ath o% South-est onsoon rains. 9he cro, is gro-n under irrigated conditions in the &orthern 1ight Soils (&1S) o% Andhra #radesh and Eastern 1ight Soils (E1S) o% :rissa and as a se i! onsoon cro, in Southern 1ight Soils (S1S) o% Andhra #radesh. 9hus, India is endo-ed -ith a 0ast ,otential to ,roduce di%%erent t+,es o% to*acco so as to cater to the interests o% the discerning custo ers.

/ormation of (o1acco BoardF

9he (o0t. o% India esta*lished the 9o*acco Board under an Act o% #arlia ent in the +ear 1?@) (*rought to e%%ect %ro 1.1.1?@;) and o,ened its head5uarters at (untur, Andhra #radesh -ith a 0ie- to *ring a*out an all!round de0elo, ent to the to*acco industr+.

I'* ;==2F4==: ertification to Indian to1acco Board

9he Indian to*acco Board, in %urtherance o% its o*'ecti0es stri0e to ,ro0ide su,erior ser0ice to its custo ers na el+, gro-ers and traders in a s+ste atic anner. M/s. $et &or.se Jeritas ($&J), &etherlands *esto-ed the honour o% IS: ?001=200D certi%icate to the Indian 9o*acco Board %or esta*lishing 5ualit+ anage ent s+ste s.

9he 9o*acco Board has i ,le ented s+ste s ai ed at achie0ing ,roduct integrit+ and tracea*ilit+, odel ,ro'ect area and 5ualit+ circles conce,t to i ,ro0e the 5ualit+ o% to*acco lea% so as to eet the s,eci%ications o% i ,orters. 9he Board, co itted to eeting the needs o% custo ers, ad0ises all the Indian e3,orters to o*tain IS: certi%ication -ith a 0ie- to eet the e3,ectations o% the glo*al ar.et.

(o1acco Board F MI''I*N

S9o stri0e %or the o0erall de0elo, ent o% to*acco gro-ers and the Indian 9o*acco Industr+.S

(o1acco Board F &I'I*N

S9o*acco Board is co itted to acco ,lishing its role ! the e3,ressed -ill o% ,arlia ent ! %or the s ooth %unctioning o% a 0i*rant %ar ing s+ste , %air and re unerati0e ,rices to to*acco gro-ers and e3,ort ,ro otion.S

(o1acco Board F A (I&I(IE'

7ecogni<ing the need to regulate ,roduction, ,ro ote o0erseas ar.eting and control recurring instances o% i *alances in su,,l+ and de and, -hich lead to ar.et ,ro*le s, the (o0ern ent o% India under the 9o*acco Board Act o% 1?@), esta*lished the 9o*acco Board, in ,lace o% the 9o*acco E3,ort #ro otion >ouncil. 9he Board ca e into e3istence %ro 1!1!1?@; and o,ened its head 5uarters at (untur in Andhra #radesh, India. 9he 9o*acco Board Act ai s at ,lanned de0elo, ent o% 9o*acco Industr+ in the countr+. 9he 0arious acti0ities o% the Board outlined in the Act %or the ,ro otion o% the industr+ are! 7egulating the ,roduction and curing o% Jirginia 9o*acco -ith regard to the de and in India and a*road. >onstant onitoring o% the Jirginia to*acco ar.et, *oth in India and a*road and ensuring %air and re unerati0e ,rice to the gro-ers and reducing -ide %luctuations in the ,rices o% the co odit+. Sustaining and i ,ro0ing the e3isting international ar.ets and de0elo,ing ne- ar.ets o0erseas %or Indian Jirginia 9o*acco and its ,roducts and de0ising ar.eting strategies in consonance -ith de and %or the co odit+ including grou, ar.eting under li ited *rand na es. Esta*lishing auction ,lat%or s %or sale o% Jirginia to*acco *+

registered gro-ers and %unctioning as an auctioneer at auction ,lat%or s either esta*lished *+ it or registered -ith it. 7eco ending to the >entral (o0ern ent the ini u ,rices to *e %i3ed %or e3,orta*le Jirginia to*acco -ith a 0ie- to a0oiding unhealth+ co ,etition a ongst the e3,orters. (/nder its E3i ,olic+, the (o0ern ent decided to a*olish %i3ation o% M.E.#. -ith e%%ect %ro 1!"!1??3). 7egulating other as,ects o% Jirginia to*acco ar.eting in India and e3,ort o% Jirginia to*acco ha0ing due regard to the interests o% gro-ers, anu%acturers, dealers and the nation. #ro,agating in%or ation use%ul to the gro-ers, dealers and e3,orters (including ,ac.ers) o% Jirginia to*acco and anu%acturers o% to*acco ,roducts and others concerned. #urchasing Jirginia to*acco %ro gro-ers -hen the sa e is considered necessar+ or e3,edient %or ,rotecting the interests o% the gro-ers and dis,osing it in India or a*road as and -hen considered a,,ro,riate. #ro oting to*acco grading at the le0el o% gro-ers. S,onsoring, assisting, co!coordinating or encouraging scienti%ic, technological and econo ic research %or ,ro otion o% to*acco industr+. Ser0ices :%%ered *+ 9o*acco Board %or the 9rade

Introduction
9o*acco Board, ha0ing a -ide net-or. o% 5uali%ied and trained technical sta%%, ,la+s a crucial role in i ,ro0ing +ield and 5ualit+ o% 4>J to*acco. 9he Board i ,le ents 0arious e3tension and de0elo, ental sche es %or i ,ro0ing +ield and 5ualit+ o% to*acco in colla*oration -ith >entral 9o*acco 7esearch Institute (>97I), 7a'ah undr+ and 7esearch 2 $e0elo, ental -ings o% to*acco co ,anies in ,ri0ate sector. 9he Board i ,le ents the %ollo-ing E3tension 2 $e0elo, ental Acti0ities %or i ,ro0ing the +ield 2 5ualit+ o% the to*acco, econo + in %uel consu ,tion, echani<ation in to*acco %ar ing, trans%er o% technolog+, #roduct Integrit+/#ost Gar0est #roduct Manage ent etc., to hel, ,ro ote e3,orts.

/arm Mec0anisation
&o- a da+s, to*acco %ar ers are increasingl+ %inding la*our shortages in an+ areas. 9here%ore, the Board, -ith a 0ie- to hel, %ar ers echanise certain o,erations is organising su,,l+ o%=

 I ,ro0ed %ar i ,le ents/ achines li.e Bulloc. $ra-n 7idger, ,o-er -eeder!cu !interculti0ator!cu !ridger, trans,lanting achines, etc. Micro!irrigation e5ui, ent %or irrigating to*acco seed*eds and dri, irrigation e5ui, ent %or irrigating ain %ields -ith the hel, o% (o0t. o% Andhra #radesh. #J> ,i,es %or dra-ing -ater %ro long distances %or irrigating to*acco cro,s in #ra.asa 2 &ellore $istricts o% Andhra #radesh. Gi!tech S,ra+ers %or ,ro,er s,ra+ o% ,esticides in seed*eds and ain %ield. #o,ularising lea% stitching achines a ong gro-ers. >uro eters / Electronic de0ices in the *arn %or ,ro,er curing o% to*acco. Ieighing scales %or ,ro,er ,ac.ing 2 *aling o% to*acco. Yield 2 Lualit+ I ,ro0e ent

'eeds & 'eedlinBs

Seed ! 9o*acco Board organises su,,l+ o% 5ualit+ seed e0er+ +ear to the gro-ers in the states o% Andhra #radesh and 6arnata.a at its 30 Auction #lat%or s through ,rocuring the sa e %ro >97I and M/s. I9> 1td. 9ra+ Seedlings T 9he Board encourages gro-ers to go %or raising o% 5ualit+ 2 health+ seedlings in tra+s. 9he Board organises su,,l+ o% tra+s 2 coco!,eat edia to the to*acco gro-ers in 6arnata.a and Andhra #radesh at co ,etiti0e ,rices and against in,ut loans at ; to ;.)C rate o% interest. 9he Board ,ro otes (reen houses/#ol+ houses %or tra+ nurseries su,,l+ing shade nets and ,ol+thene sheets at co ,etiti0e ,rices. Sche es are on the an0il to raise 5ualit+ seedlings and su,,l+ to S>/S9, S all 2 arginal gro-ers.

-ater !arCestinB 'tructures

9he rain%all in the Southern 1ight Soil areas located in the #ra.asa and &ellore districts in the state o% Andhra #radesh is erratic and the cro, in this area o%ten -itnesses ,rolonged dr+ ,eriods a%%ecting the 5ualit+ 2 +ields.

 9here%ore, the Board had e *ar.ed u, on creating so e -ater har0esting structures to hel, gro-ers gi0e one li%e sa0ing irrigation to sustain the cro,. 9he Board is ta.ing u, construction o% Mini >hec. da s o0er the ri0ulets and digging o% %ar ,onds eeting D) to 100C cost o% the -ater har0esting structures. 9he Board is i ,le enting the ,ro'ect o% ,ro0iding %ar association -ith M/s. I9> 1td. ,onds in

InteBrated Pest ManaBement

9he Board i ,le ents I#M ,rogra e in e0er+ +ear in select areas in all the Auction #lat%or s in A.#. Su,,lies o% ,hero one tra,s, lures, &#J solution, etc at co ,etiti0e ,rices to gro-ers. Monitors ,est ,o,ulation and ad0ises gro-ers ta.e u, cultural/ echanical and *io!control easures %ollo-ed *+ che ical control easures. Su,,lies tra, cro, seeds/seedlings %ree o% cost to the gro-ers. :rganises su,,lies o% organic ,esticides at co ,etiti0e ,rice. Monitors ,esticide residues in to*acco %ro <ones and ta.es correcti0e ste,s. Su,,l+ o% In,uts 9he Board organises su,,l+ o% 0arious in,uts to gro-ers 0i<. Karnataka 4ertilisers $A#, >A&, S:# #esticides 4/&(I>I$ES :rganic #esticides Starthene, 7ido ill &i0aar, >on%idor, Iellgro Actara soil/Iellgro cro, :thers 9ra+s, >oco! #eat, S,ra+ers, 9ar,aulins, >uro eters, Suc.ericides, #h+ton!9 di%%erent gro-ing

And0ra Prades0 /ertilisers :rganic 2 #esticides Bio! :thers

$A#, >A&, S:#, &i0aar, Iellgro 9ra+s, >oco!#eat, SS#, 20=20=0=13, soil/Iellgro cro,, S,ra+ers, 9ar,aulins, A oniu Sul,hate &#J Solution >uro eters, Suc.ericides, #h+ton!9, Ieighing Scales

urinB of (o1acco EnerBD onserCation Measures

9he cost o% curing o% to*acco accounts %or a*out 1/3 o% the total cost o% culti0ation. 9here%ore, the Board i ,le ents the %ollo-ing sche es to achie0e energ+ conser0ation in curing o% to*acco and thus reduce curing costs. 4i3ing o% Jenturi %urnaces in the *arns re,lacing traditional %urnaces. Barn 7oo% Insulation. Modi%ied 4lue Bo3es T re,lacing )0C o% the e3isting c+lindrical ,i,es in the *arn. #ro oting esta*lish ent o% *ri5uetting units %or *ri5uettes %ro agri -aste. #ro oting raising o% o-n %uel *+ gro-ers. 9raining ,rogra es to gro-ers on curing o% to*acco and a,,ointing aster curers to ad0ise gro-ers on curing techni5ues. E%%orts are under-a+ to de0elo, suita*le solar *arn %or curing o% to*acco. Post !arCest Product ManaBement <P!PM> H Product InteBritD anu%acture o%

BulkinB <PR* E''IN#>. #radinB & storinB of (o1acco

9he cured to*acco unloaded %ro the *arns re5uires to *e *ul.ed ,ro,erl+ to %acilitate %er entation ,rocess and i ,ro0e in 5ualit+ *e%ore it is graded and ,ac.ed in *ales. 9he Board conducts training ,rogra cured to*acco. es on ,ro,er *ul.ing o%

Su,,lies tar,aulins to gro-ers %or co0ering the *ul.s and a0oiding ad i3ture o% &on!9o*acco 7elated Materials (&97Ms) during *ul.ing and grading o% to*acco.

 Assist gro-ers construct *ul.ing sheds/ odel storage %acilities under loan tie!u, arrange ent -ith *an.s. $istri*utes lea%lets 2 ,a ,hlets on #roduct Integrit+, #ro,er curing 2 grading and on eli ination o% &97Ms. It also screens %il s through ca*le net-or. during eetings in the 0illages.

(ransfer of (ec0noloBies
9raining ,rogra es are organi<ed R 3 ,rogra es in each o% the 30 Auction #lat%or s in A.# 2 6arnata.a %or the *ene%it o% %ar ers and %ield sta%% in colla*oration -ith >97I and 7esearch Iing o% I9> T I19$ at di%%erent stages o% cro, gro-th to i ,art latest .no-ledge on cro, ,roduction. Stud+ tours o% %ar ers to research stations and BoardAs Model #ro'ect Area, :n 4ar 9rial #lots, 6rushi Jignana 6endra, (reen lea% threshing ,lants, Auction #lat%or s, to ena*le the to get ac5uainted -ith the latest i ,ro0ed ,ractices and ado,t the sa e in their o-n %ields. $istri*ution o% literature on latest ,roduction technolog+. 7esult oriented de onstrations to de onstrate 0arious latest ethods o% cro, ,roduction and 0arietal trials to test the ,er%or ance o% ,i,eline 0arieties under %ield conditions are conducted *+ Board in colla*oration -ith >97I, e0er+ +ear. Audio!0isual ,u*licit+ in 0illages on (ood Agricultural #ractices during gro-ersA eetings. Screening o% short!%il s on (ood Agricultural #ractices and latest i ,ro0ed technolog+ through ca*le net-or.. Ior.sho,s at >97I 7esearch Stations -ith gro-ers. E3clusi0e training ,rogra Stations. es to gro-ers at >97I 7esearch

:rgani<ing %ield 0isits o% scientists %ro >97I and e3ecuti0es %ro trade to ad0ice gro-ers on the latest ,ac.age o% ,ractices and cro, ,rotection easures. Model #ro'ect Area sche e in &1S 2 S1S o% Andhra #radesh 2 61S o% 6arnata.a.

Intensi0e E3tension through de onstrating all (ood Agricultural #ractices, latest technolog+, i ,ro0ed cro, ,rotection easures including I#M, #G#M 2 I&M in association -ith >97I and trade. 4re5uent contacts -ith all the %ar ers in select areas.

A?ards to #ro?ers
9o*acco Board honours the *est gro-ers %or achie0ing higher +ields e0er+ +ear as a ste, to-ards inculcating a s,irit o% co ,etition a ong the gro-ers. E0er+ +ear the Board %elicitates the Best (ro-er A-ardees on the 4or ation $a+ o% the Board cele*rated in the 1st -ee. o% 8anuar+ -ith a cash incenti0e o% 7s. ),000, a Sil0er Medal and a >erti%icate o% Merit. 9he %ollo-ing are the a-ards ,resented to the gro-ers.

'. No. 1. 2. 3. ".

ateBorD

No. of A?ards

:ne Best (ro-er A-ard %or each A#4 in A.#. 30 and 6arnata.a :ne Best (ro-er A-ard each %ro and Maharashtra states :rissa 02

All India *asis ! 1st, 2nd and 3rd *est gro-er 03 a-ards :ne Best (ro-er A-ard %or Inno0ati0e 01 a,,roach (otal A?ards 58

entral (o1acco Researc0 Institute < (RI>

7esearch on to*acco has *een ,la+ing an i ,ortant role in the de0elo, ent o% to*acco 0arieties in India. India gro-s di%%erent .inds o% to*acco under di%%erent agro cli atic >onditions. as such the ,ro*le o% i ,ro0e ent o% di%%erent 0arieties o% to*accos in India are ini al and co ,licated. 9he ain research -or. on to*acco is *eing done at >E&97A1 9:BA>>: 7ESEA7>G I&S9I9/9E at 7A8AGM/&$7Y and its research stations s,read throughout India. A ,art %ro conducting research %or de0elo, ent o% di%%erent 0arieties o% to*acco %or the a3i i<ation o% ,roduction, the >97I 7a'ah undr+ has *een ,resentl+ doing research on de0elo, ent o% alternati0e cro,s to to*acco.

India is one a ongst to, ten countries culti0ating to*acco since decades. It is the second largest ,roducer in the -orld and earning %oreign e3change to the tune o% 7s 1000 crores and 7s D000 crores as e3cise re0enue e0er+ +ear. Gu an de,endenc+ on this cro, *+ -a+ o% e ,lo+ ent is su*stantiall+ high. A*out 20 la.h ,eo,le are engaged in the ,roduction. >igarette anu%acturing industr+ engages 10 la.h ,eo,le, *idi industr+ alone ,ro0ides e ,lo+ ent to a*out ;0 la.h rural %ol. ostl+ -o en and tri*als. Besides these, the other sectors engaged in to*acco ,roducts li.e che-ing, cigar, cheroot and snu%% along -ith ,ac.ing, ,rocessing and e3,orting engage se0eral thousands o% ,eo,le. 9he trans,ort agencies such as 7ail-a+s, 7oad-a+s and Sea *orne tra%%ic *ene%it i ensel+ %ro to*acco trade. B+ 0irtue o% the do inant role ,la+ed *+ this co ercial cro,, the Indian >entral 9o*acco >o ittee (I>9>) esta*lished >entral 9o*acco 7esearch Institute ( (RI ) in 7a'ah undr+ (Andhra #radesh) in 1?"@. 9he Institute -as under the ad inistrati0e control o% Indian >entral 9o*acco >o ittee, Madras %ro 1?"@ to 1?;) and su*se5uentl+ trans%erred to the Indian >ouncil o% Agricultural 7esearch (I>A7), &e$elhi.

I>A7 acts as a re,ositor+ o% in%or ation and ,ro0ides consultanc+ on agriculture, horticulture, resource anage ent, ani al sciences, agricultural engineering, %isheries, agricultural e3tension, agricultural education, ho e science and agricultural co unication. U a *rie% note on I>A7 is enclosed at end o% this section %or read+ re%erecneV. It has the andates to co!ordinate agricultural research and de0elo, ent ,rogra es and de0elo, lin.ages at national and international le0el -ith related organisations to enhance the 5ualit+ o% li%e o% the %ar ing co unit+. I>A7 has esta*lished 0arious research centres in order to eet the agricultural research and education needs o% the countr+.It is acti0el+ ,ursuing hu an resource de0elo, ent in the %ield o% agricultural sciences *+ setting u, nu erous agricultural uni0ersities s,anning the entire countr+.9he 9echnolog+ Inter0ention #rogra es also %or an integral ,art o% I>A7Es agenda -hich esta*lishes 6rishi Jig+an 6endras (6J6s) res,onsi*le %or training, research and de onstration o% i ,ro0ed technologies. As a ,art o% its acti0it+ I>A7 has ta.en o0er the >97I %ro I>9> during 1?;) %or conducting %unda ental and a,,lied research on 9o*acco %or the *ene%it o% the %ar ing co unit+. 9he institute is ha0ing regional net-or. -ith su* stations at (untur, 6andu.ur, 8eelugu illi, 8eddangi (Andhra #radesh), Jedasandur(9a il &adu), Gunsur (6arnata.a), #usa (Bihar) and $inhata (Iest Bengal). I ,ro0ing the Yield and Lualit+ o% 0arious t+,es o% to*acco 0i<., 4>J, &atu, >he-ing, 1an.a, Burle+, G$B7(, Goo.ah, >igar -ra,,er, >igar %iller, etc is the ,ri e andate o% this institute and regional research stations %ocusing ulti!0arious ,ro*le s o% di%%erent t+,es o% to*acco culti0ation. 9he All India >oordinated 7esearch #ro'ect on 9o*acco -as sanctioned *+ the I>A7 in A,ril, 1?@0 -ith %our ain centers na el+ 7a'ah undr+ and #usa ( (RI ), Shi oga and Anand, and %i0e su* centers na el+ (untur, Gunsur and $inhata (>97I), &i,ani and &and+al to intensi%+ the research on a'or ,ro*le s o% to*acco ha0ing regional and inter! regional signi%icance. 9-o ne- centers at Berha ,ur and Sarai iran -ere sanctioned during @th ,lan and the+ started %unctioning %ro 1?D@ W ?DD and 1?DD!D? res,ecti0el+. 7ecentl+ during 2001, the Sarai iran centre -as shi%ted to (ursaha+gan' in /#. 9he AI>7# on to*acco -as erged -ith >entral 9o*acco 7esearch Institute in August, 1??D. 9his is one o% the ,ioneering organisations in the -orld dedicated to the to*acco research %or the *ene%it o% the to*acco %ar ers. 9he ne- (RI *uilding co ,le3 -as constructed -ith necessar+ in%rastructural

%acilities during 1?D2 in a land o% 1) acres gi0en *+ the (o0ern ent o% Andhra #radesh. 9he Institute Gead5uarters is located in the historical cit+ o% 7a'ah undr+ (1;.)? &, D1."@ E and 2) a*o0e MS1) on the *an.s o% ,erennial ri0er (oda0ari in East goda0ari $istrict o% Andhra #radesh. 9he 7a'ah undr+ cit+ is situated on >alcutta!>hennai 7ail 7oute and &ational Gigh-a+ &o.) 9he near*+ Air,orts are located at Jisa.ha,atna (1?0 . ) and (anna0ara (Ji'a+a-ada 1"0 . ) 9oda+, the Institute is the *iggest o% its .ind in Asia, -ell e5ui,,ed -ith the ost so,histicated instru ents %or carr+ing out *asic and a,,lied research, es,eciall+ in the %rontier areas li.e Bio!technolog+ and s o.e research at 7a'ah undr+ (E.(.$ist. o% A.#.). It is recognised *+ se0eral uni0ersities li.e Andhra /ni0ersit+, Achar+a &.(. 7anga Agricultural /ni0ersit+, Bhagal,ur /ni0ersit+, &agar'una /ni0ersit+, Mahat a #hule 6rishi Jid+a,eeth, 7ahuri %or the a-ard o% #h.$. degree through 7esearch. At ,resent a*out )30 e ,lo+ees including )" Scientists, 1@? technical sta%% and 300 ad inistrati0e and other sta%% are -or.ing in this institute %or the de0elo, ent o% to*acco in the countr+. $ue to the e0erlasting research done in the Institute %or )0 +ears, se0eral to*acco %ar ers are *ene%ited *+ %ollo-ing the ,ac.age o% ,ractices and ,roduction technolog+ de0elo,ed *+ the scientists o% this institute.

Indian ouncil of ABricultural Researc0 <I AR>

9he Indian >ouncil o% Agricultural 7esearch (I>A7) is an autono ous organisation under the $e,art ent o% Agricultural 7esearch and Education ($A7E), Ministr+ o% Agriculture, (o0ern ent o% India. 4or erl+ .no-n as I ,erial >ouncil o% Agricultural 7esearch, it -as esta1lis0ed on 28 $ulD 2;4; as a registered societ+ under the Societies 7egistration Act, 1D;0 in ,ursuance o% the re,ort o% the 7o+al >o ission on Agriculture. 9he I>A7 has its head5uarters at &e$elhi. 9he >ouncil is the a,e3 *od+ %or co!ordinating, guiding and anaging research and education in agriculture including horticulture, %isheries and ani al sciences in the entire countr+. Iith ;9 I AR institutes and 67 aBricultural uniCersities s,read across the countr+ this is one o% the largest national agricultural s+ste s in the -orld. 9he I>A7 has ,la+ed a ,ioneering role in ushering (reen 7e0olution and su*se5uent de0elo, ents in agriculture in India through

its research and technolog+ de0elo, ent that has ena1led t0e countrD to increase t0e production of food Brains 1D 6 times , 0orticultural crops 1D 8 times, fis0 1D ; times <marine 7 times and inland 29 times>, milk 8 times and eBBs 49 times since 1?)0!)1, thus a.ing a 0isi*le i ,act on the national %ood and nutritional securit+. It has ,la+ed a a'or role in ,ro oting e3cellence in higher education in agriculture. It is engaged in cutting edge areas o% science and technolog+ de0elo, ent and its scientists are internationall+ ac.no-ledged in their %ields.

Indian (o1acco Association. #untur <I(A>

9he Indian 9o*acco Association is an A,e3 Bod+ 7e,resenting 9o*acco E3,orters, $ealers and Manu%actures. It has *een esta*lished in the +ear 1?;!3@. It has a Me *ershi, o% a*out 1@) e *ers. It re,resents al ost 100C o% the do estic >igarette Manu%actures and 4>J E3,orters. It is the 7e,resentati0e Bod+ o% the >igarette 9o*acco Industr+ on all ,olic+ issues

Address=

9he Indian 9o*acco Association ?th 1ine, Srini0asarao 9hota, (.9 road (untur!)2200" A&$G7A #7A$ESG #hone!?1!D;3!221;23D 4a3!?1!D;3!23))2;?

Indian (o1acco Association 3 *1jectiCesF

9he Indian 9o*acco Association has the %ollo-ing o*'ecti0es= 9o di%%use .no-ledge a*out the use%ulness o% (rades and Standards a ong the (ro-ers Merchants and Manu%actures in India. 9he Association shall ta.e ste,s to ha0e a s+ste o% Mar.et intelligence serci0e regarding ,rices, stoc.s su,,lies, etc.

 9he association a+ o-n ,re ises or -arehouses %or its ,ur,ose *ut shall not *e a trading Association. 9he Association does all such things as a+ *e conduci0e to the de0elo, ent o% to*acco industr+ or incidental to attain ent o% the a*o0e o*'ects. 9he association can liaison -ith 9o*acco Board o% India, (o0ern ents/ $e,art ent concerned, 4oreign 9rade/Associations/i ,orters and an+ other Bodies/indi0iduals, -ith -ho contacts a+ ,ro ote the interests o% 9o*acco industr+. 9he Association can grant $onations either in cash or in .ind and to assist in the aintenance and i ,ro0e ent o% Educational institutions, Medical Institutions and :ther >harita*le Association %or the #ro otion o% 1iterature, Arts Science, en0iron ent and %or the Iel%are o% the Societ+ as a -hole -ithout distinction o% >aste 7eligion, creed, 7ace or Se3. 9he Association does such other Acts and things that are necessar+ %or the %urtherance o% the o*'ects o% the Association.

Indian

to1acco

association

ActiCities

9he Indian 9o*acco Association has *een acti0el+ in0ol0ed in the de0elo, ent o% the Indian 9o*acco Industr+ o0er the ,ast se0en decades. 7ecentl+, in 8anuar+, 2003 it has associated itsel% -ith the Indian Societ+ o% 9o*acco Science in organi<ing the &ational S+ ,osiu on 9o*acco -ith the the e S4orcing 4uture >hallengesS at I9A Auditoriu , -hich has *een attended *+ the e inent 9o*acco Scientists and other delegates %ro all o0er India and the Iorld

Chapter-7

Export documentation

Export Documentation
An e3,ort trade transaction distinguishes itsel% %ro a do estic 9rade transaction in ore than one!-a+. :ne o% the signi%icant 0ariations *et-een the t-o arises on account o% the uch hea0ier docu entation -or. -hich is characteristic o% an e3,ort transaction. So e o% the docu ents are a ust in e3,ort *usiness, arising as the+ do on account o% Mcusto o% tradeN and con0entions go0erning international co ercial ,ractices. Besides, 5uite %e- o% these o-e their e3istence to certain statutesF rules and regulations go0erning e3,ort trade, -hich inter alias, include e3,ort trade control, %oreign e3change regulations, ,re shi, ent ins,ection, central e3cise and custo s. 9he docu entation and ,rocedures are rendered co ,le3 on account o%

the ine0ita*le in0ol0e ent o% a nu *er o% inter ediar+ agencies and go0ern ent authorities such as %reight %or-arders, carriers, insurance co ,anies, *an.s, e3,ort ,ro otion councils, Ins,ection agencies, 7.B.I etc. In order to si ,li%+ the docu entation ,rocedure, a ne- Aligned $ocu entation has *een de0elo,ed. A))I#NED D* %MEN(A(I*N '"'(EM <AD') Based on /& la+out .e+ and the e3,erience gained in an+ other de0elo,ed countries, the go0ern ent o% India has decided to introduce the A$S -ith e%%ect %ro 1st :cto*er!1??1. 9his s+ste in0ol0es the ,re,aration o% docu ents on a uni%or and standard A" si<e o% ,a,er. 9he docu ents are aligned to one another in such a -a+ that the co on ite s o% in%or ation are gi0en the sa e relati0e slots in each o% the docu ents included in the s+ste . 9his a.es it ,ossi*le to ,re,are one MMaster $ocu entN e *od+ing the in%or ation co on to all the docu ents included in the aligned series and to run o%% all the aligned docu ents %ro the sa e Master $ocu ent -ith the hel, o% suita*le as.ing and re,roduction techni5ues. 9he use o% as.s is intended to *lan. out such in%or ation as is not re5uired in a ,articular docu ent. 'tandardiIed and aliBned pre3s0ipment export documents :n an a0erage, a*out 2" co ercial and regulator+ docu ents are associated -ith an e3,ort transaction in India. 9he+ include 1) i ,ortant co ercial docu ents and are discussed as under= a. #er%or a In0oice *. >o ercial In0oice c. #ac.ing list d. Shi,,ing instructions e. >erti%ication o% Ins,ection/Lualit+ >ontrol %. Insurance declaration g. >erti%icate o% insurance h. Shi,,ing order i. Mate recei,t '. B/1/ >o *ined 9rans,ort $ocu ent .. A,,lication %or certi%icate o% origin l. >erti%icate o% origin . Bill o% e3change n. Shi, ent ad0ise o. 1etter to the *an. %or collection/negotiation.

9he co ercial docu ents are those -hich, *+ custo or trade are re5uired %or e%%ecting ,h+sical trans%er o% goods and their MtitleA %ro the e3,orter to the i ,orter and the reali<ation o% e3,ort sale ,roceeds. ReBulatorD Documents 7egulator+ #re!shi, ent e3,ort docu ents are those, -hich ha0e *een ,rescri*ed *+ di%%erent agencies in co ,liance o% the re5uire ents o% 0arious rules, and regulations under rele0ant la-s go0erning e3,ort trade such as e3,ort ins,ection, %ore3, custo s etcQ. :n an a0erage there are ? regulator+ docu ents. 1. (ate ,ass!1/gate ,ass!2 pre!cribed by= ! >entral e3cise $e,t. 2. A7"!A/A7!" %or 3. Shi,,ing *ill / 4or e3,ort o% goods e3 *ond 4or e3,ort o% dut+ %ree goods 4or e3,ort o% dutia*le goods 4or e3,ort o% goods under clai $ut+ dra-*ac. ". E3,ort a,,lication/$oc. >hallan #ort trust #ort trust co,+ o% shi,,ing *ill ). 7ecei,t %or ,a+ ent o% #ort charges ;. Jehicle tic.et @. (7/##/S$4 %or s 7.B.I D. 4reight ,a+ ent certi%icate ?. Insurance ,re iu D* %MEN( #**D'. ,a+ ent >erti%icate. *NNE (ED -I(! (RAN'P*R(A(I*N */ !do! !do! %or !do! !do! !do! !do! !do! %or e3,ort >usto s de,t.

2. Air -aD Bill <A-B> Air consiBnment Note. 9he recei,t issued *+ an airline or its agent %or the carriage o% goods is called air-a+ *ill or air consign ent note. It is issued in ter s and conditions o% the contract o% carriage o% goods. It is not a docu ent o% title and it is not issued in a negotia*le %or . (enerall+ AIB is issued in three co,ies, 0i<F %or the carrier, %or the consignee and %or the consignor. 4. Postal Parcel Receipt <PPR>. 1i.e the AIB, the ##7 e0idence erel+ the recei,t o% the goods to *e

e3,orted to the *u+er and is not a docu ent o% title. 5. Bill of )adinB <BJ)>. A Bill o% 1ading is the ost i ,ortant docu ent in 4oreign 9rade. It is generall+ issued *+ a shi,,ing co ,an+. It ser0ices as a recei,t %ro the shi,,ing co ,an+ -ho underta.es to deli0er the goods at agreed destination on ,a+ ent o% %reight in a ,rearranged anner and also a docu ent o% title to the goods. B/1 is generall+ ade out in the sets o% t-o or three originals. All the originals are dul+ signed *+ the aster o% shi, or the agent o% the stea shi, co ,an+ and all the originals are e5uall+ 0alid %or ta.ing the deli0er+ o% goods and once one original co,+ is utili<ed the other originals *eco e %ull and 0oid. B/1 is nor a negotia*le instru ent in ter s o% &egotia*le instru ent Act, Go-e0er, it is a ,ractice to call the original co,ies as negotia*le co,ies. 6. om1ined (ransport Document < (D> Iith the introduction o% ulti ode o0e ent o% goods in container on the *asis o% single contract %ro and to interior o% the countr+, go0ern ent has esta*lished Inland >ontainer $e,ot (I>$s) at selected centre. 9hese dr+ de,ots ha0e ade it ,ossi*le to co0er the entire o0e ent o% goods, %ro I>$ to destination, under one trans,ort docu ent called >9$. 7ules go0erning co *ined trans,ort docu ent are designed *+ International >ha *er o% >o erce (Brochure &o.2?D) considering the international ,ractices. *MMER IA) D* %MEN('. 2. Performa InCoice As the na e denotes, it is an in0oice in esta*lished #er%or a, ,a+ ent o% -hich is not intended. 9hese in0oices are used %or o*taining %inancial assistance li.e #ac.ing >redit %ro a *an.ing institution, as #er%or a in0oice together -ith an o%%er, acce,tance on -hich -ill %or a legal contract. 4. ommercial InCoice It is the ost -idel+ used in0oice in co ercial transactions. It is the state ent o% account o% sale rendered *+ the seller to the *u+er and is ,re,ared on sellerAs letterhead or in the ,rescri*ed %or on A!" si<e ,a,er. It contains the na e o% the *u+er and his address, date, re%erence nu *er, 5uantit+, ar.s descri,tion o% goods unit ,rice, total 0alue o% goods, ter s o% ,a+ ent/> 2 B/1 no. Etc.

5. onsular InCoice

A consular in0oice is re5uired *+ so e countries li.e >anada, /SA, etcQa consul %or in0oice is re5uired to *e ,re,ared in a ,rescri*ed %or at and it should *e signed/certi%ied *+ the consul o% the i ,orting countr+ located in the countr+ o% e3,ort. 9he ain ,ur,ose o% a consular in0oice is to ena*le the i ,orterAs countr+ to collect accurate and authenticated in%or ation a*out the 0alue, 0olu e, 5ualit+, source etcF o% the i ,ort %or assessing i ,ort duties and %or other statistics ,ur,oses. 6. ustoms InCoice >ountries li.e /SA, >anada etc. need custo As in0oice. It is generall+ ade out on a s,ecial %or ,rescri*ed *+ the custo authorities o% the i ,orting countr+ and hel,s %or allo-ing entr+ o% goods in the i ,orting countr+ at ,re%erential tari%% rates. 9he in0oice %or s are generall+ a0aila*le at the consular o%%ice o% the i ,orting countr+ and are re5uired to *e signed and -itnessed a%ter dul+ %illing the sa e. 7. )eBaliIedJ &isaed InCoice 9hese are the in0oices s-orn %or their genuineness *+ the seller as *eing correct *e%ore the a,,ro,riate consulate/cha *er o% co erce/e *ass+ as the case a+ *e and the+ *ear the sta , and authentication o% the consulate/cha,ter o% co erce/e *ass+ as *eing in order. 9he+ collect a no inal charge %ro the seller %or doing this. IN'%RAN E D* %MEN(' 2. )etter of insurance. 9his is analogous to co0er note issued *+ the *ro.er. It is stated that ,articular su*'ect are ,laced under insurance and certi%icate/,olic+ o% insurance -ill *e issued later on. 4. BrokerKs ertificate 9his is also not acce,ta*le as *ro.er issues the sa e, as *ro.er acts %or the insured and cannot co ,el insurer to acce,t the ,ro,osal o% insurance. 5. Insurance ertificate. 9he insurance on Mo,en co0erN or M%loatingN ,olic+ co0ering all shi, ent on certain ter s and su*'ects to conditions laid do-n. /nless the insurance certi%icate gi0es details o% the conditions o% co0er it is not so uch 0alue to third ,art+ -ho negotiate the shi,,ing docu ents. 6. Insurance PolicD. 9his is a *asic legal docu ent!e0idencing contract o% insurance *et-een the insurer and insured. It gi0es %ull details o% all the ris.s co0ered. Marine or transit insurance ,olicies can *e assigned *+ the insured erel+ *+ endorse ent and deli0er+. Insurance ,olicies are issued in

di%%erent %or s li.e %loating ,olic+, o,en ,olic+ or co0er, s,eci%ic ,olic+ etcQ A %loating ,olic+ is a contract o% insurance %or co0ering a nu *er o% shi, ents, the details o% -hich are not %inali<ed -hen the contract o% insurance is conclude. 9he rele0ant details li.e na e o% the 0essel, destination, descri,tion o% cargo etc. is there%ore re5uired to *e declared su*se5uentl+ and endorse in the ,olic+. An o,en co0er /,olic+ is 0alid %or a gi0en ,eriod o% ti e or ,er anentl+ o,en. As ,er this ,olic+ the insurer underta.es to insure all the shi, ents %or -hich the details are alread+ inti ated to the insurer. A s,eci%ic ,olic+ co0ers s,eci%ic shi, ents and such ,olic+ is readil+ a0aila*le %or su* itting -ith the e3,ort docu ents. 9he co0erage o% ris.s is classi%ied into categories li.e A, B, > etc. and the insurance ,olicies are issued accordingl+. /INAN IA) D* %MEN(' 2. Draft It is *ill o% e3change. According to section ) o% the &egotia*le Instru ents Act, 1DD1 a *ill o% e3change is M an instru ent in -riting containing an unconditional order, signed *+ the a.er, directing a certain ,erson to ,a+ a certain su o% one+ onl+ on or to the order o% a ,erson to the *earer o% the instru ent.N A *ill o% e3change contains an order %ro the >reditor to the de*tor to ,a+ a s,eci%ic a ount to a ,erson entioned therein. 9he a.e o% the *ill is called the Mdra-erN the ,erson -ho is directed to ,a+ is called the Mdra-eeN. 9he ,erson -ho is entitled to recei0e ,a+ ent is called M,a+eeN. In an e3,ort transaction it is ad0isa*le that an e3,orter dra-s a dra%t, -hich a+ either Mat sight/on de and or usanceN. $ra%ts are ainl+ a.e in t-o sets -ith all other concerned docu ents and ailed to the %oreign corres,ondent through an authori<ed dealer %or ,resentation to the dra-ee/i ,orter, Ihen an+ o% the dra%ts is ,aid on ,resentation it is called an Mat sight/on de and dra%t and i% acce,ted -hen it is a usance dra%t *+ the dra-ee, then the second dra%t *eco es null and 0oid. 4. lean Bill and DocumentarD Bill Ihen the dra-er o% a *ill encloses -ith it a docu ent o% title to goods or an+ other e5ui0alent docu ent it is called a docu entar+ *ill. In an e3,ort transaction the e3,orter deli0ers to the *an.er, docu ents li.e %ull set o% B/1, AIB, ##7 etcQ together -ith docu ents li.e dra%ts, in0oices, ,ac.ing list etcQ %or ,resent ent to the dra-ee. $e,ending

u,on the tender o% the *ill i.e. $/# or $/A, the docu ents are deli0ered to the dra-ee against ,a+ ent or acce,tance. I% no such docu ents are attached -ith the *ill, then it is called as a clean *ill. 5. 'tamp DutD All dra%ts are dra-n on the dra-ee. /nli.e in ost o% the %oreign countries, the Indian sta , Act does not re5uired the sight dra%ts to *e Msta ,edN. I.e no sta , dut+ is a,,lica*le to dra%ts dra-n at sight/de and *ills. $ra%ts dra-n on usance *asis re5uire to *e ade5uatel+ sta ,ed. Sta , dut+ is the sa e no atter -hether the *ills is dra-n or negotiated in India. 6. Acceptance of Bill A *ill o% e3change ,a+a*le on de and or at sight or on a %i3ed date does not need acce,tance and hence ,resent ent %or acce,tance is unnecessar+ unless such ,resentation is s,eci%icall+ desired. A dra%t ,a+a*le a%ter sight ust *e ,resented %or acce,tance since the aturit+ date o% the *ill can onl+ *e deter ined a%ter such acce,tance. Ihen the dra-ee o% a *ill signi%ied his consent to the dra-erAs order in the *ill o% -riting his na e across the %ace o% the *ill -ith or -ithout the -ord Macce,tedN the *ill is said to *e acce,ted. Acce,tance o% a *ill, there%ore, Means that the dra-ee gi0es his consent to ,a+ the a ount entioned therein on the due date/ aturit+ date. 9he %oreign corres,ondent *an. usuall+ ad0ises the due date to the e3,orter through his *an.er in India. 7. NotinBJProtestinB of /oreiBn Bills At the ti e the *ills are %or-arded to the e3,orterAs *an., it is ad0isa*le to ,ro0ide the *an. -ith clear instructions/ste,s to *e ta.en in case the *ills are dishonored on ,resentation or aturit+ as the case a+ *e. 9he dra-er/holder %or 0alue a+ cause the dishonor to *e noted *+ a &otar+ #u*lic on the instru ent or u,on a ,a,er attached thereto or ,artl+ u,on each. 9he notar+ %or all+ a.es a de and o% acce,tance or ,a+ ent u,on the acce,tor or dra-ee and on his re%usal to do so notes the sa e on the *ill. 9hus M&otingN eans the %act that the *ill has *een dishonored is recorded on it and ,uts the dra-er/holder %or 0alue on a higher ,edestal in the e+es o% la-. 9his is done -ithin a reasona*le ti e a%ter dishonor. /suall+ the notar+ a.es the %ollo-ing o*ser0ations= ! a) 9he date o% dishonour.

*) 9he reason, i% an+ assigned %or such dishonor. c) 9he &otar+Es charges. 9he %oreign *ills ust, therea%ter #rotested %or dishonor, %or it is to *e ,laced as docu entar+ e0idence in the court o% la-. In other -ords the o*ser0ations ade thereon *+ the notar+ -ill *e ta.en at %ace 0alue. A ,rotest is a certi%icate issued *+ the &otar+ #u*lic attesting that the *ill has *een dishonored and -ill usuall+ contain= ! a) 9he na e o% the ,erson %or -ho and against -ho the instru ent has *een ,rotested. *) A state ent that the &otar+ #u*lic and the reason %or dishonor de anded acce,tance or ,a+ ent %ro the acce,tor or dra-ee. c) 9he ,lace and ti e o% dishonor o% the *ill d) 9he signature o% the &otar+ #u*lic. (!IRD PAR(" D* %MEN(' 2. ertificate of *riBin. (enerall+ the i ,orter to %urnish to hi a certi%icate stating that the goods are o% his countr+As origin -ill call u,on an e3,orter. Inde,endent *odies li.e, the >ha *er o% >o erce, Gandicra%ts Board, E3,ort ins,ection >ouncil etc, -ill gi0e this certi%icateQ Iho Issue the against ,a+ ent or no inal %ees a%ter *eing satis%ied o% the origin o% goods. 9here a+ *e a ,re%erential tari%% in %a0our o% goods %ro ,articular countries and there%ore, it has to *e ensured that the e3,orter -ho has *rought the into his o-n countr+ %ro so e other ,lace o% origin has not reshi,,ed the goodsF -hich is not eligi*le %or the ,re%erence.

4. Black )ist ertificate. 9his is to certi%+ that the shi,/aircra%t carr+ing the goods has not touched a ,articular countr+ on its 'ourne+ or that the goods are not o% a ,articular countr+. 9his certi%icate is usuall+ called -here countries ha0e strained ,olitical relations -ith another. 5. PackinB )ist. 9his docu ent sho-ing details o% goods contained in each

,arcel/shi, ent. It sho-s ite !*+!ite the contents o% the containers or ,arcels shi,,ed to ena*le the *u+er / recei0er o% the shi, ent to chec. the shi, ent. 6. ManufacturerKsJ'upplierKs GualitDJInspection ertificate. 9his is a certi%icate to the e%%ect that the goods, -hich ha0e *een anu%actured / su,,lied, are as ,er the re5uire ent o% the contract o% sale. 7. ertificate of Inspection. Ins,ection certi%icate, indicating that goods ha0e *een ins,ected *e%ore so e countries need under so e contracts or shi, ent. 9his certi%icate is generall+ re5uired to *e issued *+ one o% the authori<ed inde,endent Ins,ection Agencies li.e E3,ort Ins,ection Agenc+, 9e3tile >o ittee, and >entral Sil. Board etc. 8. ertificate of AnalDsis. >erti%icate regarding the che ical anal+sis o% the goods issued *+ a co ,etent o%%ice. >erti%icate o% shi,,ing agent that a certain lot o% goods ha0e *een shi,,ed. 9. !ealt0J&eterinarDJ'anitarD ertificate. Ihen the goods i ,orted are %oodstu%%s, arine ,roducts, li0estoc. etc. a certi%icate %ro the health/0eterinar+/sanitar+/authorities is called %or. 9his is *ecause the i ,orter desires to .no- i% the goods are %it %or hu an consu ,tion. D* %MEN(' RE@%IRED B" EE !AN#E *N(R*) 2. #RJ EE !AN#E *N(R*) *P" J'D/ /*RM. 9his is one o% the ost i ,ortant docu ents re5uired *+ 7eser0e *an. o% India %or E3change >ontrol #ur,ose. But no- (7/S$4 %or s has *een -ai0ed o%% incase the total 0alue o% shi, ent is less /SB!2)000. 9he (7 %or contains the *rie% details o% shi, ent sa e as entioned in the shi,,ing *ill. 9his co es under the 4oreign E3change Manage ent Act. But S$4 is a sel%!declaration ade *+ the e3,orter the re,atriation o% the a ount -ithin the sti,ulated ti e, under the Indian >usto s E$I s+ste s %or E3,orts (I>ES/E).

4. P.P /*RM 9his is also one o% the ost i ,ortant docu ents %or e3change control, ,rescri*ed *+ 7BI, i% the e3,ort ,arcel/shi, ent is routed through Authori<ed 4oreign #ost o%%ice, as a ,ostal ,arcel. But no- ## %or s has *een -ai0ed o%% in case the total 0alue o% shi, ent is less /SB!2)000.

IN *(ERM'
1anguage is one o% the ost co ,le3 and i ,ortant tools o% International 9rade. As in an+ co ,le3 and so,histicated *usiness, s all changes in -ording can ha0e a a'or i ,act on all as,ects o% a *usiness agree ent. Iord de%initions o%ten di%%er %ro industr+ to industr+. 9his is es,eciall+ true o% glo*al trade. Ihere such %unda ental ,hrases as Sdeli0er+S can ha0e a %ar di%%erent eaning in the *usiness than in the rest o% the -orld. 4or *usiness ter inolog+ to *e e%%ecti0e, ,hrases ust ean the sa e thing throughout the industr+. 9hat is -h+ the International >ha *er o% >o erce created SI&>:9E7MSS in 1?3;. I&>:9E7MS are designed to create a *ridge *et-een di%%erent e *ers o% the industr+ *+ acting as a uni%or language the+ can use. Each I&>:9E7M re%ers to a t+,e o% agree ent %or the ,urchase and shi,,ing o% goods internationall+. 9here are 13 di%%erent ter s, each o% -hich hel,s users deal -ith di%%erent situations in0ol0ing the o0e ent o% goods. 4or e3a ,le, the ter 4>A is o%ten used -ith shi, ents in0ol0ing 7o/7o or container trans,ortF $$/ assists -ith situations %ound in inter odal or courier ser0ice!*ased shi, ents. I&>:9E7MS also deal -ith the docu entation re5uired %or glo*al trade, s,eci%+ing -hich ,arties are res,onsi*le %or -hich docu ents. $eter ining the ,a,er-or. re5uired to o0e a shi, ent is an i ,ortant 'o*, since re5uire ents 0ar+ so uch *et-een countries. 9-o ite s, ho-e0er, are standard= the co ercial in0oice and the ,ac.ing list. I&>:9E7MS -ere created ,ri aril+ %or ,eo,le inside the -orld o%

glo*al trade. :utsiders %re5uentl+ %ind the di%%icult to understand. See ingl+ co on -ords such as Sres,onsi*ilit+S and Sdeli0er+S ha0e di%%erent eanings in glo*al trade than the+ do in other situations. In glo*al trade, Sdeli0er+S re%ers to the seller %ul%illing the o*ligation o% the ter s o% sale or to co ,leting a contractual o*ligation. S$eli0er+S can occur -hile the erchandise is on a 0essel on the high seas and the ,arties in0ol0ed are thousands o% iles %ro the goods. In the end, ho-e0er, the ter s -ind u, *oiling do-n to a %e- *asic s,eci%ics= >osts= -ho is res,onsi*le %or the e3,enses in0ol0ed in a shi, ent at a gi0en ,oint in the shi, entEs 'ourne+W >ontrol= -ho o-ns the goods at a gi0en ,oint in the 'ourne+W 1ia*ilit+= -ho is res,onsi*le %or ,a+ing da age to goods at a gi0en ,oint in a shi, entEs transitW It is essential %or shi,,ers to .no- the e3act status o% their shi, ents in ter s o% o-nershi, and res,onsi*ilit+. It is also 0ital %or sellers 2 *u+ers to arrange insurance on their goods -hile the goods are in their SlegalS ,ossession. 1ac. o% insurance can result in -asted ti e, la-suits, and *ro.en relationshi,s. I&>:9E7MS can thus ha0e a direct %inancial i ,act on a co ,an+Es *usiness. Ihat is i ,ortant is not the acron+ s, *ut the *usiness results. :%ten co ,anies li.e to *e in control o% their %reight. 9hat *eing the case, sellers o% goods ight choose to sell >I4, -hich gi0es the a good gras, o% shi, ents o0ing out o% their countr+, and *u+ers a+ ,re%er to ,urchase 4:B, -hich gi0es the a tighter hold on goods o0ing into their countr+. In this glossar+, -eEll tell +ou -hat ter s such as >I4 and 4:B ean and their i ,act on the trade ,rocess. In addition, since -e reali<e that ost international *u+ers and sellers do not handle goods the sel0es, *ut -or. through custo s *ro.ers and %reight %or-arders, -eEll discuss ho- *oth %it into the ter s under discussion. I&>:9E7MS are ost %re5uentl+ listed *+ categor+. 9er s *eginning -ith 4 re%er to shi, ents -here the ,ri ar+ cost o% shi,,ing is not ,aid %or *+ the seller. 9er s *eginning -ith > deal -ith shi, ents -here the

seller ,a+s %or shi,,ing. E!ter s occur -hen a sellerEs res,onsi*ilities are %ul%illed -hen goods are read+ to de,art %ro their %acilities. $ ter s co0er shi, ents -here the shi,,er/sellerEs res,onsi*ilit+ ends -hen the goods arri0e at so e s,eci%ic ,oint. Because shi, ents are o0ing into a countr+, $ ter s usuall+ in0ol0e the ser0ices o% a custo s *ro.er and a %reight %or-arder. In addition, $ ter s also deal -ith the ,ier or doc.ing charges %ound at 0irtuall+ all ,orts and deter ining -ho is res,onsi*le %or each charge. 7ecentl+ the I>> changed *asic as,ects o% the de%initions o% a nu *er o% I&>:9E7MS, *u+ers and sellers should *e a-are o% this. 9er s that ha0e changed ha0e a star alongside the .

EE3-orks
:ne o% the si ,lest and ost *asic shi, ent arrange ents ,laces the ini u res,onsi*ilit+ on the seller -ith greater res,onsi*ilit+ on the *u+er. In an EH!Ior.s transaction, goods are *asicall+ ade a0aila*le %or ,ic.u, at the shi,,er/sellerEs %actor+ or -arehouse and Sdeli0er+S is acco ,lished -hen the erchandise is released to the consigneeEs %reight %or-arder. 9he *u+er is res,onsi*le %or a.ing arrange ents -ith their %or-arder %or insurance, e3,ort clearance and handling all other ,a,er-or..

/*B </ree *n Board>

:ne o% the ost co onl+ used!and isused!ter s, 4:B eans that the shi,,er/seller uses his %reight %or-arder to o0e the erchandise to the ,ort or designated ,oint o% origin. 9hough %re5uentl+ used to descri*e inland o0e ent o% cargo, 4:B s,eci%icall+ re%ers to ocean or inland -ater-a+ trans,ortation o% goods. S$eli0er+S is acco ,lished -hen the shi,,er/seller releases the goods to the *u+erEs %or-arder. 9he *u+erEs res,onsi*ilit+ %or insurance and trans,ortation *egins at the sa e o ent.

/ A </ree arrier>
In this t+,e o% transaction, the seller is res,onsi*le %or arranging

trans,ortation, *ut he is acting at the ris. and the e3,ense o% the *u+er. Ihere in 4:B the %reight %or-arder or carrier is the choice o% the *u+er, in 4>A the seller chooses and -or.s -ith the %reight %or-arder or the carrier. S$eli0er+S is acco ,lished at a ,redeter ined ,ort or destination ,oint and the *u+er is res,onsi*le %or Insurance.

/A' </ree AlonBside '0ip>L

In these transactions, the *u+er *ears all the trans,ortation costs and the ris. o% loss o% goods. 4AS re5uires the shi,,er/seller to clear goods %or e3,ort, -hich is a re0ersal %ro ,ast ,ractices. >o ,anies selling on these ter s -ill ordinaril+ use their %reight %or-arder to clear the goods %or e3,ort. S$eli0er+S is acco ,lished -hen the goods are turned o0er to the Bu+ers 4or-arder %or insurance and trans,ortation.

/R < ost and /reiB0t>

9his ter %or erl+ .no-n as >&4 (>24) de%ines t-o distinct and se,arate res,onsi*ilities!one is dealing -ith the actual cost o% erchandise S>S and the other S4S re%ers to the %reight charges to a ,redeter ined destination ,oint. It is the shi,,er/sellerEs res,onsi*ilit+ to get goods %ro their door to the ,ort o% destination. S$eli0er+S is acco ,lished at this ti e. It is the *u+erEs res,onsi*ilit+ to co0er insurance %ro the ,ort o% origin or ,ort o% shi, ent to *u+erEs door. (i0en that the shi,,er is res,onsi*le %or trans,ortation, the shi,,er also chooses the %or-arder.

I/ < ost. Insurance and /reiB0t>

9his arrange ent si ilar to >47, *ut instead o% the *u+er insuring the goods %or the ariti e ,hase o% the 0o+age, the shi,,er/seller -ill insure the erchandise. In this arrange ent, the seller usuall+ chooses the %or-arder. S$eli0er+S as a*o0e, is acco ,lished at the ,ort o% destination.

P( < arriaBe Paid (o>

In >#9 transactions the shi,,er/seller has the sa e o*ligations %ound -ith >I4, -ith the addition that the seller has to *u+ cargo insurance, na ing the *u+er as the insured -hile the goods are in transit.

IP < arriaBe and Insurance Paid (o>

9his ter is ,ri aril+ used %or ulti odal trans,ort. Because it relies on the carrierEs insurance, the shi,,er/seller is onl+ re5uired to ,urchase ini u co0erage. Ihen this ,articular agree ent is in %orce, 4reight 4or-arders o%ten act in e%%ect, as carriers. 9he *u+erEs insurance is e%%ecti0e -hen the goods are turned o0er to the 4or-arder.

DA/ <DeliCered At /rontier>

Gere the sellerEs res,onsi*ilit+ is to hire a %or-arder to ta.e goods to a na ed %rontier, -hich usuall+ a *order crossing ,oint, and clear the %or e3,ort. S$eli0er+S occurs at this ti e. 9he *u+erEs res,onsi*ilit+ is to arrange -ith their %or-arder %or the ,ic. u, o% the goods a%ter the+ are cleared %or e3,ort, carr+ the across the *order, clear the %or i ,ortation and e%%ect deli0er+. In ost cases, the *u+erEs %or-arder handles the tas. o% acce,ting the goods at the *order across the %oreign soil.

DE' <DeliCered Ex '0ip>

In this t+,e o% transaction, it is the sellerEs res,onsi*ilit+ to get the goods to the ,ort o% destination or to engage the %or-arder to the o0e cargo to the ,ort o% destination uncleared. S$eli0er+S occurs at this ti e. An+ destination charges that occur a%ter the shi, is doc.ed are the *u+erEs res,onsi*ilit+.

DE@ <DeliCered Ex @uaD>L

In this arrange ent, the *u+er/consignee is res,onsi*le %or duties and charges and the seller is res,onsi*le %or deli0ering the goods to the 5ua+, -har% or ,ort o% destination. In a re0ersal o% ,re0ious ,ractice, the *u+er ust also arrange %or custo s clearance.

DDP <DeliCered DutD Paid>

$$# ter s tend to *e used in inter odal or courier!t+,e shi, ents. Ihere*+, the shi,,er/seller is res,onsi*le %or dealing -ith all the tas.s in0ol0ed in o0ing goods %ro the anu%acturing ,lant to the *u+er/consigneeEs door. It is the shi,,er/sellerEs res,onsi*ilit+ to insure the goods and a*sor* all costs and ris.s including the ,a+ ent o% dut+ and %ees.

DD% <DeliCered DutD %npaid>

9his arrange ent is *asicall+ the sa e as -ith $$#, e3ce,t %or the %act that the *u+er is res,onsi*le %or the dut+, %ees and ta3es.

Chapter-8 Suggestions & Conclusion

Suggestions
9he anage ent has to loo. a%ter and assign tas.s to its ti e to ti e so that things a+ o0e %aster e ,lo+ees %ro

9he :rganisation s.ills and talents

a+ ,ro0ide training and de0elo, ent

,rogra s %or the e3isting e ,lo+ees to de0elo, ,ro%essional

9he :rganisation has greater sco,e %or increasing its e3,orts *+ e3,orting ore 5uantities.

Conclusion
9he :rganisation is ho-e0er success%ul in carr+ing on its *usiness o,erations. It ar.ed i ,ro0e ent in its ,er%or ance o0er the +ears. 9here is e0en greater sco,e %or e3,anding its trade acti0ities a.ing a re ar.a*le e3cellence in its %ield o% *usiness. It has *een ,ro0ed to *e success%ul in achie0ing its o*'ecti0es and %ul%illing its %unctions e%%ecti0el+.

Chapter-9 Bibliography

Bibliography
1. Information taken from the web sites of : Tobacco Board [www.tobaccoboard.com ] Indian Tobacco Association [www.smenetwork.net] Central Tobacco Research Institute(CTRI [ www.ctri.or!.in ] ". #anual of $%&ort 'ocumentation b( ).*eeraredd( + ). #amatha [ Commercial ,aw )ublications India )ri-ate ,imited ] .. $%&ort / )olic(0 )rocedures + 'ocumentation b( #.I.#a1an [ 2now 3hite )ublications )ri-ate ,imited ]