c


 

 
 


 
 

Presented by:
Ashish Omar
Krishanu Bose
Pramod Kumar
Nitin Verma
Neeraj Kr. Ravi
 Š r A
PREPARE
BUSINESS PLAN

Š LEGAL
REGISTRATION

MARKET
IDENTIFICATION NEED ANALYSIS

CHANNEL AGENTS, DSTBTR,

SELECTION WHLSLRS, SALES REP.,
END USERS

IDENTIFYING THE TRADE FAIRS/

POTENTIAL Going for
INTERNET/ procuring
BUYERS/ PERSONAL
CUSTOMERS orders
VISITS/
r AGREEING UPON
PRICING, FRIEGHT
CHARGES,DOCUMENT, SIGNING OF
CURRENCY, DELIVERY CONTRACT
ETC.

ADVANCE
DETERMINING THE PAYMENT/ LETTER
PAYMENT TERMS OF CREDIT/ OPEN
ACCOUNT

IMPORTER
SENDS PACKAGING
PRODUCTION WAREHOUSE
PURCHASE
ORDER

CERTIFICATE OF
QUALITY
CONTROL
 INSURANCE
PREPARE CERTIFICATE,
MARINE, AIR, SHIPPING BILL,
AND DOCS MATE·S RECEIPT,
BILLS

TRANSPORTATION
SUBMISSION OF MARITIME/ AIR/
DOCS TO BANKS ROAD

BANK SENDS DOCS TO

IMPORTER·S BANK
.PAYMENT IS DONE
 @
 


Š Political barriers to trade

Š Scope of exporter's selected product

Š Demand stability

Š Preferential treatment to products from

developing countries
Š Market penetration by competitive countries .

Š Distance of potential market

Š Transportation

Š Language
Š Tariff and non-tariff barriers

Š Distribution infrastructure and size of demand

Š Life span of market and product requirements

Š sales and distribution channels

¢  


  


Š Export Promotion Council,

Š Federation of Indian export Organization (FIEO)
Š IIFT
Š Indian Trade Promotion Organization (ITPO)
Š Indian Embassies
Š Abroad & Foreign Embassies in India
Š Import Promotion Institutions Abroad
Š Overseas Chambers of Commerce and Industries
Š Various Directories, Journals, Market Survey
Reports
Š Primary research

Š Secondary research
¢
Gather information on a broad range of
markets.
It includes:
Š The demand for product/service.

Š The size of the potential audience.

Š Whether the target audience can afford product.

Š What the regulatory issues are that impact on

exports of product.
Š Ease of access to this market ² proximity/freight.

Š Are there appropriate distribution channels for

product/ service
¢
˜


 

  



 
Questions to be answered in relation to
the product
Š Similar products

Š Uniqueness

Š Way of obtaining and use

Š Providers
Š Other source of import ,if any

Š Local availability

Š Competitor

Š Market size

Š Other ways to obtain sales/representation

Š Existing prices

Š Mark-ups at different distribution levels

Š Import regulations, duties or taxes, including

compliance and professional registrations

Š Translation of promotional material and

packaging.
@


 



Š Friends and relatives

Š International Trade Fairs and Exhibitions

Š International Yellow Pages

Š Private Indian Publications Directories

Š International Trade Directories/

Journals/periodicals
Š Monthly bulletins e.g. Indian Trade Journal.

Š Embassies, Consultants

Š ITPO, IIFT

Š Contacting authorized dealers in foreign exchange

with whom exporter is maintaining bank account.

Š Advertising in newspapers having overseas

editions and other foreign newspapers and
magazines etc.
Š Corresponding and sending brochures and
product literature .

Š Foreign markets and establishing personal rapport

.
Š Buyer-seller meets and meeting the members

of foreign delegation.

Š International trade fairs and seminars.

Š Overseas Advertisement .
Š Exports through Export Consortia

Š Export through Canalizing Agencies

Š Export through Other Established Merchant

Š Exporters or Export Houses, or Trading Houses

Š Direct Exports

Š Export through Overseas Sales Agencies.

Š Necessary to get the best business deal

v
  

Š Avoid conflict

Š controversy and criticism

Š Effective communication
Š Coherence, creativity, compromise,

Š concessions, commonality, consensus,

Š commitment and compensation in business

negotiations.

Š Most important issue : Price

Acknowledgement of order

Examination :-
Items, specification,pre-shipment inspection,payment
conditions, special packaging, labeling and marketing
requirements,shipment and delivery date, marine
insurance, documentation requirement etc.

Š If satisfied, confirmation is sent

 

 
 

To avoid disputes, it is necessary to enter into an export
contract with the overseas buyer. For this purpose,
export
contract should be carefully drafted incorporating
comprehensive but in precise terms
Š Product, Standards and Specifications
Š Quantity
Š Inspection
Š Total Value of Contract
Š Terms of Delivery
Š Taxes, Duties and Charges
Š Period of Delivery/Shipment
Š Packing, Labeling and Marking
Š Terms of Payment-- Amount/Mode & Currency
Š Discounts and Commissions
Š Licenses and Permits
Š Insurance
Š Documentary Requirements
Š Guarantee
Š Excuse for Non-performance of contract
Š Remedies
Š Arbitration
Š Important tool for promoting sales and facing
international competition should be realistically

Š Determining factors
¬ Range offered
¬ deliveries and continuity in supply
¬ after-sales service
¬ Product differentiation
¬ brand image
¬ frequency of purchase etc.
Š 
'Ex-works' means that your
responsibility is to make goods available to the
buyer at works or factory. The full cost and risk
involved in bringing the goods from this place
to the desired destination will be borne by the
buyer. This term thus represents the minimum
obligation for you.

Š v


 ˜v ˜  v


 
v  These terms
are used when the goods are to be carried by
rail, but they are also used for road transport.
Your obligations are fulfilled when the goods
are delivered to the carrier.
Š v


@ 
 v@ Once the goods
have been placed alongside the ship, your
obligations are fulfilled and the buyer notified.

Š v


  
v   responsibility ends the
moment the contracted goods are placed on
board the ship, free of cost to the buyer at a
port of shipment named in the sales contract.

Š ã v

 ãv You must on your
own risk and not as an agent of the buyer,
contract for the carriage of the goods to the port
of destination named in the sale contract and
pay the freight.
Š v

 
ã


ã While C&F is

used for goods which are to be carried by sea, the
term "DCP" is used for land transport only,
including national and international transport by
road, rail and inland waterways.

Š  !  This is an arrival contract and

means that you make the goods available to the
buyer in the ship at the named port of destination
as per sales contract.

Š 
"


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Š 
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##
Š 




Š 
 





 
 Under the Export(Quality
Control and Inspection) Act, r
, about r
commodities

Š Foreign buyers lay down their own standards /

specifications and may insist upon inspection by their
own nominated agencies
 
 
 
!

 exporter

Obtains sample as per buyer

specification from vendor

Sends sample for approval of buyer

After approval puts order in bulk

with vendor

Obtains material in bulk from vendor

shipment
Š Inspection as per standardized pre-shipment
export documents ,inspection fee and
following documents should sent be the
nearest office of the respective Export


 
"
 Copy of the Commercial
Invoice, Copy of letter of credit, Details of packing
specifications, Copy of the export order/contract.
Š If all criteria are satisfied the inspection
agency issues, generally within four days of
receipt of intimation for inspection, the
necessary certificate of inspection to the
exporter in the prescribed Performa in five
copies.

(rst original for custom, 2nd copy for foreign buyer, rd
copy for exporter's use , 4th copy for data bank and fifth
copy is retained with agency)
Š In process quality control(IPQC):- e.g.
engineering goods chemicals etc.

Š ISO  :- TQM concept

Š a)series of standards
b) quality assurance :-how a company can establish
document and maintain an effective and economic
quality control system
Š Labeling:- Differ country to country, indicate quality,
quantity and method of use .

Š Packaging:- Vital role in getting product in top

condition in market and representation of product .I
should have conformity with the instructions issued
by the importer.
Export documentation
Š Commercial documents

Š Auxiliary documents

Š Regulatory documents

Š Miscellaneous documents
@ ã 

 

Š For effecting physical transfer of goods and their title
from the exporter to the importer.

Š Example :- Performa invoice, commercial invoice,

packing list, shipping instructions, intimation for
inspection, certificate, of inspection of quality control,
insurance declaration, certificate' of insurance, mate's
receipt, bill of lading or combined transport document,
application for certificate origin, certificate of origin,
shipment advice and letter to the bank for collection or
negotiation of documents
r ã 

" 

 
  

Information related with exporter ,consignee,
vessel, port of loading and discharge, origin of
goods, Terms of delivery and payment, Marks
and container number, Signature of the
exporter with date etc.

$ %
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The certificate is issued
by the inspection authority such as the export
inspection agency. This certificate states that
the goods have been inspected before
shipment, and that they confirm to accepted
quality standards.
 &



 
 There are
different types of policies such as Specific
Policy, Floating Policy, Open Policy, Open
Cover Policy.

4) ã


Consular invoice is a
document required mainly by the Latin
American countries like Kenya, Uganda etc«..

ã
 
 chamber of commerce
logo, exporter and consignee address, number
of Vessel of Flight, number of containers and
packages etc.
Š Name and logo of chamber of commerce.
Š Name and address of the exporter.
Š Name and address of the consignee.
Š Name and the number of Vessel of Flight
Š Name of the port of loading.
Š Name of the port of discharge and place of delivery.
Š Marks and container number.
Š Packing and container description.
Š Total number of containers and packages.
Š Description of goods in terms of quantity.
Š Signature and initials of the concerned officer of the
issuing authority.
Š Seal of the issuing authority.
6  
The bill of lading is a document
issued by the shipping company or its agent
acknowledging the receipt of goods on board
the vessel, and undertaking to deliver the
goods in the like order and condition as
received, to the consignee or his order,
provided the freight and other charges as
specified in the bill have been duly paid.

 An airway bill, also called an air

consignment note, is a receipt issued by an
airline for the carriage of goods.
  !"
Š Name and logo of the
shipping line.
Š Name and address of the
shipper.
Š Name and the number of
vessel.
Š Name of the port of loading.
Š Name of the port of discharge
and place of delivery.
Š Marks and container number.
Š Packing and container
description.
Š Total number of containers
and package
Š Name of the airport of
departure and destination.
Š The names and addresses of
the consignor, consignee and
the first carrier.
Š Marks and container number.
Š Packing and container
description.
Š Total number of containers
and packages.
Š Description of goods in terms
of quantity
À 

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$%  &'

(
The instrument is used in
receiving payment from the importer. The
importer may prefer Bill of Exchange to LC as
it does not involve blocking of funds. A bill of
exchange is drawn by the exporter on the
importer, to make payment on demand at sight
or after a certain period of time.
 )

 Name and address of
exporter and importer, mode of
transportation, port of discharge and final
destination, port of discharge and final
destination, Buyer's and exporter·s reference
number, packing description etc
¬
)
 
*

v r the pre shipment inspection, necessary
application is given to the concerned inspection agency for conducting the
inspection
and issue of certificate thereof.

¬

 


Where the insurance is to be covered by the
exporter, the shipper has to give details of the shipment to the insurance
company for necessary insurance cover. 




 ( "



Name of the shipper \ exporter.

Name & address of buyer.
Details of goods such as packages, quantity, value in currency
 Name of the Vessel \ Aircraft.
Value for which insurance to be covered
Š @  
ã

 

: An application
has to be made to the concerned authority with
required documents.

Š &
)˜

 @ receipt issued by the Commanding

officer of the ship when the cargo is loaded, an
evidence that goods are loaded in the vessel.

Š  


Issued by the Shipping/Conference
Line intimating the exporter about the reservation of
space for shipment of cargo.
Š  %
 when the documents are to
sent for customs clearance, necessary instructions are
to be given. It includes name of vessel, goods carried,
freight amount, instructions for obtaining bill of
landing.

Š 




    
 A set of
instruction for the bank as to how to negotiate or
discount or collection for forwarding the same to the
customer and also for realization of export proceeds.
Š Name and address of the buyer.
Š Details of various documents being sent and the number of
the copies thereof.
Š Name and address of the buyer¶s bank if available.
Š If the bill amount is to be adjusted against any forward
exchange cover.
Š In case of credit bill who has to bear the interest, either
exporter or if the same is to be collected from the buyer.
Š Instructions in case non-acceptance/non-payment by the
buyer.
Š Pre-shipment export documents
Š Prescribed by the different government departments and
bodies .
Š export inspection, foreign exchange regulation, export trade
control, customs, etc.

Š   The main customs document grants

permission for the shipment of goods.

Š @˜r
ã



 In case goods meant for
export are cleared directly from the premises of a
manufacturer, the exporter can avail the facility of
exemption from payment of terminal excise duty
Š  
ã 
 

  v
 : All exporters
must declare the details of shipment for monitoring by
the Reserve Bank of India.

Š 
 @  The application to be made to the
customs officials before shipment of goods.

Š !


!ã
 
!*

 : Before the
goods are being taken inside the port for loading,
necessary permission has to be obtained for moving the
vehicle into the customs area.
Š  ã

 
˜
+  The negotiating bank
declares the fob value of exports and for the date of
realization of the export proceeds.
Š  , ã

 
 This is required by certain
nations who have strained political and economical
relations with the so called ´Black Listed Countriesµ.

Š ,
ã

 
 Importers in the European
Community require a language certificate along with
the GSP certificate in respect of handloom cotton
fabrics.

Š v

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 ã

 
 The shipping company
may issue a separate certificate for payment of the
freight charges instead of declaring on the main
transport documents.
Š %



ã

 
This is the certificate
issued by the Insurance Company as
acknowledgement of the amount of premium paid for
the insurance cover.

Š ã -
ã

 
 
!
This
certificate should contain special details as to the origin
and value of goods, which are useful for determining
import duty.

Š ã %" 
This is required by the countries like

Canada, USA for imposing preferential tariff rates.
Š ,
+
%" 
 It is just like consular invoice,
which requires certification from Consulate or
authorized mission, stationed in the exporter·s country.
Š Octroi is the local tax levied by the civic body on goods
entering into the city.
Š Goods in transit are subject to risks of loss of
goods arising due to fire on the ship, perils of
sea, thefts etc. Marine insurance protects losses
incidental to voyages and in land
transportation.
Š Marine Insurance Policy is one of the most
important document used as collateral security
because it protects the interest of all those who
have insurable interest at the time of loss. The
exporter is bound to insure the goods.
Š 
  #This policy is taken to cover different risks for a
single shipment.

Š v  #This policy is taken to cover all shipments for

same months &there is no time limit.

Š 
 #This policy remains in force until cancelled by

either party, i.e. insurance company or the exporter.

Š 
ã "

 # This policy is generally issued for r2
months period, for all shipments to one or all destinations.
Š %



Differs upon from product to
product and a number of other such factors, such as,
distance of voyage, type and condition of packing .

4 

# $ 


Š The name and address of the insurance company.

Š The name of the assured & description of the risk

covered.
Š A description of the consignment.

Š The sum insured & the date of issue.

Š The place where claims are payable together with

details of the agent to whom claims may be directed &
any other details, as applicable.
Š
Š The shipment of export cargo has to be made with prior
permission of, and under the close supervision of the
custom authorities.

Š Goods cannot be loaded on board the ship unless a formal

permission is obtained.

Š Permission is given when satisfied that the goods being

exported are of the same type and value as have been
declared by the exporter.
Š -   
 The exporter or his agent
submits the necessary documents along with the
shipping bill to the Custom House.

Š !

    
  The Customs Appraiser
verifies the documents and appraises the value of
goods.

Š ã



 Carting Order is the permission to
bring the goods inside the docks
Š 

* 

 After securing the
carting order, the goods are moved inside the docks &
stored in the sheds at the docks.

Š   * The customs examiner

examines the cargo and records his report on the
duplicate copy of the shipping bill.

Š , *  The goods are then loaded on the

ship.

Š - , The shipping company

issues bill of landing.
Payment in advance
Documentary Bills
Letter of Credit
Open Account
Counter Trade
Š Doesn·t involve any risk of bad debts.

Š Provided entire amount has been received in advance.

Š At times, a certain per cent is paid in advance, say 5

and the rest on delivery.
Š The exporter agrees to submit the documents to his
bank along with the bill of exchange.

Š There are two main types of documentary bills:

 
  #


 
  @


Š _ 
 
  
 The
documents are released to the importer against
payment. This method indicates that the
payment is made against Sight Draft.
Necessary arrangements will have to be made
to store the goods, if a delay in payment occurs.

Š _ 
 
 "

 The
document are released against acceptance of
the Time Draft i.e. credit allowed for a certain
period, say  days
Š It is ´an undertaking by importer·s bank stating that
payment will be made to the exporter if the required
documents are presented to the bank.µ

Š It is a more secured method.

Š @: The buyer or importer

Š %  Importer·s bank

Š 


#: The party to whom the L/C is addressed

Š @"  Issuing bank·s branch in the exporter·s country

Š ã  
  Bank in beneficiary·s country which
guarantees the credit
Š

    The bank to whom the beneficiary present
his documents for Payment
Š ˜
-
  the bank which will reimburse the
negotiating bank
Š Name and address of the bank establishing the
letter of credit
Š Letter of credit number and date
Š The letter of credit is irrevocable
Š Date of expiry and place of expiry
Š Value of the credit
Š Product details to be shipped
Š Port of loading and discharge
Š Mode of transport
Š Final date of shipment
Š Details of goods to be exported like description
of the product, quantity, unit rate.

Š Type of packing

Š Documents to be submitted to the bank upon

shipment.

Š Tolerance level for both quantity and value.

Š Reimbursement clause
Š 
! The money is transferred in account
provided by exporter to buyer.

Š ã 



 a system of providing goods in
lieu of goods. Instead of providing with money
they would provide with some other material,
product or services.
Š Special thanks to: Mr. Vishal
Sn. Merchandiser; Radhnik Exports , Gurgaon

Š A guide on export, policy, procedure and documentation

By: M.I. Mahajan

Š Export management
By: T.A.S. Balagopal

Š Export management
By: N.Kumar and R.Mittal

Š Magazines: Garment line, Apparel online

Š www.google.com
Š
Š www.exportindia.com
Š
Š www.exportpolicy.com
Š
Š www.expoinfo.com
Š
Š www.apparel.co.in
Š
Š www.indiandata.com