exports

From India to other countries

Exports-increase in revenue

Exports contribute to a major extent in increasing revenue to the country at the same increase profitability to the manufacturer or the trader which in turn creates employment in multifold, but the only factor that comes is being in India we do find some parties who are trouble some, but how can we trust a firm which is far away and concerned persons are never met before, then how about my security? as generally huge amounts are involved this can be a debacle if something goes wrong in the transaction?

ECGC
This is where your tension is eased ,ECGC India, established in 1957 takes care of various risks involved in export business it offers credit risk insurance cover for exporters against loss in export of goods or services 1 standard policy 2 small exporters policy( turn over not exceeds 50 lacs /year.)

contd

3 specific shipment policy 4 export (specific buyers) policy

5 export turn over policy

6 exposure single buyers policy 7 exposure multi buyers policy

contd
8 consignment exports policy 9Cinsignment exports (stock holding agent) policy 10 service policy (service industries) 11specific contract for supply contract A specific shipment (s) policy B specific contract policy

contd
12 software project policy These different policies are depended upon type of exports and situations of countries the products are being exported The following risks are covered depending on the policies we opt as per our needs in general A. commercial risks B. political risks

contd
A. commercial risksInsolvency of the buyer
Failure of the buyer to make the payment due within a specified period normally 4 months from the date of issue Buyers failure to accept the goods, subject to certain conditions

contd
B. political risksImposition of restriction by the government of the buyers country or any government action, which may block or delay the transfer of payment made by the buyer war, civil war, revolution or civil disturbances in the buyers country ,new import restrictions or cancellations of a valid import license in the buyers country

Political risks (contd)

Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which can not be recovered from the buyer Any other cause of loss occurring outside India not normally insured by general insurers and beyond the control of both exporter and the buyer

Status certificates (govt. export performance certificates)

Category total- FOB/FOR value during the preceding

three licensing years (in Rs)
EXPORT HOUSE 45 CRORE

TRADING HOUSE -

300 CRORE

STAR TRADING HOUSE -1500 CRORE SUPER STAR TRADING HOUSE- 600CRORE

Are you relaxed now?

You should be by now because when you take a risk you will be concerned about your security of the stock or about currency expectations but thats not all-------------1.We have to register for IEC (import export code) from DGFT (director general of foreign trade) 2.Registration cum membership certificate (RCMC) from export promotion council 3.Registration with ECGC

But think! Can we export?

Are the products we do business are export worthy Are these products are recognised by the govt for exports If yes any restrictions by the govt on these products What is the demand of these products in other countries

contd
Possible nearest country where we can start doing business to begin with Present production capacity and full capacity to meet the required demand for goods to be delivered in time Are we up to the quality standards to export our products Are we ready to upgrade our machinery to meet standards if required

Are we in a position to wait if there is delay in payments due to various reasons in order to run the show with out any hindrance (financially ) An importer sends us an enquiry basing on follow up to send a quotation mentioning details of products ,price, quality, mode of delivery terms and conditions if any Any importer will be asking the samples to gain confidence on the quality and to meet his requirements here we actually make the beginning in the exports procedures Enough care has to be taken for the shipment of samples as that is going to decide your future in exports because quality and specifications should be intact in order to get better results

contd

You have done it, what next?

Your product has been approved by the importer of X country now you are in all smiles

Export procedures

1 Indent -(with all the details as told mode of payment is also mentioned generally on L/C) 2 Pro forma invoice -(for clarification on total amount on foreign currency and other costs involved for shipping etc) 3 Export invoice- (with complete details like invoice number, date, buyers indent /purchase order, address of exporter, address of consignee, address of buyer, description of goods ,price, quantity ,gross weight, net weight, packing ,country of origin, marks flight, port of loading, destination, route of travel, payment terms, etc)

contd

4Consular invoice this invoice is signed by consul of the importers country (U S,CANADA) 5Customs invoice special form prescribed by custom authorities of importing country and helps for allowing entry of goods in the importing country at preferential rates (U S ,CANADA) 6Legalized/visaed invoice-invoices sworn for their genuineness by the seller as being correct by the consulate/embassy they bear the stamp and authencation of the consulate/chapter of commerce/embassy as being in order

7 COA- (certificate of analysis of the product, bath number, manufacturing date, date of expiry), pyrogen(fever) free report if required

contd

8 Packing list -(invoice number ,date, indent/purchase order number, address of exporter, address of consignee ,address of buyer, pre carriage by, vessel/flight number, port of discharge , port of loading ,final destination, marks and numbers container numbers, number and kind of packages, description of goods, quantity, remarks, etc

9 L/C- (letter of credit details as per the contract between the importer and exporter) payment terms are mentioned,

10 ARE1,CT1- forms duly filled meant for tax exemption for export of goods, form N required for octrai in mumbai 11 Drug license copy ,factory license copy ,GMP certificate copy, income tax PAN number

12 Export value declaration- value of currency involved in the country of export

contd

13 SDF (self declaration form) it is the declaration under foreign exchange regulation act, declaring that the value as contracted with the buyer is same as the full export value in the shipping bills ,
14 Shippers certificate for non hazardous cargo (declaring that the products are not listed under current edition of IATA/dangerous goods regulations-DGR)

15 Certificate of origin that the product is manufactured in this country where the company is situated( issued through chamber of commerce in the country concerned)

contd
16 Draw back/AIR drawback/section 74 drawback/advance license/ duty entitlement pass book scheme (depb)/export promotion capital goods scheme (epcg). various schemes available to claim the duty free on export goods 17 Incoterms international commercial terms- this is the declaration given by the exporter that who is going to pay what kind of expenses (exporter and importer) from embarkation to debarkation depending on the contract upon by the importer and exporter like ex works (EXW), free carrier (FCA), free along side ship (FAS),free on board (FOB), cost and frieght (CFR),cost insurance and frieght (CIF), cost and insurance (CI), carriage paid to (CPT),carriage and insurance paid (CIP) , deliverd at frontier (DAF), deliverd ex ship (DES), deliverd ex quay (DEQ),deliverd duty unpaid (DDU), deliverd duty paid (DDP) ,generally FOB ,CPT,CIP,CFR,CIF ,FCA are commonly used which is to be mentioned in the export invoice along with payment terms

contd
18 Shipping bill/bill of landing issued by shipping agent for the ships owner responsibility to take the goods from one place to another for the seller documentary proof that the merchandise was shipped in a certain vessel ,in certain conditions and consignee to certain buyer including merchandise conditions characteristics and quantity ,for the buyer the necessary document for claim the merchandise

19 air way bill a reciept issued by international courier company and an evidence of the contract of carriage

contd
20 marine insurance- A specific policy, B open cover policy C custom duty cover policy depending on type of shipment, country and number of shipments risk coverage's the policies are being designed 21 customs declaration letter to the customs authority producing the filled all necessary documents (originals with copies) ready for the export of goods 22-original copies of all the documents related have to be sent to the consignee, generally the consignee is the bank who in turn informs the importer to pay the amount and collect the documents to release the good from the designated place

contd

23- And also most important thing is some countries ask for different set of forms like form 7,form9,form3 etc which have to be sent along with the documents 24-bonds and surety/security may be required to be provided to authority of customs and central excise for claiming duty exemption ,generally B1 general bond is used for this purpose,B17 bond is used by EOU/EHTP/STP units 25-payment terms in general T.T (telegraphic transfer or cash advance) ,L/C at sight given by the buyers bank that they will pay for the goods exported, CAD cash against document ,mentioned in the L/C and to be mentioned in the export invoice

contd

26 types of credit (L/C) irrevocable L/C, unconfirmed L/C, confirmed L/C, standby L/C ,revolving L/C, transferable L/C, back to back L/C

Just keep in mind all is not that easy and nothing is impossible as long as we take necessary precautions in documentations as per the contract and quality specifications are met up to the standards ,sufficient insurance coverage is given to take care of the goods it will be a good beginning and a successful journey towards a great achievements in the business
wish you good luck Thank you Krishna

(corrections are well come in any manner please free to send your opinions on these slides)