export processing – step by step 2 step i seller contacts a buyer after studying the market 3
TRANSCRIPT
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Export Processing – Step By Step
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Step I Seller contacts a Buyer after studying the
market
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Step IICheck on the Regulatory Controls in your own
country and in Importer’s countryForex restrictions?Ask Importer to obtain licenceObjective is to account for movement of goods
and forex, protect economic, political, culturaland other interests and to properly implement bilateral and multilateral trade agreements
So the exporter should ensure that s/he seeks permission from all the competent authorities before sending a formal offer
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Foreign Trade (dev and Regulation) Act 1992Office of DGFT brings out EXIM policyDetermines whether export is prohibited,
whether product is subject to quota restrictions or licensing arrangements, or it is to be canalised through some public channel
Is there some floor price provision for the product?
Under quota restricted products exporter is advised to enter this in contract that it is subject to availability from the concerned department
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FEMA
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Acknowledgement of the OfferUsually in the form of an invoice , should contain:Expected date of shipment from factory to portPrice and credit terms in acc with the quotationMethod of shipment – Air/ Ship/ CourierMethod of packing, labeling, markingSpecify whether exp/imp license is to be obtainedName of bank for negotiating the documentsMention if any specific bank is preferred for issuing
L/CAny other instructions that will be adhered to as per
the customer’s needs
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Step IVAfter receiving final order:Apply for Importer-Exporter Code No. from
DGFTHave a PAN no allotted from IT authoritiesRCMC (Reg-Cum-Membership Certificate) from
concerned Promotion AgencyApply for exp license / quota/ import license from
the chief Controller of Import and Export (CCIE)Give instructions to your suppliers/ factory to
proceed
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Step V
Arrange for Excise Clearance
Inform the Central Excise and arrange for clearance either under clearance under bond or after payment of excise duties
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Step VIApply to Export Inspection Council for Pre-
shipment Inspection to obtain Certificate of inspection
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Step VIIApply to RBIFill in Exch control declaration forms;GRSoftexSubmit to RBI
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Step VIIIApply for Maritime Insurance if necessary
(cif)Obtain ECGC coverObtain Certificate of Origin / Consular
Invoice if necessary
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Step IX
Dispatch Documents to Forwarding Agents with instructions
Then dispatch the goods from factory
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Step X
Shipment of Export cargo by completing all port procedures
Customs clearanceQuality controlShipping – loading on ship, etc
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Step XI
Obtain Bill of Lading (B/L)
Send shipment advice to Importer
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Step XII
Present documents to Bank for negotiation and collection of payments
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Step XIII
Apply for excise rebates ( where applicable) to Maritime Collector of Central Excise
And obtain Duty Drawbacks (excise and imports)
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Step XIV
Apply for incentives, reliefs (cash, Import replenishments, etc)
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Procedure for Export Cargo Clearance
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Procedure for Import Cargo Clearance
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EXPORT-IMPORT PROCEDURE
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Seller and Buyer conclude a sales contract, with method of payment usually by letter of credit (documentary credit).
Buyer applies to his issuing bank, usually in Buyer's country, for letter of credit in favor of Seller (beneficiary).
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Issuing bank requests another bank, usually a correspondent bank in Seller's country, to advise, and usually to confirm, the credit.
Advising bank, usually in Seller's country, forwards letter of credit to Seller informing about the terms and conditions of credit.
If credit terms and conditions conform to sales contract, Seller prepares goods and documentation, and arranges delivery of goods to carrier.
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Bank examines the documents and draft for compliance with credit terms. If complied with, bank will pay, accept or negotiate.
Bank, if other than the issuing bank, sends the documents and draft to the issuing bank.
Seller presents documents evidencing the shipment and draft (bill of exchange) to paying, accepting or negotiating bank named in the credit (the advising bank usually), or any bank willing to negotiate under the terms of credit.
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Bank examines the documents and draft for compliance with credit terms. If complied with, Seller's draft is honored.
Documents released to Buyer after payment, or on other terms agreed between the bank and Buyer.
Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order.
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Schematic diagram – Processing of an Export Order
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