exportsexportsFrom India to other countriesFrom India to other countries

Exports-increase in revenueExports-increase in revenue

Exports contribute to a major extent in increasing Exports contribute to a major extent in increasing revenue to the country at the same increase revenue to the country at the same increase profitability to the manufacturer or the trader which in profitability to the manufacturer or the trader which in turn creates employment in multifoldturn creates employment in multifold,,

but the only factor that comes is being in India we do but the only factor that comes is being in India we do find some parties who are trouble some, but how can find some parties who are trouble some, but how can we trust a firm which is far away and concerned we trust a firm which is far away and concerned persons are never met before, then how about my persons are never met before, then how about my security?security?

as generally huge amounts are involved this can be a as generally huge amounts are involved this can be a debacle if something goes wrong in the transaction?debacle if something goes wrong in the transaction?

ECGCECGCThis is where your tension is This is where your tension is

eased ,ECGC India, established in 1957 eased ,ECGC India, established in 1957 takes care of various risks involved in takes care of various risks involved in export business it offers credit risk export business it offers credit risk insurance cover for exporters against insurance cover for exporters against loss in export of goods or servicesloss in export of goods or services

1 standard policy1 standard policy2 small exporters policy( turn over not 2 small exporters policy( turn over not

exceeds 50 lacs /year.)exceeds 50 lacs /year.)

contdcontd 3 specific shipment policy3 specific shipment policy

4 export (specific buyers) policy 4 export (specific buyers) policy 5 export turn over policy5 export turn over policy

6 exposure single buyers policy6 exposure single buyers policy

7 exposure multi buyers policy7 exposure multi buyers policy

contdcontd8 consignment exports policy8 consignment exports policy9Cinsignment exports (stock holding 9Cinsignment exports (stock holding

agent) policyagent) policy 10 service policy (service industries)10 service policy (service industries) 11specific contract for supply contract11specific contract for supply contractA specific shipment (s) policyA specific shipment (s) policyB specific contract policyB specific contract policy

contdcontd 12 software project policy12 software project policy These different policies are depended These different policies are depended

upon type of exports and situations of upon type of exports and situations of countries the products are being countries the products are being exportedexported

The following risks are covered The following risks are covered depending on the policies we opt as per depending on the policies we opt as per our needs in generalour needs in general

A. A. commercial risks commercial risks B. political risksB. political risks

contdcontd

A. A. commercial risks-commercial risks-Insolvency of the buyerInsolvency of the buyer

Failure of the buyer to make the payment due Failure of the buyer to make the payment due within a specified period normally 4 months from within a specified period normally 4 months from the date of issuethe date of issue

Buyers failure to accept the goods, subject to Buyers failure to accept the goods, subject to certain conditionscertain conditions

contdcontd B. B. political risks-political risks-Imposition of restriction by the Imposition of restriction by the

government of the buyer’s country or government of the buyer’s country or any government action, which may any government action, which may block or delay the transfer of payment block or delay the transfer of payment made by the buyer war, civil war, made by the buyer war, civil war, revolution or civil disturbances in the revolution or civil disturbances in the buyer’s country ,new import buyer’s country ,new import restrictions or cancellations of a valid restrictions or cancellations of a valid import license in the buyer’s country import license in the buyer’s country

Political risks (contd)Political risks (contd)Interruption or diversion of voyage Interruption or diversion of voyage

outside India resulting in payment of outside India resulting in payment of additional freight or insurance additional freight or insurance charges which can not be recovered charges which can not be recovered from the buyer from the buyer

Any other cause of loss occurring Any other cause of loss occurring outside India not normally insured by outside India not normally insured by general insurers and beyond the general insurers and beyond the control of both exporter and the buyer control of both exporter and the buyer

Status certificatesStatus certificates (govt. export performance (govt. export performance certificates)certificates)

Category total-Category total- FOB/FOR value during the FOB/FOR value during the preceding three licensing years (in Rs)preceding three licensing years (in Rs)

EXPORT HOUSE - 45 CROREEXPORT HOUSE - 45 CRORE

TRADING HOUSE - 300 CRORETRADING HOUSE - 300 CRORE

STAR TRADING HOUSE -1500 CRORESTAR TRADING HOUSE -1500 CRORE

SUPER STAR TRADING HOUSE- 600CRORESUPER STAR TRADING HOUSE- 600CRORE

Are you relaxed now?Are you relaxed now?You should be by now because when you take a You should be by now because when you take a

risk you will be concerned about your security risk you will be concerned about your security of the stock or about currency expectations of the stock or about currency expectations

but that’s not all--------------but that’s not all--------------1.We have to register for IEC (import export 1.We have to register for IEC (import export

code) from DGFT (director general of foreign code) from DGFT (director general of foreign trade)trade)

2.Registration cum membership certificate 2.Registration cum membership certificate (RCMC) from export promotion council(RCMC) from export promotion council

3.Registration with ECGC3.Registration with ECGC

But think! Can we export?But think! Can we export?Are the products we do businness Are the products we do businness

are export worthy are export worthy Are these products are recognised by Are these products are recognised by

the govt for exports the govt for exports If yes any restrictions by the govt on If yes any restrictions by the govt on

these productsthese productsWhat is the demand of these What is the demand of these

products in other countriesproducts in other countries

contdcontdPossible nearest country where we can Possible nearest country where we can

start doing business to begin withstart doing business to begin withPresent production capacity and full Present production capacity and full

capacity to meet the required demand capacity to meet the required demand for goods to be delivered in time for goods to be delivered in time

Are we up to the quality standards to Are we up to the quality standards to export our productsexport our products

Are we ready to upgrade our machinery Are we ready to upgrade our machinery to meet standards if required to meet standards if required

contdcontd Are we in a position to wait if there is delay in payments 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 due to various reasons in order to run the show with out any hindrance (financially )any hindrance (financially )

An importer sends us an enquiry basing on follow up to An importer sends us an enquiry basing on follow up to send a quotation mentioning details of products ,price, send a quotation mentioning details of products ,price, quality, mode of delivery terms and conditions if anyquality, mode of delivery terms and conditions if any

Any importer will be asking the samples to gain confidence Any importer will be asking the samples to gain confidence on the quality and to meet his requirements here we on the quality and to meet his requirements here we actually make the beginning in the exports proceduresactually make the beginning in the exports procedures

Enough care has to be taken for the shipment of samples Enough care has to be taken for the shipment of samples as that is going to decide your future in exports because as that is going to decide your future in exports because quality and specifications should be intact in order to quality and specifications should be intact in order to get better resultsget better results

You have done it, what next?You have done it, what next?Your product has been approved by the Your product has been approved by the

importer of X country now you are in all importer of X country now you are in all smiles smiles

Export proceduresExport procedures 1 Indent -(with all the details as told mode of payment 1 Indent -(with all the details as told mode of payment

is also mentioned generally on L/C)is also mentioned generally on L/C)

2 Pro forma invoice -(for clarification on total amount 2 Pro forma invoice -(for clarification on total amount on foreign currency and other costs involved for on foreign currency and other costs involved for shipping etc)shipping etc)

3 Export invoice- (with complete details like invoice 3 Export invoice- (with complete details like invoice number, date, buyers indent /purchase order, address number, date, buyers indent /purchase order, address of exporter, address of consignee, address of buyer, of exporter, address of consignee, address of buyer, description of goods ,price, quantity ,gross weight, net description of goods ,price, quantity ,gross weight, net weight, packing ,country of origin, marks flight, port of weight, packing ,country of origin, marks flight, port of loading, destination, route of travel, payment terms, loading, destination, route of travel, payment terms, etc)etc)

contdcontd 4Consular invoice this invoice is signed by consul of 4Consular invoice this invoice is signed by consul of

the importers country (U S,CANADA)the importers country (U S,CANADA)

5Customs invoice special form prescribed by custom 5Customs invoice special form prescribed by custom authorities of importing country and helps for authorities of importing country and helps for allowing entry of goods in the importing country at allowing entry of goods in the importing country at preferential rates (U S ,CANADA)preferential rates (U S ,CANADA)

6Legalized/visaed invoice-invoices sworn for their 6Legalized/visaed invoice-invoices sworn for their genuineness by the seller as being correct by the genuineness by the seller as being correct by the consulate/embassy they bear the stamp and consulate/embassy they bear the stamp and authencation of the consulate/chapter of authencation of the consulate/chapter of commerce/embassy as being in ordercommerce/embassy as being in order

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

contdcontd 8 Packing list 8 Packing list -(invoice number ,date, indent/purchase order number, -(invoice number ,date, indent/purchase order number,

address of exporter, address of consignee ,address of buyer, pre address of exporter, address of consignee ,address of buyer, pre carriage by, vessel/flight number, port of discharge , port of carriage by, vessel/flight number, port of discharge , port of loading ,final destination, marks and numbers container numbers, loading ,final destination, marks and numbers container numbers, number and kind of packages, description of goods, quantity, remarks, number and kind of packages, description of goods, quantity, remarks, etcetc

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

10 ARE1,CT1- 10 ARE1,CT1- forms duly filled meant for tax exemption for export of forms duly filled meant for tax exemption for export of goods, goods, form Nform N required for octrai in mumbai required for octrai in mumbai

11 Drug license copy ,factory license copy ,GMP certificate copy, 11 Drug license copy ,factory license copy ,GMP certificate copy, income tax PAN numberincome tax PAN number

contdcontd 12 Export value declaration- 12 Export value declaration- value of currency involved in value of currency involved in

the country of exportthe country of export

13 SDF (self declaration form) 13 SDF (self declaration form) it is the declaration under it is the declaration under foreign exchange regulation act, declaring that the value as foreign exchange regulation act, declaring that the value as contracted with the buyer is same as the full export value in contracted with the buyer is same as the full export value in the shipping bills ,the shipping bills ,

14 Shippers certificate14 Shippers certificate for for non hazardous cargo non hazardous cargo (declaring that the products are not listed under current (declaring that the products are not listed under current edition of IATA/dangerous goods regulations-DGR)edition of IATA/dangerous goods regulations-DGR)

15 Certificate of origin 15 Certificate of origin that the product is manufactured in this that the product is manufactured in this

country where the company is situated( issued through country where the company is situated( issued through chamber of commerce in the country concerned)chamber of commerce in the country concerned)

contdcontd

16 Draw back/AIR drawback/section 74 drawback/advance 16 Draw back/AIR drawback/section 74 drawback/advance license/ duty entitlement pass book scheme (depb)/export license/ duty entitlement pass book scheme (depb)/export promotion capital goods scheme (epcg). various schemes promotion capital goods scheme (epcg). various schemes available to claim the duty free on export goodsavailable to claim the duty free on export goods

17 Incoterms international commercial terms- 17 Incoterms international commercial terms- this is the this is the declaration given by the exporter that who is going to pay what declaration given by the exporter that who is going to pay what kind of expenses (exporter and importer) from embarkation to kind of expenses (exporter and importer) from embarkation to debarkation depending on the contract upon by the importer and debarkation depending on the contract upon by the importer and exporterexporter likelike ex works (EXW), free carrier (FCA), free along ex works (EXW), free carrier (FCA), free along side ship (FAS),free on board (FOB), cost and frieght side ship (FAS),free on board (FOB), cost and frieght (CFR),cost insurance and frieght (CIF), cost and insurance (CFR),cost insurance and frieght (CIF), cost and insurance (CI), carriage paid to (CPT),carriage and insurance paid (CI), carriage paid to (CPT),carriage and insurance paid (CIP) , deliverd at frontier (DAF), deliverd ex ship (DES), (CIP) , deliverd at frontier (DAF), deliverd ex ship (DES), deliverd ex quay (DEQ),deliverd duty unpaid (DDU), deliverd ex quay (DEQ),deliverd duty unpaid (DDU), deliverd duty paid (DDP) ,deliverd duty paid (DDP) ,generally FOB ,CPT,CIP,CFR,CIF ,FCA generally FOB ,CPT,CIP,CFR,CIF ,FCA are commonly used which is to be mentioned in the export are commonly used which is to be mentioned in the export invoice along with payment terms invoice along with payment terms

contdcontd 18 Shipping bill/bill of landing –issued by shipping agent for 18 Shipping bill/bill of landing –issued by shipping agent for

the ship’s owner responsibility to take the goods from one the ship’s owner responsibility to take the goods from one place to another for the seller documentary proof that the place to another for the seller documentary proof that the merchandise was shipped in a certain vessel ,in certain merchandise was shipped in a certain vessel ,in certain conditions and consignee to certain buyer including conditions and consignee to certain buyer including merchandise conditions characteristics and quantity ,for the merchandise conditions characteristics and quantity ,for the buyer the necessary document for claim the merchandisebuyer the necessary document for claim the merchandise

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

contdcontd 20 marine insurance- 20 marine insurance- A specific policy, B open cover policy A specific policy, B open cover policy

C custom duty cover policy depending on type of C custom duty cover policy depending on type of shipment, country and number of shipments risk coverage's shipment, country and number of shipments risk coverage's the policies are being designed the policies are being designed

21 customs declaration –21 customs declaration –letter to the customs authority letter to the customs authority producing the filled all necessary documents (originals with producing the filled all necessary documents (originals with copies) ready for the export of goodscopies) ready for the export of goods

22-original copies of all the documents related have 22-original copies of all the documents related have to be sent to the consignee, generally the consignee is to be sent to the consignee, generally the consignee is the bank who in turn informs the importer to pay the the bank who in turn informs the importer to pay the amount and collect the documents to release the good amount and collect the documents to release the good from the designated placefrom the designated place

contdcontd 23- And also most important thing is some countries 23- And also most important thing is some countries

ask for different set of forms like form 7,form9,form3 ask for different set of forms like form 7,form9,form3 etc which have to be sent along with the documentsetc which have to be sent along with the documents

24-bonds and surety/security may be required to be 24-bonds and surety/security may be required to be provided to authority of customs and central excise provided to authority of customs and central excise for claiming duty exemption ,generally B1 general for claiming duty exemption ,generally B1 general bond is used for this purpose,B17 bond is used by bond is used for this purpose,B17 bond is used by EOU/EHTP/STP units EOU/EHTP/STP units

25-payment terms in general T.T (telegraphic transfer 25-payment terms in general T.T (telegraphic transfer or cash advance) ,L/C at sight given by the buyers or cash advance) ,L/C at sight given by the buyers bank that they will pay for the goods exported, CAD bank that they will pay for the goods exported, CAD cash against document ,mentioned in the L/Ccash against document ,mentioned in the L/C

and to be mentioned in the export invoiceand to be mentioned in the export invoice

contdcontd 26 types of credit (L/C) – irrevocable L/C, unconfirmed L/C, 26 types of credit (L/C) – irrevocable L/C, unconfirmed L/C,

confirmed L/C, standby L/C ,revolving L/C, transferable L/C, confirmed L/C, standby L/C ,revolving L/C, transferable L/C, back to back L/Cback to back L/C

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

wish you good luckwish you good luck Thank youThank you Krishna Krishna

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