EXIM procedures & documentation for.pptx

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1. WHAT IS INTERNATIONAL TRADE? THE EXCHANGE OF GOODS & SERVICES BETWEEN COUNTRIES.

2. IMPORTANCE OF FOREIGN TRADE

3. REGISTER AS AN IMPORTER OR EXPORTER N EGO T I A T E TERMS OF SALE UNDERSTAND EXPORT FORMALITIES AND R ESPO N SI B I L IT Y TOWARDS SALE PROCEEDS UNDERSTAND D O CU M E N T A T I ON AND INCOTERMS FOR EXPO R T , C O M P LETE CUSTOMS FORMALITIES AND OBTAIN DOCUMENTS SUBMIT TO THE BANK FOR ONWARD TR A N S M ISSION TO BUYER RECEIVE SALE PROCEEDS EXPO R T IMPO R T PROCESS

4. EXIM Bank

5. EXIM Bank Export-Import Bank of India is the premier export finance institution of the country, established in 1982 under the Export-Import Bank of India A G c o t ve 1 r 9 n 8 m 1 ent of India launched the institution with a mandate, not just to enhance exports from India, but to integrate the country’s foreign trade and investment with the overall economic growth. like other Export Credit Agencies in the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in their globalisation efforts, through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment.

6. EXIM Bank Exim Bank of India has been the prime mover in encouraging project exports from India. The Bank extends lines of credit to overseas financial institutions, foreign governments and their agencies, enabling them to finance imports of goods and services from India on deferred credit terms. The Bank provides financial assistance by way of term loans in Indian rupees/foreign currencies for setting up new production facility, expansion/modernization/upgradation of existing facilities and for acquisition of production equipment/technology. Such facilities Such facilities particularly help export oriented Small and Medium Enterprises for creation of export capabilities and enhancement of international competitiveness. The Bank has launched the Rural Initiatives Programme with the objective of linking Indian rural industry to the global market. The programme is intended to benefit rural poor through creation of export capability in rural enterprises.

7. EXIM Bank Exim Bank supplements its financing programmes with a wide range of value-added information, advisory and support services, which enable exporters to evaluate international risks, exploit export opportunities and improve competitiveness, thereby helping them

8. Support Institutions to Facilitate Exports Some of these institutions are : Export Credit Guarantee Corporation (ECGC) Exim Bank of India India Trade Promotion Organisation (ITPO) Export Inspection council (EIC) Indian Institute of Packaging (IIP) contd

9. ECGC The Export Credit Guarantee Corporation of India Limited ( ECGC ) is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. Government of India had initially set up Export Risks Insurance Corporation (ERIC) in July 1957.

10. ECGC LOGO

11. ECGC What does ECGC do? Provides a range of credit risk insurance covers to exporters against loss in export of goods and services. Offers guarantees to banks and financial institutions to enable exporters to obtain better facilities from them. Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan. Information on different countries with its own credit rating Assists the exporters in recovering bad debts

12. Exports & Import – General Provisions in Foreign Trade Policy The interpretation of Policy: DGFT is the final authority. Any exemption from policy or procedure also to be referred to DGFT Freedom to export & import except to the extent of provisions in the Foreign Trade Policy or any other law in force Every exporter/importer must comply with the provisions of the Foreign Trade (Development & Regulation) Act 1992 No agency shall withhold consignments allowed for exports. Free movement of export goods is allowed. Authority can take undertaking from exporter in case of any doubt

13. Excise Duty An excise or excise tax (sometimes called a duty of excise special tax) is an inland tax on the sale, or production for sale, of specific goods or a tax on a good produced for sale, or sold, within a country or licenses for specific activities. Excises are distinguished from customs duties, which are taxes on importation

14. Custom Duty Custom Officer U.K . Customs duty is a kind of indirect tax which is realized on goods of international trade. In economic sense, it is also a kind of consumption tax . Duties levied by the government in relation to imported items is referred to as import duty . In the same vein, duties realized on export consignments is called export duty . Tariff, which is actually a list of commodities along with the leviable rate (amount) of Customs duty, is popularly understood as Customs duty .

15. INCOTERMS The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions.It defines the trade contract ,responsibilities and liabilities between the buyer and the seller These terms make international trade easier and help traders in different countries to understand the responsibilities and rights of the S b O uy M ers E an O d s F ell T er H s. E TERMS ARE- EXW – Ex Works (named place of delivery) FCA – Free Carrier (named place of delivery) CPT - Carriage Paid To (named place of destination) CIP – Carriage and Insurance Paid to (named place of destination) DAT – Delivered at Terminal (named terminal at port or place of destination) DAP – Delivered at Place (named place of destination) DDP – Delivered Duty Paid (named place of destination)

16. What Is an Export? 1. Develop Your Export Strategy Identify products to sell.( https://youtu.be/GZqqz0gBVWw ) HS Code Identify markets to sell to.( https://youtu.be/hwLSvgjvxU8 ) DGFT site Identify your strategy for selling Identify how you will support your products: Service,technical support,repairing,warranties,Returns Identify any intellectual property concerns .(ipindiaonline.gov.in) Decide how to price your products.( costs,demand,competion,Market segment,product line,Market elasticities)

17. Activity 1. Identify HS codes for Gems & jewellery Spices Toys Keyboard Instruments Grains Rice Comment on 1. Import & export Policy 2. Major Trading partners 3.Top 10 Exporting states of India 4.Indias world merchandise trade

18. Activity 2 on why IPR is important in international trade Concept of ‘Deceptively Similar’ in Indian trademark law: Starbucks v Sardarbuksh Sued by Starbucks, SardarBuksh changes name to Sardarji -Bakhsh

19. 2. Review and Understand Export and Import Regulations any restrictions on exporting your goods: Export license requirements.  (Embargoed Countries) Restricted parties any restrictions on importing your goods in prospective countries.(Use HS Code import licenses and permits, various certificates, absolute and tariff rate quotas, and anti-dumping and countervailing duties.) Research to see if your products qualify for any free trade agreements (FTA) The U.S. currently has free trade agreements with 20 countries

20. 3. Prepare Your Goods for Shipping Identify partners like freight forwarders. Do I have a specialized product line or type of export? How many ports will I be using for exports? Is automation easy with this partner? What is the broker or freight forwarder’s general reputation? Do I need a dedicated account representative? Do we have a written working agreement? Are there warning signs about the freight forwarder you might choose? The  answers to your questions about freight forwarders  will help you identify if your relationship is as functional and profitable as it could be.

21. Understand Incoterms 2020 rules. Incoterms, a standardized set of rules that help facilitate trade between countries. Incoterms 2020 rules are the official commercial terms published by the  International Chamber of Commerce (ICC).  They are a voluntary, authoritative, globally-accepted and adhered-to text for determining the responsibilities of buyers and sellers for the delivery of goods under sales contracts for international trade. Incoterms closely correspond to the U.N. Incoterms are only part of the whole export contract. They don’t say anything about the price to be paid, when payment will be made or the method of payment that will be used in the transaction. Furthermore, Incoterms 2020 rules don’t deal with the transfer of ownership of the goods, breach of contract or product liability; all of these issues need to be considered in the contract of sale. Also, Incoterms 2020 rules can’t override any local country laws. 

22. These are the 11 Incoterms 2020 rules: EXW  (Ex Works) —insert place of delivery FCA   (Free Carrier) —insert named place of delivery  CPT   (Carriage Paid To) —insert place of destination  CIP  (Carriage and Insurance Paid To) —insert place of destination   DAP  (Delivered at Place) —insert named place of destination DPU  (Delivered at Place Unloaded) —insert of place of destination   DDP  (Delivered Duty Paid) —insert place of destination FAS  (Free Alongside Ship) —insert name of port of loading  FOB  (Free on Board) —insert named port of loading CFR  (Cost and Freight) —insert named port of destination CIF  (Cost Insurance and Freight) —insert named port of destination

23. Understand product labeling requirements in your destination country Here are a few things you need to consider: Does the country legally require using specific language? Do the product content and country of origin need to be included? Are weights and measures stated in the local units? Do items need to be labelled individually?

24. Pack your goods. Understand and correctly apply Hazmat (dangerous goods)requirements if appropriate Make carrier choices. Understand insurance requirements.

25. 4. Complete Your Export Paperwork you now need to fill out the documentation and supporting paperwork that will accompany your goods on their export journey. This is crucial to your success, because any errors (even simple typos) in your paperwork could delay shipments and your payday. Depending on what, how and where you’re exporting, you may need to prepare several different export forms.

26. 5. Make Sure You Get Paid Find an international banking partner. Understand your payment options.

27. Chapter II. Who’s Who in Your Export Journey 1. Exporter 2.Shipping Department 3.Freight Forwarder 4.Inland carrier 5.Licenses and other agencies 6.International carrier 7.Foreign custom agency 8.Intermediate Consignee 9.Banks 10.Buyer/Importer

28. Case STUDY: AMAZON GO https://youtu.be/NrmMk1Myrxc

29. Student exercise What goes into the Amazon Global Business strategy secret sauce? Does this case study explores Amazon's revenue model and culture of customer metrics, history of Amazon.com and marketing objectives.

30. Case Study: aMUL https://www.youtube.com/watch?v=Wvu0SZub83s&t=106s

31. STUDENT EXERCISE? AMUL SUCCESS STORY? What Makes Amul Visually Appealing and Memorable GLOBALLY

32. BISLERI A GLOBAL SUCCESS https://www.youtube.com/watch?v=aN1apuyCQ3E&t=25s

33. EXPORT PROCEDURES & DOCUMENTATIONS

34. It is essential for an exporter to register himself with the specified authorities: Regional licensing Authority Registration with export promotion councils

35. REGIONAL LICENSING AUTHORITY

36. REGISTRATION WITH EPCS This is done on a prescribed form given by the counci l . This registration also helps the exporter to get any benefit given under export import policy. If th e produ c t or s e rv i ces to b e expo r te d does not h a v e an y speci f ic co u ncil o r a u thor i t y to which it is attac h ed, th e or g ani z at i on can register with FIEO (federation of Indian exporter’ organization)

37. STEPS INVOLVED IN EXPORT PROCESS

38. Step 1 In the case of first time exporters –importers ,they need to apply to the Director General of Foreign Trade (DGFT) regional office for getting Importer-Exporter Code (IEC) Number. Step 2 The exporter has to register with the concerned export promotion council in order to obtain various permissible benefits given by the government. ,they need to get registered with sales tax office, and even Export Credit Guarantee Corporation. Step 3 The exporter can now go in for procuring orders, by first sending a sample, if required. The importer sends a purchase order once both exporter and importer have agreed upon the terms and conditions of the contract like pricing, documents, freight charges, currency etc. Step 4 With export order in hand, the exporter starts manufacturing goods or buying them from other manufacturers. Step 5 The exporter makes arrangements for quality control and obtains a certificate confirming the quality of the goods from inspector of quality control.

39. Step 6 Exportables are then dispatched to ports/airports for transit. Step 7 The export firm has to apply to an insurance company for marine/air insurance cover.(The exporter asks the importer to take marine/ air insurance under cost and freight , free on board etc., terms of contract.) Step 8 The exporter contacts the clearing and forwarding agent (C & F) for storing the goods in warehouses. A document called Shipping Bill, required for allowing shipment by Customs Authority is presented by the forwarding agent. Step 9 Once the goods are loaded into the ship ,a receipt called ‘Mate’s Receipt ‘ is issued by the captain to the ship superintendent of the port. Step 10 The superintendent calculates port charges and handover to the exporter /C&F agent. Step 11 After making the port payments , the C&F agent or exporter gets the Bills of Lading or Airway Bill from the official agent of the shipping company or the airline

40. Step 12 The exporter applies to the relevant Chamber of Commerce for obtaining Certificate of Origin, stating that the goods originated from India. Step 13 The exporter sends a set of documents to the importers , stating the date of shipment , name of vessel ,etc. Step 14 Within 21 days after shipment the exporter must present all the documents at his bank which scrutinizes these documents against the original letter of credit /purchase order. Step 15 The exporter’s bank sends these documents to the importer’s bank which should make the payment on of before the due date.

41. IMPORTANT DOCUMENTS Proforma Invoice Proforma Invoice, as the name suggests ,is a proforma of the invoice. It is prepared by an exporter and sent to the importer for necessary acceptance. It suggests to a buyer what the actual invoice would look like and is sent to him when he is ready to purchase the goods Shipping Bill/Bill of Entry It is a requisite for seeking the permission of customs to export goods .It contains a description of export goods by sea/air. It contains a description of export goods, number and kind of packages, shipping marks, and number numbers, value of goods, the name of the vessel, the country of destination ,etc. On the other hand, importers have to submit copies of document called Bill of Entry for customs clearance.Later, a copy has to be given to the bank for verification .

42. ARE-1 Form This form is an application for the removal of excisable goods from the factory premises for export purposes. The ARE-1 form has multiple copies which are distributed to different authorities, including Customs, Range office of Excise, Refund office of Excise , etc. Exchange Declaration Form (GR/SDF Form) The RBI has prescribed has prescribed a GR form (SDF) , a PP form, and SOFTEX forms to declare the export transactions. The GR form contains : a) Name and address of the exporter and description of goods. b) Name and address of the authorized dealer through whom proceeds of the exports have been or will be realized. c) Details of commission and discount due to foreign agent or buyer. d) The full export value, giving break up of FOB, Freight, Insurance, Discount , and Commission ,etc.

43. OTHER D OC U MENTS Commercial invoice Packing list Bill of lading Combined transport document Certificate of inspection/quality control Insurance certificate/policy Certificate of origin Bills of exchange and shipment advice Performa invoice Intimation for inspection Shipping instructions Insurance declaration Shipping order Mate receipt

44. IMPORT PROCEDURES & DOCUMENTATIONS

45. Import procedure: Step 1. Obtaining import license and quota Importer has to attach the following documents to his application form :- Receipt which shows that import license fee has been paid. Certificate from a Chartered Accountant showing the total value of goods to be imported. Verification Certificate for income tax. Step 2. Obtaining foreign exchange Before placing any order, the importer must apply to the Exchange Control Department (ECD) of RBI (India's Central Bank) for the release of requisite foreign exchange. The importer should forward the application through his bank. The ECD verifies the application of the importer, and if found valid, sanctions the foreign exchange for the particular transaction. Step 3. Placing an order The importer may either place the order directly or through the indent house (Agent). In case of canalised items, he obtains the imports through the canalizing agency. The importer cannot directly import such canalized items. They have to place an order with the canalizing agency who shall import and supply the same.

46. Step 4. Despatching letter of credit After getting the confirmation from the supplier regarding the supply of goods, the importer requests his bank to issue a Letter of credit in favour of supplier. It can be defied as "an undertaking by importer's bank stating that payment will be made to the exporter if the required documents are presented to the bank". Step 5. Appointing clearing and forwarding agents The importer makes arrangement to appoint clearing and forwarding agents to clear the goods from the customs. Since clearing of goods is a specialized job, it is better to appoint C & F agents. Step 6. Receipt of shipment device The importer receives the shipment advice from the exporter. The shipment advice states the date on which the goods are loaded on the ship. The shipment advice helps the importer to make arrangement for clearance of goods. Step 7. Receipts of documents The importer's bank receives the documents from the exporter's bank. The documents include bill of exchange, a copy of bill of lading, certificate of origin, commercial invoice, consular invoice, packing list, and other relevant documents. The importer makes payment to the bank (if not paid earlier) and collects the documents.

47. Step 8. Bill of entry This is a document required in case of import of goods. It is like shipping bill in case of exports. A Bill of Entry is the document testifying the fact that goods of the stated value and description in specified quantity are entering into the country from abroad. The customs office supplies this form which is prepared in triplicate. Three different colours are used to prepare bill of entry.One copy is retained by custom department, other is retained by port trust and the third is kept by the importer. Step 9. Delivary order The clearing agents obtains the delivery order from the office of the shipping company. The shipping company gives the delivery order only after payment of freight, if any. Step 10. Clearing of goods The clearing agent pays the necessary dock or port trust dues and obtains the port Trust Receipt in two copies. He then approaches the Customs House and presents one copy of Port Trust Receipt, and two copies of Bill of. Entry to the customs authorities. The customs officer endorses the Bill of Entry Forms and one copy of Bill of Entry is handed back to the importer. The importer then pays the customs duty and clears the goods. In case, the customs duty is not paid, then the goods are stored in the bonded warehouses. As and when the duty is paid, the goods are cleared from the docks.

48. Step 11. Payment to clearing and forwarding agent The importer then makes the necessary payment to the clearing agent for his various expenses and fees. Step 12. Payment to exporter The importer has to make payment to exporter. Usually, the exporter draws a bill of exchange. The importer has to accept the bill and make payment. Step 13. Follow up The importer then informs the exporter about the receipt of goods. If there are any discrepancies or damages to the goods, he should inform the exporter.