Import export procedures

Procedure for import and export business

1. PROCEDURE FOR PROCUREMENT
THROUGH IMPORT PROCEDURES
Dr. N. Yuvaraj
Assistant Professor
AchariyaArts and Science College
Villianur, Puducherry

2. IMPORT
Importtradereferstothepurchaseofgoodsfromthe
foreigncountry.
Theprocedureforimporttradediffersfromcountryto
country,dependingupontheimportpolicy,thestatutory
requirementsandcustomsofdifferentcountries.
Inalmostallthecountriesoftheworldimporttradeis
controlledbythegovernment.

3. IMPORT PROCEDURE
trade enquiry
procurement of import licence
obtaining foreginexchange
placing the indent
dispatching a letter of credit
obtaining necessary documents
customs formalities and clearing of goods
making the payment

4. 1.TRADEENQUIRY
Anenquiryisawrittenrequestfromtheintendingbuyeror
itsagentforinformationregardingthepriceandtermson
whichtheexporterandtermsonwhichtheexporterwill
beabletosupplygoods.

5. 2.PROCUREMENT OFIMPORTLICENCE
ApersonorafirmcannotimportgoodsintoIndiawithout
avalidimportlicense.
Animportlicensemaybeeithergenerallicenseorspecific
license.
Undergenerallicensegoodscanbeimportedfromany
country.
Individuallicenseauthorizestoimportonlyfromspecific
countries.

6. For the purpose of issuing
licence, the importers are
divided into three categories
Established Importer
Actual users
Registered Exporter

7. EstablishedImporter
Ifthepersonimportedgoodsoftheclassinwhichheis
interestedduringthebasicperiodprescribedforsuch
class,heistreatedasanestablishedimporter.
Actualuser
Iftheperson[importer]importgoodsforhisownusein
industrialmanufacturingprocessiscalledactualusers.

8. Registeredexporter
Registeredexporterimportingagainstexportsmadeunder
aschemeofexportpromotionandothershavetoobtain
licensefromthechiefcontrollerofexportsandimports.
OpenGeneralLicenceList[O.G.L]
TheGovernmentissuesfromtimetotimealistof
commoditiesandproductswhichcanbeimported
obtainingageneralpermissiononly.Thisiscalledopen
GeneralLicenceList.

9. 3.OBTAININGFOREIGNEXCHANGE
Importerhastomakepaymentforimportsinthecurrency
ofexportingcountry.
Theforeignexchangereservesofanycountryare
controlledbyGovernmentandarereleasedthroughits
centralbank.
InIndia,theexchangecontroldepartmentofReserves
BankofIndiadealswiththeforeignexchange.

10. STEPS
Theimportershastosubmitanapplicationinthe
prescribedformalongwiththeimportlicencetoany
exchangebankaspertheprovisionsofexchange
controlact.
Scrutinizingtheapplicationonthebasisofexchange
policyofgovernmentofIndiainforceatthetimeof
application.
ReserveBankofIndiasanctionsorrejecttherelease
offoreignexchange.

11. 4.PLACINGINDENTORORDER
TheorderisknownasIndent.Itcontainstheinstructions
fromtheimportersoastothequantityandqualityof
goodsrequired,methodsforforwardingthem.
Inopenedindentallthenecessaryparticularofgoods,
pricesetc.arenotmentioned.
Aconfirmatoryindentisonewhereanorderisplaced
subjecttotheconfirmationbytheimportersagent

12. 5.DISPACTCHING ALETTEROFCREDIT
Exporterwantstobesurethatthereisnoriskofnon-
payment.Usuallyforthispurposeheaskstheimporterto
sendaletterofcredittohim.Aletterofcreditis
popularlyknownasL/C.

13. 6.OBTAINING NECESSARY DOCUMENTS
Onthereceiptofletterofcredittheexporterarrange
forshipmentofgoodsandsendsanadvicenotetothe
importerimmediatelyaftertheshipmentofgoods.
Theexporterthendrawsabillofexchangeonthe
importerfortheinvoicevalueofgoods.
Theshippingdocumentssuchasthebilloflading,invoice
insurancepolicy,certificateororigin,customerinvoice
etc.alsoattachedtothebillofexchange.

14. Suchbillofexchangewithalltheseattacheddocumentsis
calleddocumentarybill.
Documentarybillofexchangeisforwardedtothe
importerthroughaforeignexchangebankwhichhasa
branchoranagentintheimporterscountryforcollecting
paymentsofthebill.

15. 7.CUSTOM FORMALITIES AND
CLEARINGOFGOODS
Afterreceivingdocumentsoftitleofthegoods,the
importersonlyconcernistotakethedeliveryofgoods
whentheshiparriveattheportandtobringthemtohis
ownplaceofbusiness.

16. 8.MAKINGTHEPAYMENT
Themodeandtimeofmakingthepaymentisdetermined
accordingtothetermsandconditionsasagreedtoearlier
betweentheimporterandexporter,usually30to90days
areallowedtotheimporterformakingthepaymentof
D/A(DocumentsagainstAcceptance)andD/P(Documents
againstPurchase)bills.

17. 9.CLOSINGTHETRANSACTION
Laststepinimportprocedureisclosingthetransaction.But
ifheisnotsatisfiedwiththequalityofgoodshewillwriteto
theexporterandsettlethematters.
Incasethegoodshavebeendamagedintransittheinsurance
companywillpayhimthecompensationunderanadvicetothe
exporters.