Import export procedures

Project report on Import and Export documentation requirement in INdia

1. Import and Export requirements and procedures in India

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TABLE OF CONTENT S
S.NO DESCRIPTION PAGE NO
1 ABSTRACT 5
2 INTRODUCTION 6
3 LITERATURE REVIEW 8
4 RESEARCH METHODOLGY 10
5 TECHNICAL FRAKMEWORK 11
6 DOCUMENTS NEEDED FOR EXPORT AND IMPORT 12
7 IMPORT PROCEDURE 23
8 EXPORT PROCEDURE 32
9 TODAYS SCENERIO OF INDIA 40
10 CUSTOMS DUTY IN INDIA 45
11 EXPORT BENEFITS AND INCENTIVES IN INDIA 46
12 FINDINGS 54
13 RECOMMENDATIONS 59
14 LIMITATION 59
15 CONCLUSION 60
16 REFRENCES 61
17 LIST OF FIGURES 62

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1. ABSTRACT
Indian foreign trade and economy is on growing pace. Indian exports have come a long way in
value terms after the independence. India’s exports grew a robust 20.18% in May, a six-month
high, benefiting from a broad-based recovery in sectors led by petroleum. Costlier crude also
caused imports to grow 15% in the month, leaving a four month high trade deficit of $14.62
billion, or about Rs 99,975 crore. Trade deficit was $13.84 billion in May 2017. India’s exports
with respect to imports is slightly more than unity revealing that the ratio of exports to imports
goes on increasing slightly with the increase in imports. The composition of trade is now
dominated by manufactured goods and services. India services exports share in global exports is
more than double of that of Indian manufacturing exports. East Asian countries, particularly
China have become a major trading block. There is huge untapped potential for Indian foreign
trade in years to come which is in growing trend but need much more technological reforms and
capabilities to compete the world. India’s imports with respect to exports is somewhat less than
unity implying that the ratio of imports to exports goes on declining with the increase in imports.

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2. INTRODUCTION
International trade is one of the hot industries of the new millennium. But it's not new. In history
the cargo of siks and spices was there.And before that trading of shells and salts with distant
tribes.Trade exists because one group or country has a supply of some commodity or
merchandise that is in demand by another. And as the world becomes more and more
technologically advanced, as we shift in subtle and not so subtle ways toward one-world modes
of thought, international trade becomes more and more rewarding, both in terms of profit and
personal satisfaction.
Types of Import/Export Business:
 Export management company (EMC): An EMC handles export operations for a
domestic company that wants to sell its product overseas but doesn't know how (and
perhaps doesn't want to know how). The EMC does it all-- hiring dealers, distributors and
representatives; handling advertising, marketing and promotions; overseeing marking and
packaging; arranging shipping; and sometimes arranging financing. In some cases, the
EMC even takes title to the goods, in essence becoming its own distributor. EMCs
usually specialize by product, foreign market or both, and--unless they've taken title- -are
paid by commission, salary or retainer plus commission.
 Export trading company (ETC): While an EMC has merchandise to sell and is using its
energies to seek out buyers, an ETC attacks the other side of the trading coin. It identifies
what foreign buyers want to spend their money on and then hunts down domestic sources
willing to export. An ETC sometimes takes title to the goods and sometimes works on a
commission basis.

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 Import/export merchant: This international entrepreneur is a sort of free agent. He has
no specific client base, and he doesn't specialize in any one industry or line of products.
Instead, he purchases goods directly from a domestic or foreign manufacturer and then
packs, ships and resells the goods on his own. This means, of course, that unlike the
EMC, he assumes all the risks (as well as all the profits).

Objectives of the Study:
 To know what is Import and Export.
 To understand about all different Documents required for Import and Export.
 To study India’s Import and Export.
 To understand Procedure of Import and Export.
 To understand the Duties and taxes in Export and Import.

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3. LITERATURE REVIEW :
Exports are the goods and services produced in one country and purchased by residents of
another country. It doesn't matter what the good or service is. It doesn't matter how it is sent. It
can be shipped, sent by email, or carried in personal luggage on a plane. If it is produced
domestically and sold to someone in a foreign country, it is an export. Exports are one
component of international trade. The other component is imports. They are the goods and
services bought by a country's residents that are produced in a foreign country. Combined, they
make up a country's trade balance. When the country exports more than it imports, it has a trade
surplus. When it imports more than it exports, it has a deficit. Most countries want to increase
their exports. Their companies want to sell more. If they've sold all they can to their own
country's population, then they want to sell overseas as well. The more they export, the greater
their competitive advantage. That's because they gain expertise in producing the goods and
services. They also gain knowledge about how to sell to foreign markets. Governments
encourage exports. That's because it increases jobs, brings in higher wages and raises
the standard of living for residents. They become happier and more likely to support their
national leaders. Exports also increase the foreign exchange reserves held in the nation's central
bank. That's because foreigners pay for exports either in their own currency or the U.S. dollar. A
country with large reserves can use it to manage their own currency's value. They have enough
foreign currency to flood the market with their own currency. That lowers the cost of their
exports in other countries. Countries also use currency reserves to manage liquidity. That means
they can better control inflation, which is too much money chasing too few goods. To control
inflation, they use the foreign currency to purchase their own currency. That decreases
the money supply, making the local currency worth more.

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Imports are foreign goods and services bought by residents of a country. Residents include
citizens, businesses, and the government. It doesn't matter what the imports are or how they are
sent. They can be shipped, sent by email, or even hand-carried in personal luggage on a plane. If
they are produced in a foreign country and sold to domestic residents, they are imports. Even
tourism products and services are imports. When you travel outside the country, you are
importing any souvenirs you bought on your trip.
If a country imports more than it exports it runs a trade deficit. If it imports less than it exports,
that creates a trade surplus. When a country has a trade deficit, it must borrow from other
countries to pay for the extra imports. It's like a household that's just starting out. The couple
must borrow to pay for a car, house, and furniture. Their income isn't enough to cover the
necessary expenses that improve their standard of living. But, like the young couple, a country
should not continue to borrow to finance its trade deficit. At some point, a mature economy
should become a net exporter. At that point, a trade surplus is healthier than a deficit. Why?
First, exports boost economic output, as measured by gross domestic product. They create jobs
and increase wages. Second, imports make a country dependent on other countries' political and
economic power. That's especially true if it imports commodities, such as food, oil, and
industrial materials. It's dangerous if it relies on a foreign power to keep its population fed and its
factories humming. For example, the United States suffered a recession when OPEC embargoed
its oil exports. Third, countries with high import levels must increase their foreign currency
reserves. That's how they pay for the imports. That can affect the domestic currency
value, inflation, and interest rates. Fourth, domestic companies must compete with the imports.
Small businesses that can't compete will fail. Since they create70 percent of all new jobs that will
affect employment.

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4. RESEARCH METHODOLOGY
The study is descriptive and the data is collected from various sources like journals, past studies,
current scenarios and the management books on Import and Export. The study is to clear all the
Exporter and Importers how they can avail benefits and what all documents are needed prior of
Export and Import so that they can cost control and be safe from the forwarding agents for any
demand of documents. The study concludes with what is the risk involved and what are the
payment options they can avail to be free from any cheat in the global. The study also helps the
Exporter or Importer to choose a specific package so that they can avail good service and can
track their way of doing things. To collect data from sources and make them understand the facts
of trading by different sort of documentation and procedures needed.

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5. THEORITICAL FRAMEWORK :

Figure 1: Import and Export
Export trade in India is regulated by the Directorate General of Foreign Trade (DGFT) and its
regional offices, functioning under the Ministry of Commerce and Industry, Department of
Commerce. Policies and procedures required to be followed for exports from India are
announced by the DGFT, from time to time. For the purpose of exports, goods have been divided
into the following categories:

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• Prohibited goods that are not permitted to be exported
• Restricted goods that can be permitted for export under license and subject to compliance of
stipulated procedures/conditions
• Canalized goods that are permitted to be exported through State Trading Enterprises (STEs)
the exporter of goods has to obtain an Importer-Exporter Code (IEC) Number from the office of
Director General of Foreign Trade prior to filing of shipping bill for clearance of export goods.

6. DOCUMENTS NEEDED IN EXPORT AND IMPORT TRADE
Invoice:
Invoice is a seller’s bill for merchandise. It is a basic document in export transaction. The invoice
contains information about the description of goods, value of goods, terms of shipment, marks
and numbers of packages, etc. It also contains date, name and address of both buyer and seller,
name of shipping vessel, port of destination, terms of delivery and payments, etc. The exporter
may design his own form. Some countries ask for a particular type of form. The contents of the
invoice must correspond exactly to the description in letter of credit. If no specific proforma is
prescribed then it can be in a generic form. Some importing countries insist on a particular type
of invoice. The United Nations Key Layout has now been accepted in preparing a standard
invoice. The information requirements of this document have been determined after examining a
number of forms of invoices used by leading export organizations. A series of discussions were
held with the representatives of the Department of Customs and Central Excise and Federation of
Custom House Agent’s Association in India. This proforma which will be acceptable to many
countries will also facilitate processing of export documents at various stages.

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Packing List:
A packing list is a consolidated statement of the contents of a number of cases or packs. It gives
a detail of the nature of goods which are being exported and the form in which these are sent.
The description is given in such a manner as to permit checks of the contents by the customs on
arrival at the port of destination as well as by the recipient. Packing list should contain
information such as invoice number and date, names of exporter and importer, country of origin
and country of final destination, marks and number of containers, description of goods, quantity,
etc. It is a relatively simpler document and required information can be reproduced from master
document.

HS CODE:
It relates to any particular section of items or commodity to be exported and as listed by the
global society for free flow or any miscommunication for the items to be Exported or imported.

Certificate of Origin:
A certificate of origin, as the name indicates, is a certificate which specifies the country of the
production of goods. The customs law of a country may require this certificate before clearance
of goods and assessment of duty. Some countries may offer preferential tariff to Indian goods
and the importing country would like to see that this concession is allowed on those goods only.
This certificate may also be required when goods of a particular type are banned from certain
countries. The Federation of Indian Chambers of Commerce and Industry, Export Promotion
Councils and various other trade organizations have been authorized by the Government of India

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to issue a certificate of origin. The Chambers of Associations issue these certificates on their
printed forms.

Mate’s Receipt:
When the cargo is loaded on the ship, the Commanding Officer of the ship issues a receipt
known as mate’s receipt. The mate’s receipt indicates name of the vessel, berth, date of
shipment, description of packages, marks and numbers, condition of the cargo at the time of its
receipt etc. The port of loading and discharge is also given in this receipt. The mate’s receipt is
first handed over to port trust authorities for payment of dues by the exporter. After paying the
dues the exporter or his agent will collect this receipt from port authorities. The shipping agent
prepares bill of lading on the basis of mate’s receipt.

Bill of Lading:
A bill of lading is a document issued by the shipping company acknowledging the receipt of
goods mentioned therein and undertaking to deliver them in the like order and condition, as
received, to the consignee or his order.
A bill of lading serves the following purposes:
(a) It is a document of title to the goods
(b) It is a receipt from the shipping company, receiving the goods.
(c) It is a contract for the transportation of goods.
Each shipping company has its own bill of lading. These forms can be had from shipping
companies or their agents. A bill of lading contains information about date and place of
shipment, port of loading and port of destination, marks and numbers, kind of packages,

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description of goods, gross weight and measurement, freight etc. If the exporter has paid the
freight then it is marked ‘freight paid’, if on the other hand the freight is to be collected from the
consignee then bill of lading is marked ‘freight collect’.
A bill of lading is freely transferable by practice and custom. If, however, the bill requires that
goods should be delivered to a particular named person and does not include reference to his
assignees, the bill of lading is not transferable.
The consignor or consignee can make the bill of lading transferable either by a special
endorsement or by blank endorsement. In blank endorsement the goods are delivered to the
bearer. The holder may, however, convert the blank endorsement to special endorsement by
inserting the name of a person to whom delivery is to be made. It is then called endorsement in
full.
At present a number of shipping companies are issuing Standard Bill of Lading as recommended
by International Chamber of Shipping. The standard bill included in aligned series can be
reproduced from the master bill. The shippers prepare bill of lading on the blank forms of the
shipping companies and present them for signature at the shipping company’s office. The bill of
lading is issued in exchange for mate’s receipt.

Shipping Bill:
It is a document on the basis of which customs permission for exports is given. The shipping bill
contains contents such as name and address of the exporter and consignee, invoice number and
date, import, export code number, RBI code number, particulars of goods exported, name of the
vessel, port at which goods are to be discharged, number and kind of packets, quantity and value
of goods.

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The shipping bill is prepared by the clearing and forwarding agent and presented to the shed
superintendent for getting carting order. The preventive officer of the customs, after being
satisfied, endorses the shipping bill with ‘Let Ship’ order.
The Customs Public Notice No. 39 suggests a uniform shipping bill for all categories of exports
i.e. dutiable, free and drawback claims. Since all the columns are not printable on one side of A4
size paper, some contents have been printed on the backside of the form. Some declarations
which are material to the transaction have also been given in the standard form.

Cart Ticket:
Cart ticket is prepared by the exporter giving details of the cargo to be exported. It has the name
of the ship, number of packages, shipping bill number, port of destination and the number of
vehicle carrying the cargo. The cart ticket is handed over by the driver of the vehicle at the entry
of the port. The gate keeper will check the cargo as shown in the ticket. If satisfied, the gate
keeper will allow the vehicle to enter.

Airway Bill:
It is a receipt issued by an airline for the carriage of goods. Every airline issues its own bill for
receiving the goods. Airway bill is non-transferrable so it does not carry the same validity as a
bill of lading in sea transport.

Tax Invoice:
The invoice is as commercial invoice, but it is in the home currency conversion and the
conversion rate is as per that day or the rate communicated by the CHA.

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LOU (Letter of Understanding):
It is the declaration letter from the shipper that the commodity exporter does not have any taxes
as it is to be sold or used in another country.

Annexure 1:
In this format the exporter declares that everything pure like the provided is true that is the
invoice number, shipping bill number and the amount.

Annexure D:
It is the format in which the Exporter wants to claim Duty Drawback against the said export.

Hazardous Certificate:
It is an IATA format in which the Exporter declares weather the goods is hazardous or not.

Corporate Certificate:
It is the for format needed by the seller to clear the goods from another country without violation
of regulations from another country.

Declaration letter from Shipper:
It is a declaration that the said shipment contains which commodity with proper HSN codes.

Letter of Credit:

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In an export trade, the exporter would like to ensure that there is no risk of nonpayment. Usually,
the exporter asks the importer to send a letter of credit to him. A letter of credit popularly known
as L/C is an undertaking by its issuer (usually importer’s bank) that the bills of exchange drawn
by the foreign dealer on the importer will be honored on presentation for specified amount. L/ C
are simply a guarantee by the bank to the foreign dealer (exporter) that their bills up to a
specified amount would be honored.
There are three parties to a letter of credit:
(a) The opener or importer-the buyer who opens the credit.
(b) The issuer-the bank that issues the letter of credit
(c) The beneficiary-the exporter in whose favor the letter of credit is opened.

Bill of exchange:
A bill of exchange, popularly known as bill, as defined under Section 5 of the Indian Negotiable
Instruments Act, means “an instrument in writing containing an unconditional order, signed by
the maker, directing a certain person to pay a certain sum of money only to, or to order of a
certain person, or to the bearer of the instrument.”
Payment through a bill of exchange is a common method of payment in international trade. An
exporter draws a bill on an importer calling upon him to pay a specified sum of money on an
appointed date. The bill will be sent to the importer who will sign it by giving his consent. A
banker of the importer may also accept the bill on behalf of his client.
There are three parties to the bill of exchange:
(a) The drawer (exporter):
The person who executes the bill and the payment is due to him.

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(b) The drawer (importer):
The person on whom the bill is drawn and is expected to make the payment as per the terms of
the document.
(c) The payee (exporter or his bank):
An exporter may dispose of the bill by discounting it with bank, placing it for collection. If it is
not discounted then it is sent to the bank along-with the documents attached, with the instructions
to send them abroad for collection.
It is a common practice to deliver it to the banker along-with the bill the documents of title to the
goods such as bill of lading, invoice, certificate of origin, insurance policy etc. The banker is
instructed to deliver the documents to the importer against acceptance or payment of bill.
In case the documents are to be released against acceptance of the bill, bill is called documents
against acceptance bill. But where the documents are to be released only against payment, it is
called documents against payment bill. Where no documents of title to the goods are enclosed to
the bill, it is called a clean bill.

Insurance Certificate:
An insurance policy is an insurance document evidencing insurance has been taken out on the
goods shipped, and it gives full details of the insurance coverage. An insurance certificate
certifies that the shipment has been insured under a given open policy and is to cover loss of or
damage to the cargo while in transit.

Fumigation Certificate:

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A pest control certificate issued to certify that the concerned products have been undergone the
quarantine and pre-shipment fumigation by the approved fumigation service providers

SLI (Shippers letter of Instruction):
It is a form in which the exporter declares the item category and the currency in which the
transaction is going to be happened.

SDF (Self Declaration Form):
A format in which the exporter is going to provide the basic details of the export going to be
happen inclusive of the Shipping Bill number.

Certificate of Inspection:
To ensure proper quality of goods, exportable goods are inspected before being dispatched for
export. Export Inspection Council of India (EIC) issues such certificate in India. Some countries
have made this certificate compulsory for goods being imported.
When goods are ready for dispatch, the exporter will request EIC to send persons for inspection
of goods. The inspectors check the goods against prescribed quality standards. If they are
satisfied with the quality then goods are packed in the presence of inspection staff and a
certificate to this effect is issued. This certificate is a part of documents being sent to the
importer.

A.R.E. 1 form (Central excise):

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This form ARE-1 is prescribed under Central Excise rules for export of goods. In case goods
meant for export are cleared directly from the premises of a manufacturer, the exporter can avail
the facility of exemption from payment of terminal excise duty. The goods may be cleared for
export either under claim for rebate of duty paid or under bond without payment of duty. In both
the events the goods are to be cleared under form A.R.E-1 which will show the details of the
goods being exported, the relevant duty involved and if the duty is paid or goods being cleared
under bond, details of goods being sealed either by the exporter or Central Excise officials etc.

Indent:
An indent is an order placed by an importer with the exporter for the supply of certain goods. It
is usually prepared in duplicate or triplicate. The indent may be of several types like open indent,
closed indent and confirmatory indent.
An indent contains the following information:
(a) Quantity of goods to be imported
(b) Quality of goods
(c) Method of forwarding the goods
(d) Nature of packing
(e) Mode of setting payment
(f) Price to be charged
(g) Sale of delivery

Bill of Entry:
This is a form supplied by the custom office to the importer and is to be filled in triplicate.

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The bill of entry contains following particulars:
(a) Name and address of the importer
(b) Name of the ship
(c) Package number
(d) Marks on the package
(e) Description of goods
(f) Quantity and value of goods
(g) Name, address and country of the exporter
(h) Port of destination
(i) Custom duty payable

Bill of Sight:
If the importer is not in a position to supply the detailed particulars of goods because of
insufficient information supplied by the exporter, he (importer) has to prepare a statement called
‘bill of sight’. The bill of sight contains only the information possessed by the importer along-
with a remark that he is not in a position to give complete information about the goods. The bill
of sight enables him to open the package and examine the goods in the presence of custom
officer so as to complete the bill of entry.
POA:
It is required when an Import clearance is done by the Seller in other country.


Dock Challan:

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It is a form to be filled by the importer or his clearing agent in the dock for payment of dock
charges. Dock charges are paid when all the formalities of the customs are completed. The goods
imported will be delivered only when dock charges are paid.

Dock Warrant:
This is document issued by Warehouse keepers to the persons who have deposited the goods
with them.

7. IMPORT PROCEDURE
Import trade refers to the purchase of goods from a foreign country. The procedure for import
trade differs from country to country depending upon the import policy, statutory requirements
and customs policies of different countries. In almost all countries of the world import trade is
controlled by the government. The objectives of these controls are proper use of foreign
exchange restrictions, protection of indigenous industries etc. The imports of goods have to
follow a procedure. This procedure involves a number of steps.

Trade Enquiry:
The first stage in an import transaction, like any other transaction of purchase and sale relates to
making trade enquiries. An enquiry is a written request from the intending buyer or his agent for
information regarding the price and the terms on which the exporter will be able to supply goods.
The importer should mention in the enquiry all the details such as the goods required, their
description, catalogue number or grade, size, weight and the quantity required. Similarly, the

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time and method of delivery, method of packing, terms and conditions in regard to payment
should also be indicated.
In reply to this enquiry, the importer will receive a quotation from the exporter. The quotation
contains the details as to the goods available, their quality etc., the price at which the goods will
be supplied and the terms and conditions of the sale.

Procurement of Import License and Quota:
The import trade in India is controlled under the Imports and Exports (Control) Act, 1947. A
person or a firm cannot import goods into India without a valid import license. An import license
may be either general license or specific license. Under a general license goods can be imported
from any country, whereas a specific or individual license authorizes to import only from
specific countries.
The Government of India declares its import policy in the Import Trade Control Policy Book
called the Red Book. Every importer must first find out whether he can import the goods he
wants or not, and how much of a certain class of goods he can import during the period covered
by the relevant Red Book.
For the purpose of issuing license, the importers are divided into three categories:
(a) Established importer,
(b) Actual users, and
(c) Registered exporters, i.e., those import under any of the export promotion schemes.
In order to obtain an import license, the intending importer has to make an application in the
prescribed form to the licensing authority. If the person imported goods of the class in which he

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is interested now during the basic period prescribed for such class, he is treated as an established
importer.
An established importer can make an application to secure a Quota Certificate. The certificate
specifies the quantity and value of goods which the importer can import. For this, he furnishes
details of the goods imported in any one year in basic period prescribed for the goods together
with documentary evidence for the same, including a certificate from a chartered accountant in
the prescribed form certifying the c.i.f. value of the goods imported in the selected year.

The c.i.f. value includes the invoice price of the goods and the freight and insurance paid for the
goods in transit. The quota certificate entitles the established importer to import up to the value
indicated therein (called Quota) which is calculated on the basis of past imports. If the importer
is an actual user, that is, he wants to import goods for his own use in industrial manufacturing
process he has to obtain license through the prescribed sponsoring authority.
The sponsoring authority certifies his requirements and recommends the grant of license. In case
of small industries having a capital of less than Rs. 5 lakhs, they have to apply for licenses
through the Director of Industries of the state where the industry is located or some other
authority expressly prescribed by the Government.
Registered exporter importing against exports made under a scheme of export promotion and
others have to obtain license from the Chief Controller of Exports and Imports. The Government
issues from time to time a list of commodities and products which can be imported by obtaining
a general permission only. This is called as O.G.L. or Open General License list.

Obtaining Foreign Exchange:

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After obtaining the license (or quota, in case of an established importer), the importer has to
make arrangement for obtaining necessary foreign exchange since the importer has to make
payment for the imports in the currency of the exporting country.
The foreign exchange reserves in many countries are controlled by the Government and are
released through its central bank. In India, the Exchange Control Department of the Reserve
Bank of India deals with the foreign exchange. For this the importer has to submit an application
in the prescribed form along-with the import license to any exchange bank as per the provisions
of Exchange Control Act.
The exchange bank endorses and forwards the applications to the Exchange Control Department
of the Reserve Bank of India. The Reserve Bank of India sanctions the release of foreign
exchange after scrutinizing the application on the basis of exchange policy of the Government of
India in force at the time of application. The importer gets the necessary foreign exchange from
the exchange bank concerned. It is to be noted that whereas import license is issued for a
particular period, exchange is released only for a specific transaction. With liberalization of
economy, most of the restrictions have been removed as rupee has become convertible on current
account.

Placing the Indent or Order:
After the initial formalities are over and the importer has obtained the license quota and the
necessary amount of foreign exchange, the next step in the import of goods is that of placing the
order. This order is known as Indent. An indent is an order placed by an importer with an
exporter for the supply of certain goods. It contains the instructions from the importer as to the
quantity and quality of goods required, method of forwarding them, nature of packing, mode of

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settling payment and the price etc. An indent is usually prepared in duplicate or triplicate. The
indent may be of several types like open indent, closed indent and Confirmatory indent. In open
indent, all the necessary particulars of goods, price, etc. are not mentioned in the indent, the
exporter has the discretion to complete the formalities, at his own end. On the other hand, if full
particulars of goods, the price, the brand, packing, shipping, insurance etc. are mentioned clearly,
it is called a closed indent. A confirmatory indent is one where an order is placed subject to the
confirmation by the importer’s agent.

Dispatching a Letter of Credit:
Generally, foreign traders are not acquainted to each other and so the exporter before shipping
the goods wants to be sure about the creditworthiness of the importer. The exporter wants to be
sure that there is no risk of non-payment. Usually, for this purpose he asks the importers to send
a letter of credit to him.
A letter of credit, popularly known as ‘L/C or ‘L.C is an undertaking by its issuer (usually
importer’s bank) that the bills of exchange drawn by the foreign dealer, on the importer will be
honored on presentation up to a specified amount.

Obtaining Necessary Documents:
After dispatching a letter of credit, the importer has not to do much. On receipt of the letter of
credit, the exporter arranges for the shipment of goods and sends Advice Note to the importer
immediately after the shipment of goods. An Advice Note is a document sent to a purchaser of
goods to inform him that goods have been dispatched. It may also indicate the probable date on
which the ship is expected to reach the port of destination.

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The exporter then draws a bill of exchange on the importer for the invoice value of goods. The
shipping documents such as the bill of lading, invoice, insurance policy, certificate of origin,
consumer invoice etc., are also attached to the bill of exchange. Such bill of exchange with all
these attached documents is called Documentary Bill. Documentary bill of exchange is
forwarded to the importer through a foreign exchange bank which has a branch or an agent in the
importer’s country for collecting the payment of the bill.
There are two types of documentary bills:
(a) D/P, D.P. (or Documents against payment) bills.
(b) D/A, D.A. (or Document against acceptance) bills.
If the bill of exchange is a D/P bill, then the documents of title of goods are delivered to the
drawee (i.e., importer) only on the payment of the bill in full. D/P bill may be sight bill or usance
bill. In case of sight bill, the payment has to be made immediately on the presentation of the bill.
But usually a grace period of 24 hours is granted.
Usance bill is to be paid within a particular period after sight. If the bill is a D/A bill, then the
documents of title of goods are released to the drawee on his acceptance of the bill and it is
retained by the banker till the date of maturity. Usually 30 to 90 days are provided for the
payment of the bill.

Customs Formalities and Clearing of Goods:
After receiving the documents of title of the goods, the importer’s only concern is to take
delivery of the goods, when the ship arrives at the port and to bring them to his own place of
business. The importer has to comply with many formalities for taking delivery of goods. Unless

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the following mentioned formalities are complied with, the goods lie in the custody of the
Custom House.

To obtain endorsement for delivery or delivery order:
When the ship carrying the goods arrives at the port, the importer, first of all, has to obtain the
endorsement on the back of the bill of lading by the shipping company. Sometimes the shipping
company, instead of endorsing the bill in his favor, issues a delivery order to him. This
endorsement of delivery order will entitle the importer to take the delivery of the goods.
The shipping company makes this endorsement or issues the delivery order only after the
payment of freight. If the exporter has not paid the freight, i.e., when the bill, of lading is marked
freight forward, the importer has to pay the freight in order to get green signal for the delivery of
goods.

To pay Dock dues and obtain Port Trust Dues Receipts:
The importer has to submit two copies of a form known as ‘Application to import’ duly filled in
to the ‘Lading and Shipping Dues Office’. This office levies a charge on all imported goods for
services rendered by the dock authorities in connection with lading of goods. After paying the
necessary charges, the importer receive back one copy of the application to import as a receipt
‘Port Trust Dues Receipt’.
To pay Customs or Import Duty:
There are three types of imported goods:
(i) Non dutiable or free goods,
(ii) Goods which are to be sold within the country or which are for home consumption, and

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(iii) Re-exportable goods i.e. goods meant for re-export. If the goods are duty free, no import
duty is to be paid at the custom office.
Custom authorities will permit the delivery of such goods after usual examination of the goods.
But if the goods are liable for duty, the importer has to pay custom or import duty which may be
based on weight or measurement of goods, called Specific Duty or on the value of imported
goods Ad-valorem Ditty. There are three types of import duties. On some goods quite low duties
are levied and they are called revenue duties. On some others, quite high duties are charged to
give protection to home industries against foreign competition. While goods imported from
certain nations are given preferential treatment for the levy of import duties and in their case full
protective duties are not charged.

Bonded and Duty paid Warehouses:
The port trust and custom authorities maintain two types of warehouses-Bonded and Duty paid.
These warehouses are situated near the dock and are very useful to importers who do not have
godown of their own to store the imported goods or who, for business reasons, do not wish to
carry them to their own godowns. The goods on which the duty has already been paid by the
importer can be kept in the duty paid warehouses for which a receipt called ‘warehouse receipt’
is issued to him. This receipt is a document of title and is transferable. The bonded warehouses
are meant for goods on which duty has been paid by the importer. If the importer cannot pay the
duty, he may keep the goods in Bonded warehouses for which he is issued a receipt, called
‘Dock Warrant’. Dock Warrant, also like warehouses receipt, is a document of title and is
transferable.
The bonded warehouses are used by the importer when:

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(i) He has no godown of his own.
(ii) He cannot pay the duty immediately.
(iii) He wants to re-export the goods and thereby does not want to pay the duty.
(iv) He wants to pay the duty in installments.
A nominal rent is charged for the use of these warehouses. One special advantage of these
warehouses is that the importer can sell the goods and transfer the title of goods merely by
endorsing warehouse receipt or dock-warrant. This will save the importer from the trouble and
expenses of carrying the goods from the warehouses to his godown.

Making the Payment:
The mode and time of making payment is determined according to the terms and conditions as
agreed to earlier between the importer and the exporter. In case of a D/P bill the documents of
title are released to the importer only on the payment of the bill in full. If the bill is a D/A bill,
the documents of title of the goods are released to the importer on his acceptance of the bill. The
bill is retained by the banker till the date of maturity. Usually, 30 to 90 days are allowed to the
importer for making the payment of such bills.

Closing the Transactions:
The last step in the import trade procedure is closing the transaction. If the goods are to the
satisfaction of the importer, the transaction is closed. But if he is not satisfied with the quality of
goods or if there is any shortage, he will write to the exporter and settle the matter. In case the
goods have been damaged in transit, he will claim compensation from the insurance company.
The insurance company will pay him the compensation under an advice to the exporter.

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8. EXPORT PROCEDURE
In reality, an export exercise is concluded successfully only after the exporter has been able to
deliver the consignment in accordance with the export contract and receive payment for the
goods.
This involves practice of prescribed procedure to be performed (Branch 2000). The fact is that
one does not need only to be very well informed about his/her export company, his/her products,
his/her suppliers, his/her export chain, his/her market, the world market, but one also needs to
know the export rules and terms, the different cultures that one targets and the final customers’
needs.
Then comes fulfilling these needs by the most competitive way and by adding value to one’s
services. This is so because all sell the same products with minor changes, but what make the
difference are the method and the value added services one provides to the ultimate consumers.
Simply speaking, that making an export company is an easy process, but making d successful
and long lasting export company is a very difficult task
Therefore, it seems pertinent now to make you learn the various steps’ involved in the processing
of an export order.

Having an Export Order:
Processing of an export order starts with the receipt of an export order. An export order, simply
stated, means that there should be an agreement in the form of a document, between the exporter
and importer before the exporter actually starts producing or procuring goods for shipment.
Generally an export order may take the form of proforma invoice or purchase order or letter of
credit. You have already learnt these just in the preceding section.

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Examination and Confirmation of Order:
Having received an export order, the exporter should examine it with reference to the terms and
conditions of the contract. In fact, this is the most crucial stage as all subsequent actions and
reactions depend on the terms and conditions of the export order.
The examination of an export order, therefore, includes items like product description, terms of
payment, terms of shipment, inspection and insurance requirement, documents realizing payment
and the last date of negotiation of documents with the bank. Having being satisfied with these,
the export order is confirmed by the exporter.

Manufacturing or Procuring Goods:
The Reserve Bank of India (RBI), under the export credit (interest subsidy) scheme, extends pre-
shipment credit to exporter to finance working capital needs for purchase of raw materials,
processing them and converting them into finished goods for the purpose of exports. The
exporter approaches the bank on the basis of laid down procedures for the pre-shipment credit.
Having received credit, the exporter starts to manufacture / procure and pack the goods for
shipment overseas.

Clearance from Central Excise:
As soon as goods have been manufactured/ procured, the process for obtaining clearance from
central excise duty starts. The Central Excise and Sale Act of India and the related rules provide
the refund of excise duty paid. There are two alternative schemes whereby 100 per cent rebate on
duty is given to export products on the submission of the proof of shipment.

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The first scheme is to make payment of the excise duty at the time of removing the export
consignment from the factory and file a claim for rebate of duty after exportation of goods. The
second scheme is to remove goods from factory/warehouse without payment but under an
appropriate bond with the excise authorities. The exporter needs to apply on a form known as
AR4 or AR4A to the Central Excise Range Superintendent for obtaining excise clearance.
Form A is filed when goods are to be cleared after examination by the excise inspector. In all
other cases, form AR4A is filed.

Pre-Shipment Inspection:
There are number of-goods whose export requires quality certification as per the Government of
India’s notification. Consequently, the Indian custom authorities will require the submission of
an inspection certificate issued by the competent and designated authority before permitting the
shipment of goods takes place.
Inspection of export goods may be conducted under:
(i) Consignment-wise Inspection
(ii) In-process Quality Control, and
(iii) Self-Certification.
The Inspection Certificate is issued in triplicate. The original copy is for the customs verification.
The second copy of the certificate is sent to the importer and the third copy remains with the
exporter for his reference purpose.

Appointment of Clearing and Forwarding Agents:

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On completion of the process of obtaining the Inspection Certificate from the custom agencies,
the exporter appoints clearing and forwarding agents who perform a number of functions on
behalf of the exporter.
The main functions performed by these agents include packing, marking and labeling of
consignment, arrangement for transport to the port arrangement for shipment overseas, customs
clearance of cargo, procurement of transport and other documents.
In order to facilitate the exporter in discharging his duties, the following documents are
submitted to the agent:
(i) Commercial invoice in 8-10 copies
(ii) Customs Declaration Form in triplicate
(iii) Packing list
(iv) Letter of Credit (original)
(v) Inspection Certificate (original)
(vi) G.R. Form (in original and duplicate)
(vii) AR4/ AR4A (in original and duplicate)
(viii) GP-l/GP-2 (original)
(ix) Railway Receipt/Lorry Way Bill, as the case may be

Goods to Port of Shipment:
After the excise clearance and pre-shipment inspection formalities are completed, the goods to be
exported are packed, marked and labeled. Proper marking, labeling and packing help quick and
safe transportation of goods. The export department takes steps to reserve space on the ship
through which goods are to be sent to the importer.

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The shipping space can be reserved either through the clearing and forwarding agent or freight
broker who works on behalf of the shipping company or directly from the shipping company.
Once the space is reserved, the shipping company issues a document known as Shipping Order.
This order serves as a proof of space reservation.
If goods are sent through a road carrier to the port, no specific formality is involved. In case, the
goods are sent by rail to the port of shipment, allotment of wagon needs to be obtained from the
Railway Board.
The following documents are submitted to the booking railway yard/station:
(i) Forwarding Note (A Railway Document)
(ii) Shipping Order
(iii) Wagon Registration Fee Receipt
Once wagons have been allotted, goods are loaded, for which railways will issue Railway
Receipt (RR). Then, this receipt and other documents are sent to the clearing and forwarding
agent at the port town. At the same time, the production/export department takes insurance
policy in duplicate for risk coverage (internal as well as overseas) for the goods to be exported.

Port Formalities and Customs Clearance:
Having received the documents from the export department, the clearing and forwarding agent
takes delivery of the cargo from the railway station or the road transport company and stores it in
the warehouse. He also obtains customs clearance and permission from the port authorities to
bring the cargo into the shipment shed. The custom department grants permission for export at
the office of the customs and physical verification of goods in the shipment shed. The clearance
for export is given on the Shipping Bill. The clearing and forwarding agent is required to submit

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the following documents with the Customs House for obtaining customs clearance and
permission:
(i) Shipping Bill
(ii) Contract Form
(iii) Letter of Credit, if applicable
(iv) Commercial Invoice
(v) GR Form
(vi) Inspection Certificate
(vii) AR4/AR4A Form
(viii) Packing List, if needed
After receiving documents from the export department, the clearing and forwarding agent
presents the Port Trust Document to the Shed Superintendent of the port. He obtains carting
order bringing the cargo to the transit shed for physical examination by the Dock Appraiser.
The Dock Appraiser is presented the following documents to facilitate him in physical
examination of export goods:
(i) Shipping Bill
(ii) Commercial Invoice
(iii) Packing List
(iv) AR4/ AR4A Form and Gate Pass
(v) GR Form (duplicate)
(vi) Inspection Certificate (original)
The Dock Appraiser, after making examination, makes ‘Let Export’ endorsement on the
duplicate copy of the Shipping Bill and hands over it to the Forwarding Agent. All these

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documents are presented to the Preventive Officer who puts an endorsement ‘Let Ship’ on the
duplicate copy of the Shipping Bill. The preventive officer supervises the loading of cargo on
board the vessel.
After the goods are loaded on board the vessel, the captain of the ship issues a receipt known as
‘Mate’s Receipt’ to the Shed Superintendent of the port concern. The forwarding, agent after
paying port charges, takes the delivery of the ‘Mate Receipt’. He submits to Shipping Company
and requests it to issue the Bill of Lading.

Dispatch of Documents by Forwarding Agent to the Exporter:
After obtaining the Bill of Lading from the Shipping Company, the clearing and forwarding
agent dispatches all the documents to his / her exporter.
These documents include:
(i) Commercial Invoice (attested by the customs)
(ii) Export Promotion Copy
(iii) Drawback Copy
(iv) Clean on Board Bill of Lading
(v) Letter of Credit
(vi) AR4/ AR4A and Gate Pass
(vii) GR Form (in duplicate)

Certificate of Origin:
On receipt of above documents from the forwarding agent, the exporter now applies to the
Chamber of Commerce for a Certificate of Origin and obtains it. If the goods are exported to

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countries offering GSP concessions, the exporter needs to procure the GSP Certificate of Origin
from the concerned authority like Export Inspection Agency.

Dispatch of Shipment Advice to the Importer:
At last, the exporter sends ‘Shipment Advice’ to the importer intimating the date of shipment of
the consignment by a named vessel and its expected time of arrival at the destination port of the
importer.
The following documents are also sent to the importer to facilitate him for taking delivery of the’
consignment:
(i) Bill of Lading (non-negotiable copy)
(ii) Commercial Invoice
(iii) Packing List
(iv) Customs Invoice

Submission of Documents to Bank:
At the end of the process, the exporter presents the following documents to his bank for
realization of his amount due to the importer:
(i) Commercial Invoice
(ii) Certificate of Origin
(iii) Packing List
(iv) Letter of Credit
(v) Marine Insurance Policy
(vi) GR Form

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(vii) Bill of Lading
(viii) Bill of Exchange
(ix) Bank Certification
(x) Commercial Invoice

Claiming Export Incentives:
On completion of the processing of an export order at the three levels of shipment i.e., pre-
shipment, shipment and post-shipment, the exporter claims for export incentives admissible to
him / her.

9. TODAYS SCENERIO OF INDIA
In recent years, India exported mostly: pearls, precious and semi-precious stones and jewelry (16
percent of total shipments); mineral fuels, oils and waxes and bituminous substances (12
percent); vehicles, parts and accessories (5 percent); nuclear reactors, boilers, machinery and
mechanical appliances (5 percent); pharmaceutical products (5 percent); and organic chemicals
(4 percent). India’s main export partners are: United States (15 percent of the total exports),
United Arab Emirates (11 percent), Hong Kong (5 percent), China (4 percent), Singapore (4
percent) and United Kingdom (3 percent). This page provides the latest reported value for - India
Exports - plus previous releases, historical high and low, short-term forecast and long-term
prediction, economic calendar, survey consensus and news. India Exports - actual data, historical
chart and calendar of releases - was last updated on October of 2018.

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Figure 2: India’s Export
India main imports are: mineral fuels, oils and waxes and bituminous substances (27 percent of
total imports); pearls, precious and semi-precious stones and jewelry (14 percent); electrical
machinery and equipment (10 percent); nuclear reactors, boilers, machinery and mechanical
appliances (8 percent); and organic chemicals (4 percent). India’s major import partners are:
China (16 percent of total imports), the United States (6 percent), United Arab Emirates (6
percent), Saudi Arabia (5 percent) and Switzerland (5 percent). This page provides the latest
reported value for - India Imports - plus previous releases, historical high and low, short-term
forecast and long-term prediction, economic calendar, survey consensus and news. India Imports
- actual data, historical chart and calendar of releases - was last updated on October of 2018.

Figure 3: India’s Import

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Export and Import categories:

Figure 4: Export categories in India

Figure 5: Import categories in India

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Export country/continent wise:

Figure 6: India’s export Country Wise

Figure 7: India’s export Continent Wise

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Import country/continent wise:

Figure 8: India’s Import Country Wise

Figure 9: India’s Import Continent Wise

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10. CUSTOMS DUTY IN INDIA:
Under GST regime, there are two main import duties – Basic Custom Duty (BCD) and Integrated
Goods and Services Tax (IGST). However, additional import duties like Compensation Cess,
Safeguard Duty and Anti-Dumping Duty are levied on some goods. Let’s understand them one
by one:
 Basic Custom Duty :
BCD is a specific type of import duty, which is levied on value of goods imported into
India from other countries. It is charged as usual after GST.
 Integrated Goods and Services Tax:
IGST is a new type of tax under GST regime, which is levied on goods imported into
India from other countries. Basically, the tax is collected when goods
 Compensation Cess:
Compensation Cess is levied on certain goods such as pan-masala, cigarettes, etc. in order
to provide compensation to the states for loss of revenue due to implementation of Goods
and Services Tax (GST).
 Safeguard Duty:
Safeguard Duty is other type of custom duty, which is levied on goods when sudden rise
in imports of any product has caused serious problem to the domestic industries.
 Anti-Dumping Duty:
Anti-dumping duty is a tariff, levied by government on goods that are believed to be
dumped in national market. Basically, dumping is a process where a company exports a
commodity at a price lower than the price it normally charges on its own home market.

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11. EXPORT BENEFITS AND INCENTIVES IN INDIA:
 Export from India scheme:
MEIS (Merchandise Exports from India Scheme)
MEIS scheme for exporters was introduced in recent Foreign Trade Policy of India 2015-20 by
consolidating previous different schemes such as Vishesh Krishi Gram Udyog Yojana
(VKGUY), Focus Product Scheme (FPS), Agri-Infrastructure Incentive Scrip), Market Linked
Focus Product Scheme (MLFPS) etc with modification. MEIS scheme extends benefits to more
than 5000 export items and the duty credit scrip’s helps exporters in payment of Customs Duties
for import of inputs or goods, payment of excise duties on domestic procurement of inputs or
goods, payment of service tax on procurement of services, payment of Customs Duty and fee etc.

SEIS (Service Exports from India Scheme)
The foreign Trade Policy of India 2015-20 introduced SEIS (Service Exports from India
Scheme) for service exporters by modifying SFIS scheme of previous years by benefiting all
service providers of India including foreign brand of Indian Companies.

Assistance from trade promotion councils and commodity boards
Trade promotion council of different products and commodity boards helps exporters with
various financial schemes and other service assistance. Market Development Assistance (MDA),
Market Assistance Initiative (MAI), Financial support to attend Trade Fairs, various information
supports etc. are some of them.

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 Duty exemption and remission scheme for exporters
Advance Authorization Scheme (AA scheme):
As per foreign trade policy of India, inputs are allowed to import without duty payment for
export purpose. The licensing authority fixes value addition on export products not below 15%.
A stipulated period to import is allowed and validity for export obligation. For more details,
contact nearest DGFT office (Director General of Foreign Trade, Government of India).

Export Duty Drawback of Customs, Central Excise and Service Tax
Duty paid inputs against exported products is refunded to exporters in the form of Duty
Drawback. If the rates of such items are scheduled under Drawback schedule, the amount of
drawback is refunded accordingly. If not scheduled, a separate application has to be filed to fix
Brand Rate. Detailed articles on Duty Drawback and Brand rate are available in this web blog
with method of claim.

Brand rate under Duty Drawback for Exporters
If Duty Drawback rate has not been mentioned in schedule, exporters can approach concerned
authority for Brand rate.

Rebate of Service Tax through all industry rates for Exporters
Service tax refund paid is reimbursable on specified output services used for export of goods at
specified all industry rates fixed time to time by the authority.

Export benefit of duty free import authorization

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DFIA (Duty Free Import Authorization) scheme is the export scheme introduced by DGFT by
clubbing DEEC (Advance License) and DFRC to support exporters for free import of inputs.

DEPB, another advantage to exporter
DEPB (Duty Entitlement Pass Book) scheme is another export incentive scheme in India. At
present, DEPB can be claimed post export. Import customs duty credit is allowed to exporters to
neutralize the customs import duty against export of goods.

EPCG scheme to promote exports
Export Promotion Capital Goods (EPCG) scheme helps exporters to import capital goods with
zero import duty for the purpose of production of export products with a commitment of export
obligation period with licensing authority. Certain rate of relaxation is allowed to sell in local
market after fulfilling export obligation.

Central Excise rebate of duty for exporters
Rebate of duty paid on excisable goods exported or duty paid on the material used in
manufacture of such export goods may be claimed.

Central Excise duty exemption on exports
Excisable goods are exempted to pay export excise duty with simple procedures with central
excise department. Necessary registration of premise, factory or warehouse is required to be
completed with concerned central excise department by executing bond.

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Deemed export benefits
Deemed Export transactions are those transactions in which the goods supplied do not leave the
country and the payment for such supplies is received either in Indian rupees or in free foreign
exchange. You may go through this link to know in detail about Deemed Exports.

Income tax benefits for exporters
Income tax exemption to exporters is allowed by government in different categories. You may
contact your nearest Income Tax Department to know latest updated information on income tax
exemptions to exporters in India.

Bilateral trade agreements benefits to exporters
Trade Agreement between countries promotes exports each other by providing different special
schemes to exporters.

Post office clearance facility to exporters
Post office clearance facility is also available for exporters who would like to export/import clear
the goods in India.

Bank assistance for exporters
Much financial assistance with different schemes is given to exporters to boost exports in
India. Pre Shipment Credit in Foreign Currency (PCFC) and in INR, Packing Credit loans,
Supplier’s credit, Buyer’s credit, Post shipment Finance, short term and long term finance,
Finance for special export projects, Working capital finance, Capital Equipment Finance, Fund

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for export consultancy and technological services, different guarantees for exports like Advance
Payment Guarantee, Performance Guarantee, Retention Money Guarantee, Guarantee for
customs, central excise and other government and private agencies etc. Banks also provide
financial assistance to Export Oriented Units (EOU), Special Economic Zones (SEZs),
Corporate, STPs, EHTPs, FTZs, MSMEs etc. Bank also provides Line of Credit mechanism for
export of projects, equipment, goods and services from India.

ECGC (export credit guarantee corporation)
Export Credit Guarantee Corporation (ECGC) protects exporters in covering credit risk of
overseas buyers.

Federation of Indian exporters organisation
FIEO also plays a major role in promoting exports in India by assisting exporters in various
ways.
Export support from chambers of commerce
Chamber of Commerce at different parts of the country and Federation of Indian Chamber of
Commerce and Industry (FICCI) help exporters in various ways to promote exporters in earning
foreign currency to strengthen economy.

Export assistance from industries’ associations
The support from Exporters Organization formed privately also plays a major role in sharing
practical problems facing by industry and helps to find solutions. Such exporter’s association

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takes up their issues with government time to time, so as to enable the government to introduce
new policy or to amend existing one.

Central assistance to states for exports (ASIDE)
Assistance to States for Infrastructural Development for Exports (ASIDE) has been introduced
by Central Government with an objective to involve States / Under Takings in export effort by
providing assistance to the State Governments or State Under Takings Administrations for
creating appropriate infrastructure for development and growth of exports.

Towns of export excellence (TEE)
India government declared a list of towns of export excellence where specialized export products
are promoted.

 Benefits to special group of exporters
Benefits for exporters from certain regions
Exporters and manufacturers from special region such as Sikkim, Jammu and Kashmir etc. are
given specific benefits by government. The exporters can contact the related government
agencies for more details.

Export benefits to units having ISO 9000 (series) / ISO 14000 (series) / WHOGMP /
HACCP / SEI CMM level-II and above status
Export units holding special status are also eligible for different exports benefits from
government modifying time to time.

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SSI/MSME BENEFITS
There are many schemes available for Micro Small and Medium Enterprises (MSME) and SSI
(Small Scale Industries) including scheme to promote exports. You may approach concerned
office.

Export benefits to Free Trade Zones (FTZ)
Export Units in Free Trade Zones can enjoy zero excise duty on goods manufactured for export
purpose. Import customs duty is exempted for import of components used for manufacturing
export goods.

Export Advantages for Electronic Hardware Technology Park (EHTP)
Advantages like Single point contact service, income tax benefits, DTA sales up to certain limit
and many other export benefits can be enjoyed for units of Electronic Hardware Technology
Park (EHTP)

Export benefits for Software Technology Parks
Many advantages like foreign equity permission, income tax benefits, DTA sales up to certain
limit and many other supports can be enjoyed for the units under STP.

Advantages to 100% Export Oriented Units (EOUs)

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Import of second hand capital goods, re export of capital goods, income tax benefits, DTA sales
up to certain limit and many other government assistances can be enjoyed by Export Oriented
Units.

Export benefits to Bio Technology Park (BTP)
Income tax benefits, re export of capital goods, DTA sales up to certain limit and many other
conveniences can be enjoyed from different government and non-government agencies to BTP.

Export merits for Agri Export Zone (AEZs)
Income tax benefits, re export of capital goods, DTA sales up to certain limit and many other
export advantages can be availed for Agri Export Zone (AEZs)

Advantages of Electronic Hardware Technology Parks (EHTPs)
Income tax benefits, re export of capital goods, DTA sales up to certain limit and may other
export supports can be enjoyed by Electronic Hardware Technology Parks (EHTPs).

Export supports to Special Economic Zones
Government provides many benefits to Special Economic Zones in India to create an
internationally competitive and smooth working environment for exports and thereby economic
development of the country. Some of the advantages enjoyed by SEZ are single window
clearance, free import of goods, exemption of customs duty for import of capital goods,
consumables, raw materials, spares etc, reimbursement of CST, 0% income tax for 5 years,

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Foreign Direct Investment, exemption on MAT, Service Tax, DDT, CST, Service Tax, External
commercial borrowing facility etc. and many more.

12. FINDINGS
According to Foreign trade policy 2015-20.
Mandatory Documents Required For Export of goods from India
 Bill of lading
 Commercial invoice cum packing list
 Shipping bill

Mandatory Documents Required For Import of goods into India
 Bill of leading
 Commercial invoice cum Packing list
 Bill of entry o As per Foreign trade Policy Government reduce the mandatory Documents
The Term on which business deals are done:

Figure 10: Incoterms

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Source: Google Images
Figure 11: ICC Incoterms
Risk Involved:
Currency Risks:
As regards covering the currency risk, due to the exchange rate fluctuations, you can request
your banker to book a forward contract.

Credit Risks:
You can cover your credit risk against the foreign buyer by insisting upon opening a letter of
credit in your favor. Alternatively one can avail of the facility offered by various credit risk
agencies. A specific insurance cover can also be obtained from ECGC (Exports Credit &
Guarantee Corporation) to cover your country risk besides covering credit risk.

Country Risk:

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ECGC provides cover to protect the exporter from country risks. Detailed procedures how an
exporter can get him protected against the above risks are given in separate chapters later.

Carriage Risk: The carriage risk can be covered by taking an appropriate general insurance
policy.

Payment method
Payment in advance
This method does not involve any risk of bad debts, provided entire amount has been received in
advance. At times, a certain per cent is paid in advance, say 50% and the rest on delivery. This
method of payment is desirable when:
The financial position of the buyer is weak or credit worthiness of the
 Buyer is not known. The economic/ political conditions in the buyer’s country are unstable.
 The seller is not willing to assume credit risk, as the case of open account
 Method. However, this is the most unpopular methods as a foreign buyer would not be willing
to pay advance of shipment unless: The goods are specifically designed for the customer, and
 There is heavy demand for the goods (a seller’s market situation).

Documentary bills:
Under this method, the exporter agrees to submit the documents to his bank along with the bill of
exchange. The minimum documents required are full set of bill of lading
 Commercial Invoice
 Marine Insurance policy and other document, if required.

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 There are two main types of documentary bills: Documents against Payment,
 Documents against Acceptance.

Documents against payment (D/P):
The documents are released to the importer against payment. This method indicates that the
payment is made against Sight Draft. Necessary arrangements will have to be made to store the
goods, if a delay in payment occurs. The risk involved that the importer may refuse to accept the
documents and to pay against them. The reason for non-acceptance may be political or
commercial ones. In India, ECGC covers losses arising out of such risks. Under this system, as
compared to D/A, the exporter has certain advantages: The document remain in the hands of the
bank and the exporter does not lose possession or the ownership of goods till payment is made,
Other reason may include that the exporter may not be able to allow credit and wait for
payment.

Documents Against acceptance (D/A):
The document are released against acceptance of the Time Draft i.e. credit allowed for a certain
period, say 90 days. However, the exporter need not wait for payment till bill is met on due date,
as he can discount the bill with the negotiating bank and can avail of funds immediately after
shipment of goods. In case of D/A as compared to D/P bills, the risk involved is much greater, as
the importer has already taken possession of goods which may or may not be in his custody on
the maturity date of the bill. If the importer fails to pay on due date, the exporter, will have to
start civil proceedings to receive his payment, if all other alternatives fails. The risk involved can
be insured with ECGC.

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Letter of credit (L/C):
This method of payment has become the most popular form in recent times, it is more secured as
company to other methods of payment (other than advance payment).

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13. RECOMMENDATION S
Exporter and Importer should work according to Foreign Trade Policy 2015-20.It is observed
that requirement of Document according to new policy is less then requirement of Documents
according to 2009-14 policy. One should ask his CFA or if himself EXPORTING and
IMPORTING should be aware of all the documents so there should be fair Export or Import
should be done. One should be capable of all the prevailing conversion rates as on Export
website which is changed after every 10 days.

14. LIMITATIONS
As the data is collected from the websites, books, journals so there might be some controversies
in the method of Export and Import. New amendments if any might not have been included or
clubbed with the data and findings. The data can be amended that data might not get included.

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15. CONCLUSION:
All the Exporters and Importers must know the type of documents and processes involved in
Export and Import of any item. They must know what is the material description in terms of HS
code and what is the customs duty involved in it. All documents should be available so tht
Demurrage charges are not to be paid for any delay in clearance. Custom clearance processes
should be well noted so that they can easily identify and learn not to be cheated by any means.
They should be very much known what is the exchange rate prevailing in the customs as the
rates readily changes in 7 days and are continuously updated so there should not be nay extra
duties paid by them. They should be very much aware of what sort of INCO terms they are
choosing for their transactions. For availing benefits and not to come in Caution list of RBI they
should complete the transactions by submitting all the necessary documents to their bank where
the trade transaction should be closed.

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16. REFRENCES:
 http://dgft.gov.in/
 https://www.indianchamber.org/international-business-and-export-services/
 https://www.shippingsolutions.com/blog/the-chamber-of-commerce-role-in-exporting
 http://commerce.gov.in/
 https://www.researchgate.net/publication/266392027_EXPORT
IMPORT_MANAGEMENT_2nd_edition
 https://www.investopedia.com/terms/i/import.asp
 http://howtoexportimport.com/Meaning-of-Import-Trade-9040.aspx
 https://www.thebalance.com/imports-definition-examples-effect-on-economy-3305851
 https://www.infoplease.com/homework-help/social-studies/gdp-and-players-three-
imports-and-exports
 https://atlas.media.mit.edu/en/profile/country/ind/
 https://www.economicshelp.org/blog/7164/trade/importance-of-exports-to-the-economy/
 https://study.com/academy/lesson/importing-and-exporting-in-a-global-market.html
 https://www.indiafilings.com/learn/export-and-import-procedure-in-india/
 https://www.civilserviceindia.com/subject/Management/notes/export-import-
procedures.html
 http://agriexchange.apeda.gov.in/Ready%20Reckoner/EXPORT_DOCUMENTATION.a
spx
 http://www.himpub.com/documents/Chapter2105.pdf
 http://skncustoms.com/pdfs/SKB%20Import%20Procedures%20%20Final.pdf
 https://www.env.go.jp/en/recycle/basel_conv/files/importProcFlow.pdf

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 http://www.kvic.org.in/update/circulars/MDTC_New%20Delhi_15.7.15.pdf
 http://www.nishantpub.com/yahoo_site_admin/assets/docs/AHMEDABAD_Exim_13-
12-2015.305225838.pdf
 https://www.managementstudyguide.com/import-and-export-management-articles.html

17. LIST OF FIGURES:
S.No Description
Figure 1 Import and export
Figure 2 India Export
Figure 3 India’s Import
Figure 4 Export categories in India
Figure 5 Import categories in India
Figure 6 India’s export Country Wise
Figure 7 India’s export Continent Wise
Figure 8 India’s Import Country Wise
Figure 9 India’s Import Continent Wise
Figure 10 Incoterms defined
Figure 11 ICC Incoterms