Export Experts Global


Export Experts Global

Export is a broad concept, and an exporter must make numerous preparations before beginning an export firm. The following actions can be taken to begin an export business:

How to Export – Step by Step

export and import procedure1. Constructing an Organization

To begin an export business, a sole proprietorship/partnership firm/company must be established according to protocol, with an appealing name and logo.

2. Registering for a bank account

It is necessary to open a current account with a bank that is allowed to deal in foreign exchange.

3. Obtaining a Permanent Account Number is the third step (PAN)

Every exporter and importer is required to obtain a PAN from the Income Tax Department. (Click here to apply for a PAN card.)

4) Getting an IEC (Importer-Exporter Code) Number

It is required to obtain an IEC for export/import from India, according to the Foreign Trade Policy. The procedure for getting a PAN-based IEC is outlined in paragraph 2.05 of the FTP, 2015-20.

According to ANF 2A, an application for IEC is filed online at www.dgft.gov.in and an application fee of Rs. 500/- is paid online using net banking or credit/debit card, along with the required papers listed in the application form. (Click here for more details.)

5) Certificate of registration and membership (RCMC)

Exporters must get RCMC from the concerned Export Promotion Councils/ FIEO/Commodity Boards/ Authorities in order to obtain a licence to import/ export or any other benefit or concession under FTP 2015-20, as well as to obtain services/ guidance.

6) Product selection

Except for a few goods on the prohibited/restricted list, all things are freely exportable. After researching the export trends of various Indian items, a proper selection of the product(s) to be exported can be made.

7) Markets to Be Considered

After conducting research on market size, competitiveness, quality requirements, payment arrangements, and other factors, an overseas market should be chosen. Exporters can also assess markets based on the export benefits provided by the FTP for a limited number of nations. Colleagues, acquaintances, and family, as well as export promotion agencies and Indian missions abroad, may be of assistance in acquiring information.

8) Identifying Buyers

Trade shows, buyer-seller meetings, exhibits, B2B portals, and web browsing are all good ways to locate buyers. EPCs, Indian embassies abroad, and international chambers of commerce can all be beneficial. It would also, be beneficial to create a bilingual website with a product catalogue, price, payment terms, and other relevant information.

9) Take a sample

Providing customised samples to meet the needs of international buyers aids in the acquisition of export orders. Exports of bona fide trade and technical samples of freely exportable products are allowed without restriction under the FTP 2015-2020.

10) Costing/Pricing

In the face of international competition, product pricing is critical for attracting buyers’ attention and encouraging sales. The price should be calculated based on the terms of sale, such as Free on Board (FOB), Cost, Insurance, and Freight (CIF), Cost and Freight (C&F), and so on, taking into account all expenses from sampling through realisation of export proceeds. The goal of export costing should be to sell as much as possible at a competitive price with a high profit margin. It’s a good idea to make an export costing sheet for each export product.

11) Buyers’ Negotiations

Demand for a reasonable allowance/discount in price may be considered after considering the buyer’s interest in the product, future prospects, and business continuity.

12) ECGC as a Risk Management Tool

Payment risks exist in international trade owing to buyer/country insolvency. These risks can be mitigated by an Export Credit Guarantee Corporation Ltd policy (ECGC). It is important to obtain a credit limit on the foreign buyer from ECGC to protect against the risk of non-payment when the buyer places an order without making an advance payment or obtaining a letter of credit.

Putting together an Export Order

1. Order confirmation

When an export order is received, it should be thoroughly checked in terms of products, specifications, payment terms, packaging, delivery schedule, and so on, before being confirmed. As a result, the exporter and the overseas buyer may enter into a legal contract.

2. Goods Procurement

Following confirmation of the export order, urgent measures for procurement/manufacture of the goods for export may be taken. It’s important to remember that the order was won after a lot of hard work and competition, therefore the procurement should follow the buyer’s specifications to the letter.

3. Quality Assurance

In today’s competitive world, it’s critical to be quality conscious when exporting goods. Pre-shipment inspection is required for some products, such as food and agriculture, fisheries, and certain chemicals. Foreign buyers have the option of establishing their own norms and specifications, as well as requiring examination by their own designated agency. To stay in business as an exporter, you must maintain a high level of quality.

4. Funding

To complete the export transaction, exporters are eligible to seek pre-shipment and post-shipment financing from commercial banks at reduced interest rates. In the pre-shipment stage, new exporters are given a Packing Credit advance against the submission of an L/C or a confirmed order for a period of 180 days to meet working capital requirements for the purchase of raw materials/finished goods, labor expenses, packing, and transportation, among other things. Normally, banks advance 75 percent to 90 percent of the order’s value, leaving the remaining as margin. The packaging credit advance is adjusted by banks using the proceeds of negotiated, acquired, or discounted export bills.

Exporters are typically allowed post-shipment financing of up to 90% of the invoice amount during regular transit periods, and in the case of usance export bills, up to the notional due date. Post-shipment advances can last up to 180 days from the date of shipment. The realisation of the sale profits of the export bills is used to settle bank advances. Banks will charge commercial lending rates of interest if an export bill is late.

5. Labeling, packaging, packing, and marking are all examples of 

The export goods must be labelled, boxed, and packed precisely according to the buyer’s instructions. Good packing ensures that the goods arrive in perfect condition and are presented in an appealing manner. Similarly, good packing facilitates easy handling, maximum loading, lower transportation costs, and ensures cargo safety and quality. Identification and information about the cargo packed is provided by markings such as address, package number, port and destination, weight, handling instructions, and so on.

6. Insurance

The danger of loss or damage to the products while they are in transit is covered by a marine insurance policy. In general, exporters arrange insurance for CIF contracts, whereas buyers obtain insurance for C&F and FOB contracts.

7. Shipping

It’s a crucial aspect of export, and the exporter must stick to the delivery timetable. Nothing should be allowed to get in the way of quick and effective delivery.

8. Customs Procedures

Prior to filing a shipping bill for clearance of export goods, obtain a PAN-based Business Identification Number (BIN) from Customs and open a current account in the designated bank for crediting of any drawback amount, which must be registered on the system.

In the absence of EDI, shipping bills or bills of export must be filled out in the manner outlined in the Shipping Bill and Bill of Export (Form) Regulations of 1991. For the export of duty-free commodities, dutiable goods, and export under drawback, an exporter must use distinct types of shipping bills/bills of export.

Declarations in the approved format must be filed through Customs Service Centers under the EDI System. The exporter/CHA generates a checklist for data verification. After the data has been verified, the Service Center operator submits it to the System, which generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the exporter/CHA. In most circumstances, the system processes a Shipping Bill based on statements given by the exporters without the need for human participation. When the Appraiser Dock (export) orders samples to be drawn and tested, the Customs Officer may take two samples from the consignment and record the details, as well as the testing agency’s information.

If the papers have not yet been filed in the system and the shipping bill number has not been issued, any corrections or adjustments to the check list generated after completing the declaration can be made at the service centre. Amendments are made in the following ways in circumstances where modifications are required after the production of the shipping bill number or after the products have been transported into the Export Dock.

  1. If the items have not yet been “let export,” the Assistant Commissioner may grant revisions (Exports).
  1. Where a “Let Export” order has already been issued, only the Additional/Joint Commissioner, Custom House, in charge of the export department, may make changes.

After the Additional /Joint Commissioner has granted authorization for adjustments, the Assistant Commissioner / Deputy Commissioner (Export) may approve the system amendments on behalf of the Additional /Joint Commissioner. If the exporter has already printed the Shipping Bill, all copies of the shipping bill must be surrendered to the Dock Appraiser for cancellation before the adjustment can be accepted on the system.

9. Customs House Agents 

Exporters can hire Customs House Agents who have been licenced by the Commissioner of Customs. They are professionals who make the task of clearing cargo from Customs easier.

10. Supporting documentation

The following necessary documentation for import and export are described in the FTP 2015-2020.

A bill of lading or an airway bill
A commercial invoice and a packing list
A shipping bill, a bill of export, or a bill of the entrance (for imports)
(Other documents, such as a certificate of origin or an inspection certificate, may be necessary depending on the circumstances.)

11. Documents must be submitted to the bank

Following shipment, the paperwork must be presented to the bank within 21 days for forwarding to the foreign bank for payment arrangements. Documents should be drawn under Collection/Purchase/Negotiation under L/C, as appropriate, and the following documents should be attached.

– Bill of Exchange
– Letter of Credit (if the shipment is covered by an L/C)
– Bill of Sale
– Checklist for Packing
– Airway Bill/Bill of Lading (Bill of Lading)
– Under the Foreign Exchange Act, a declaration must be made.
– GSP (Guaranteed Substances Program)/Certificate of Origin
– Wherever required, an inspection certificate
– Any other documentation necessary by the L/C, the buyer, or the law.

12. Receipt of Export Profits

According to the FTP 2015-2020, all export contracts and invoices must be priced in either freely convertible currency or Indian rupees, with the exception of exports to Iran, where export revenues must be realized in freely convertible currency.

In 9 months, the export proceeds should be realized.

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