1.

Preliminary requirements

Importer & Exporter Code

Import Export (IE) Code is a registration required for persons importing or exporting goods and services
from Bangladesh. IE Code is issued by the Office of the Chief Controller. IE Codes when issued can be
used by the entity throughout its existence and doesn't require any renewal or filing. Therefore, it is
recommended for most organizations to obtain IE Code, irrespective of if they need it at the moment.

Membership number Registration

Membership of certain bodies will help the exporters in a number of ways

2. Inquiry and Offer under Exports

Exporter may receive inquiries, directly. An inquiry is a request from the prospective buyer to inform the
terms and conditions of sale. Any export inquiry has to be attended with promptness and meticulous
care.

If the inquiry is from a new person it is usual to inquire about the credentials of the potential importer.
Importer may furnish his bank reference or trade reference. Trade reference means the importer may
furnish the names of persons with whom he had business dealings, earlier, to facilitate the exporter to
gather required details.

As export business is becoming highly competitive, many a time, exporters have to take the initiative,
without waiting for inquiries, in identifying potential buyers by gathering information from trade
journals which publish trade inquiries.

3. Sending export sample

Sending export samples is a simple procedure under export.

There is two important question to consider here, can we get cost of export sample from foreign buyer,
if value of product is high? Can we get reimbursed on the cost of courier to send export samples?

Based on our communication with the buyer, we will ask to send sample of our product. Because value
of our product sample is high, we will request buyer to make payment for sample. The buyer remits the
amount to your bank. We will contact with export promotion council or commodity board for further
assistance. While sending samples, we keep a set of same samples with us as we have to meet the
specification of product similar to the sample. Otherwise there is a chance of era.
4. Issuing proforma invoice

Once after agreeing the terms of contract of sale, the buyer has to issue a purchase order or Letter of
Credit. Just before this process, the seller has to send a pro-forma invoice to buyer, mentioning
complete details of agreement of sale. Normally, purchase order or Letter of credit is opened on the
basis of this pro-forma invoice sent by the seller.

So, we can treat pro-forma invoice as a document of commitment to sell the goods to the buyer as per
the terms and conditions agreed between both in person, over telephone, by fax, email or any other
mode of communication. In other words, we can treat the pro-forma invoice as a confirmed purchase
order from the seller, although the official purchase order has to be issued by the buyer. The pro-forma
invoice is issued before sales takes place.

Once after receiving pro-forma invoice from us, Srilankan buyer will send a purchase order or open a
letter of credit to us. As per agreed date of shipment, we will arrange to ship the goods. We will issue
commercial invoice at this point of time. Invoice is a prime document of sale in any business.

5. Confirmation of order

Once after approval of our sample by Srilankan buyer, the next step is on negotiation price of sale. We
will quote our price of goods with all terms and conditions of sale. Once after approving each other on
price of goods, terms of payment, terms of delivery and all other conditions on the sale, we will send a
Pro forma Invoice to overseas buyer.

Based on pro forma invoice, buyer will prepare a sale contract with complete terms and conditions of
contract. Then the contract is sent to us duly signed by our buyer. Once after receiving the contract of
sale we sign and return back a copy to our buyer as a proof of acceptance of sale contract by us.

6. Terms of payments

Most of the beginner exporters may worry about the terms of payment. Because, unlike other domestic
business, you are dealing with a buyer who situates thousands of miles away from your place crossing
borders of your country. You may or may not know the financial condition or credit worthiness of your
buyer. You may not be meeting the buyer personally at initial stage, may not be aware of the specific
policy of trade of buyers country, no idea about political status or natural calamity chances of the
region etc.

The Major ways of making payment in export and import are given below:

Advance payment

Documents against acceptance (DA)

Documents against payment (DAP)

Letter of credit (L.C)

We are going to use Letter of credit as our mode of transaction

We are going to use LC as our mode of transaction as it is the most safe and efficient way to use.

Letter of credit is an assurance given by the buyers bank (Sri Lanka Savings Bank) to remit the amount
to us through our bank (Exim Bank) on maturity, as per the terms and conditions of document based on
the contractual agreement between us and Srilankan buyer. Now in simple words, If LC opened on our
name, we will receive amount though the buyers bank on the agreed time. All Letter of Credits for
export import trade is handled under the guidelines of Uniform Customs and Practice of Documentary
Credit of International Chamber of Commerce (UCP 600).

There are various types of letters of credits like Revocable, Irrevocable, Confirmed, Unconfirmed, Clean
& Documentary, Fixed, Revolving, Transferable, Back to Back etc. Most common and safe LC is
Irrevocable Letter of Credit.

7. Incoterms/ Terms of Delivery

Incoterms are trade terms published by the International Chamber of

Commerce (ICC) that are commonly used in both international and domestic
trade contracts. Incoterms, which is short for "international commercial terms,"
are used to make international trade easier by helping traders who are in different
countries to understand one another.
EXW
FCA
CPT
CIP
DAT
DAP
DDP/DTP
FAS
FOB
CFR
CIF

We are going to choose CFR as our terms of delivery

CFR | Cost & Freight

CFR point must be a destination ocean port, no inland points allowed, see like CPT. This option works for
us because we only going to deliver through ship. Above all we get to control the freight all the way to the
destination port but risk for loss passes to the buyer at the ships rail at the origin port. It reduces our cost
because we are cutting one step of transportation cost.
8. Finance against export

Finance against export means different before and after finance is given by exporter local bank
according to their credit to smoothen the exporting process.

Pre-shipment finance Packing credit

Packing credit is a financial assistance to exporters provided by bank. Getting financial assistance before
shipment of goods is a great help for any exporter is concerned. Here, an exporter can avail finance
before shipment which is called Packing Credit. Packing credit is pre shipment financial assistance to
exporters allotted by banks on the basis of export stocks available for exports. The exporter has to
produce copy/original of necessary export orders along with the details of stocks available for exports.
The bank authorities inspect the exporters premises and collect data of such stock ready for export and
assess the value. Based on such valuation of stock, the exporter is allotted packing credit loan by banks
with a very narrow interest rate.

Post shipment finance - Bill discounting/Bill Negotiation

Financial assistance to exporters after exports in the form of Bill discounting/negotiation is provided by
banks with a low interest rate. This financial support also helps exporters to procure/manufacture new
products for exports for next export consignment. Once after completing the procedures of an export
consignment, the exporter submits all required documents to send to overseas buyer. If the export sale
contract between buyer and seller is on credit basis, normally the export bills are sent to buyer for
collection of payment on maturity date, mutually agreed. When submitting such documents, if the
exporter requires finance for upcoming export consignments, he can apply for post shipment finance by
discounting of export bills already exported. In the case of Letter of credit, negotiation procedures are
followed to avail post shipment finance.

9. Insurance of payments

For insurance coverage from Srilankan party we are going to make Export Credit Guarantee Corporation
(ECGC). Export Credit Guarantee Corporation is a central government undertaking body to provide credit
guarantee on the default of payments by the buyer. It works as an insurance firm who guarantees
export payment, if the buyer defaults in making payment.

After finalizing the order, buyer will executes a purchase order to us with the terms and conditions as
agreed by both. The purchase order should contain full details of Srilankan buyer and buyers bank
account details from Sri Lanka Saving Bank. The exporter approaches Export Guarantee Corporation to
get approval on the buyer with amount of limit. Here, the ECGC with their available contact with
overseas network collects credit worthiness of the said buyer and determines a figure of
creditworthiness and inform the maximum limit of amount can be shipped at any point of time. Export
Credit Guarantee Corporation collects premium on the amount of approval and issue insurance policy
accordingly.

Bangladeshs growing pharmaceutical sector

The export value of pharmaceuticals is growing at a reasonable rate every year. Exports

increased from $8.2 million in 2004 to $43.63 million in 2013 and posted further gains

last year. Export destinations are also increasing in number.

Beginning in the 1950s, when a few multinationals and local entrepreneurs set up

manufacturing facilities in the then East Pakistan, now over 200 companies produce now

medicines in Bangladesh.

The pharmaceutical industry in Bangladesh has otherwise the potential to grow and enjoy

a number of competitive advantages. Quality assurance has put the industry on a solid

base. Almost all companies follow the World Health Organization (WHO) Good

Manufacturing Practice (GMP) standards.

Bangladeshs strict quality compliance gives pharmaceuticals an advantage to compete

with producers in India, China, Brazil and Turkey in the overseas export markets. The

capability of the industry has helped it achieve excellence as per the general international

standards.

A good number of local pharmaceutical companies have won accreditation from the

overseas regulatory authorities including some of those in the developed countries. Two

such local companies have been accredited by EMEA (Austria) and the Therapeutic

Goods Administration (TGA-Australia). The accreditation facilitates their entry into the

lucrative market as reputed players. Bangladeshs national drug policy requires strict

standards compliance from the pharmaceutical manufacturers.

The Current Good Manufacturing Practice (cGMP) is recognized worldwide for its

holistic approach for the control and management of manufacturing and quality control
testing of food and pharmaceutical products.

Bangladeshi pharmaceutical industries are expanding their exportable items. The country

is now exporting a reasonably wide range of pharmaceutical products covering

therapeutic classes and dosage forms like tablets, capsules and syrups.

Bangladesh also exports some high-tech specialized products like, HFA, inhalers,

suppositories, hormones, steroids, oncology, immunosuppressant products, nasal sprays,

injectibles and IV infusions. The sector stands on a sound footing due to the growing

demand of medicines for the countrys 150 million people.

The industry, producing quality medicines at an affordable price for millions of people,

has made Bangladesh almost self-reliant in pharmaceutical products. It meets the major

part of local demand for medicines.

Mortality from major epidemics, malaria, dengue, cholera and typhoid, has also been

reduced substantially over the years in Bangladesh. Increased affordability and

availability of medicines have contributed to this achievement.

Bangladeshs average life expectancy of about 63 years is otherwise at a high level in

South Asia though its per capita consumption of medicines is at one of the lowest levels

in the region. A good number of new factories that have come up in recent years, have

aggressive sales and promotion strategies. A sizeable number of them have their own

manufacturing facilities of which five are multinationals.

The sector is active in API (active pharmaceutical ingredients). Many companies now

locally manufacture a good number of APIs. However, compared to large local demand,

more API industries are needed to be set up. Pharmaceutical industries potential has

multiplied with the recently approved API industrial park in Munshigonj.

The API can save at least 70 per cent of the cost of import of pharmaceutical raw

materials from aboard. Skilled professionals at home and abroad are joining the

industrys human resources pool every year.

Currently, bio-equivalency tests are conducted in Singapore, Malaysia and in European

countries, resulting in some hefty operational expenditure on the part of pharmaceutical

industries. More investments in these sub-sectors would be needed in future. Foreign

investors can take advantage of the flourishing industry.

It is estimated that over $250 million have been invested in this sector over the recent

years for facility modernization and setting up of new facilities.

All of these investments were for developing full GMP compliant facilities to meet the

stringent regulatory requirement of any country of the world. The investment has already

started paying off as most of the companies have either already received certification or

are about to get the approval from more regulatory authorities at abroad. This has opened

up wider opportunities for the Bangladeshi companies to claim a bigger share in the large

global pharmaceutical market.

Recommendations

The domestic pharmaceutical companies should produce quality products by

using the modernized equipment and raw materials, which can help them to
acquire market share

Should concentrate in producing world class medicine which may increase the
demand for Bangladeshi drug in the world market

The industry should make the people aware of the local medicines and with that
they should ensure the quality medicine to earn confidence

Companies should not violate the rules and regulation imposed by the
government, that can hamper the trust of the people of the country

Companies should produce their product in a hygienic environment and maintain the
highest standard, to survive in the competitive global market