1.

The international buyer who wishes to buy goods from the other country sends an inquiry
relating to price, desired quality, terms, and conditions for the export of goods which is
known as a Trade inquiry. The exporter sends a reply to the inquiry in the form of a
‘Quotation’.The quotation is also known as a ‘Proforma Invoice’ which contains
information about the selling price, quantity, quality, mode of delivery, etc. After the
receipt of the ‘Quotation’, if the prospective buyer finds the information suitable to him,
he places the ‘Order’ for the import of goods.

After receiving an order, to minimize the risk of non-payment, the exporter inquires
about the creditworthiness of the importer. The exporter demands a Letter of credit from
the importer for the security of the payment. A letter of credit is a guarantee given by the
importer’s bank that in case of non-payment by an importer, the bank shall pay a certain
amount of export bill to the exporter’s bank, on the behalf of the importer. If required, the
exporter can ask for advance payment also from the importer.

After satisfying himself with the payment, the exporter has to get an export license.To
receive the export license, he has to apply to the office of the controller of imports and
exports. the exporter approaches his/her bank to obtain pre-shipping finance to procure
necessary items required for the production of the goods ordered and other related
activities like packaging and transportation of goods to the port of shipment, delivery of
goods, etc. After obtaining the finance from the bank, an exporter starts to procure the
goods as per the instruction of the importer. The export firm either produces the goods or
gets the mass-produced goods from the market. Goods are then packed and marked
properly with details
 After the goods are set for transmission, an exporter issue an invoice stating the number
of goods and amount to be cleared by an importer. The importer releases payment after
the maturity of the bill of exchange.

2. Incoterms are:

1. EXW -Ex-work or Ex Warehouse

Ex-works is when the seller places the goods at the disposal of the buyer at the seller’s premises
or at another named place (i.e., works, factory, warehouse, etc.).The seller does not need to load
the goods on any collecting vehicle. Nor does it need to clear them for export, where such
clearance is applicable.

2. FCA - Free Carrier

The seller delivers the goods to the carrier or another person nominated by the buyer at the
seller’s premises or another named place. The parties are well advised to specify as explicitly as
possible the point within the named place of delivery, as the risk passes to the buyer at that point.

3. FAS - Free Alongside Ship

The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a
barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage
to the goods passes when the products are alongside the ship. The buyer bears all costs from
that moment onwards.

4. FOB - Free On Board

The seller delivers the goods on board the vessel nominated by the buyer at the named port of
shipment or procures the goods already so delivered. The risk of loss of or damage to the goods
passes when the products are on board the vessel. The buyer bears all costs from that moment
onwards.

5. CFR - Cost and freight

The seller delivers the goods on board the vessel or procures the goods already so delivered.
The risk of loss of or damage to the goods passes when the products are on board the vessel.
The seller must contract for and pay the costs and freight necessary to bring the goods to the
named port of destination.

6. CIF - Cost, insurance & freight

The seller delivers the goods on board the vessel or procures the goods already so delivered. The
risk of loss of or damage to the goods passes when the products are on the ship. The seller must
contract for and pay the costs and freight necessary to bring the goods to the named port of
destination. The seller also contracts for insurance cover against the buyer’s risk of loss of or
damage to the goods during the carriage.The buyer should note that under CIF the seller is
required to obtain insurance only on minimum cover. Should the buyer wish to have more
insurance protection, it will need either to agree as much expressly with the seller or to make its
own extra insurance arrangements.

7. CPT - Carriage paid To

The seller delivers the goods to the carrier or another person nominated by the seller at an agreed
place (if any such site is agreed upon between parties).The seller must contract for and pay the
costs of carriage necessary to bring the goods to the named place of destination.

8. Carriage And Insurance Paid To

The seller has the same responsibilities as CPT, but they also contract for insurance cover against
the buyer’s risk of loss of or damage to the goods during the carriage.The buyer should note that
under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer
wish to have more insurance protection, it will need either to agree as much expressly with the
seller or to make its own extra insurance arrangements.

9. DAP- Delivered AT Place

The seller delivers when the goods are placed at the disposal of the buyer on the arriving means
of transport ready for unloading at the named place of destination.The seller bears all risks
involved in bringing the goods to the named place.

10.DPU- Delivered At Place Unloaded

DPU replaces the former Incoterm® DAT (Delivered At Terminal). The seller delivers when
the goods, once unloaded are placed at the disposal of the buyer at a named place of destination.
The seller bears all risks involved in bringing the goods to and unloading them at the named
place of destination.

11. DDP – Delivered Duty Paid

The seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for
import on the arriving means of transport ready for unloading at the named place of destination.

The seller bears all the costs and risks involved in bringing the goods to the place of destination.
They must clear the products not only for export but also for import, to pay any duty for both
export and import and to carry out all customs formalities.
3. The four categories of Inco terms are:

A. Category C (Main Carriage Paid)

For Incoterms in Category C, the seller bears costs and risks associated with getting the goods to
the port where they will be loaded and shipped off. When the goods are loaded onto the transport
vehicle, the seller is free of any responsibility.

Responsibility at this point of the importing process is transferred to the buyer. There are a total
of four Incoterms within Category C which are:

● Cost and Freight (CFR)

● Cost, Insurance and Freight (CIF)

● Carriage Paid To (CPT)

● Carriage and Insurance Paid To (CIP)

B. Category D (Arrival)

The generalities of Category D deal mostly with determining the destination of the imported
goods. There are three Incoterms within Category D and they are:

● Delivered at Place unloaded(DPU)

● Delivered at Place (DAP)

● Delivered Duty Paid (DDP)

C. Category E (Departure)

There is only one Incoterms in Category E and that is the EXW (Ex Works) term. This term
gives the buyers most of the responsibility for overseeing the import process.

D. Category F (Main Carriage Unpaid)

Lastly, Category F Incoterms gives the seller responsibility for overseeing the delivery of the
goods to the buyer. The seller must use a delivery method the buyer wants them to use. After the
goods have been delivered, the buyer then becomes responsible for the related costs and risks.

As with Category D, Category F has four Incoterms:

● Free Carrier (FCA)

● Free Alongside Ship (FAS)

● Free on Board (FOB)

4. Pros of Landbridge Klong Thai Projects are:

● Help the economy in the long term.

● Shorten travel time for ships sailing between the Indian Ocean in the west and the South
China Sea and the Pacific in the east.
● Creates millions of jobs.

Cons of Landbridge Klong Thai Projects are:

● Poses a security risk (China’s armada may cross and control the two oceans thereby
leading to disputes between India and China)
● Deep seaports connected by road and rail – would be far less profitable and practical than
the waterway.
● It costs a lot to transfer containers from ships to trucks or trains.