Procedure for import and export U-12

What is foreign trade

. Exchange of goods and services between people, across national boundaries is called 'foreign
trade' or 'international trade'.
. Foreign trade can ' be bilateral or multilateral. When there is trade between people of any two
nations, it is bilateral:
. Foreign trade is multilateral when people of any country buy from and sell to people of more
than one country.

Types of trade

1. Import trade
2. Export trade
3. Entrepot trade or re-export trade

Importance of Foreign trade

1. Specialization and efficiency of production

2. Utilization of resources
3. Facilitates economic development
4. Equalization of prices
5. Employment opportunities
6. Harmonious relationship between countries

Problems in foreign trade

1. Suitability of the product for the market

2. Changes in supply and demand conditions
3. Frequent price changes
4. Credit risk
5. Changes in exchange rate:
6. Rules, regulations and procedures
7. Credit, worthiness of importer and reliability of exporters
8. Transportation and cargo risks
9. Time gap
10. Political and legal problems
Regulations Governing foreign trade

1. Reserve bank code number

2. registration with Export Promotion Council
3. Registration with Export Promotion Council

Export trade procedure

1. Receives enquiry
2. Receives and Scrutinizes the order from importer
3. Obtains export license
4. Manufactures/procures goods
5. Fulfils exchange regulations
6. Books shipping space
7. Gets excise clearance and pre-shipment inspection
8. Packing and marking
9. Appoints clearing and forwarding agents
10. Customs formalities
11. Insurance of goods and ECGC cover
12. Places the goods on board the ship
13. Obtains bill of lading
14. Collects necessary documents and dispatches shipment advice to the importer
15. Secures payment
16. Claims the incentives

Import trade procedure

1. Trade Enquiry
2. Obtains an import License
3. Obtains foreign exchange
4. Places the order indent
5. Arranges letter of credit
6. Gets shipping document
7. Clears the goods
8. Makes payment