Export Procedure

Export

 “Export" is when you trade something out of the country.

 In economics, an export is any good or commodity,
transported from one country to another country in a
legitimate fashion, typically for use in trade.
 Exports are regulated by the Central Government under
the provisions of the imports and exports control
act,1947.
 Central government announces rules ad regulations
procedures to be followed for export of goods from time
to time.
 Export Procedure

Receipt of an
Receipt of an order Status Enquiry
enquiry

Compliance with
Fixation of a Obtaining the
exchange
exchange Rate license
regulations

Securing the
Custom
Shipping Packing & Marking
Formalities
Order
 Cont…

Mate’s Receipt Bill Of Lading Insurance

Invoice &Consular Certificate of Origin

Invoice

Securing Payment
 1. Receipt of an Enquiry

 Request by a purchaser regarding price, quality

and quantity of goods which he tends to purchase.
 Issued by the importer to the exporter.
 Reply of an enquiry is in the form of quotation –
known as Proforma invoice.
 Cont….
 Both enquiry and quotation should contain:
i. Full details of goods required.
ii. Description .
iii. Catalogue no.
iv. Delivery method.
v. Sizes & rate.
 Type of price quotation to be given by exporter will
depend upon the enquiry of the importer.
 2. Receipt of Order

 When the Importer accepts the quotation he places

an order to exporter.
 The order is made on importers instruction & rules.
 The quotation contains full particulars of goods as
size, color, quality, shipment required.
 The Indent may be open or close.
 3. Credit Enquiry

 When the import accepts the order, the exporter will

enquire about the credit worthiness of the Importer
(buyer).

 The Importer open's an account with exporter’s

bank & gets a letter of credit in his favour.
 4. Export License

 An Export License is a document issued by

licensing agency ,after which he is free to
transport his goods in foreign.

 For obtaining Export License, he has to apply to

the controller of export on prescribed manner.
 Cases where no license is required
 Goods exported under the authority of Central
Government.
 Goods exported in accordance with the terms of
‘Open General License.
 Goods exporter via air or post under Postal
Authority.
 Any personal goods or luggage of any passenger
or member of crew going abroad.
 5. Compliance with the exchange
regulations
 The exporter makes a declaration to the Reserve
Bank of India under the Foreign Exchange
Regulation Act, 1947 and obtain the foreign
currency for the purpose of export.

 This declaration is done on a prescribed form.

 6. Fixation of exchange rate

 Rate at which currency of one country is

exchange for the currency of another country.
 It is a fluctuating rate.
 It is fixed before the goods are dispatch by the
exporter and receipt of payment so that the
interest of either exporter or importer are not
affected.
 7. Securing the shipping order

Shipping order is issued by the shipping

line intimating the exporter about the
reservation of space of shipment of
cargo through a particular vessel from a
specified port & on a specified date.
 Cont…

Charter
Party

Voyage Time
charter charter
party party
 8. Packing & Marking

Packing
 It is an extremely important part of
the export procedure.
 It shouldn’t be too bulky.
 It must be compact.
 It should ensure the safety of
goods.
 Cont…
Marking
 A distinctive mark and number together with
the port of destination should be marked on
each packet.
 The measurement, gross weight, net weight
and the weight of packing material should
also be there.
 A distinctive mark is printed on the packet.
 The initials of the importer and the number
of indent are also noted.
 9. Custom Formalities
 Shipping Bill is prepared in
triplicate and an Application to
Export in duplicate.
 There are different forms for
different classes of goods,
namely, free goods, dutiable
goods, and bonded goods.
 The specified form of application
to export is also available with the
Landing and shipping dues Office.
 Cont…
 The Shipping Bill and a copy of
Application to the Export duly
endorsed for payment for Shipping
Charges are returned to the
exporter.
 The Custom Authorities scrutinize
the documents.
 The Exporter is issued a ‘Custom
Export Pass’ after complying with
the formalities.
 10. Mate’s Receipt
 When goods are delivered on the
dock, a Dock Receipt or Wharfinger
Receipt is issued.
 When the goods are directly handed
to the Captain of Ship or his
assistant, then Mate’s Receipt is
issued.
 Captain of the ship inspect the goods
and issues either Clean Receipt or
Foul Receipt.
 11. Bill of Lading
 A document by which the shipping company
acknowledges the receipt of goods expected to
be carried in its ship to the port of destination
specified therein in return for the payment of
freights.
 It serves Three Purposes:
i. Quasi negotiable document of title to the goods.
ii. It acknowledges receipt of goods on board.
iii. Evidence of the terms of contract of affreightment
b/w shipper & ship owner.
Bill of lading also mention:

 Freight has been paid

or
 It has to be paid

If it is paid by exporter it
is marked “freight paid”.
If it is paid by importer it is
marked “freight
forward”.
 12. Insurance
 Before the goods are dispatched
they are insured against sea
perils.
 Insurance policy is sent to the
importer along with bill of lading.
 Certificate of origin
 Indicates the origin of
exports
 Issued by Trade Consul or
by Secretary of Chamber of
Commerce.
 Certificate is required for the
purpose of calculation of
import duties
 13. Invoice & Consular Invoice
Invoice
 Prepares invoice in triplicate showing quality,
quantity, description, and price of goods.
 Sends two copies to exporter.
Consular invoice
 Prepares for the purpose of clearance of goods
at the post of destination.
 Issued by Trade consul of the importing country.
 It is sent to the importer.
 15. Securing Payment

When the shipment has been dispatched, the

exporter takes steps to secure payment from the
importer. He can secure payment by three
methods:

 Documentary bill of exchange

 Discounting the bill
 Bill on bank
 Cont…
Documentary bill of exchange
 Exporter can draw BOI on the importer, ordering payment to
be made on exporter’s order to his bank.
 Attaches bill of lading, marine insurance, invoice etc.

Discounting the bill

 Exporter can discount the documentary bill of exchange
with the bank.
 He has to sign a letter of hypothecation & give it to bank.
 Cont…

Bill on bank
 Exporter may obtain letter of credit from importer.
 Common practice to ask the importer to open a
letter of credit with the bank.
 Letter of credit also states:
a) Usance of the bill
b) Period within which it must be drawn
c) Documents which must accompany it.
 Conclusion
Transaction b/w exporter and importer
is closed when the goods reach the
importer and the payment is received by
the exporter . After this, the foreign
exchange received by the exporter will
be handed over to the RBI under the
Foreign Control Regulations Act.