project guidelines bft vi 2007

8/2/2019 Project Guidelines BFT VI 2007

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EXPORT PROCEDURE ANDDOCUMENTATION IN TATA

INTERNATIONAL, DEWAS (M.P.)

A Dissertation Submitted in Partial Fulfillment

of the Requirement for the Degree of

MBA (Foreign Trade) - 5 Yrs.VI Sem

Batch 2007

Submitted by: Guided by:

Ms. Sapna BhaveMBA (FT) -5 Yrs-VI Sem IER, IPS Academy,

Indore

INSTITUTE OF ECONOMICS & RESEARCH, IPS ACADEMY

Rajendra Nagar, A.B. Road, Indore452 012 (MP)


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ACKNOWLEDGEMENT

My work will remain incomplete until I express my deepest gratitude to respected

Mr. V. S. Pal., TATA INTERNATIONAL LTD, and his employees. This project would

not have been possible without their support and cooperation. I am also thankful to

Ms. Sapna Bhave for guiding me throughout the project.

A mention has to be made for Mr. Pawan (Logistics) for his support and guidance.

I am indebted to Dr. Vivek Singh Kushwah (Director IER, IPS Academy, INDORE) for

providing me with an opportunity to explore the various procedures of foreign trade and

the documentation process involved in the same.

I would also like to express my gratitude to the entire staff of IER, IPS Academy for their

help and cooperation for the completion of this project.

A significant support has been provided by my parents and without their blessings thisproject would not have seen the light of day.

And last but not the least I would highly rewarded if this project report promotes interest

for further research work and /or provides information about the EXIM procedures and

documentation involved in foreign trade.

Acknowledging the gratitude


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ABSTRACT

Generally documentation is perceived to be the most complex, difficult and critical

activity of export and import procedures. To think about the smooth flow of betweennations is to take a faulty, narrow and opaque view of the way trade occurs in reality.

This is because a certain degree of documentation is necessary to protect the respective

interests of export and import which is conditioned by the fact that the exporter and

importer are located in two countries, which have different laws and regulations

governing the flow of goods and money. Therefore goods must be accompanied,

followed or preceded by relevant documents to have proper compliance with those laws

and regulations.

I therefore felt that there was a need of a project which could impart useful information to

all the concerned people as regards the EXIM documentation and procedures.

I have approached TATA INTERNATIONAL LTD. I sincerely hope that this project

succeeds in providing answers to number of documentation and procedure related issues

of foreign trade.


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CONTENTS:

Sl. No. CONTENT PAGE

1 Overview of Indian Leather Industry 6

2 Global Scenario 11

3 Company profile 13

4 International Network of TATA leather company 15

5 Product and capacity of the company 16

6 Objective 18

7 Methodology 20

8 Export Procedure 21

9 An introduction to Export Documents 28

10 Documents Explained 31

11 Problem faced in the process of documentation 42

12 SWOT Analysis of industries 44

13 Findings and Conclusion 46

14 Suggestion 48

15 Bibliography/ References 49

16 Annexure 50

Indian Leather Industry


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The leather industry occupies a place of prominence in the Indian economy in view of its

massive potential for employment, growth and exports. There has been an increasing

emphasis on its planned development, aimed at optimum utilization of available raw

materials for maximizing the returns, particularly from exports. The exports of leather

and leather products gained momentum during the past two decades. There has been a

phenomenal growth in exports from Rs.320 million in the year 1965-66 to Rs.69558

million in 1996-97. Indian leather industry today has attained well merited recognition in

international markets besides occupying a prominent place among the top seven foreign

exchange earners of the country.

The leather industry has undergone a dramatic transformation from a mere exporter of

raw materials in the sixties to that of value added finished products in the nineties. Policy

initiatives taken by the Government of India since 1973 have been instrumental to such a

transformation. In the wake of globalization of Indian economy supported with

liberalized economic and trade policies since 1991, the industry is poised for further

growth to achieve greater share in the global trade.

Apart from a significant foreign exchange earner, leather industry has tremendous

potential for employment generation. Direct and indirect employment of the industry is

around 2 million. The skilled and semi-skilled workers constitute nearly 50% of the total

work force. The estimated employment in different sectors of leather industry is as

follows:

Sector Total Employment

Flaying, curing & Carcass Recovery - 8, 00,000

Tanning & Finishing - 1, 25,000

Full Shoe - 1, 75,000

Shoe Uppers 75,000

Footwears & Sandals - 4, 50,000

Leather Goods & Garments - 1, 50,000

Structure of the industry


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The leather industry is spread in different segments, namely, tanning & finishing,

footwear & footwear components, leather garments, leather goods including saddlery &

harness, etc. The estimated production capacity in different segments is as under

Product Capacity

Leather

a) Hides - 64 million pieces

b) Skins - 166 million pieces

Footwear & Footwear Components

a) a) Shoes - 100 million pairs

b) b) Leather shoe uppers - 78 million pairs

c) c) Non-leather shoes/ footwear etc - 125 million pairs

d) d) Leather Garments - 6 million pieces

e) e) Leather Products - 70 million pieces

f) f) Industrial Gloves - 40 million pairs

g) g) Saddlery - 6000 pieces

The major production centers for leather and leather products are located at Chennai,

Ambur, Ranipet, Vaniyambadi, Trichi, Dindigul in Tamil Nadu, Calcutta in West Bengal,

Kanpur in Uttar Pradesh, Jalandhar in Punjab, Bangalore in Karnataka, Delhi and

Hyderabad in Andhra Pradesh.

Raw material supplies


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There exists a large raw material base. This is on account of population of 194 million

cattle, 70 million buffaloes, 95 million goats. According to the latest census, India ranks

first among the major livestock holding countries in the world. In respect of sheep with

48 million sheeps, it claims the sixth position. These four species provide the basic raw

material for the leather industry.

The annual availability of 166 million pieces of hides and skins is the main strength of

the industry. This is expected to go up to 218 million pieces by the end of year 2000.

Some of the goat/calf/sheep skins available in India are regarded as speciality products

commanding a good market.

Abundance of traditional skills in training, finishing and manufacturing downstream

products and relatively low wage rates are the two other factors of comparative advantage

for India.

Tanning and finishing capacity

With tanning and finishing capacity for processing 1192 million pieces of hides and skins

per annum spread over different parts of the country, most of which is organized along

modern lives, the capability of India to sustain a much larger industry with its raw

material resource is evident. In order to augment the domestic raw material availability,

the Government of India has allowed duty free import of hides and skins from anywhere

in the world.

It is an attraction for any foreign manufacturer who intends to shift his production base

from a high cost location to low cost base.

Export Potential


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The leather industry, one of the major foreign exchange earners of the country recorded

significant growth since the beginning of the decade. Today the share of the value added

finished products in the total exports from leather sector are 80% as against 20% in

1970s.

(Value in million US$)

Category 2006-2007

Finished Leather 265.2

Leather Footwear 290.2

Footwear Components 243.7

Leather Garments 368.6

Leather Goods 429.0

Saddlery and Harness 33.4

Total 1630.1

DATA COLLECTED :

(Value in million Rs.)


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Country 2006-2007 Share in total exports in

2006-07

Germany 15462 22.23 %

USA 10826 15.56 %

Italy 8317 11.96 %

UK 9744 14.00 %

France 3240 4.6 %

Spain 3103 4.46 %

Russia 1009 1.445 %

Portugal 1240 1.78 %

Australia 1465 2.10 %

Denmark 808 1.16 %

Netherlands 2127 3.06 %

Hong Kong 258 3.25 %

Others 9958 14.32 %

Total 69558 100 %


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Global Scenario :

The global trade in leather and leather products has been increasing over the years from

mere US$ 4 billion in 1972 to US$ 70 billion in 1997.

Although the exports of Indian leather and leather products have grown manifold during

the past decades, our country's share in global trade is around 3% among world imports

of leather products. Whereas India's share in world imports of leather footwear is 1%.

Major exporting countries of leather footwear are China (14% share), Portugal (6%

share), Brazil (5% share) and Indonesia (4% share).

India's share in world imports of leather garments is 6%. Major exporting countries ofleather garments are China (36% share), Germany (9% share), Italy (7% share), Turkey

(5% share) and Pakistan (4% share)

India's share in world imports of leather goods is 7%. Major exporting countries are

China (22% share), Italy (22 % share), France (7% share) and Greece (5% share),

India's share in world imports of harness and saddlery is 8%. Major exporting countries

of harness & saddlery are Germany (14 % share), U.K. (14 % share), China (12% share).

Overall, India is facing fierce competition in international market from countries like

China, Vietnam, Thailand, Indonesia, etc., which are emerging as major manufacturing

countries.

East European countries like Poland, Romania, Czech and Slovak Republics have re-

emerged as major production centers particularly for footwear sector. These countries

pose major challenge to Indian exporters as they enjoy geographical advantage.

CONCLUSION:


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The leather industry comprising of tanning and finishing, footwear and footwear

components, leather garments, leather goods including saddlery & harness etc. segments

is the fourth largest foreign exchange earner for India. It has around 7% share in our

exports.

India has 10% of world's hides and skins but it has only 4% share in the leather and

leather product trade worldwide. Exports from this industry have increased to Rs 5778

million in 1996-97 from Rs 3758 million in 1992-93. Earlier India's exports comprised

mainly of leather but 90's have seen a boom in export of value added products. But, thelast three years have not been very profitable in terms of Indian exports.

On the manufacturing front the value of production is estimated by experts to reach Rs

302,000 million in 2000 AD. Major production centres for leather & its products are

located at Chennai, Ambur, Ranipet, Viniyambadi, in Tamil Nadu, Calcutta in West

Bengal, Kanpur, Agra in Uttar Pradesh, Jalandhar in Punjab and Delhi.

A study interestingly tells that 50% of the total production is expected to be consumed

within the country by 2000 AD. Germany tops the list of importers of Indian leather

goods with USA, UK, Italy, Japan, Australia, and Denmark, The Netherlands, France andthe CIS countries towing the line.

Leather industry which employs about 15 lakh persons directly has footwear as the

largest, segment.

Indian government has undertaken a National Leather Development Programme with the

assistance of UNDP to upgrade the quality, design wise and manufacturing capability

wise. This is an integrated programme for development of the industry. Selected

institutions, for e.g. Shoe Design Centre (for shoes only) at Delhi, are working all over

India for the cause.

Leather industry is one of the most polluting industries in India. Tanneries are the main

centres for the aforesaid. But gradually individual and common Effluent Treatment Plants

are being set up. Dutch government supported Ganga Action Plan is covering Kanpur, the

biggest leatherwork centre of Uttar Pradesh. Council for Leather Export (CLE) reports

that leather is damaged during the removal process and that 35-40 % goes waste. The

government has recently undertaken projects in Kalyani, Athani, Wardha, Dewas,

Muzzaffarpur and Lucknow for training the worker in tanneries

COMPANY PROFILE


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THE HOUSE OF TATA

Established in 1962, Tata International is an international marketing company with a

global turnover of US$ 850 million in 2008-09. It is a trading company with business

lines that include leather, engineering and pharmaceutical products. It has a worldwide

reach provided by a well- integrated network that encompasses its subsidiaries, offices,

joint ventures and alliances, with business hubs in South Asia, South East Asia, Europe

and Africa catering to its markets in Europe, SAARC, ASEAN, the Far East, and Africa.

Tata International is India's leading leather and leather products exporter. As a leather and

leather products exporter, the company operates its leather business in India from Dewas

, Chennai, Delhi, Calcutta, as well as, from China, South Asia and the Middle East,

leveraging our global network. It sources wet blue worldwide and have world-renowned

clients for our finished leather and leather products.

Tatas R&D department has made internationally acknowledged break-through in the

production of chrome free leather and processing of solid waste. It established and co-

ordinate a highly flexible supply chain for sourcing leather, footwear, garments and

leather goods. As a leather and leather products exporter our main markets are the quality

stringent markets of Western Europe, North America and the Far East.

TIL is the international business arm of the house of TATA which is Indias largest

industrial group having aggregate assets of US $9 billion to total business turnover

nudging US $8.6 billion and an employee strength of 2,50,000. The group enjoys high

reputation world wide for its technology, quality and reliability.

Its main mission is to be competitive value provider in international business for group

companies and all are partners

TATA INTERNATIONAL LTD, DEWAS


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Tatas state-of-the-art manufacturing facility at Dewas in Central India is among the top

three worldwide for goat skin. Our units have ISO 9001 certification from RW TUV

CERT of Germany since 1994, making ours the first leather-manufacturing facility in

India to receive this certification. The leather unit in Dewas is the first in the industry in

Asia to be ISO 14000 certified. Its facilities are governed by International Labour

Organization laws.

Tata international became a leather garments exporter in 1975. The Dewas based (inMadhya Pradesh, India) Leather Garments division of Tata International, adopted best in

class manufacturing processes and systems in collaboration with one of the premier

leather manufacturers of Germany - Lederman.

Today Tata International dewas has one of the most modern and well-equipped

manufacturing facilities on the South Asian subcontinent.

Apart from being the first leather garments unit in India to boast ISO 9001 and ISO

14001 certification (certificates awarded by RW TUV of Germany), Tata as a leather

garments exporter also enjoy the patronage of an established international clientele that

includes names like Betty Barclay, Escudo, Karlstad, Kaufof, C&A, Marks & Spencers, Talenti, Gerry Weber, Mango (Spain), Stallman and Mauritius.

TI set up an integrated leather and leather products business at Dewas in the state MP in

central India in the year of 1975.it is situated in 100 acres site in the midst of Sylam

surroundings and amongst the largest in the world.

The tannery in fact ranks amongst the top three skin tanneries in the world. The leather

and leather products business obtain RM in wet blue form select tanners all over India

quality audit of the production of these tanneries I carried out by supervision by the

companys technicians posted at Calcutta, Delhi, Kanpur and Muzafarpur and Chennai.TI also import wet blue, cow tubes and sheep skins for muting its special requirement

from overseas, including from units managed by TI.

International Network of Tata international Ltd.


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Offices of Tata in abroad of leather units

South Africa:-

Consilience Technologies (pvt) Ltd.

Faritte house, 150 kelvin drive,

P.O. Box 76784,

Woomead 2144,

South Africa

Tel. 27-11-6007400

Fax 27-11-4423385

South Africa:-

Tata South Africa Holdings (SA) (PVT) Ltd.

P.O.Box: 1627, Parklands ,

Johannesburg 2121

South Africa

Tel: 27-11-4423382/3

Fax: 29-11-4423385


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PRODUCTS OF THE COMPANY

Range of the products:

Finished leather

The leather finished units makes a wide range of full aniline and semi aniline leather

from goat, sheep, cow, and buffalo. Colors are processed in a month and specialty is that

it can match any tone shade. There is high flexibility in production lot size and

computerized color matching.

Leather shoe

The shoe unit has a capacity of manufacturing intricate and high quality shoe upper for

fashion conscious customers. Tata internationals large and well equipped production

facilities at Dewas, Chennai and Delhi are both versatile and flexible. Orders from 500

pairs to 2, 50,000 pairs can be handled with equal ease.

Leather garment division

The leather garment division makes a wide range of mens and ladies jacket, blousons,

skirts and trousers.

Leather article division

This includes a wide range of soft luggage and travel goods, leather accessories and

personal articles.


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CAPACITY

The leather unit of TATA located at dewas in central India and Chennai in southern India

have a capacity for 25,000 pieces per month of high quality leather garment. Production

on leather is 1, 50,000 sq ft of finished leather per day

Annual capacity of TATA leather footwear division: Shoe upper - 3 million pairs

Full shoe - 2 million pairs

Minimum order

The minimum order size will be dependent on the work content. However as an

indicative guide this should be as follows:

Finished leather : 2000 sq ft/finish leather

Shoe upper : 500 pairs

Leather garments : 250 pieces

Full shoe : 500 pairs

Internationally repute names as Salamander, Gybon, peter Kaiser, Ara, Stella, George

shoe, Grandson. It has specially developed a market niche in the high value market

segment of quality unlined leather out of goat, sheep and cow. This is reflected in the

high volumes of sales and continuity business from leading European manufactures.


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OBJECTIVE:

To study the export and import procedure and documentation of leather (both raw and

finished) in Tata international ltd and to analyze the problems involved in the procedure

as well as provide suggestions regarding these problems.

The objectives of this report are a follows:

To know about the export procedure.

To know about the various documents required for export.

To get practical knowledge of export procedure

To know the actual problems that is faced by export managers in professional

transactions.

To know about the importance of foreign trade in leather industry.

To study the export procedure in detail.

To know about the role in government departments like CHA, Excise, Shipping

Companies, etc.


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GLOBAL MARKETING NETWORK

The company has a global network to its own offices and also has arrangements with

associate TATA companies abroad. In addition the company has agency arrangements in

certain markets.

In recent years it has expanded its operation to the Far East and important center making

sure for the North Americans markets. It has opened a warehouse at Hong Kong to

strengthen its sales efforts there providing off the self distributors of its finished leather to

the large client in Hong Kong, China, Taiwan and South Korea. TATA formed its

subsidiaries company in HONG KONG named TATA SOUTH ASIA LIMITED for

these operations.

FUTURE EXPANSION PLANS

The leather and leather product business of TATA INTERNATIONAL for the last

several years has been the largest overseas exporter of finished leather from India. It has

Drawn up an ambitious perceptive plan for a quantum jump in the exports of value added

product mainly leather footwear and wide ranges of leather garment and leather articles.

The company has identified Western Europe North America and Far East as thrust

markets.


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METHDOLOGY

The research work was conducted over duration of 14 days at TATA INTERNATIONAL

LTD., DEWAS.

Primary Data

The primary data was collected on the basis of a personal interview of Mr. V. S. Pal

(Executive H.R. & Admin.).

This work is based on data collected from secondary sources as well as primary sources.

As the Government of India already fixes the procedure and legal requirements for

exports and imports, they are collected from the DGFT website and EXIM Policy

Booklets and on the basis of books providing valuable information

Secondary Data

1.) Books

Export documentation & procedure by Jain Khushpat s.

Export documentation & procedure by P.K. khurana.

2.) Through Internet

www.tatainternational.com

www.exim.com

For a satisfactory result a detailed explanation has been made in this report by me.
http://www.tatainternational.com/http://www.tatainternational.com/http://www.exim.com/http://www.exim.com/http://www.exim.com/http://www.tatainternational.com/


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EXPORT PROCEDURES

Step -1 Receipt of an entry:

Exporter locates a trade enquiry i.e. he comes across the detail of a foreign buyer who is

willing to import the items .On receipt of the trade enquiry, the exporter sends his

company profile and the promotional of his product range to know the interest of the

buyer. The buyer may like to have the details of a product of his choice from the

exporter. Exporter sends the quotation in respect of the product of interest of the buyer.

On the receipt of this basic information, the foreign buyer puts forward his requirements.

Once the product has been identified, then the process of negotiations of other terms and

conditions begins. Exporter sends the Performa Invoice to the foreign buyer setting out in

detail the terms and conditions negotiated between the two parties. This invoice

represents the Offer to Sell made by the exporters. The importer conveys hisAcceptance of Offer to Sell to the exporter. It may be on other document also.

Step2 Acknowledgement of the export order :

Exporter should send an acknowledgment letter to the importer. Stress should be laid on

building if long term business relation ships based on mutual trust.

Step3 Scrutiny of the export order

Before sending the conformation order, exporter should check for all terms and

conditions including:

Product Specification, Size, Quality, Quantity

Terms of payment

Delivery Schedule

Inspection


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Documents like Commercial Invoice, Bill of lading, Certificate of origin ,

Marine Insurance, etc

Labeling, Packaging, Marking

Price (FOB Value)

Exporter has to strictly follow the regulation of both the exporting and importing country.

Step4 Arranging the goodsexport production / procurement :

As soon as the export order has been confirmed or finalized, preparation is made for the

production or procurement of the goods to be exported. Goods manufactured must

comply with the description of the goods given in the export order, together with a copy

of instruction given by the importer.

Step5 Export License / Quota requirements:

If the item being exported requires an export license, the same should be procured by theexporter from the licensing authority.

Step6 Central Excise Clearance:

Excisable goods can be imported either:

1. Under claim for the rebate of excise duty.

2. Under Bond


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In the case of former, the duty is first paid and its refund is claimed after exportation and

in the latter case the goods are allowed to be exported without payment of duty provided

a bond in executed (form B). Before excisable goods are removed from the factory with

an application in the form ARE for claming rebate of excise duty.

The exporter then presents when the goods have been removed from the factory a copy of

this application together with the goods to customs collector at the port who will certify

that the goods have been actually exported.

Step7 Apply to Export Inspection Council for the Inspection :

EIC will depute an inspector for carrying out quality control and inspection of exportable

products. If consignment found is according to the prescribed specification, each packet

is sealed by inspecting officer. A certificate of inspection is issued by the inspection

agency. Original is valid for custom purpose, which ensures that only the consignment

whose details are given on the certificate is permitted for shipment.

Step8 Apply for Marine Insurance (if CIF) :

Insurance policy should be obtained in duplicate by the exporter. At this stage, all the

formalities in relation to certificate of origin, ECGC etc should be completed.

Step9 Issue instruction to the C & F Agent :

A detail note is prepared for the clearing and forwarding agent, giving instruction

regarding the shipment of the consignment. A Master Document and form of bank

Guarantee should be forwarded to the forwarding agent.


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Step10 CHA / CFAs role for shipping and customs at the port

(Custom Clearance Procedure) :

CHA prepares the Shipping Bill and presents them along with other documents to the

export department of the Custom House. The custom appraisal examines the documents

and appraises the value of the goods.

If everything is in order, he endorses the duplicate copy of the Shipping Bill and indicates

the extent of the physical examination to be carried out at the docks. Then all the master

documents are returned to the CHA for presentation to the appraisal. CHA presents the

Port Trust copy of the Shipping Bill to the shed superintendent of the port trust and

obtains a Carting order. This enables him to cart the cargo to the transit shed for physical

examination. If satisfied, the dock appraisal makes out of charge.

STEP 11Documents returned by CHA:

1. Shipping Bill

2. Original letter of credit

3. Full set of Bill of Lading and number of non-negotiable copies.

STEP 12Shipment advice to Importer:

Intimation is sent to the importer, indicating the date of dispatch and the name of the ship

by which they have sent along with the non-negotiable copies of Bill of Lading and

Master Document copy.


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STEP 13Presentation of Documents by the Exporter to the Bank:

1. Master Document

2. GR-1 (duplicate and triplicate)

3. Full set of Bill of Lading and non-negotiable copies.

4. Original Letter of Credit.

5. Bank Certificate (duplicate)

6. Export Contract

7. Marine Insurance (duplicate)

8. Bill of Exchange

STEP 14Processing of Documents by Bank:

Bank examines the documents with reference to the terms and conditions of the original

order and also the L/C. Exporters Bank screens the above documents and sends a set of

the following documents to the importers bank:

1. Master Document (original copy)

2. Marine Insurance Policy

3. Negotiable Bill of Lading (original copy)

4. Bill of exchange (original copy)

The bank sends GR-1 (duplicate) to the ECD of the RBI. Triplicate copy is sent to the

RBI on receipt of payment from abroad.

1. Original copy of the Bank Certificate

2. Attested copies of Master Documents.

The exporter receives payment against the above documents. The bankers also send to the

concerned Joint Chief Controller of import and export a duplicate copy of the bank

certificate.


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STEP 15Central Excise Rebate:

The exporter files a claim with the concerned maritime collector of Central Excise for

rebate on the Central Excise duty or for getting credit in his bond account as the case may

be.

Goods which are manufactured in India are liable for central excise tax. But if you export

those goods, you get exemption in duty.

1. First you pay the duty and ask for rebate.

2. Execute the bond.


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EXPORT DOCUMENTATION

ABBEVIATIONS:

TIL Tata international limited

DGFT Director General of Foreign Trade

ISO International Organization of Standardization

AWB Air way bill

COO Certificate of Origin

C & F Cost and Freight

GR1 Guarantee Remittance Form no. 1

CAD Cash against Document

DA Document against Payment

DP Document against Form

ARE-1 Application for Removal Of excisable goods for export

GSP Generalized System Of preferences

SDf Self Declaration Form

CHA Custom House Agent

ICD Inland Container depot

CIF Cost Insurance & Freight.

AN INTRODUCTION TO EXPORT DOCUMENTS


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8. Bill of Exchange

9. Shipping Advice (information to importer)

10.Letter to bank for collection of payment.

11.Bill of lading / Airway Bill / Combined Transport Receipt

REGULATORY DOCUMENTS:

Regulatory documents are Pre-Shipment Documents, which are prepared by different

government departments / bodies in compliance with requirements of various rules and

regulations under relevant laws governing export and import trade such as EIA, FEMA,

DGFT, CHA, etc.

These are the legal documents that are compulsory to be presented to comply with

countrys rules and regulations for both Import and Export.

Any cargo without these documents is not allowed to be sent out. These documents are

compulsory for exporters and importers in any country.

TYPES OF REGULATORY DOCUMENTS:

1. As prescribed by the Central Excise

ARE form

2. As prescribed by the Port Trust Authorities

Export Application

Dock Challan

Port trust copy of Shipping Bill

Vehicle Ticket


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3. As prescribed by the Customs Department.

Shipping Bill

Bill of Exchange

4. A prescribed by the RBI

Exchange Control Certificate

Freight Payment Certificate (required in CIF and C&F terms of contract)

Insurance premium paid certificate (required in CIF and C&F terms of

contract)

DOCUMENTS EXPLAINED


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1. EXPORT ORDER:

An order is a commercial transaction which is not only important to exporter and

importer, but it is also of concern to their respective countries, since it affects the balance

of payment position of both countries. It is, therefore, not just a matter of products,

manufacturing, packing, shipment, and payment but also one of licensing authorities,

exchange control authorities and banks dealing in export trade.The exporter is required to produce copies of export order to various Government

departments / financial institutions e.g. obtaining export licenses when the product is

covered under the restricted items or canalized items for exports, availing post shipments

finance and other incentives and dealing with inspection authorities, insurance,

underwriters, custom offices and exchange control authorities etc. for various purposes.

2. ORDER ACCEPTANCE:

The order acceptance is another important commercial document prepared by the

exporter confirming the acceptance of order placed by the importer. Under this document

he commits the shipment of goods covered at the agreed price during a specified time.

Sometimes, the exporter needs a copy of his order acceptance signed by the importer. The

order acceptance normally covers the name and address of the intender, name and address

of the consignee, port of destination the description of good, quantity, price each and total

amount of order in terms of delivery details of freight and insurance, mode of transport,

packing and marking details, terms of payment etc.

3. LETTER OF CREDIT:

Letter of credit is a document issued by the importers banking favor of the exporter

giving him the authority to draw bills up to a particular amount covering a specified

shipment of goods and services and assuring him of payment against the delivery of

shipping documents. The operations of letter of credit have been regulated and are

governed by the Articles of Uniform customs and practices for documentary Credits.

Types of L/C


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Documentary letter of credit

Revocable and Irrevocable L/C

Confirmed and Unconfirmed L/C

Revolving L/C

Back to back L/C

Deferred payment L/C

Transferable L/C

Red Clause and green clause L/C

Transit L/C

Restricted and Unrestricted L/C

Traveling L/C, Omnibus L/C

4. MATES RECEIPT:

Mates receipt is issued by the chief of vessel after the cargo is loaded, and it contains the

name of the shipping line, port of loading, port of discharge, place of delivery, marks and

numbers, numbers and kind of packages, description of goods, container status/ seal

number, gross weight, condition of cargo at the time of its receipt on the board the vessel

and shipping bill number and date. The mate Receipt is of transferable nature and must be

presented immediately at the shipping companys office to be exchanged into Bill of

Lading.

5. Bill Of Lading:

The Bill of Lading is a document issued buy the shipping company or its agent

acknowledging the receipt of goods mentioned in the bill of shipment on board the

vessel, and undertaking to deliver the goods in the like order and conditions are received,

to the consignee or his order of consignee, provided the freight and other charges asspecified in the bill of Lading have been duly paid.

TYPES OF BILL OF LADING:

Clean B/L


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Cause B/L

Stale B/L

Freight paid and Freight collect B/L

To order B/L

Straight B/L

On Board & Received B/L

Container B/L

6. AIRWAY Bill:

Airway bill or Air Consignment Note is the receipt issued by the Airline Company for the

carriage of goods, in the terms of the conditions of the contract of carriage of goods.

Airway Bill or Air Consignment Note treated as a Document of title and is not issued in

negotiable form.

7. POST PARCEL RECEIPT:

Post Parcel Receipt evidences the receipt of goods for exports by the Post Office and it is

also not treated as a document of title. If the Post Parcel is sent directly in the name of the

buyer, the buyer can take immediate possessions of the goods sent by the exporter

sometimes without paying for it. Hence, it will be in the interest of the exporter to send

Post Parcels in the name of foreign correspondent bank unless the condition of letter of

credit provides for the dispatch of goods directly in the name of buyer. In such a case the

buyer can take possessions of the post Parcel from the foreign correspondent bank, only

after the payment of bill drawn by the exporter.

8. BILL OF EXCHANGE:

Bill of exchange is also known as Draft. According to Sec.5 of the Negotiable

instrument Act, 1881, a bill of exchange is an instrument in writing containing an

unconditional order, signed by maker directing an certain person to pay a certain sum of

money only to or to the order of a person or to the bearer of the instrument.

9. MANUFACTURERS CERTIFICATE:


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Some Countries require a certificate from the manufacture himself stating that the goods

exported by him are manufactured in India and manufacture of such goods does not

contain the raw material of components imported in India from other country or

manufactured in third country.

10. GSP CERTIFICATE:

The EEC countries France, Germany, Belgium, Luxembourg, Netherlands, Italy, UK,

Ireland, Denmark and Greece have adopted the Generalized System of preferences.

Under this system manufacturers and semi-manufacturers from developing country

including India are entitled to a concessional rate of import duty in these countries. The

Government of India has authorized the Export Promotion Offices at Mumbai, Kolkata,

Chennai and Cochin and the heads of the Licensing Offices have also been authorized to

issue the Certificate of Origin.

11. PROFORMA INVOICE:

A temporary commercial invoice is prepared and sent by the exporter to the importer, it

contains almost the same particulars as commercial or final invoice. It is required help the

exporter in:

Getting an import license in his o.0wn country.

Opening the letter of credit in favor of the exporter in his own country.

The exporter should cultivate a habit of sending a Proforma invoice, even if it is not

demanded.

12. EXPORT DECLARATION FORMS:

As per the exchange control regulations, exporters are required to submit following

declaration forms to the prescribed authority before any export of goods from India is

made.

13. GR FORM:


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This has been prescribed by the Reserve Bank of India to ensure that the foreign

exchange receipts in respect of exports are repatriated to India. This has to be prepared in

duplicate. Both the copies have to be submitted to the customs authorities at the port of

shipment. Customs authorities will certify the value declared by the exporter on both the

copies of GR form and will also record the assessed values. They will retain the original

to be sent to the RBI directly they will return duplicate copy which is submitted to the

negotiating bank along with other documents after shipment of goods. The negotiating

bank sends the duplicate copy to the RBI after the exporter has released the proceeds.

When the exporter wants to retain the proceeds of the exports with agents or branches

abroad or to make other approved types of payment abroad, he has to seal the permission

of the RBI. For this purpose he has to submit GR-3 from. This is prepared in triplicate.

The original is submitted to the customs authorities who send it to the RBI directly. The

duplicate and triplicate copies are to be dealt with in accordance with the procedures laid

down by the RBI. Export by Parcel Post other than value payable, is to be declared on PP

form. Export under value payable or cash on delivery have to be declared on VP/COD

form. Form SDF to be used for declaring exports in case of specified customs office and

specifies categories of shipping bill under EDI system. Form SOFTEX to be used for

declaring software exports through data communication links and receipt of royalty on

the software exports through packages/ products exported.

14. CERTIFICATE OF ORIGIN:

A certificate of origin states the country in which the products under export were

originally produced or manufactured. The goods produced in a particular country attract

preferential tariff rates in foreign markets at the time of importation or goods produced in

a particular country are banned for import in a foreign market. The certificate of origin

helps a buyer in adhering to the import regulations of the country. Some of the foreign

markets may accept the certificate of origin issued by a CHAMBER OPF COMMERCE

of an exporting country. Others require these certificates to be legalized by their own

respective consulates. An exporter submits a copy of the commercial invoice to the

CHAMBER OF COMMERCE, together with the nominal fee prescribed by the


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CHAMBER. The chamber of commerce issues a Certificate of Origin to be submitted to

the consulate of the concerned foreign country, which makes its endorsement on the

certificate. Special certificates of origin are applicable for concessions under the

Generalized System of Preferences in which the COO in the specified form is usually in

triplicate, is obtained from any one of the following agencies.

A. Export Inspection Council and its exports

B. Chief Controller of Imports and Exports

C. The Central Silk Board, The Coir Board, The All India Handicrafts Board and the

Textile Committee are also authorized to issue COO for the products under their purview.

15. MARINE INSURANCE POLICY:

Where the contract with the foreign buyer is on CI or CIF basis, the responsibility for

taking insurance cover against all risk of damage to or loss of good during voyage is that

of the exporter an application received from him describing the goods loaded as well as

the value of goods for which the insurance is required, the insurance company issues a

policy in the name of the exporter and endorsed in blank.

The premium charged by the goods are insured, the type of ship and also its age, and the

port if discharge of cargo as evidenced in the bill of lading. The premium rate when

goods are loaded on deck is higher than when they are loaded in the hold of the ship, for

the risks involved and chance of damage to the cargo are more when they are loaded on

the deck of the ship.

The insurance policy issued by the insurance company should carry the name of the

vessel and the description of the goods, corresponding to those found in the bill of lading.

It comes only in effect only after the date of the bill of lading.

As a specified Marine insurance covers many types of risks, the insurance cover differs

from material to material and also depends upon the risk involved. The exporter should

consult the insurer before taking a suitable policy.


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16. SHIPPING BILL:

This is a main document required by the customs authorities for the shipment of goods. It

is only after the shipping bill is stamped by the customs, the cargo is allowed to be carted

to the docks. The shipping bills are generally prepared in 5 copies:

A Customs Copy

B. Drawback Copy

C. Export Promotions Copy

D. Port Trust Copy

E. Exporters Copy

CONVERSION OF E.P COPY OF SHIPPING BILL FROM ONE SCHEME TO

ANOTHER:

If the customs authorities, after recording sessions in writing, permit the conversion of an

E.P copy of any scheme shipping bill on which the benefit of that scheme has not been

availed, on the exporter would be entitled to the benefit under the scheme in which the

shipment is subsequently converted.

Types:

Free Shipping Billable

Dutiable Shipping Bill Drawback Shipping Bill

Shipping Bill for Shipment Ex-Bond

Coastal Shipping Bill

17. CERTIFICATE OF INSPECTION:

Certificate of inspection is issued y the Inspection Agency concerned certifying that the

consignment has been inspected as required under the EXPORTS (QUALITY

CONTROL AND INSPECTION) ACT 1963 and satisfies the condition relating to

quality control and inspection as applicable to it and is certified export worthy.


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In addition to this certificate some countries need Clean Report of Findings under SGS

certificate.

18. ANTIQUITY CERTIFICATE:

This certificate is issued by the Archeological Society of India in the case of export of

antiques.

19. CERTIFICATE OF MEASUREMENT:

Freight can be charged wither on weight or on the measurement basis. When it is charged

on weight basis, the weight declared by the exporter is accepted. However, a certificate of

measurement from the INDIAN CHAMBER OF COMMERCE or any other approved

organization is required to be obtained by the exporter and given to the shipping company

for calculation of necessary freight. The certificate contains the name of the vessel, port

of destination of goods, quantity of packages, etc.

20. PACKING LIST / NOTE:

A packing list / note contains the date of packing, connecting invoice number, order

number, details of shipping such as the name of the vessels, bill of lading number and

date of sailing, case number to which the list / note relates, the details of goods such as

the quality and weight and /or item wise details.

21. TRANS-SHIPMENT BILL:

This document is used for goods imported into a customs port / airport intended for the

trans-shipments.

22. TRANS-SHIPMENT PERMIT:

The trans-shipment permit is the permission for the trans-shipment of goods from the

vessel on which the same are booked originally to another for shipment.


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23. SHIPPING ORDER:

Shipping order is issued by the Shipping Line intimating the exporter about the

reservation of space for the shipment of cargo through a particular vessel from a specific

port and on a specified date.

24. CART / LORRY TICKET:

This ticket is prepared for admittance of cargo through the port gate. This is also known

as the known as Vehicle Ticket or Gate pass. This includes the details of export cargo, i.e.

Shippers name, Cart / Lorry Number, Marks on packages, quantity and description

25. SHIPPERS DECLARATION FORM:

The exporter has to submit his declaration to the customs authorities regarding the value,

in sort, specifications, quantity and description of goods being exported. This declaration

is usually typed in the shipping bill.

TYPES:

CONSULAR INVOICE

It is required by Philippines. It is to be certified by the authorized consular invoice

mission of the importing country in the exporting country. It may be obtained by

paying prescribed fee.

LEGALIZED INVOICE

Some countries including Mexico require legalized invoices which is not very

much different from consular invoice as far as the aim of exporting country is

concerned. However, there is no prescribed format for obtaining the legalized

invoice.


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CUSTOMS INVOICE:

Countries including USA and Canada require customs invoice for their customs

valuation. The exporter has to submit the invoice in the prescribed form in such

cases. On the basis of price charged as per the agreement, the commercial invoice

may be of the following types:

1. FOB Invoice

2. C & F Invoice

3. Ex-Ship price

4. France Invoice

26. SHIPPING ADVICE:

A shipping advice is used to inform the overseas customer about the shipment of goods.

There is no particular form of shipping advice, the exporter only advices his importer

about the invoice number, Bill of Lading / Airway Bill number and date, name of the

vessel with the date, the port of export description of goods and quantity and the date of

sailing of the vessel.

27. FREIGHT DECLARATION:

Freight Declaration is required to be attached to export document, if the importer agrees

to pay freight charges. When the exporter pays freight, he also should submit the same

declaration.

28. HEALTH CERTIFICATE:

Health certificate is required for exports of food products, seed, animal meat products.

The Health Department of exporting country issues this certificate.


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29. CERTIFICATE OF VALUE:

Though the value is indicated in commercial Invoice, some countries need certificate of

value separately.

30. CERTIFICATE OF EXPORT AND REALIZATION:

After shipment, the exporter should get his exports certified by an authorized dealer in

foreign exchange in the prescribed form namely Bank Certificate of Export and

Realization


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PROBLEMS FACED IN THE PROCESS OFDOCUMENTATION:

In the process of documentation, there have been often faced by a number of problems

faced by the exporters and importers. These problems arises due to oversight of either the

exporting/ importing parties or on the part of their respective agents or freight forwarders

etc. at times there has been lack of knowledge and misunderstanding between parties

involved in transaction.

Problems related to the documentation:

The most common and important problem in the documentation refers to dealing in the

preparation of document due to various reasons, as follows:

1. TECHNICAL PROBLEMS:

Due to failure of the computer system, there is a possibility of delay in either making

or forwarding of export document and this can create a time lag between the actual and

estimated time to perform a particular task.

2. DELAY DUE TO STOCKING:

If there is low level of stock in the warehouse or the stock available Is not in usable

condition or in case of sudden hike in the demand of goods. The company may require

some time in order to maintain level of stock accordingly and this may cause a delay in

the operations of the manufacturing, which in turn affects the stocking process.

3. DELAY DUE TO OVER-VOLUME :

Sometimes it is seen that the inventory level of company is much bigger than the point

of minimum requirements and lead to piling up of goods in the store. But at a time

containerizing the goods must be loaded in the order of their lots. Because the goods have

been ordered in excess quantity, they are randomly stored here and there which requires a

lot of time to load them systematically into the container and hence there can be a delay

in shipment of goods which may result into delay submission of export documents.


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4. DELAY DUE TO DISRUPTED PRODUCTION PLANS:

At times there are situations when the containers are ready for stuffing at the plant but

there are delay in delays in production due to lack of materials, information or some

mechanical failure at the plant. These situations also indirectly affect the documentation

process.

5. MISTAKES IN DRAFTING / MAKING OF DOCUMENTS:

Differences in the numeric values, omission of certain numbers, making wrong entry

in documents, printing and typing mistakes in documents, errors due to repetition of

numbers, etc are some of the examples of mistakes made while drafting of documents

which require a lot of time to make correction in them. This is also one of the reasons for

delay in documentation.

6. OTHER PROBLEMS:

Sometimes, the containers require cleaning before stuffing and this task may take

time which cause a delay in the stuffing of containers, this may further create

problems at the later stages like:

Extension in the supply period of the goods.

The company has to pay more for the containers and other charges


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SWOT Analysis of Indian Leather Industry

STRENGTHS

Existence of more than sufficient productive capacity in tanning.

Easy availability of low cost of labour.

Exposure to export markets.

Managements with business background become quality and environment

conscious.

Presence of qualified leather technologists in the field.

Comfortable availability of raw materials and other inputs.

Massive institutional support for technical services, designing, manpower

development and marketing. Exporter-friendly government policies.

Tax incentives on machinery by Government.

Well-established linkages with buyers in EU and USA.

WEAKNESSES

Low level of modernization and up gradation of technology and the integration of

developed technology is very slow.

Low level of labour productivity due to inadequate formal training / unskilled

labour.

Horizontal growth of tanneries.

Less number of organized product manufacturers.

Lack of modern finishing facilities for leather.

Highly unhygienic environment.

Unawareness of international standards by many players as maximum number of

leather industries are SMEs.

Difficulties in accessing to testing, designing and technical services.


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Environmental problems.

OPPORTUNITIES

Abundant scope to supply finished leather to multinationals setting up shop in

India.

Growing fashion consciousness globally.

Use of information technology and decision support software to help eliminate the

length of the production cycle for different products

Product diversification - There is lot of scope for diversification into other

products, namely, leather garments, goods etc.

Growing international and domestic markets.

THREATS

Entry of multinationals in domestic market.

Stiff competition from other countries.(The performance of global competitors in

leather and leather products indicates that there are at least 5 countries viz, China,

Indonesia, Thailand, Vietnam and Brazil, which are more competitive than

India.)

Non- tariff barriers - Developing countries are resorting to more and more non

tariff barriers indirectly.

Improving quality to adapt the stricter international standards.

Fast changing fashion trends are difficult to adapt for the Indian leather

industries.

Limited scope for mobilizing funds through private placements and public issues,

as many businesses are family-owned.


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FINDINGS AND CONCLUSION

During the training period, the company I worked in dealt with several export documents.

I realized that documents have a crucial role in export and import. An export firm has to

deal with several organizations like bank, CHA, shipping company and various

Government and non Government agencies, licensing authorities, board, institutions. All

documents are interrelated and it is not possible to move to the next step withoutcompleting previous documents.

Actual process followed at TIL to make the pre-shipment and post shipment document is

necessary to complete accurately.

There are so many discrepancies in transacting with banks, custom authorities, etc. The

banks making payments on behalf of its foreign customers must verify that all the

documents and drafts confirm precisely to the term and conditions of the L/C, the

requirement of credit cannot be waived off or altered by the paying bank without specific

authority from the issuing bank. To avoid delay in payments, the beneficiary should

prepare and examine all the documents carefully before presenting them to the paying

bank. Paying banks find that the following discrepancies in documents and the L/C occur

most frequently.

Invoice value of drafts exceed amount over lower under L/C.

Drafts are presented after the L/C has expired.

Drafts are presented after shipment has expired.

Amount of insurance coverage does not include risk required by L/C.

Insurance documents are not endorsed and countersigned.

Date of insurance policy or certificate is later than the date on the bills of lading.


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I worked with the company as a trainee and found that documentation is the basic and

most significant part of foreign trade. The entire business depends on the accuracy of

documentation. Effective documentation helps in maintaining the proper flow of all

business transactions. Documentation is equally important to both the exporter as well as

the importer.

Moreover the procedure of import and export is also complex and error at any level can

be carried forward resulting in the incurring of loss to the respective parties. Thus it is

highly essential for the procedure of import and export to be very clear to the people

involved in foreign trade,


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SUGGESTIONS:

Each discrepancy in documents may result in the incurring of heavy loss to an

organization. So extra care should be taken while preparing documents and receiving

documents from any department.

The following precautions should be taken while dealing with document:

The right document should be at the right place.

Single window assistance should be acceptable by the government, which willreduce the load.

Each and every document should be checked within the proper time period.

Documents should be prepared with extra care to avoid errors.

Caution should be taken while receiving any documents from other departments.

Number of document should be curtailed.

Common or repetitive information can be clubbed in one document.

E- Mail copies should be acceptable by the government, which will reduce the

load.

Document should be checked in all aspects at very first stage.


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BIBLIOGRAPHY:

The following sources have been referred to for obtaining the information required for

the completion of this project.

www.tatainternational.com

www.dgft.com

www.export911.com

www.google.com

www.wikipedia.com

www.exim.com

www.indiatrade.com

Import Export Portfolio by Disha Madan

Export Policy and Procedure by M. L. Mahajan

Foreign Exchange and Risk management by C. Jeevnandanam

Export Marketing by Rathore and Rathore

Commercial manual of TATA INTERNATIONAL LTD.
http://www.tatainternational.com/http://www.tatainternational.com/http://www.dgft.com/http://www.dgft.com/http://www.export911.com/http://www.export911.com/http://www.google.com/http://www.google.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.exim.com/http://www.exim.com/http://www.indiatrade.com/http://www.indiatrade.com/http://www.indiatrade.com/http://www.exim.com/http://www.wikipedia.com/http://www.google.com/http://www.export911.com/http://www.dgft.com/http://www.tatainternational.com/