sample copy. not for distribution. · preliminaries for starting export business – deemed exports...

Sample Copy. Not For Distribution.

1

EXPORT AND

IMPORT TRADE

PROCEDURES

Dr.A. THARMALINGAM

M.COM.,M.PHIL.,PHD

ASSOCIATE PROFESSOR

SRI RAMAKRISHNA ARTS AND SCIENCE COLLEGE

COIMBATORE-06

Ms.K.AKILA

M.COM., M.PHIL., PGDCA (PH.D)

ASSISTANT PROFESSOR

SANKARA COLLEGE OF SCIENCE AND COMMERCE

Ms.J.MANIMEGALAI

M.COM(CS).,M.COM.,M.PHIL.,(PHD)

ASSISTANT PROFESSOR

SANKARA COLLEGE OF SCIENCE AND COMMERCE

According To Bharathiar University Syllabus for Students of M.Com


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SYLLABUS

Objective : To make the students well aware about the formalities associated with export and

import

Unit I: Exports – Recent measures to boost Country’s Exports – Rules for successful exporting –

Preliminaries for starting export business – Deemed exports and its benefits – Impediments in

Export Promotion

Unit II: Different Categories of exporters - Registration of Exports – Appointing Overseas agents

– Obtaining an export license – Arranging finance for exports – Packing goods for exports –

Marketing goods for export.

Unit III: Export procedure – Insuring goods against Marine risks – Preparing export documents –

Institutional support for Exports – Compulsory quality control and pre-shipment Inspection –

Labeling – Shipping and customs clearance of goods.

Unit IV: Import Trade law in India – Preliminaries for starting Import Business – Registration of

Importers – Arranging finance for Import – Arranging letter of Credit for Imports – Balance of

Payments – Liberalization of Imports.

Unit V: Retirement of Import Documents and RBI’s directives for making payment for Imports –

Customs clearance of Imported Goods and payments of customs Duty – Imports under special

schemes.


Dr.A.Tharmalingam is an associate professor of commerce, with 13 years of

teaching experience. He obtained his master in commerce and M.phil from

Pondicherry central university. He has attended and participated in national

and international conference. He has published more than 10 research

papers. His doctoral degree was awarded from Pondicherry University. He is

currently working in commerce with computer applications, Sri

Ramakrishna College of Arts and Science College. At present, 3 PH.Dscholars are doing

research under his guidance. And he is also an external examiner for PH.D.He has deliver guest

lecture to the various colleges.

K.Akila Devaraj is an assistant Professor of Commerce Department, with

industrial experience of more than 5 years and teaching experience of 3 year

and above. She is pursuing her PH.D inRamakrishna College of Arts and

Science College. She has attended and participated in national and

international conferences, workshopsand published more than 10 research

papers

J. Manimegalai is an assistant professor of commerce, Sankara College of

science and commerce. She has expertise in the areas of management and

accountancy. She has more than 9 years of teaching experience. She is currently

pursuing her PH.DRamakrishna College of Arts and Science College. She has

attended and participated in national and international conferences and

published more than 10 research papers.


Content

Units Lessons Page

I Exports 1

Export Promotion Measures In India 1

Ten steps for starting export business 4

How to start export business 8

How to make export 13

Deemed export and benefits 19

Export finance 27

Financial institution offer export finance 31

II Different Categories of exporter 38

Registration of Exports 39

Appointing Overseas agents 40

Obtaining an export license 42

Arranging finance for exports 46

Packing goods for exports 47

Labeling for export 49

III Export procedure 51

Insuring goods against marine risk 54

Procedure and document for filling , claim of marine insurance 55

Preparing for export document 57

Institution supporting for exports 66

Methods of quality control 67

Pre-shipment inspection

Packing and label

Customs procedure for export 72

Documents used in export 76

IV Import Trade law in India 81

Steps involved in import the goods 82

Preliminary for starting import business 84

Arranging finance for importers 87

Trade liberalization 91


V Retirement of import document 93

Custom clearance of import goods 94

Custom duty 96

Import incentive 98


1

UNIT I

EXPORT

MEANING

An export is a function of international trade whereby the goods are produced in one country is

been shipped to another country for sale.

In simple term the word export means sending of goods or services produced in one country for

the usage of another country.

EXPORTER

The seller of such goods is called as exporters. Or in other words who export the goods to

another country is named as exporters.

IMPORTER

The buyer of such goods is called as Importers. Or in other words who imports the goods to

home country is named as Importers.

ADVANTAGES OF EXPORT

Export is the one of the oldest form of economic transfer and occurs on a large scale

between nations.

That has less restriction on the trade, such as tariffs and subsidies.

The ability to export goods help an economy to grow, by selling more over all goods and

services

Export are a crucial component of a country’s economy

Export facilitates international trade, they also stimulate domestic economic activities by

creating employment, production and revenues of the nation

EXPORT PROMOTION MEASURES IN INDIA

A number of institutions have been set up by the government of India to promote exports.

The exports and import functions are looked after by the Ministry of CommerceThe Government

formulates the export-import policies and programmes that give direction to the exports.


2

The government wishes to stimulate economic growth in case when there is a increase in the

export rank and gives priorities to the export. There is, however, still strong disagreement on

how governments should intervene. For instance, it has often been argued that the best

governments can do is to eliminate the obstacles to the smooth functioning of market forces and

provide information to exporting firms about destination markets and foreign competitors. This

view is, of course, far from being unanimously shared. While policymakers continue to debate

the issue, our survey of the literature on successful strategies and practices for boosting export

has enabled us to compile a list of best practices (Belloc and Di Maio 2011):

Creation of duty drawback schemes. Among the traditional measures, the duty drawback

scheme is, as surveys of entrepreneurs’ opinions suggest, one measure that has proven to be

successful in the past. Standard duty drawback schemes can be improved by: (a) making

them accessible also to indirect exporters and extending them to imported inputs used in

production of exported final products; (b) eliminating duty pre-payment for exporting firms

in order to reduce credit requirements.

Increasing the availability of credit. The availability of short and (especially) long-term

credit is crucial to exporters. This is decisive for small and medium enterprises (SMEs), for

which the credit constraints are more binding than for large firms. Since SMEs make up the

large majority of firms in developing countries, improvements in this domain are necessary

to favour export growth.

Simplifying regulation. The government should simplify regulation related to exports; long

bureaucracy procedures negatively affect especially new exporters. At the same time,

governments should improve information collection and dissemination about foreign markets

and requirements for exporting. Actions in this category should also consider product

standards and other technical requirements imposed for exporting to developed country

markets.

Improving cooperation among economic actors. Besides traditional policy instruments,

export growth could be favored by improving cooperation among exporters and between the

government and business actors. For instance, there is nowadays increasing awareness about

the possibility of using export consortia to help SMEs access the international markets. This

may be seen as a complement to other forms of government intervention.


3

Combining short-term and long-term export growth policies. The stimulation of export

growth requires the combination of short- and long-term policies. In this context, it is

important to also exploit the complementarily between EPPs and other domestic policies

(aimed, for instance, at enhancing productivity and technological content of domestic

products).

Strategic collaboration between different levels of government (sub-national and national level,

for instance) and the private sector is widely considered a key element for policy success.

Indeed, a pre-condition for successful EPPs is the domestic government ability, including policy

design, implementation, and enforcement and monitoring. It follows that the policy mix

suggested for a given country must be tailored on the basis of capabilities available to national

government, sub-national government and the domestic agencies. In the extreme case, this

argument could lead to very practical criteria for policy design, suggesting the (second) best

policy mix relying on considerations about the most efficient (least corrupted) governmental

institutions. Adopting such criteria could minimize resource waste and reduce the danger of

fostering powerful domestic interest groups and rent-seeking activities.

The careful analysis of the specificities of the local economic and institutional environment

suggests not borrowing policy strategies from other countries simply because they have been

successful there. Indeed, the same policy (or policy mix) implemented in two different countries

may yield completely different outcomes. In particular, the country specific institutional

environment is crucial for policy results.

Institutional and policy complementarities are important. Domestic policies may affect export

performance either directly, through the set of policy instruments with direct influence on foreign

trade, or indirectly, through the set of policy measures that have their direct influence on other

aspects of the economic systems (for instance, monetary and fiscal policies, production and price

controls, investment policies, exchange rate policies) and, in turn, stimulate foreign trade

performance. All these policy measures cannot be considered in isolation; not only does the

choice of policy matter, but also the economic and institutional context and policy mix within

which it is implemented.


4

In conclusion, our review of the literature finds that successful export promotion policies have

clearly defined priorities, goals, and objectives. In particular, they:

enhance the domestic enabling environment for potential exporters (in terms of

infrastructures, regulation, access to finance, insurance, fiscal policies);

foster the strategic cooperation between private and public actors and among domestic

producers, exporters, and policymakers;

improve the productivity and technological content of domestic goods, and provide

incentives to nurturing innovation;

facilitate the access to credit,

serve to build the country image in foreign markets (through marketing, information

provision, advocacy);

offer targeted and tailored assistance, and rely on continuous evaluation;

are supported by monetary and fiscal policies designed to improve the enabling environment;

and

Stimulate institutional development, also considering institutional complementarities.

TEN STEPS TO SUCCESSFUL EXPORTING

1. Decide where to sell

Research is vital! Identify the markets with a little desk research. Find the consumption / import

figures of products similar to your own and the economic growth rate of a potential new market.

Look up the demographics, cultural and religious practices and your potential competition.

2. Have a plan

Your export plan should include your people.


5

Your People

Can someone from your team drive this programme or do you need to recruit?

Your Capacity

Do you have enough capacity to meet a new market’s demands? Do you need to upscale?

Your Packaging

Will your packaging design appeal to your market? Is there a legal requirement to label things

differently or do you needs to translate your labelling?

Your Knowledge

Visit your potential new market. Showcase your products at trade fairs and build new contacts.

3. Choose a route to market

You can do one of four options:

1. Sell directly

2. Use a distributor

3. Use a sales agent

4. Create a joint venture.

Whichever option you chose, you must ensure clarity of responsibility for things like delivery

and payment and ALWAYS remember to protect your intellectual property.

4. Find the opportunities

Trade fairs are one of the best ways to find opportunities both in the UK and abroad. Meet

buyers and generate new business. Check with us about available grants to subsidies the cost of

exhibiting, or see if you can share the cost of a stand with another business.

5. Start marketing

Adverts can help you gain exposure but can be expensive. As with the UK, be mindful of the

target audience and expense vs. return on investment. Another option is to create a website with

content translated according to your target market. Global social media sites such as LinkedIn,

Face book and Twitter can also help you to promote your message quickly and free of charge.
