Arranging Xportn Fin

8/7/2019 Arranging Xportn Fin

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HOW TO EXPORT

�Golden Rule.

�Sell Experience.

�Selling in Export.

�On-time Deliveries.

�Communication

�Testing Products

�Approach



GOLDEN RULE.

One must fully research its markets.

Overseas design and product requirements must

be carefully considered.

Always sell as close to the market as possible.

The fewer intermediaries one has the better.

They must be produced with due regard to the

needs of export markets





SELLING IN EXPORT

�In today's competitive world, everyone has to be sold.

�The customer always has a choice of suppliers.

�Selling is an honorable profession, and you have to be

an expert salesman.



ON-TIME DELIVERIES.

�Late deliveries are not always an exporters fault.

�Dock strikes, go-slows, etc. occur almost everywhere

in the world.

�If one enters into export for the first time, he must

ensure of fast and efficient delivery of the promised

consignment.



COMMUNICATION

�Communication internal and external must

be comprehensive and immediate.

�

Good communication is vital in export.

�When you are in doubt, pick up the phone or email for

immediate clarification.



TESTING PRODUCT

�The risk of failure in export markets can be minimized

by intelligent use of research.

�Before committing to a large-scale operation overseas,

try out on a small scale. Use the a sample test, and any

mistakes can then be corrected without much harm

having been done.

� While the test campaign may appear to cost more

initially, remember that some of the cost will be repaid

by sales, so that test marketing often turns out to be

cheaper.



A PPROACH

If possible some indication of the attitudes towards the

product should be established, like any sales operation.

Even if the product is successful, to obtain reactions

from the customer.



A RRANGING FINANCE

Financial assistance to the exporters are generally

provided by Commercial Banks, before shipment as well as

after shipment of the said goods.



The assistance provided before shipment of goods

is known as per-shipment finance and that

provided after the shipment of goods is known aspost-shipment finance.



1. Pre-shipment finance is given for working

capital for purchase of raw-material,

processing, packing, transportation, ware-

housing etc. of the goods meant for export.

2. Post-shipment finance is provided forbridging the gap between the shipment of

goods and realization of export proceeds.



�The later is done by the Banks bypurchasing or negotiating the exportdocuments or by extending advance

against export bills accepted on collectionbasis.

�While doing so, the Banks adjust the pre-shipment advance, if any, already granted

to the exporter.



PRE-SHIPMENT FINANCE

An application for pre-shipment advance should be

made by you to your banker along with the following

documents:



Confirmed export order/contract etc. in original. Where it is

not available, an undertaking to the effect that the same

will be produced to the bank within a reasonable time for

verification and endorsement should be given.

An undertaking that the advance will be utilized for thespecific purpose of procuring/manufacturing/shipping etc.,

of the goods meant for export only, as stated in the relative

confirmed export order or the L/C.

If you are a sub-supplier and want to supply the goods to

the Export/Trading/Star Trading House or MerchantExporter.

Copies of Income Tax/Wealth Tax assessment Order for the

last 2-3 years in the case of sole proprietary and

partnership firm.



Copy of Exporter's Code Number (CNX).

Copy of a valid RCMC held by you and/or the

Export/TradingCertificate.

Appropriate policy/guarantee of the ECGC.

Any other document required by the Bank. For

encouraging exports, R.B.I. has instructed the banks to

grant preshipment advance at a concessional rate of

interest.



SPECIAL SCHEMES ARE ALSO AVAILABLE IN

RESPECT OF PRE-SHIPMENT FINANCE





POST SHIPMENT FINANCE

Post-shipment finance is the finance provided

against shipping documents.

It is also provided against duty drawback claims.

It is provided in the following forms.



PURCHASE OF EXPORT DOCUMENTS

DRAWN UNDER EXPORT ORDER

Purchase or discount facilities in respect of export bills drawnunder confirmed export order are generally granted to thecustomers who are enjoying Bill Purchase/Discounting limitsfrom the Bank.

The bank financing against export bills is open to the risk of non-payment.

Banks, in order to enhance security, generally opt for ECGC policies and guarantees which are issued in favor of theexporter/banks to protect their interest on percentage basis incase of non-payment or delayed payment which is not on

account of mischief, mistake or negligence on the part of exporter.

At the time of purchasing the bill bank has to ascertain thatthis drawee limit is not exceeded so as to make the bankineligible for claim in case of non-payment



A DVANCES AGAINST EXPORT BILLS

SENT ON COLLECTION

It may sometimes be possible to avail advance

against export bills sent on collection.

Advance against such bills is granted by way of a

'separate loan' usually termed as 'post-shipmentloan'.

A margin of 10 to 25% is, however, stipulated in

such cases

This type of facility is, however, not very popular

and most of the advances against export bills are

made by the bank by way of

negotiation/purchase/discount.





A DVANCE AGAINST UNDRAWN BALANCE

In certain lines of export it is the trade practice

that bills are not to be drawn for the full invoice

value of the goods.

Banks do finance against the undrawn balance if undrawn balance is in conformity with the

normal level of balance left undrawn in the

particular line of export subject to a maximum of

10% of the value of export.

Against the specific prior approval from ReserveBank of India the percentage of undrawn balance

can be enhanced by the exporter



A DVANCE AGAINST RETENTION MONEY

Banks also grant advances against retention

money, which is payable within one year from the

date of shipment, at a concessional rate of

interest up to 90 days.

If such advances extend beyond one year, they

are treated as deferred payment advances which

are also eligible for concessional rate of interest.



A DVANCES AGAINST CLAIMS OF DUTY

DRAWBACK

Duty Drawback is permitted against exports of

different categories of goods under the 'Customs

and Central Excise Duty Drawback Rules, 1995.

The claims of duty drawback are settled by

Custom House at the rates determined and

notified by the Directorate.

A copy of the shipping bill presented by the

exporter at the time of making shipment of goods

serves the purpose of claim of duty drawback as

well.



THANK YOU

Arranging Xportn Fin

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