Export=Import documentation and procedures in IndiaI.ppt

Export/ Import Deemed export ?

Top Exports from IndiaMineral fuels, mineral oils and products of their distillation including products like coal and oil accounted for 16.92% of the total percentage share of India’s exports of top ten commodities during 2010-11.

Natural or cultured pearls, precious or semiprecious stones, and jewelery clad with precious metals and also coins accounted for 15.95% of total exports.

Vehicles other than railway or tramway rolling stock, and their parts and accessories accounted for 4.5%.

Electrical machinery and their equipment and parts including products like televisons and sound recorders had a total share of 4.31% of the export basket.

Exports of Iron and steel accounted for 3.76% of the total 2010-11 exports.

Organic chemicals like fertilizers and similar products made up 3.64% of India’s exports.

Nuclear reactors, boilers, machinery and mechanical appliances constituted 3.57% of India’s total exports.

Copper and its products accounted for 3.23% of the 2010-11 export figure.

Products made of iron and steel accounted for 3.05% of India’s total exports

Cotton exports accounted for 2.67%. (All data from the National Centre for Trade Information)

India’s top imported commodities

Gold imports to India• India's total yellow metal consumption is around 900 tonnes a

year, of which 600 tonnes goes into manufacturing and 300 tonnes into investments.

• The country's gold import may touch 725 tonnes this fiscal India imported 354 tonnes of gold in April-September 2013, of which 118 tonnes came in April, 162 tonnes in May, 31 tonnes

• The South Indian states alone account for 60 per cent of gold sales in India, the world's biggest gold consumer. Kerala tops the country in gold consumption, with the largest number of retailers-more than 5,000 . The state consumes about 75 tonnes-valued at about Rs.20,000 crore-of the 650 tonnes of gold sold in India every year and is home to some of Asia's largest gold showrooms.

A Golden Kerala Bride ! Gold's Own Country -

Classification of goods for export the Director General of Foreign Trade (DGFT) gives

details in the Export Licensing Schedule.1. Free goods. All goods other than entered in the

export licensing schedule are freely exportable2. Prohibited goods. Not permitted/no license will be

given.3. Restricted goods. License required. Procedures to

be followed. 4. State Trading Enterprises. Export thro STE (STC,

MMTC)permitted without license for some items5. Restrictions on countries . Eg: Iraq

Prohibited Goods • Narcotic drugs and psychotropic substances • Pornographic and obscene material • Counterfeit and pirated goods and goods infringing any of the legally enforceable

intellectual property rights • Antiquities • Aero models (such as remote controlled toy helicopters) that operate on high radio

bandwidths because of their possible interference with the communication networks of security agencies.

• Indian coins which are covered by the Antique and Art Treasure Act, 1972. • Maps and literature where Indian external boundaries have been shown incorrectly, in

view of Government of India. • Chemicals mentioned in Schedule 1 to the Chemical Weapons Convention of U.N. 1993.

• Wild life products – Human skeleton – Specified sea-shells – Beef, tallow, fat/oil of animal origin – Exotic birds except a few specified ones – Wild animals, their parts and products – Specified Live birds and animals

Restricted Goods • Firearms and ammunition • Live birds and animals including pets • Plants and their produce e.g. fruits, seeds • Endangered species of plants and animals, whether live or dead. • Any goods for commercial purpose: for profit, gain or commercial usage. • Radio transmitters not approved for normal usage • Gold and Silver, other than ornaments (for import only) • Currency in excess of prescribed limits • Telephone and telephony equipments of restricted frequencies • Medicines and drugs • Certain Animals - Camel, Horses, Cattle • Semi processed hides and skins • Silk worms, silk worm seeds and cocoons • Family Planning Devices (NOC from Ministry of Health Required) • Vintage products, replicas of antiques or weapons • Sand and soil • Whole human blood plasma and certain products derived from human blood • Sandal-wood (except handicraft products & oil)

Methods of exporting

1. Direct exporting. Exporting goods directly to the foreign buyers by the manufacturers or through their agents situated in the foreign country

2. Indirect exporting. Exporter uses the services of some specialised agencies like mechant exporters and export houses or trading houses for exporting goods

International orientations

The EPRG FrameworkFour types of attitudes or orientations of

companies planning exports1.Ethnocentrism (home country orientation)2.Polycentrism (host country orientation)3.Regiocentrism ( regional orientation)4.Geocentrism ( world orientation)

Market entry strategies1. Licensing/franchising ( Coca Cola, ITC-Sheraton Hotels, IFB Bosch)

2. Exporting3. Contract manufacturing ( Godrej for Dettol of Reckkit and Coleman)

4. Management contract (TATA TEA, H & M, AVT in Sri Lanka)

5. Assembly operations6. Fully owned manufacturing facilities7. Joint venturing (Pepsi with Voltas and Punjab Agro Industries Corp)

8. Countertrade (Pepsi in USSR)

9. Mergers and acquisitions10.Strategic alliance (TATA Tea and TETLEY)

11.Third country location (Rank Xerox to USSR thro Modi Xerox in India)

Role of Export Documentation • Export documentation plays a vital role in

international marketing as it facilitates the smooth flow of goods and payments thereof across national frontiers.

• Exporters are required to follow certain formalities and procedures, using a number of documents.

• Each of these documents serves a specific purpose and hence carries its own significance.

• A clear understanding of all documents and their purpose, how to prepare these, number of copies required, when and where to file, is a must for all export professionals.

Export Documentation in India• Export Documentation in India has evolved a

great deal of interest since 1990.• Efforts are on, at a faster footing to streamline

and modernize the system further. • Prior to 1990, documentation was manual and it

lacked proper co-ordination.• The result was lot of delays and mistakes,

rendering the task very clumsy, tiresome, repetitive, and truly frustrating.

• India adopted the ADS (Aligned Documentation System) in 1991 which is the Internationally accepted documentation system

Export Documentation in India• Export documentation is complex in nature as the

number of documents to be filled-in is very large, so also is the number of the concerned authorities to whom the relevant documents to be submitted. It is, therefore, advisable to take the help of shipping and forwarding agents who will obtain and fill out the documents correctly as well as arrange for transportation.

• There are buyers and exporters, buying agents, RBI, authorized dealers (where the exporter has his bank Account), buyer’s bank (foreign bank), DGFT, Customs and Port Authorities, VAT and Excise Authorities, EPC’s, Insurance Companies, Inspection Agencies, Clearing and Forwarding Agents, Shipping Companies/Airlines and Inland Carriers etc

Export Documentation in India

• Proper Documentation will ensure smooth sailing with the requirements of the above agencies and the resulting transaction will be a successful one.

• Inaccurate or incomplete documentation will result in serious financial and goodwill losses.

• Such losses can be completely avoided by understanding clearly the documentation requirements of all concerned parties and then meticulously planning to get the right documents in the right numbers, at the right places and at the right time.

Classification of Export Documents

• Export Documents can be classified into following four categories:

(1) Commercial Documents(2) Regulatory Documents(3) Export Assistance Documents(4) Documents Required by

Importing Countries

Registration Formalities for Export1. Registration of Organisation2. Opening bank account3. Obtaining Importer-Exporter Code Number (IEC No.)4. Obtaining Permanent Account Number (PAN)5. Registration with VAT authority and Sales Tax

authority6. Registration with Export Promotion Council (EPC)7. Registration with Export Credit and Guarantee

Corporation of India(ECGC)8. Registration with other authorities. Chambers of

Commerce, Productivity Councils, Federation of Indian Export Organisations, Indian Trade Promotion Organisation

Importer-Exporter Code Number IEC is a unique 10 digit code issued by the

Director General of Foreign Trade (DGFT), Ministry of Commerce, GOI, to Indian exporters and importers. It is a mandatory requirement for any import or export in India.

Eligibility and legal provisions for IEC number

1. IEC No. valid for all branches/divisions/units/factories2. If lost/misplaced, duplicate issued based on an affidavit3. May surrender if not wishes to operate4. Only one No. against one PAN number5. Mandatory requirements to apply for IEC: PAN Number, Current Bank Account, Banker’s Certificate Appln.fee : Rs.250/ Profile of Importer/Exporter: File details in Ayaat/Niryaat

Form – ANF2A with Regional Authority Self addressed stamped envelopeProcedure: a) Online application and submit print copy b) Physical application direct to regional DGFT office

Registration-cum-Membership Certificate(RCMC)

• Any company/firm applying for any import/export license and/or avail any concession or benefit under Foreign Trade Policy is required to have a Registration-cum-Membership Certificate issued by a competent authority, unless exempted under the policy.

• Issuing authorities: Federation of Indian Exporter’s Organisations

Export Promotion Council Electronic and Computer Software EPC Services EPCValidity: usually 5 yearsFurnishing reports: Quarterly reports to EPC

Export License• A document issued by appropriate licensing

authority allowing an exporter to export under restricted category of goods.

• Issued by DGFT or Regional Authority.Terms and conditions:a)Quantity ,description and value of goodsb)Actual user conditionc) Export obligationd)Value addition to be achievede)Minimum export/import priceApplication fee:Rs.250/

DOCUMENTATION

EXPORT DOCUMENTATION• Invoice • Certificate • Custom documents • Transport documents • Exchange control • Payment documents • Miscellaneous documents

IMPORT DOCUMENTATION• Transport documents • Bill of entry • Certificate of inspection • Certificate of measurement • Freight declaration • Fumigation certificate

• Export documentation is a tedious but necessary process that all exporters must pay close attention to, as documentation requirements vary considerably by country, commodity, and situation.

Aligned Documentation System (ADS)• India adopted the Aligned Documentation System in 1991

which is internationally accepted, based on UN guidelines – printed on same size paper, same common terms used in same relative slots to ensure uniformity.

• Documents classified as: Commercial or Regulatorya) Commercial documents: For effecting physical transfer of

goods and their title from exporter to importer and realisation of sale proceeds.

Eg: proforma invoice, commercial invoice,packing list,shipping instructions,intimation for inspection, certificate of inspection of quality control, insurance declaration, certificate of insurance, mate’s receipt,bill of lading, certificate of origin,shipment advice, and letter to bank for collection or negotiation of documents

Regulatory documents• Those prescribed by different govt

departments and bodies in order to comply with various rules and regulations under relevant laws governing export trade

• such as export inspection, foreign exchange regulation, export trade controls, customs formalities, etc.

EXPORT DOCUMENTATION INVOICE • Proforma invoice – Proforma invoice is a

quotation given in the form of a regular invoice.

• Commercial invoice – It is an exporter’s bill for the goods shipped.

• Consular invoice- A consular invoice is the commercial invoice stamped or notarized by the consulate or embassy of your customer’s country, if required.

EXPORT DOCUMENTATION

CERTIFICATE • Certificate of origin- COO declares that the

goods which are being exported are manufactured in a specific country.

• Combined certificate of origin and value- This document is applicable to common wealth countries only. This document certifies not only the origin of goods but also the value of goods.

Certificate of Value and Origin

Exporter Status of Exporter

(Manufacturer, Producer, Supplier, Grower, etc)

Page of

Date / / 20

Sold To Deliver To

Country of Origin Terms

( FOB, CFR, CIF , etc )

Ship / Airline Sea / Air

Sea / of Discharge Final Destination

Marks & Numbers Quantity and Description Currency

Invoice Price to Purchaser

Specify the following charges and indicate if each amount has been included in the selling price

Amount in the currency

of the exporting

country

State if Incl

1. Value of outside packages / containers I the undersigned being duly authorised by the above exporter and having made the necessary enquiries HEREBY CERTIFY THAT THIS INVOIVE HAS BEEN MADE IN ACCORDANCE WITH THE VALUE AND ORIGIN CLAUSES ATTACHED

Full name and position of signatory

2. Labour for packing goods into outside packages / containers

3. Inland transport and insurance cost to port / airport area4. Port Charges5. Ocean Freight6. Overseas Insurance7. Royalties8. Other Charges (drawbacks, commissions, etc)

Signature of authorised Signatory

Date

Export Document

Customs Documents

• Shipping Bill: Shipping bill is the main customs document. It is required by the customs authorities for granting permission for the shipment of goods.

Export documents Transport documents • Mate receipts -It is a prime facie evidence that

goods are loaded in the vessel. It is an acknowledgement of the goods on board the ship.

• Bill of lading – It is issued by the shipping company and serves as a receipt from the shipping company which undertakes to deliver the goods at agreed destination on payment of freight

• Airway bill- When goods are exported by air, the concerned airline authorities issue airway bill.

Export Documents

Exchange Control Documents

• GR Form - Form GR (Guaranteed Remittance)is an exchange control document which is to be submitted to the Reserve Bank of India after clearance from the customs authorities. It is designed mainly to furnish guarantee to the RBI to remit the foreign exchange earned from the export shipment within 180 days from the date of exports.

Export Documents

Exchange control Documents • PP form- PP (Parcel Post)Form is also an

exchange control document. It is used in place of Form GR when goods are exported by post parcel.

Export Documentation

Payment documents

• Bill of exchange- Bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or order of, a certain person or to the bearer of the statement.

Letter of Credit (LC)

• A document containing the guarantee of a bank to honour drafts drawn on it by an exporter, under certain conditions and upto certain amounts, provided that the beneficiary fulfils the stipulated conditions.

Sample Letter of Credit

Export Documents

•Insurance certificate- All goods meant for export are compulsorily covered by insurance.

Miscellaneous Documents

Health certificate- This document is required for the export of food products,seeds,animal meat etc.

Miscellaneous Documents

Import documents

Import Licenses

The import of specific products requires obtaining import licenses and authorizations issued by the competent authorities (Ministry of Economy, Ministry of Environment, Ministry of Culture, etc.) The goods that shall be subject to import licenses are listed in detail in the Decision for Classification of Goods to Import and Export.

Import Documents

Transport Documents • Ocean freight :Bill of lading. • Air freight :Airway Bills.• Rail / Road :Railway Receipt.• Post :Waybill issued by Foreign

Post office• Courier : Courier Receipt.

BILL OF ENTRY

This document contain details like quality,quantity,number of packages etc.

Import document

Fumigation Certificate

Fumigation certificate is required as proof that the packing materials e.g. wooden crates, wood, wool etc), have been fumigated or sterilized.

Inspection Certificate or Inspection Report 

Import document

This certificate certifies that goods being exported are exportworthy.