INTERNATIONAL BUSINESS - II the quotation acceptable, he places an order or indent and gets a letter of credit issued from his bank to the exporter. The exporter then proceeds with the formalities related to obtaining an export licence from the Director General of Foreign Trade and getting a registration-cum-membership certificate from the export promotion council looking after the export of the concerned product. In case the exporter requires funds, he/she can avail of pre-shipment finance from a bank. The exporter then proceeds with the production or procurement of the goods and gets them inspected from Export Inspection Council.
If required by the importer, the exporter approaches the foreign consulate for obtaining the certificate of origin to enable the importer to claim tariff or quota concessions at the time of clearance of cargo at the import destination. The exporter then makes arrangement for reserving space on the ship and insuring goods against transit perils. After obtaining the excise clearance, goods are sent to the concerned port for customs clearance. Since customs clearance is a tedious process, exporters often employ C&F agents for availing their services in preparation of various customs documents and getting the goods customs cleared.
After customs clearance and payment of dock charges to the port authorities and freight charges to the shipping company, goods are loaded on the ship. The captain of the ship issues a mate’s receipt. This mate’s receipt is submitted to the shipping company’s office for payment of freight. After receiving the freight charges, the shipping company issues a bill of lading which is a document of contract relating to shipment of the goods by the shipping company.
Once the goods are despatched, the exporter prepares an invoice and sends the necessary documents such as certified copy of invoice, bill of lading, packing list, insurance policy, certificate of origin, letter of credit and bill of exchange to the importer through his/her bank. The bank presents these documents to the importer. On getting acceptance of the bill of exchange by the importer, the documents are handed over to the importer to enable him/her to claim the imported goods. Once the payment is received, the exporter requests his/her bank to release a certificate of payment.
Certificate of payment is a document that certifies that the export transaction is over and the payment has been received. Import Procedure: The procedure to import is also beset with several formalities. The process starts with a search for export firms and making a trade enquiry about the product, its price and terms and conditions of exports. Having selected an export firm, the importer asks the exporter to send him/her a formal quotation — called proforma invoice.
The importer then proceeds to obtain the import licence, if required, from the office of the Directorate General Foreign Trade (DGFT) or Regional Import Export Licensing Authority. The importer also applies for the Import Export Code (IEC) number. This number is required to be mentioned on most of the import documents. Since payment for imports requires foreign currency, the importer has to also make an application to a bank authorised for sanction of the necessary foreign exchange.
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