INTERNATIONAL

TRADE
DOCUMENTATION AT

Abhilasha Exim Pvt. Ltd.

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GROUP MEMBERS

 AMIT MATHUR
 KANIKA GUPTA
 LALIT SHARMA
 PANKIL MOOLCHANDANI
 SWATI SINGHANIA
 VED PRAKASH SHARMA

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 PRESENTATION FLOW

• Introduction of Export Firm

•Methods of Payment
•Pre-Shipment Finance
•Post-Shipment Finance
•Letter of Credit
• Open Account
•Factoring

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 Company profile
 Name : Abhilasha Exim Pvt. Ltd.
 Established As : A Private Ltd. Company & as Manufacturers & Exporters
 Products : Ready to Wear Garments, Textiles & Fashion Accessories.
 Year of Establishment   1997
 Address : Reg. Office: 
Jwala Building, C/21A, Bhagwan Das Road, 
Jaipur-302 001 (Rajasthan) INDIA
Ph: +91 - 93140 63699
 Works: 
F-160/A, Sitapura Industrial Area, Tonk Road, 
Jaipur-302 022 (Raj.) INDIA
Ph: +91-141-277 0728, 277 0729  
Cell: +91- 94140 76688  
Fax: +91-141- 2771399
 Production capacity : 25,000 - 40,000 units of Hi-Fashion garments per month.
 Turnover :  US $ 3.4 million

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 Members of..
Registered with the following Export Promotion
Organisation (s), Association (s), & Chamber (s) of
Commerce : :

Apparel Export Promotion Council. (Govt. Of India)

Export Promotion Council for Handicrafts & Textiles
(Govt. of India)
CII (Confederation of India Industry)
CIAe (Confederation of Indian Apparel Exporters)

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 Bankers : Punjab National Bank

 Swift Code - BIC :  PUNB IN BB JMI 

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Cliental Details
USA
Canada
Spain
South Africa
Egypt
Greece
Australia

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 INTERNATIONAL TRADE

Advantages Disadvantages
•Market expansion •Annihilation of infant
industry
•Economies of scale
•Exchange rate
•Surplus not wasted
fluctuation
•BOP
•Unequal distribution of
•Global productivity wealth
•Socio economic setup of
country

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FISCAL INCENTIVES TO
PROMOTE EXPORT

Duty Drawback

Tax Concession

Market development assistance

Export promotion of capital goods scheme

Cash compensatory support

Air Freight Subsidiary

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METHODS FOR INTERNATIONAL
TRADE FINANCE

According to stage of financing

Pre-shipment finance

Post-shipment finance

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METHODS FOR INTERNATIONAL
TRADE FINANCE

Instruments/methods of financing

Letter of credit

Open account

Factoring

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Pre-Shipment Finance
“Financial assistance extended to the
exporter from the date of receipt of the
export order till the date of shipment is
known as pre-shipment credit”.

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 EXPORT DOCUMENTATION

Export Documents

Commercial Documents Regulatory Documents

Principal Auxiliary

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 Commercial Documents
Document Functions Prepared by

Quotation An offer to sell goods and should Exporter

state clearly the price, details of
quality, quantity, trade terms,
delivery terms, and payment terms.

An agreement between the buyer

Sales and the seller stipulating every Exporter
Contract details of the transaction. It is a and
legally binding document. It is Importer
therefore advisable to seek legal
advice before signing the contract.

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 Commercial Documents
Document Functions Prepared by

Performa An invoice provided by a supplier prior to Exporter

the shipment of merchandise, informing
Invoice the buyer of the kinds and quantities of
goods to be sent, their value, and
importation specifications (weight, size
and similar characteristics).

Commerci It is a formal demand note for payment Exporter

al Invoice issued by the exporter to the importer for
goods sold under a sales contract. It
should give details of the goods sold,
payment terms and trade terms. It is also
used for the customs clearance of goods
and sometimes for foreign exchange
purpose by the importer.

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 Commercial Documents
Document Functions Prepared by

Packing List A list with detailed packing Exporter

information of the goods
shipped.
Inspection A report issued by an
Certificate independent surveyor Inspection
(inspection company) or the Company or
Exporter
exporter on the specifications of
the shipment, including quality,
quantity, and/or price, etc;
required by certain buyer and
countries.
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 Commercial Documents
Document Functions Prepared by

Insurance An insurance policy is an insurance Insurer or

Policy/ document evidencing insurance has
been taken out on the goods shipped, Insurance
Certificate and it gives full details of the insurance Agent or
coverage. An insurance certificate
certifies that the shipment has been
Insurance
insured under a given open policy and is Broker
to cover loss of or damage to the cargo
while in transit.

A certificate to certify the products are Accredited

Product conformed to a certain
Laboratori
Testing international/national technical standard,
Certificate such as product quality, safety and es
specifications, etc.

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 Transport Documents
Document Functions Prepared by

Bill of An evidence of contract between the Shipping

Lading shipper of the goods and the carrier. Company
(B/L) The customer usually needs the
original as proof of ownership to take
possession of the goods.

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 Transport Documents
Document Functions Prepared by

Air A kind of waybill used for the carriage Airline

Waybill of goods by air. This serves as a
receipt of goods for delivery and
(AWB)
states the condition of carriage but is
not a title document or transferable/
negotiable instrument.
A list providing information needed for Shipper
Packing transportation purpose, such as details of
List invoice, buyer, consignee, country of origin,
vessel/flight date, port/airport of loading,
port/airport of discharge, place of delivery,
shipping marks / container number, weight /
volume of merchandise and the fullest details
of the goods, including packing information.

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 Financial Documents
Document Functions Prepared by

Document A bank instrument began (issuing or opening Issuing Bank

ary Credit bank), at the request of the buyer, upon an
evidencing the bank's undertaking to the application
seller to pay a certain sum of money made by the
provided that specific requirements set out in Importer
the D/C are satisfied.

Bill of An unconditional written order, in Exporter

Exchange which the importer addressed to and
(B/E) or required by the exporter to pay on
Draft demand or at a future date a certain
amount of money to the order of a
person or bearer.
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Regulatory Documents
There are seven regulatory documents associated with the pre-shipment stage
of the export transaction. They are:

1. GRE Form ( for Central Excise)

2. Shipping Bill/Bill of Export (for Customs)
- For export of goods Ex. Bond
- For export of duty free goods
- For export of dutiable goods
- For export of goods under claim of drawback
- For export of goods under claim of DEPB

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3. Port Trust Copy of Shipping Bill/ Export Application/Dock Challan

4. Vehicle ticket

5. Exchange Control Declaration/GR/PP forms

6. Freight Payment Certificate

7. Insurance Premium Payment Certificate

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 INTEREST SUBVENTION
SCHEME
Government steps in by picking up a part of
the interest burden
Interestsubvention of 2 per cent on the pre-
shipment credit for seven employment-
oriented export sector
Textiles including handlooms
Handicrafts
Carpets
Leather
Gems & Jewellery
Marine products
Small & Medium exporters.

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 Post Shipment Finance is a kind of
loan provided by a financial institution
to an exporter or seller against a
shipment that has already been made.

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 TYPES OF POST SHIPMENT
FINANCE
Export Bills Purchased / Discounted

Export Bills Negotiated

Advance Against
◦ Export Bills Sent On Collection Basis
◦ Export On Consignments Basis
◦ Claims Of Duty Drawback

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BENEFITS TO EXPORTERS

Competitiveness – Exporter able to offer credit

terms to buyer

Energized Cash flows – Producer receives cash

from export proceeds upfront and can continue
production activities.

Expansion Of Client Base – Exporter able to

expand client base due to availability of
financing

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A formal document issued by a bank
on behalf of customer, stating the
conditions under which the bank will
honour the commitment of the
customer

• The letter of credit is also known as

banker’s commercial credit or
documentary letter of credit.

•L/C used in domestic trade are called

inland L/C’s.

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PARTIES TO A LETTER OF CREDIT

 Importer or Applicant

 Issuing Bank

 Beneficiary
Advising Bank
Negotiating/ The Paying Bank.
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 LETTER OF CREDIT – THE
PROCESS

Seller 1. Contract Buyer

(Beneficiary) Applicant

2. Documentary
4. Advice of credit Application
Documentay
credit

Advising Bank 3. Documentary credit ISSUING

BANK.

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 Open Account is a
form of trade whereby
sales are made to the
buyer without
entering into any
formal contract. The
system works on
complete trust
between buyer &
seller.
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 OPEN ACCOUNT

Open Account is the most advantageous option

to the importer in cash flow and cost terms.

Itis consequently the highest risk option for an

exporter.

Exporters may also wish to seek export working

capital financing to ensure that they have access
to financing for both the production for export
and for any credit while waiting to be paid.

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 OPEN ACCOUNT

 Open account terms may be offered in competitive

markets with the use of one or more of the following
trade finance techniques:
1. Export Working Capital Financing

2. Export Credit Insurance

3. Export Factoring

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 Pros & Cons
Pros:
Boost competitiveness in the global market.

Establish and maintain a successful trade

relationship.
• Cons:
Exposed significantly to the risk of nonpayment

Additional costs associated with risk mitigation

measures.
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OPEN ACCOUNT – PROCESS

TARGET Purchase order VENDOR

Pu er Goods
or
rc
Do

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ha

ts
cu

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Pa

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en
ym

e
cu

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ts

Do
en

ta

Pa
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tu
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BANK

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 “Financial transaction
whereby a business
sells its accounts
receivable to a third
party called a factor
(financial institution) at
a discount in exchange
for immediate money
with which to finance
continued business.”
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FLOW CHART OF FACTORING

(1) Credit Sale

of Goods

Customer Client
(2) Invoice

(5) Pays the amount (6) Pays

(In recourse type the (3)
customer pays balance Submit
through client) (4) Invoice
Payment Copy
upto 80%
initially
Factor

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