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A textile[1] or cloth[2] is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn.

Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands.[3] Textiles are formed by weaving, knitting, crocheting, knotting, or pressing fibres together (felt). The words fabric and cloth are used in textile assembly trades (such as tailoring anddressmaking) as synonyms for textile. However, there are subtle differences in these terms in specialized usage. Textile refers to any material made of interlacing fibres.Fabric refers to any material made through weaving, knitting, spreading, crocheting, or bonding that may be used in production of further goods (garments, etc.). Cloth may be used synonymously with fabric but often refers to a finished piece of fabric used for a specific purpose .

uses
Textiles have an assortment of uses, the most common of which are for clothing and containers such as bags and baskets. In the household, they are used in carpeting, upholstered furnishings, window shades, towels, covering for tables, beds, and other flat surfaces, and in art. In the workplace, they are used in industrial and scientific processes such as filtering. Miscellaneous uses include flags, backpacks, tents, nets,handkerchiefs, cleaning rags, transportation devices such as balloons, kites, sails, andparachutes, in addition to strengthening in composite materials such as fibreglass and industrial geotextiles. Children can learn using textiles to make collages, sew, quilt, and toys. Textiles used for industrial purposes, and chosen for characteristics other than their appearance, are commonly referred to as technical textiles. Technical textiles include textile structures for automotive applications, medical textiles (e.g. implants), geotextiles (reinforcement of embankments), agrotextiles (textiles for crop protection), protective clothing (e.g. against heat and radiation for fire fighter clothing, against molten metals for welders, stab protection, and bullet proof vests). In all these applications stringent performance requirements must be met. Woven of threads coated with zinc oxide nanowires, laboratory fabric has been shown capable of "self-powering nanosystems" using vibrations created by everyday actions like wind or body movements.

sources and types Textiles can be made from many materials. These materials come from four main sources: animal (wool, silk), plant (cotton, flax, jute), mineral (asbestos, glass fibre), and synthetic (nylon, polyester, acrylic). In the past, all textiles were made from natural fibres, including plant, animal, and mineral sources. In the 20th century, these were supplemented by artificial fibres made from petroleum. Textiles are made in various strengths and degrees of durability, from the finest gossamer to the sturdiest canvas. The relative thickness of fibres in cloth is measured in deniers. Microfibre refers to fibres made of strands thinner than one denier. Animal textiles Animal textiles are commonly made from hair, fur or skin. Wool refers to the hair of the domestic goat or sheep, which is distinguished from other types of animal hair in that the individual strands are coated with scales and tightly crimped, and the wool as a whole is coated with a wax mixture known as lanolin (aka wool grease), which is waterproof and dirtproof. Woollen refers to a bulkier yarn produced from carded, non-parallel fibre, while worsted refers to a finer yarn which is spun from longer fibres which have been combed to be parallel. Wool is commonly used for warm clothing. Cashmere, the hair of the Indian cashmere goat, and mohair, the hair of the North African angora goat, are types of wool known for their softness. Other animal textiles which are made from hair or fur are alpaca wool, vicua wool, llama wool, and camel hair, generally used in the production of coats, jackets, ponchos, blankets, and other warm coverings. Angora refers to the long, thick, soft hair of theangora rabbit. Qiviut is the fine inner wool of the muskox. Wadmal is a coarse cloth made of wool, produced in Scandinavia. Silk is an animal textile made from the fibres of the cocoon of the Chinese silkworm which is spun into a smooth fabric prized for its softness. There are two main types of the silk: 'mulberry silk' produced by the Bombyx Mori, and 'wild silk' such as Tussah silk. Silkworm larvae produce the first type if cultivated in habitats with fresh mulberry leaves for consumption.

Plant textiles Grass, rush, hemp, and sisal are all used in making rope. In the first two, the entire plant is used for this purpose, while in the last two, only fibres from the plant are utilized. Coir (coconut fibre) is used in making twine, and also in floormats, doormats, brushs,mattresses, floor tiles, and sacking. Straw and bamboo are both used to make hats. Straw, a dried form of grass, is also used for stuffing, as is kapok. Fibres from pulpwood trees, cotton, rice, hemp, and nettle are used in making paper. Cotton, flax, jute, hemp, modal and even bamboo fibre are all used in clothing. Pia (pineapple fibre) and ramie are also fibres used in clothing, generally with a blend of other fibres such as cotton. Nettles have also been used to make a fibre and fabric very similar to hemp or flax. The use of milkweed stalk fibre has also been reported, but it tends to be somewhat weaker than other fibres like hemp or flax. Acetate is used to increase the shininess of certain fabrics such as silks, velvets, and taffetas. Seaweed is used in the production of textiles. A water-soluble fibre known as alginate is produced and is used as a holding fibre; when the cloth is finished, the alginate is dissolved, leaving an open area Lyocell is a man-made fabric derived from wood pulp. It is often described as a man-made silk equivalent and is a tough fabric which is often blended with other fabrics cotton for example. Fibres from the stalks of plants, such as hemp, flax, and nettles, are also known as 'bast' fibres. Mineral textile Asbestos and basalt fibre are used for vinyl tiles, sheeting, and adhesives, "transite" panels and siding, acoustical ceilings, stage curtains, and fire blankets. Glass fibre is used in the production of spacesuits, ironing board and mattress covers, ropes and cables, reinforcement fibre for composite materials, insect netting, flame-retardant and protective fabric, soundproof, fireproof, and insulating fibres.

Metal fibre, metal foil, and metal wire have a variety of uses, including the production of cloth-of-gold and jewellery. Hardware cloth (US term only) is a coarse weave of steel wire, used in construction. It is much like standard window screening, but heavier and with a more open weave. It is sometimes used together with screening on the lower part of screen doors, to resist scratching by dogs. Synthetic textiles All synthetic textiles are used primarily in the production of clothing. Polyester fibre is used in all types of clothing, either alone or blended with fibres such as cotton. Aramid fibre (e.g. Twaron) is used for flame-retardant clothing, cut-protection, and armor. Acrylic is a fibre used to imitate wools, including cashmere, and is often used in replacement of them. Nylon is a fibre used to imitate silk; it is used in the production of pantyhose. Thicker nylon fibres are used in rope and outdoor clothing. Spandex (trade name Lycra) is a polyurethane product that can be made tightfitting without impeding movement. It is used to make activewear, bras, and swimsuits. Olefin fibre is a fibre used in activewear, linings, and warm clothing. Olefins are hydrophobic, allowing them to dry quickly. A sintered felt of olefin fibres is sold under the trade name Tyvek. Ingeo is a polylactide fibre blended with other fibres such as cotton and used in clothing. It is more hydrophilic than most other synthetics, allowing it to wick away perspiration. Lurex is a metallic fibre used in clothing embellishment. Milk proteins have also been used to create synthetic fabric. Milk or casein fibre cloth was developed during World War I in Germany, and further developed in Italy and America during the 1930s. Milk fibre fabric is not very durable and wrinkles easily, but has a pH similar to human skin and possesses anti-bacterial properties. It is marketed as a biodegradable,renewable synthetic fibre.

Types of Indian Fabric

Acetate A manufactured fiber formed by a compound of cellulose, refined from cotton linters and/or wood pulp, and acetic acid that has been extruded through a spinneret and then hardened. Angora The hair of the Angora goat. Also known as Angora mohair. Angora may also apply to the fur of the Angora rabbit. Appliqu A cutout decoration fastened to a larger piece of material. Beaded This refers to any style of fabric that has beads embroidered into the design. Beading can be done at the time the lace is made or can be re-embroidered after the lace is made. Bengaline A fabric with a crosswise rib made from textile fibers (as rayon, nylon, cotton, or wool) often in combination de from cotton, silk, or manufactured fibers, but is most commonly cotton. It incorporates a colored warp (often blue) and white filling yarns. Chantilly lace This lace has a net background, and the pattern is created by embroidering with thread and ribbon to create floral designs. The pattern has areas of design that are very dense, and the pattern is often outlined with heavier cords or threads. Charmeuse Trade name of silk and silk-like fabrics that are characterized by a shiny, soft, satin-like appearance Chenille Soft, fuzzy yarns stand out around a velvety cord on this fabric, whose name comes from the French word for "caterpillar." Chiffon A plain, woven, lightweight, extremely sheer, airy, and soft silk fabric, containing highly twisted filament yarns. The fabric, used mainly in evening dresses and scarves, can also be made from rayon and other manufactured fibers. Chintz A usually glazed printed cotton fabric. Cotton A unicellular, natural fiber that grows in the seed pod of the cotton plant. Fibers are typically 1/2 inch to 2 inches long. The longest staple fibers, longer than

1-1/2 inch, including the Pima and Egyptian varieties, produce the highest quality cotton fabrics. Crepe Used to describe all kinds of fabrics--wool, cotton, silk, rayon, synthetics and blends-that have a crinkle, crimped or grained surface. Crepe back satin A satin fabric in which highly-twisted yarns are used in the filling direction. The floating yarns are made with low twist and may be of either high or low luster. If the crepe effect is the right side of the fabric, the fabric is called satin-back crepe. Crinkled Forming many short bends or ripples. Crocheted Loose, open knit made by looping thread with a hooked needle. Used for light, summer sweaters. Denim True denim is a twill-weave, cotton-like fabric made with different colored yarns in the warp and the weft. Due to the twill construction, one color predominates on the fabric surface. Dupioni Similar to shantung, this textured fabric is recognized by irregular-sized, thick fibers woven into the base fabric. Fibers that create the texture, are thicker and heavier than those used in shantung. Elastin A protein that is similar to collagen and is the chief constituent of elastic fibers. Embroidered An embellishment of a fabric or garment in which colored threads are sewn into the fabric to create a design. Embroidery may be done either by hand or machine. Fagoting an embroidery produced by pulling out horizontal threads from a fabric and tying the remaining cross threads into groups of an hourglass shape. Faille A glossy, soft, finely-ribbed, silk-like woven fabric made from cotton, silk, or manufactured fibers. Faux fur Artificial fur made from synthetic material.

Sheer Any very light-weight fabric (e.g., chiffon, georgette, voile, sheer crepe). Usually has an open weave. Sheers mostly feel cool. Silk It is obtained from cocoons of certain species of caterpillars. It is soft and has a brilliant sheen. It is one of the finest textiles. It is also very strong and absorbent. Spandex A manufactured elastomeric fiber that can be repeatedly stretched over 500% without breaking, and will still recover to its original length. Suede Leather with a napped surface. Taffeta A lustrous, medium-weight, plain-weave fabric with a slight ribbed appearance in the filling (crosswise) direction. For formal wear, taffeta is a favorite choice. It provides a crisp hand, with lots of body. Silk taffeta gives the ultimate rustle, but other fibers are also good choices. Tencel A trademark of Courtaulds for a high performance fiber used to make soft, beautifully draping rayon fabrics. Tencel is made from wood pulp that is harvested from replenished tree farms. So it's environmentally sensitive and it's washable! Terry A woven fabric, usually cotton, with loop pile on one or both sides. Tri-acetate A manufactured fiber, which, like acetate, is made by modifying cellulose. Tri-acetate is less absorbent and less sensitive to high temperatures than acetate. It can be hand or machine washed and tumble dried, with relatively good wrinkle recover. An import is a good brought into a jurisdiction, especially across a national border, from an external source. The purchaser of the exotic good is called an importer. An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customsauthority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions.

Definition "Imports" consist of transactions in goods and services (sales, barter, gifts or grants) from non-residents to residents. The exact definition of imports in national accounts includes and excludes specific "borderline" cases. A general delimitation of imports in national accounts is given below:
1.

2.

An import of a good occurs when there is a change of ownership from a nonresident to a resident; this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e.g. cross border financial leasing, cross border deliveries between affiliates of the same enterprise, goods crossing the border for significant processing to order or repair). Also smuggled goods must be included in the import measurement. Imports of services consist of all services rendered by non-residents to residents. In national accounts any direct purchases by residents outside the economic territory of a country are recorded as imports of services; therefore all expenditure by tourists in the economic territory of another country are considered as part of the imports of services. Also international flows of illegal services must be included.

This term export derives from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer". In International Trade, "exports" refers to selling goods and services produced in the home country to other markets. DEFINITION "Foreign demand for goods produced by home country" In national accounts "exports" consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents.[2] The exact definition of exports includes and excludes specific "borderline" cases.[3] A general delimitation of exports in national accounts is given below:

An export of a good occurs when there is a change of ownership from a resident to a non-resident; this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e.g. cross border financial leasing, cross border deliveries between affiliates of the same enterprise, goods crossing the border for significant processing to order or repair). Also smuggled goods must be included in the export measurement. Export of services consist of all services rendered by residents to non-residents. In national accounts any direct purchases by non-residents in the economic territory of a country are recorded as exports of services; therefore all expenditure by foreign tourists in the economic territory of a country is considered as part of the exports of services of that country. Also international flows of illegal services must be included.

Export Procedure

Concept:
Export procedure consists of several commercial and regulatory formalities, which an exporter is

required to complete during the course of export trade transactions. These formalities are very complex and time-consuming and involve considerable documentation. Hence, the exporters must possess adequate knowledge of such formalities. At the same time, it should be ensured that the rules and regulations of not only exporting country but also of importing country are duly complied with. Last but not the least, it should be ensured that all the required documents, whether commercial or regulatory, are prepared and filed with the appropriate authorities. An export procedure can be studied under the following heads:1. 2. 3. 4. Registration Stage Pre-Shipment Stage Shipment Stage Post-Shipment Stage

1. Registration Stage The exporter is required to register his organization with a number of institutions and authorities, which directly or indirectly help him in the smooth conduct of export trade. The registration stage includes: a) Registration of the Organization The form of organization selected by the exporter must be registered under the appropriate Act of the country. A joint stock company under the Companies Act, 1956 A partnership firm under the Indian Partnership Act, 1932 A sole trader should seek permission from the local authorities, as required.

b) Opening Bank Account The exporter should open a current account in the name of the firm or company with a commercial bank which is authorized by the Reserve Bank Of India (RBI) to deal in foreign exchange. Such bank also serves as a source of pre-shipment and post-shipment finance for the exporter.

c) Obtaining Importer-Exporter Code Number (IEC No.) Prior to 1.1.1997, it was obligatory for every exporter to obtain CNX number from the RBI. However, since then, the CNX number has been replaced by IEC number issued by the Director General for Foreign Trade (DGFT). The application form for obtaining IEC number should be accompanied by fee of Rs.1000. d) Obtaining Permanent Account Number (PAN) Export income is subject to a number of exemption and deductions under different sections of the Income Tax Act. For claiming such exemptions and deductions, the exporter should register his organization with the Income Tax Authorities and obtain the Permanent Account Number (PAN). e) Obtaining Sales Tax Number Exportable goods are exempted from sales tax, provided the exporter or his firm is registered with the Sales Tax Authorities. For this purpose, the exporter is required to make an application in the prescribed form to the Sales Tax Office (STO) in whose jurisdiction his (exporters) office is situated. f) Registration with Export Promotion Council (EPC) It is obligatory for every exporter to register with the appropriate Export Promotion Council (EPC) and obtain the Registration-cum-Membership Certificate (RCMC). The benefits provided in the current EXIM Policy are extended only to the registered exporters having valid RCMC. g) Registration with ECGC

The exporter should also register with the Export Credit and Guarantee Corporation of India (ECGC) in order to secure overseas payments against political and commercial risks. It also helps the exporters in obtaining the financial assistance from commercial banks and other financial institutions. h) Registration with other Authorities The exporter should also register with various other authorities, such as: - Federation of Indian Export Organization (FIEO), - Indian Trade Promotion Organization (ITPO) - Chambers of Commerce (COC), - Productivity Councils, etc.

2. Pre-Shipment Stage Pre- shipment stage consists of the following steps:a) Approaching Foreign Buyers In order to secure an export order, a new exporter can make use of one or more of the techniques, such as, advertising in international media, sales promotion, public relation, public selling, publicity and participation in trade fairs and exhibition b) Inquiry And Offer An inquiry is a request from a prospective importer about description of goods, their standard or grade, size, weight or quantity, terms of payments, etc. on getting an inquiry, the exporter must process it immediately by making an offer in the form of a proforma invoice. c) Confirmation of Order Once the negotiations are completed and the terms and conditions are finalized; the exporter sends three copies of proforma invoice to the importer

for the confirmation of order. The importer signs these copies and sends back two back copies to the exporter. d) Opening Letter of Credit The documentary credit or letter of credit is the most appropriate and secured method of payment adopted to settle international transactions. On the finalization of the export contract, the importer opens a letter of credit in favour of the exporter, if agreed upon in the contract. e) Arrangement of Pre-shipment finance On securing the letter ofcredit the exporter procures a pre-shipment finance from his bank for procuring raw materials and other components, processing and packing of goods and transfer of goods t the port of shipment. f) Production or Procurement of goods On securing the pre-shipment finance. From the bank, the exporter either arranges for the production of the requirement goods or procures them from the domestic market as per the specification of the importer. g) Packing and Marking Then the goods should be properly packed and marked with necessary details such as port of shipment and destination, country of origin, gross and net weight, etc. if required assistance can be taken from Indian institute of Packing (IIP) h) Pre-shipment Inspection If the goods to be exported are subject to compulsory quality control and pre-shipment inspection then the exporter should contact the export inspection agency (EIA) for obtaining ang inspection certificate. i) Central Excise Clearance The exporter is totally exempted from the payment of central excise duty. However, the exemption should be claimed in one of the following ways: - Export under rebate - Export under bond

j) Obtaining Insurance Cover: The exporter must take appropriate policies in order to ensure risks. - ECGE policy in order to cover credit risk. - Marine policy, if the price quotation price agreed upon is CIF k) Appointment of C&F agent Since exporting is a complex and time-consuming process, the exporter should appoint a clearing and forwarding (C&F) agent for the smooth clearance of goods from the Customs and preparation and submission of various export documents.

3. Shipment Stage Export cargo can be exported t the overseas buyer by sea, air or land. However, shipment by sea is the most popular and generally resorted to, as it is comparatively cheaper. Besides, the ships capacity is far greater than other modes of transportation. Nevertheless, transportation by air is utilized for export of expensive items like, diamonds, gold, etc. the shipment stage includes the following steps: a) Reservation of Shipping space Once the export contract is finalized, the exporter reserves the required space in the vessel for shipment. On accepting the exporters request, the shipping company issues a shipping order. The original copy of the shipping order is given to the exporter and a duplicate is sent to the commanding officer of the ship. The shipping order is an instruction by the shipping company to the commanding officer of the ship that the goods are as per the details given should be received on board.

b) Arrangement of internal transportation upto the port of shipment

The exporter makes necessary arrangements for transportation of goods to the port either by road or railways. On loading goods into the railway wagon, the railway authorities issue a railway receipt, which may be either freight paid or freight to pay. It serves as a title to the goods. The exporter endorses the railway receipt in favour of his agent to enable him to take delivery of the goods at the port of shipment. c) Preparation and Processing of Shipping documents As the goods reaches the port of shipment, the exporter should issue the detailed instructions to the C&F agent for the shipment of cargo along with a complete set of documents listed below. - Letter of credit along with the export contract or export order. - Commercial invoice (2copies) - Packing list or packing note - Certificate of Origin - GR Form (original and duplicate) - ARE- 1 form - Certificate of Inspection, where necessary (original copy) - Marine insurance policy. d) Customs Clearance The cargo must be cleared from the customs before it is loaded on the ship. For this, the above mentioned documents along with the five copies of shipping bill, are to be submitted to the customs appraisal at the customs house. The customs appraisal ensures that all the formalities relating to exchange control, quality control, pre-shipment inspection and licensing have been complied with by the exporter. After verification, all the documents, except the original GR, original copy of shipping bill and one copy of commercial invoice, are returned to the C&F agent. e) Obtaining Carting Order from the port trust authorities The C&F agent, then , approach the superintendent of concerned Port Trust for obtaining the Carting Order for moving the cargo inside the dock. After obtaining the Carting Order the cargo is physically moved into the port area and stores in the appropriate shed.

f) Customs Examination and Issue of Let Export Order The Customs Examiner at the port of shipment physically examines the goods and seals the packages in his presence. The same can be arranged for at the factory pr warehouse of the exporter by making an application to the assistance collector of Customs. The Custom examiner, if satisfies, issues a formal permission for the loading of cargo on the ship in the form of a Let Export Order.

g) Obtaining Let Ship Order from the Customs Preventive Officer Let Export Order, must be supplemented by a Let Ship Order issued by the customs preventive officer. The C&G agent submits the duplicate copy of sipping bill, duly endorsed by the Customs Examiner, to the Customs, Preventive officer who endorse it with thse Let Ship Order. h) Obtaining Mates Receipt and Bill Of Lading: The goods are then loaded on board the ship for which the mate or the captain of the ship issues mates receipt to the port superintendent. The port superintendent on receipt of port duties, hands over the mates receipt to the C&F agent, the C&F agent surrenders the mates receipt to the shipping company for obtaining the boll of lading. The shipping company issues two to three negotiable and two to three non-negotiable copies of bill of lading.

4. Post-Shipment Stage The post-shipment stage consists of the following steps:a) Submission of Documents by the C&F agent to the Exporter

On the completion of the shipping procedure, the C&F agent submits the following documents to the exporter: - A copy of invoice duly attested by the Customs - Drawback copy of the shipping bill - A full set of negotiable and non- negotiable copies of bill of lading

- The original L/C, export order or contract. - Duplicate copy of the ARE-1 form
b) Shipment Advice to Importer

After the shipment of goods, the exporter intimates the importer about the shipment of goods giving him details about the date of shipment, the name of the vessel, the destination, etc. he should also send one copy of nonnegotiable bill of lading to the importer.
c) Presentation of Documents to Bank for Negotiation

Submission of relevant documents to the bank and the process of getting the payment from the bank is called Negotiation of the Documents and the documents are called Negotiable Set of the Documents. The set normally contains: - Full set of Bill of Lading or Airway Bill - Original letter of credit - Customs Invoice - Commercial Invoice including one copy duly certified by the Customs - Packing List - Foreign exchange declaration forms, GR/SOFTEX/PP forms in duplicate - Exchange control copy of the Shipping Bill - Certificate of Origin, GSP or APR Certificate, etc. - Marine Insurance Policy, in duplicate - Bill of Exchange, Sigh Draft or Usance Draft
d) Dispatch Of Documents

The bank negotiates these documents these documents to the importers bank in the manner as specified in the L/C. Before negotiating documents, the exporters bank scrutinizes them in order to ensure that all formalities have been complied with and all documents are in order. The bank then sends the Bank Certificate and attested copies of commercial invoice to the exporter.

e) Acceptance of the Bill of Exchange

Bill of Exchange accompanied by the above documents is known as the Documentary Bill of Exchange. It is of two types: Documents against Payment (Sight Drafts): In case of sight draft, the drawer instructs the bank to hand over the relevant documents to the importer only against payment. Documents against Acceptance (Usance Draft): In case of usance draft, the drawer instructs the bank to hand over the relevant documents to the importer against his acceptance of the bill of exchange.
f) Letter of Indemnity

The exporter can get immediate payment from his bank on the submission of documents by signing a letter of indemnity. By signing the letter of indemnity the exporter undertakes to indemnity the bank in the event of nonreceipt of payment from the porter along with accrued interests.
g) Realization of Export Proceeds

On receiving the documentary bill of exchange, the importer releases payment in case of sight draft or accepts the usance draft undertaking to pay on maturity of the bill of exchange. The exporters bank receives the payment through importers bank and is credited to the exporters account.

h) Processing of GR Form

On receiving the export proceeds, the exporters bank intimates the same to RBI by recording the fact on the duplicate copy of GR. The RBI verifies the details in duplicate copy of GR with the original copy of GR received from the Customs, if the details are found to be in order then the export trans action is treated to be completed.

i) Realization of Export Incentives

If the exporter is eligible for export incentives, then he should submit claim for the same accompanied by the bank certificate to the appropriate authority.

Lists of documents required to be submitted by the exporter to various authorities, organizations, and agencies. 1) To the custom authority:Commercial invoice GR Form ( Original and Duplicate ) Shippers Declaration Form Copy of the Export Contract /L/c/Export Order Inspection certificate AR-4 Form Export License Export license Weighment Certificate Shipping bill

2) To the port authorities:- Port Trust Copy of the Shipping Bill - Wharf age application.

3) To the bank:Letter of credit Commercial invoice Bill of lading Insurance Policy/Certificate Bill of exchange

GR Form (duplicate copy) Bank certificate Export Inspection Certificate Certificate of Origin Shipment advice

4) To the RBI:Copy of the invoice Sales Contract Bill of lading Inspection / Analysis Report

5) To the EXIM Bank: Export contract Letter of Contract Balance sheet of the exporter Statement of profit and loss in the transaction covered by the export contract Statement regarding the projections of the credit requirement.

Short shipment: In case of short shipment customs sends the short shipment notice Annexure C to the RBI (Reserve Bank of India) along with G R form. Short shipment notice is in five copies:Original Customs Second copy Agent Third copy Exporter One copy Wharf age refund One copy is for CESS

Treasure Challan:-

This is document is used at the time of payment of the duty to the customs. It shows the amount to be paid to the customs authority. It is in four copies:Original Duplicate Triplicate Quadruplicate

Customs keeps the original and duplicate copies. Triplicate and Quadruplicate copies are sent to the CHA.

Export Promotion Organizations: Ministry of Commerce Board of Trade Export Promotion Councils (EPCs) Export Promotion Council for Services Commodity Boards (CBs) Export Inspection Council (EIC) Indian Trade Promotion Organization (ITPO) Indian Institute of Foreign Trade (IIFT) Indian Institute of Packaging (IIP) Indian Council of Arbitration (ICA) Federation of Indian Export Organization (FIEO) Marine Products Exports Development Authority (MPEDA) Export Processing Zones (EPZs) 100% Export Oriented Units (EQOS) M. Visvesvaraya Industrial Research and Development Center

(MVIRDC) Chamber of Commerce (COC) Inter-state Trade Council

Import Procedure

The import procedure is quite different from the export procedure. It starts with The importer asks for the three original bills of lading from the bank. The bank issues the bill of lading only when the importer cleared all the payments due to the bank. The importer then sends the following documents CHA :a) Bill of lading b) Invoice c) Packing list d) Certificate of origin e) Pre shipment inspection certificate f) Insurance certificate g) Sales contract h) Bond copy (if H.S.S) The CHA shows the bill of lading to the shipping agent in order to get the NOC (Non Objection Certificate in Kandla Port only). No objection certificate has been issued by the shipping line to make sure that they have no objection to open the containers for the examination of goods. CHA then presents the bill of entry to the customs for noting and then customs gives the import department the serial no. that comes on all copies of bill of entry. CHA pays wharf age to the port authority and the original copy of wharf age goes to the treasury of port trust. Customs give the examination order on the back of original bill of entry in case of first check procedure. Cargo is inspected in front of the customs. Customs give the examination report at the back of the bill of entry. Customs assessed the duty to ensure that the duty evaluated by the CHA is correct. Prior to this, the CHA on the basis of invoice, packing list prepares the bill of entry. The bill of entry is a proof that the goods have been imported.

For custom clearance purpose, the importer has to submit to the customs authority a form, which is known as bill of entry.

Bill of entry is in three copies:Original copy:This is called the customs copy. In first check procedure it contains the examination report on the back of it. Duplicate copy:It is submitted in port either in container section or in break bulk section along with wharf age, NOC, Delivery order. It shows charges have been paid to customs and contain on the back, passed out of custom charges. Triplicate copy:This copy is for central excise for availing certain benefits. Quadruplicate copy:This copy is submitted to the bank. Port trust copies:Out of 5th, 6th, and 7th copies, one copy is given to the port authority. The other two copies are kept by the CHA for his record. Types of bill of Entry:1. Bill of entry for home consumption 2. Bill of entry for warehousing

3. Bill of entry for Ex-bond clearance for home consumption Bill of entry for home consumption:-This type of bill of entry is used when importer wants to take the delivery of goods on payment of custom duty. Bill of entry for warehousing:-This type of bill of entry is used when importer wants to warehousing the goods in custom bonded warehouse. Bill of for ex-bond clearance for home consumption:-This type of bill of entry is used for clearing the goods from custom bonded warehouse against warehouse bill of entry on the payment of custom duties. Another important document that is used in import is bill of lading. It plays an important role both for the exporter and importer. Documents to be used in import: 1. Bill of lading 2. Invoice 3. Certificate of origin 4. 59- Bond warehousing bond 5. Wharf age 6. Bill of entry 7. Packing list 8. NOC (No Objection Certificate) 9. Delivery order 10.Treasury challan 11.Gate pass

Export-Import Documentation Aligned Documentation System: Aligned Documentation System (ADS) is based on the UN layout key. Under this system, different forms used in the international trade transaction are printed on paper of the same size and in such way that the common items of information are given the same relative slots in each of the documents. For the purpose of Aligned Documentation System documents, have been classified as under: a) Commercial Documents- Commercial documents are required for effecting physical transfer of goods and their title from the exporter to the importer and the realization of export sale proceeds. Out of the 16 commercial documents, in the export documentation framework as many as 14 have been standardized and aligned to one another. These are proforma invoice, commercial invoice, packing list, shipping instructions, intimation of inspection, and certification of inspection of quality control. Insurance declaration, certificate of Insurance, mates receipt, bill of lading or combined transport document, application for certificate origin, certificate of origin, shipment advice and letter to the bank for collection or negotiation of documents. However, shipping order and bill of exchange could not be brought within the fold of the aligned documentation system b)Regulatory Documents- Regulatory pre-shipment export documents are prescribed by the different government departments ant bodies in order to comply with various rules and regulations under the relevant laws governing export trade such as export inspection, foreign exchange regulation, export trade control. , customs, etc. out of 9 regulatory documents 4 have been standardized and aligned. These are shipping bill or bills of export, exchange control declaration (GR Form), export application, dock challan or port trust copy of shipping bill and receipt for payment of port charges.

Proforma Invoice Thestarting point of the export contract is in the form of offer made by the exporter to the foreign customer. The offer made by the exporter is in the form of a proforma invoice. It is a quotation given as a reply to an inquiry. It normally forms the basis of all trade transactions.

Contents of Proforma Invoice Name and address of the exporter Name and address of the importer Name of country of final destination Marks and container number Name of the port of discharge and final destination Provisional invoice number and date Exporters reference number Buyers reference number and date Name of the country of origin of goods Number of packing description Description of goods giving details of quantity, rate n total amount in terms of international accepted price quotations Signature of exporter with date.

Commercial Invoice Commercial invoice is an important and basic export document. It is also known as a Document of Contents as it contains all the information required for the preparation of other documents. It is actually a sellers bill of merchandise. It is prepared by the exporter after the execution of export order giving details about the goods shipped. It is essential that the invoice is prepared in the name of the buyer or the consignee mentions in the letter of credit. It is prima facie evidence of the contract of sale or purchase and therefore must be prepared strictly in accordance within the contract of sale.

Contents ofCommercialInvoice: Name and address of the consignee Name and address of the exporter Name and number of vessel of flight Name of the port of loading Name of port of discharge n final destination Invoice number n date Exporters reference no. Buyers reference number and date Name of country of origin of goods Name of the country of final destination Marks and container number. No. n packing description Description of goods giving details of quantity, rate n total amt in terms of internationally accepted price quotations Signature of exporter with date. Packing list The exporter prepares the packing list to facilitate the buyer to check the shipment. It contains a detailed description of goods packed in each case, their gross and net weight, etc. the difference between a packing note and the packing list is that the packing note contains the particulars of contents of an individual pack. While the packing list is a consolidated statement of the contents of a number of casesn or packs. Mates Receipt Mates receipt is a receipt issued by the commanding officer of the ship when the cargo is loaded on the ship. The mates receipt is the primer-facie evidence that goods are loaded in the vessel. The mates receipt is first handed over to the port trust authority. After making payment of all port dues, the exporter or his agent collects the mates receipt from the port trust authorities. The mate receipt is freely transferable. It must be handed over to the shipping company in order to get the bill of lading. Bill of lading is prepared on the basis of mates receipt. Contents of Mates Receipt

Name and address of the shipper Name and logo of the shipping line Name and the number of the vessel Name of the port of loading Name of the discharge and place of delivery Marks and container number Packing and container description Total number of container and packages Description of goods in terms of quantity Container status and seal number Gross weight in kg and volume in terms of cubic meters Shipping bill number and date Signature and initials of chief officer

Bill Of Lading Bill of Lading is a document issued by the shipping company or its agent acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods in the like order and condition as received, to the consignee or his order, provided the freight and other chargers as specified in the bill have been duly paid. It is also a document of title to the goods and, as such, is freely transferable by endorsement and delivery. A bill of lading serves three main purposes: As a document of title to the goods As a receipt from the shipping company As a contract of transportation of goods. Contents of bill of lading: Name and logo of shipping line Name and address of the shipper Name and the number of the vessel Name of the port of loading Name of the discharge and place of delivery

Marks and container number Packing and container description Total number of container and packages Description of goods in terms of quantity Container status and seal number Gross weight in kg and volume in terms of cubic meters Amount of freight paid or payable Shipping bill number and date Signature and initials of chief officer.

Certificate of Origin The importers in several countries require a certificate of origin without which clearance to import is refused. The certificate of origin states that the goods exported are originally manufactured in the country whose name is mentioned in the certificate. Certificate of origin is required when; a) The goods produced in a particular country are subject to preferential tariff rates in the foreign market at the time of importation. b) The goods produced in a particular country are banned for import in the foreign market. Contents of Certificate of Origin: Name and logo of chambers of commerce Name and address of the exporter name and address of the consignee Name and the number of the vessel of flight Name of the port of loading Name of the port of discharge and place of delivery Marks and container number Packing and container description Total number of containers and packages Description of goods in terms of quantity Signatures and initials of the concerned officer of the issuing authority

Seal of the issuing authority Shipping Bill Shipping bill is the main custom of document, required by the customs authorities for granting permission for the shipment of goods. The cargo is moved inside the dock area only after the shipping bill is duly stamped, i.e. certified by the custom shipping bill is normally prepared in 5 copies: Customs copy Drawback copy Export promotion copy Port trust copy Exporters copy

Contents of Shipping Bill: Name and address of the exporter Name and address of the importer Name of the vessel, master or agents and flag Name of the port at which the goods are to be discharged Country of final destination Detail of packages, description of goods, marks and numbers, quality and detail of each case. FOD price and real value of goods as defined in the sea customs act. Whether Indian or foreign merchandise to be re-exported Total number of packages with total weight and value.

Consular Invoice Consular Invoice is a document required mainly by Latin American countries like Kenya, Uganda, Tanzania, Burma, Mauritius, New-Zealand, Myanmar, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Guinea Zanzibar, etc. this Invoice is the most important document, which needs to be submitted for certification to the embassy of the importing country concern. The main purpose of the consular invoice is to enable the authorities of the importing countries to collect accurate information about the volume, value, quality, grade, source, etc, of the goods imported for the purpose of assessing import duties and also for statistical purposes. In order to obtain consular invoice, the exporter is required to submit three copies of invoice to the consulate of the importing country concern. The consulate of the importing country certifies them in return for fees. One copy of invoice is given to the exporter while the other two are dispatched to the customs office of the importers country for the calculation of import duty. The exporter negotiates a copy of a consular invoice to the importer along with other shipping documents. Bill of Entry Bill of Entry is a document, prepared by the importer or his clearing agent in the prescribed form under bill of entry regulations, 1971, on the strength of which clearance of imported goods can be made. When goods are imported in a particular country, the importer has to pay the necessary import duty. For this purpose, necessary information about the goods imported must be given to the custom authorities in a prescribed form called bill of entry form. Bill of entry is a document, which states that the goods of the stated values and description in the specified quantity have entered into the country from abroad. The bill of entry is drawn in triplicate. The customs authorities may ask the importer to supply other documents like invoice, broker note and insurance policy, etc. in order to verify the correctness of the information, supplied in the bill of entry form.

For the purpose of giving information in the bill of entry form, goods are classified into three categories namely: Free goods: where the goods imported are now subject to custom duty Goods for home consumption: where the goods are imported for self consumption Bonded goods: where the goods imported are subject to custom duty, the goods are kept in bond till the duty is paid. The importer has to fill up a separate bill of entry form for different classes of goods. In India, separate forms are not used but all entries are made in one form. The free goods are marked as free in the entry form itself. The importer has to pay the duty before securing the position of the goods. Contents of Bill of entry: Name and address of the exporter Name and address of the importer Import license number of the importer Name of the port/ dock where goods are to be cleared Description of goods Value of goods Rate and amount of import duty payable Other relevant documents

Airway Bill: Airway Bill, also called as Air Consignment Note, is a receipt issued by an airline for the carriage of goods. As each shipping company has its own bill of lading, so each airline has its own airway bill. Airway bill or Air Consignment note is not treated as a document of title and is not issued in negotiable form. Contents of Airway Bill:

Name of the airport of departure and destination The names and addresses of the consigner, consignee and the first carrier Marks and container number Packing and container description Total number of containers and packages Description of goods in terms of quantity Containers status and seal number Amount of freight paid or payable Signature and initials of the issuing carrier or his agent

GR Form GR Form is an exchange controlled document required by the RBI. As per the exchange control regulations, an exporter has to realize the proceeds of the goods he has exported within 180 days of their shipment from India. In order to ensure this, the RBI has introduced the GR procedure. GR Form is to be submitted in duplicate to the customs at the port of shipment along with the shipping bill. Customs will give their running serial number on both the copies after admitting the custom shipping bill. Custom authorities will certif. the value declared by the exporter on both the copies of the GR Form and the space earmarked and will also record the assessed value. They will then return the duplicate copy of the form to the exporter and retain the original transmission to the RBI. Within 21 days from the shipment of goods, exporter must lodge the duplicate copy of GR Form together with relative shipping documents with the authorized dealer named in the GR form for negotiations of export bills. After the documents have been negotiated, the authorized dealer will report the transaction to the RBI. The duplicate copy of GR Form together with the copy of invoice will be retained by the authorized dealer till full export proceeds have been realized and thereafter, submitted to the RBI.

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On the account of introduction of electronic data interchange system at certain custom offices where shipping bills are processed electronically, the existing declaration in GR Form has been replaced by a declaration in form SDF (Statuary Declaration Form)

The INCOTERMS (International Commercial Terms) is a universally recognized set of definition of international trade terms, such as FOB, CFR & CIF, developed by the International Chamber of Commerce(ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial terms like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance and other costs and risks. The INCOTERMS was first published in 1936 --- INCOTERMS 1936 --- and it is revised periodically to keep with changes in the international trade needs. The complete definition of each term is available from the current publication --INCOTERMS 2000. Under INCOTERMS 2000, the international commercial terms are grouped into E, F, C and D, designated by the first letter of the term, relating to the final letter of the term. E.g. EXWexworks comes under grouped E. The purpose of Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree. The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods. Incoterms deal with the number of identified obligations imposed on the parties and the distribution of risk between the parties.

In international trade, it would be best for exporters to refrain, wherever possible, from dealing in trade terms that would hold the seller responsible for the import customs clearance and/or payment of import customs duties and taxes and/or other costs and risks at the buyers end, for example the trade terms DEO (Delivery Ex Quay) and DDP (Delivered Duty Paid) Quite often, the charges and expenses at the buyers end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs broker or freight forwarder in the importing country to handle the import routines. Similarly, it would be best for importers not to deal in EXW (Ex Works) which would hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and risks at the sellers end MORE CLARIFICATION ON INCOTERMS EXW {+the named place} Ex Works: Ex means from. Works means factory, mill or warehouse, which are the sellers premises. EXW applies to goods available only at the sellers premises. Buyer is responsible for loading the goods on truck or container at the sellers premises and for the subsequent costs and risks. In practice, it is not uncommon that the seller loads sthe goods on truck or container at the sellers pre4mises without charging loading fee. N the quotation, indicate the named place (sellers premises) after the acronym EXW for example EXW Kobe and EXW San Antonio. The term EXW is commonly used between the manufacturer (seller) and exporttrader(buyer), and the export-trader resells on other trade terms to the foreign

buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works. FCA {+the named point of departure} Free Carrier: The delivery of goods on truck, rail car or container at the specified point(depot) of departure, which is usually the sellers premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at sellers expense. The point(depot) at origin may or may not be a customs clearance centre. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks. In the air shipment, technically speaking, goods placed in the custody of an air carrier are considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment. The term FCA is also used in the RO/RO (roll on/roll off) services In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle. Some manufacturers may use the former terms FOT (Free on Trucks) and FOR (Free on Rail) in selling to export-traders. FAS {+the named port of origin} Free Alongside Ship: Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at sellers expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks In the export quotation, indicate the port of origin(loading)after the acronym FAS, for example

FAS New York and FAS Bremen. The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels. FOB {+the named port of origin) Free on Board: The delivery of goods on the board the vessel at the named port of origin (Loading) at sellers expense. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks. In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example FOB Vancouver and FOB Shanghai. Under the rules of the INCOTERMS 1990, the term FOB is used for ocean freight only. However, in practice, many importers and exporters still use the term FOB in the air freight. In North America, the term FOB has other applications. Many buyers and sellers in Canada and the USA dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB destination. FOB Origin means the buyer is responsible for the freight and other costs and risks. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyers premises which may include the import custom clearance and payment of import customs duties and taxes at the buyers country, depending on the agreement between the buyer and seller. In international trade, avoid using the shipping terms FOB Origin and FOB Destination, which are not part of the INCOTERMS (International Commercial Terms).

CFR {+the named port of destination} Cost and Freight: The delivery of goods to the named port of destination (discharge) at the sellers expenses. Buyer is responsible for the cargo insurance and other costs and risks. The term CFR was formerly written as C&F. Many importers and exporters worldwide still use the term C&F. In the export quotation, indicate the port of destination (discharge) after the acronym CFR, for example CFR Karachi and CFR Alexandria. Under the rules of the INCOTERMS 1990, the term Cost and Freight is used for ocean freight only. However, in practice, the term Cost and Freight (C&F) is still commonly used in the air freight. CIF {+named port of destination} Cost, Insurance and Freight: The cargo insurance and delivery of goods to the named port of destination (discharge) at the sellers expense. Buyer is responsible for the import customs clearance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym CIF, for example CIF Pusan and CIF Singapore. Under the rules of the INCOTERMS 1990, the term CIFI is used for ocean freight only. However, in practice, many importers and exporters still use the term CIF in the air freight. CPT {+the named place of destination} Carriage Paid To: The delivery of goods to the named port of destination (discharge) at the sellers expenses. Buyer assumes the cargo insurance, import custom clearance, payment of custom duties and taxes, and other costs and risks. In

the export quotation, indicate the port of destination (discharge) after the acronym CPT, for example CPT Los Angeles and CPT Osaka. CIP {+ the named place of destination) Carriage and Insurance Paid To: The delivery of goods and the cargo insurance to the named place of destination (discharge) at sellers expense. Buyer assumes the importer customs clearance, payment of customs duties and texes, and other costs and risks. In the export quotation, indicate the place of destination (discharge) after the acronym CIP, for example CIP Paris and CIP Athens.

FINANCIAL RISKS INVOLVED IN FOREIGN TRADE As an exporter while selling goods abroad, you encounter various types of risks. The major risks which you have to undergo are as follows: Credit Risk Currency Risk Carriage Risk Country Risk You can protect yourself against the above risks by initiating appropriate steps. Credit Risks : You can cover your credit risk against the foreign buyer by insisting upon opening a letter of credit in your favour. Alternatively one can avail of the facility offered by various credit risk agencies. A specific insurance cover can also be obtained from ECGC (Exports Credit & Guarantee Corporation) to cover your country risk besides covering credit risk. Currency Risks: As regards covering the currency risk, due to the exchange rate fluctuations, you can request your banker to book a forward contract. Carriage Risk: The carriage risk can be covered by taking an appropriate general insurance policy.

Country Risk: ECGC provides cover to protect the exporter from country risks. A detailed procedure how an exporter can get himself protected against the above risks are given in separate chapters later

THE ECGC COVER The abbreviated form for Export Credit and Guarantee Corporation is ECGC. As the name indicates this is a sort of guarantee or a sort of cover for the exporter. Let us now see what this is all about. Needless to say that an exporter before entering into a contract with the overseas buyer for making any supply, takes care to ensure that the customer with whom he is dealing have some credit worthiness. This he may be able to do either through the local agent who is in a better position to know about the customer or through a bank or through any of the exporters associates if happens to be in the area of the customer etc., But, in a business things may change. The financial status of a customer may take drastic turn and an established customer may go bankrupt within a short period of time. Moreover, the buyer may be willing to make the payment, but there are other environment which prevents him from effecting the transfer of funds through the bank. For e.g., there could be break out of war, the balance of payment position of the country may become unfavourable, there may be some coup of the government etc., and all transactions could be sealed. These are the risk factors for the exporters. What is the guarantee that he will get paid for the supplies he has made? With a view to provide support to Indian exporters, the Govt. of India set up the Export Risk Insurance Corporation (ERIC) in 1957. This was transformed into Export Credit & Guarantee Corporation Ltd. in 1964. In order to give the Indian identity a sharper focus the name was again changed to Export Credit & Guarantee Corporation of India Ltd., in 1983. This is a company wholly owned by the Govt.

of India and functions under the administrative control of the Ministry of Commerce and managed by the Board of Directors representing Government, Banking, Insurance, Trade, Industry etc. Though one may insist for a Letter of Credit, still there could be some elements of risk which we will study later here. Except getting an advance payment for the full value of the supplies, any other mode of payment will have some risk. Take the case of an exporter who has made supplies and before the payment is received the buyer goes bankrupt or there comes some new provision or policy of Government of the importing country preventing repatriation of the funds to other countries what recourse the exporter has to recover his dues. The litigation procedure might be time consuming and the exporter can never be sure of getting his full payment. An ECGC cover a safeguard his interest to a great extent. An exporter can either agree for sight payment or can made shipment on credit terms for say 60 days, 90 days etc., In project exports the period of payment may extend to some years. Longer the period of cre3dit given to the customer, more will be the risk factor for the exporter. In respect of sight bill, there is almost no risk because the customer has to make payment first before he retires the documents. Therefore, before the title of the goods is passed on to the customer, the importer makes the3 payment. However, in respect of usance bill (credit bills) the buyer retires the documents by accepting the usance draft and takes delivery of the goods. In case the customer goes bankrupt or become insolvent, before the due date of payment, the exporter is totally at a loss. While big units may be able to absorb the one time loss, small exporters will get broke even with one such transaction. Here the ECGC comes into picture. It takes

up the responsibility of paying the funds to the exporter and makes all efforts including legal proceedings to recover the dues from the customer, provided the exporter has taken an ECGC cover. WHAT ECGC OFFERS FOR PROTECTION OF EXPORTERS INTEREST ? ECGC offers various types of insurance cover to protect the exporters interest. For each type of cover an exporter has to take Policy specific to the respective requirements. The Policy that is most commonly taken by the exporters is the Standard Policy or otherwise called the Shipments (Comprehensive Risks) Policy. SHIPMENTS (COMPREHENSIVE RISKS) POLICY also called STANDARD POLICY For exporters with an annual export turnover in excess of Rs.50 lakhs, the Shipments (Comprehensive Risks) Policy is the one intended for covering shipments on cash basis or on short-term credit basis. (Credits not exceeding 180 days) The risks covered this Policy is as follows effective from the date of shipment.: Commercial Risks Insolvency of the buyer Failure of the buyer to make payment within a specified period. Buyers failure to accept the goods subject to certain conditions. Political Risks

Imposition of restrictions by the Govt. of the buyers country or any government action which may block or delay the transfer of payment made by the buyer. War, civil war, revolution or civil disturbances in the buyers country New import restrictions or cancellation of a valid import licence Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which cannot be recovered from the buyer. Any other cause of loss neither occurring outside India nor normally insured by general insurers and beyond the control of both the e porters and the buyer.

Risks not covered under the Policy The Standard Policy does not cover losses on account of following risks: Commercial disputes including quality disputes raised by the buyer unless the exporter obtains a decree from a competent court of law in the buyers country in his favour Causes inherent in the nature of the goods Buyers failure to obtain necessary import or exchang e control clearance from authorities concerned Insolvency or default of the agent of the exporter or of the collecting bank Loss or damage to goods which can be covered by general insurers. Exchange rate fluctuations Failure of the exporter to fulfill the terms of the export contract or negligence on his part. Shipments Covered The Standard Policy is meant to cover all the shipments that may be made by an exporter during a period of 24 months ahead. The policy cannot be issued for selected shipments, selected buyer or selected markets. For specific requirements an exporter can opt for different policy from the various services offered by the corporation

Exclusions: Shipments made against advance payments received or shipments against confirmed letters of credit which has the confirmation from the bank in India may be excluded. However, shipments against confirmed L/C may be covered for political risks only. The premium for cover under political risks will be less than that under the comprehensive policy. ECGC may also agree to exclude certain items if the exporter is dealingt in different distinct products. Shipments to Associates: Shipments to buyers i.e. the foreign buyers in whose business the exporter has financial interest, are normally excluded from the Policy. However such shipments can be covered against political risks. Shipments on Consignment basis: Shipments on consignment basis can be covered only against political risks. Shipments by Air Since the buyer is able to take delivery of the goods even without retiring the bank documents, shipments by air are not covered under the policy. However, the exporter may cover such shipments for payments under open terms. The exporter can have cover for such shipments, if he has obtained Credit Limit on such buyers on open delivery terms and also pays the premium at rates applicable to open delivery terms.

HOW TO GET ECGC COVER Step 1. Open Policy:

An exporter desiring to get the ECGC cover has to approach the office of the ECGC making a Proposal. He must make his home work and be clear as to what will be his total turnover during a year ad what will be the maximum amount he expects to be outstanding from various buyers at a given point of time. Once this is clear he can apply for an Open Policy for the maximum amount that he expects to be outstanding at a given point of time. Suppose, he expects that at any given time his outstanding will be say Rs.50/- lakhs then he can apply for a policy for this amount. After verification of the details of the exporter, the ECGC may issue a open policy for Rs.50 lakhs with a validity of say 2 years. This is the first step. Step 2. - Credit Limit on Individual Buyer Once the open policy is taken, as a next step the exporter must make out the list of the customers to whom he expects to make shipment. For each and every customer he has to apply to the ECGC to have a limit of liability fixed. That is to say, he has to declare the maximum amount of bills he expects to be outstanding from each customer at a given point of time. Based on the value of business dealing, suppose the exporter expects that from customer A the outstanding may be Rs.10 lakhs. Then the exporter has to apply to ECGC in the prescribed form for getting limit fixed for the customer. On receipt of the application, ECGC will check for the credit worthiness of the customer either through their own net work of offices globally, or through the customers bank or through some reputed independent agency. Based on the credit report, ECGC will determine the limit that can be fixed for the customer. If it feels that a limit of Rs.10 lakhs is in order, it

will advise the exporter of the same. Similarly, the exporter can have the limit fixed to all his customers. Once the limit is taken from ECGC, the exporter is free to make his shipments to the various customers. If shipment for any customer is made before getting the limit fixed by ECGC, no risk will be covered for that shipment.

Step 3 Payment of Premium and filing of monthly returns For the risk the ECGC takes, it charges a premium on the value of the shipments actually made. This is calculated as per the table to be supplied by ECGC which shows the premium per Rs.100 of exports. This table which gives the premium amount payable is framed based on the following. The various countries around the globe are divided into different groups and are classified as A1, A2, B1, B2, C1,C2 & D. The countries are grouped according to their economic standard. For e.g. USA. Canada, UK are grouped in category A. The premium amount will be less for group A countries and will be increased gradually to group B, C & D countries. The premium for group D countries will be more because they are all economically weaker countries and payment risks are high Again the premium table is based on the period of credit. The slab is for credits up to 90 days, 120 days, 180 days etc. Longer the credit period greater is the premium.

Thus, the premium will be least for group A countries and for the shorter credit period and will be maximum for group D countries and for maximum credit period POLICIES Services Policies offer protection to Indian firms against payments risks involved in rendering services to foreign parties. A wide range of services, hiring or leasing can be covered under these policies. The exporters can opt for whole Turnover Services Policy or for Specific Services Policy depending on the nature of services provided. The premium rates applicable. To standard policy will be applied for whole turnover services policy and specific shipment policy (SSP-ST) premium rates will be applied for Specific Service Policy

INTERVIEW OF AN EXPORTER Q1.What yourkind of fabrics do you export ? Ans.We export 100% polyster,pure cotton,100% cotton fabrics and polystr viscos Fabrics. Q2.Which are the major countries you export your products? Ans.We export our products to various parts of the world like Dubai,Jeddah Latin America,Mexico,Columbia. Q3.What are the dox required for exporting your products? Ans.We mainly require the following dox INVOICE: It is a proforma Invoice ie a quotation given in the form of a regular invoice.It is sent as a reply to the inquiry. PACKAGING LIST: Shipping agent helps in issuing the invoice and packing list. BILL OF LADING: Bill of lading is a document of title to goods.It is issiued by the shipping company which undertakes to deliver the goods at agreed destination.It is a contract of transportation.

CERTIFICATE OF ORIGIN: This document declares that the exports which are being exported are manufactured in a specific country.This certifies that goods are Indian in origin. We get the certificate of origin issued by the Chamber of Commerce,Export Promotion Councils,Central Silk Board and Textile Committee. INSURANCE CERTIFICATE: A copy of insurance is the most important certificate.We obtain insurance certificate from insurance company.The cerificate contains information on the goods shipped. MATE RECEIPT: This is issued by mate or master of the vessel.Mate receipt is an acknowledgement of the goods received on board the ship.It is used for the issue of bill of lading by the shipping company.It enables us to pay port trust dues.We should get a clean receipt to avoid any complications.

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