INTERNATION BUSINESS MANAGEMENT

STEPS INVOLVED IN EXPORT

PRODUCT: ELECTRONIC VALVE
Scope of the Product: Chemical, Food Processing, Agriculture Industries

DONE BY
RAVEEN T
140292601077

PRODUCT FOR EXPORT:

The Electronic valve (OM valves) is very much useful in many sectors such as
agriculture, automotive industries, Chemical industries, Food processing industry etc,
because it can be controlled using computers. It doesnt require manual intervention to
control them. They can be programmed to function accordingly.

As the industry sectors are evolving in enormous numbers adapting to automation, the
export of electronic valve will bring more profit to the firm.
Market For Export:
Indian Market is the best place to sell this product as many industries are still in
developing phase. But the rate of development is very high. Food processing industries in
India has just entered into the job of automating the process, there by reducing the manual
intervention. Automation in agriculture also is evolving in India, which requires the
Electronic valves to make it happen.
There are not more electronic valve manufactures in India. Thus exporting the product
in Indian Market will bring more profit due the enormous demand.
Type of Export Organisation:
Canalizing Agencies: It is concerned with production, distribution and marketing of
goods and services.
This is the best option for electronic valve sales. Even though the initial cost in high,
as the business grows the profit earned will also grow linearly. This is because, we can
manufacture according to the demand, on time delivery can be more ensured as we own the
responsibility of every aspect of business.
Export sales and Contract Terms and Condition:
1. Preamble:
These Standard Terms and Conditions for the Sale and Export of Goods shall
exclusively apply, save as varied by express agreement accepted in writing by both parties.
The offer, sales confirmation, order acknowledgement, order acceptance or sale of any

products covered herein is conditioned upon the terms contained in this instrument. Any
conditional or different terms proposed by THE BUYER are objected to and will not be
binding upon OM unless assented in writing by OM. These conditions shall govern any
future individual contract of sale between OM and THE BUYER to the exclusion of any
other terms and conditions subject to which any such quotation is accepted or purported to be
accepted, or any such order is made or purported to be made, by THE BUYER. By placing an
order or making an offer to OM, THE BUYER explicitly acknowledges these general terms
and conditions also in case he made the order or offer subject to differing, other terms and
conditions. Any typographical, clerical or other error or omission in any sales literature,
quotation, price list, acceptance of offer, invoice or other document of information issued by
OM shall be subject to correction without any liability on the part of OM. The provisions of
these Terms and Conditions apply to contracts merchants in the course of business. They also
apply contracts with any other private or legal person as far as legal regulations permit.
2. Offers, orders and specifications:
All offers are without obligation, subject to availability of stock and material. No
order submitted by THE BUYER shall be deemed to be accepted by OM unless and until
confirmed in writing by OM or OMs representative within 30 days after submittal. The
quantity, quality and description of and any specification for the goods shall be those set out
in OMs quotation (if accepted by THE BUYER) or THE BUYERs order (if accepted by
OM). Any such specification, sales literature, quotation etc. shall be strictly confidential for
THE BUYER and must not be made available to third parties by THE BUYER. THE
BUYER shall be responsible for ensuring the accuracy of the terms of any order submitted by
THE BUYER, and for giving OM any necessary information relating to the goods within a
sufficient time to enable OM to perform the contract in accordance with its terms. If the
goods are to be manufactured or any process is to be applied to the goods by OM in
accordance with a specification submitted by THE BUYER, THE BUYER shall indemnify
OM against all loss, damages, costs and expenses awarded against or incurred by OM in
connection with or paid or agreed to be paid by OM in settlement of any claim for
infringement of any patent, copyright, design, trade mark or other industrial or intellectual
property rights of any other person which results from OMS use of THE BUYERs
specification. OM reserves the right to make any changes in the specification of the goods
which are required to conform with any applicable statutory requirements and/or which do
not materially affect their quality or performance. Variations in natural materials such as

leather are intended and accepted by THE BUYER and do not justify any claims or titles for
THE BUYER.
3. Price of the Goods :
The price of the goods shall be OMs quoted price or, where no price has been quoted,
the price listed in OMs published price list current at the date of acceptance of the order.
Where the goods are supplied for export, OMs published export price list shall apply. OM
reserves the right, by giving notice to THE BUYER at any time before delivery, to increase
the price of the goods to reflect any increase in the cost to OM which is due to any factor
beyond the control of OM (such as foreign exchange fluctuation, currency regulation,
alteration of duties, increase of more than 15% in the costs of materials or other costs of
manufacture) or any change in delivery dates. Except as otherwise stated under the terms of
any quotation or in any prise list of OM, and unless otherwise agreed in writing between THE
BUYER and OM, all prices are given by OM on an ex works basis, and where OM agrees to
deliver the goods otherwise than at OMs premises, the buyer shall be liable to pay OMs
charges for transport, packaging and insurance. The price is exclusive of any applicable value
added or sales tax, which THE BUYER shall be additionally liable to pay to OM, unless
otherwise quoted. Where a general handling and/or inspection charge or a general
commission has been agreed between THE BUYER and OM, the prices quoted by OM shall
be exclusive of any such charges and/or commissions, which THE BUYER shall be
additionally liable to pay to OM, unless otherwise quoted.
4. Retention of title:
Notwithstanding delivery and the passing of risk in the goods, or any other provision
of these conditions, the property in the goods shall not pass to THE BUYER until OM has
received payment in full of the price of the goods and all other goods agreed to be sold by
OM to THE BUYER for which payment is then due. OM shall have absolute authority to
retake, sell or otherwise deal with or dispose of all or any part of the goods in which title
remains vested in OM. This applies especially, but not only, if THE BUYER is in default or
fails to fulfil his obligations in other ways. In this case OM also has the right to demand the
transfer of all titles of THE BUYER against third parties to give back or retake the goods.
The act of retaking or seizing the goods is not to be considered as cancellation of the contract.
Until such time as the property in the goods passes to THE BUYER, THE BUYER shall hold
the goods as OMs fiduciary agent clearly separated from his or third parties goods, and shall
keep the goods properly stored, protected, insured and marked as OMs property. Until that

time and as long as he is not in default THE BUYER shall be entitled to resell or use the
goods in the ordinary course of business. THE BUYER assigns the proceeds, titles and claims
deriving from the sale or any other legal argument concerning the goods - including such
from insurance and compensation for damage by third parties and balances receivable on
current account - already now completely to OM for security and shall keep all such proceeds
separate from any moneys or properties of THE BUYER and third parties. OM authorizes
THE BUYER revocable to collect all such claims on own account and name. THE BUYER is
not entitled to pledge or assign goods in which title remains vested in OM by bill of sale as
security. If the goods are processed or reshaped by THE BUYER and if processing is done
with goods that OM has no property in, OM shall become co-owner of the goods, but without
any legal obligation of OM. The same shall apply, if OMs goods are completely reshaped
and /or mixed with other goods. If third parties take up steps to pledge or otherwise dispose
of the goods, THE BUYER shall immediately inform this third party about OMs title
concerning the goods and notify OM in order to enable OM to seek a court injunction in
accordance with 771 of the German Code of Civil procedure. If the BUYER fails to do so
in due time he will be held liable for any damages caused. Moreover THE BUYER is liable
for all cost and expenses incurred by OM to enforce its titles and claims towards the third
party, if reimbursement cannot be obtained from the third party. OM shall on demand of THE
BUYER release any part of the collateral if the value of the collateral held in favour of OM
exceeds the value of the claims being secured for more than 20%. It is to OMs decision to
release those parts of the collateral suitable to it.
5. Warranties and exclusion clauses:
THE BUYER shall examine the goods and in doing so check every delivery in any
respect and make any according complaints to OM without delay (within two days, unless
special circumstances apply). OM warrants that all the items delivered under this agreement
will be free from defects in material and workmanship, conform to applicable specifications,
and, to the extent that detailed designs have not been furnished by THE BUYER, will be free
from design defects and suitable for the purposes intended by THE BUYER. OM shall not be
liable for the goods being fit for a particular purpose unless otherwise agreed upon, to which
THE BUYER intends to put them. The above warranty is given by OM subject to the
following conditions: - OM shall not be liable in respect of any defect in the goods arising
from any design or specification supplied by the buyer; - OM shall not be liable under the
above warranty if the total price for the goods has not been paid by the due date for payment;
- The above warranty does not extend to parts, materials or equipment manufactured by or on

behalf of THE BUYER and further damages caused by such parts, materials or equipment.
OM will however transfer all titles, rights and/or claims against the manufacturer regarding
such parts, materials and equipment to THE BUYER on his demand. This warranty does not
cover defects in or damage to the products, which are due to improper installation or
maintenance, misuse, neglect or any use or application other than the ordinary intended one.
Any claim by THE BUYER, which is based on any defect in the quality or condition of the
goods or their failure to correspond with specification and was impossible to detect by the
time of the examination of the goods shall be notified to OM within six months from the date
of delivery. THE BUYER is entitled to demand the delivery of any substitute goods, or repair
or a reduction of the purchase price as set forth with the terms of each individual contract of
sale. Where any valid claim in respect of any goods which is based on any defect in the
quality or condition of the goods or their failure to meet specification is notified to OM in
accordance with these conditions, OM shall be entitled at OMs sole discretion to either
replace the goods free of charge or repair the goods. If OM is neither willing nor able to
either repair or replace the goods THE BUYER shall be entitled at THE BUYERS sole
discretion to claim for a reduction of price or a cancellation of the contract.
6. Miscellaneous clauses:
OM reserves the right to improve or modify any of the products without prior notice,
provided that such improvement or modification shall not affect the form and function of the
product. This agreement supersedes and invalidates all other commitment and warranties
relating to the subject matter hereof, which may have been made by the parties either orally
or in writing prior to the date hereof. Such prior commitments and warranties shall become
null and void from the date this agreement is signed. Should a clause of these terms or of an
individual sales contract be invalid or unlawful or should there be a blank, the rest of the
agreement stays valid and effective in force. The invalid or unlawful clause is replaced or the
blank is filled by a clause which is valid and lawful and comes most closely to the intended
economical purpose of the invalid or unlawful clause or, in case of a blank, the intended
economical purpose of the agreement. Should this not be possible due to legal reasons, the
parties will cooperate in order to agree on such valid clause. Changes or completions to this
agreement have to be made in writing. This agreement shall not be assigned or transferred or
made known to any third party by THE BUYER except with the written consent of OM. Each
party shall be responsible for all its legal, accountancy or other costs and expenses incurred in
the performance of its obligation hereunder.

7. Choice of Law:
Place of Jurisdiction This agreement shall be governed and construed in accordance
with Hong Kong law and each party agrees to submit to the jurisdiction of the courts having
jurisdiction for the principal place of business of OM. OM shall have the right to bring a
claim before a court at THE Buyers principal place of business or at his discretion before
any other court being competent according to any national or international law. In case of the
transfer of any title or claim to a third party, the assignee shall also have the right to chose the
place of jurisdiction accordingly
TERMS OF SHIPMENT:
1. Terms of Payment:
THE BUYER shall pay the price of the goods 10 days before delivery unless
otherwise agreed by both parties in writing. Where the finished goods sold are to be
transported to any other location from the place where production or processing was finished
or from the place of OMs premises for and on behalf of THE BUYER or as a part of the
obligations of OM according to the sales contract, delivery shall be deemed to be the time
when the goods are leaving the place where production or processing was finished or the
place of OMs premises. Payment shall be effected by interbank payment transaction only; no
cheque or bill of exchange will be considered as fulfilment of the payment obligation unless
otherwise agreed by both parties in writing. Any payment obligation of THE BUYER shall
only be considered as fulfilled, when OM has received the payment amount to its irrevocable
disposal. It may be agreed between the parties that THE BUYER has to deliver a letter of
credit issued by his bank (or any bank acceptable to OM). In this individual case it is assumed
that any letter of credit will be issued in accordance with the Uniform Customs and Practise
for Documentary Credits, 1993 Revision, ICC Publication No. 500. If THE BUYER fails to
make any payment on the due date then, without prejudice to any other right or remedy
available to OM, OM shall at its discretion be entitled to: - Cancel the contract or suspend
any further deliveries to THE BUYER; or - Charge THE BUYER interest on the amount
unpaid, at the rate of 10 percent per annum above the interest rate for main refinancing
operations of the European Central Bank then being valid, until payment in full is made. THE
BUYER shall be entitled to prove that the delay of payment caused no or minor damage only.
If discounts for payment within a certain time are granted by OM to THE BUYER in the
individual sales contract, these discounts are void and may not be deducted, if there are any
overdue receivables of TOIKA that have not been settled by THE BUYER. The set-off of any

receivables, claims or titles of THE BUYER against receivables, claims or titles of OM

deriving from deliveries or services to THE BUYER is excluded, unless the receivables,
claims or titles of THE BUYER are undisputed or have been declared finally legally binding
by a court. OM reserves the right to assign claims and accounts receivable against THE
BUYER to third parties. If THE BUYER is in default with any payment owed to OM, all
accounts receivable and claims of OM against THE BUYER become due in total
automatically with immediate effect without OM serving formal notice of default on THE
BUYER. As far as not covered by German law, it is considered as explicitly agreed between
THE BUYER and OM, that THE BUYER has to bear and/or reimburse OM for all cost
incurred to enforce OMs claims, titles and accounts receivable against THE BUYER, equal
if judicially or not.
2. Delivery:
Delivery of the goods shall be made by THE BUYER collecting the goods at the
place where production or processing was finished or the place of OMs premises at any time
after OM has notified THE BUYER that the goods are ready for collection or, if some other
place for delivery is agreed by OM , by OM delivering the goods to that place. Where
delivery of low-priced goods is to be made by OM in bulk, OM reserves the right to deliver
up to 3% more or 3% less than the quantity ordered without any adjustment in the price, and
the quantity so delivered shall be deemed to be in the quantity ordered. Where goods are
specially produced for THE BUYER, which is deemed to be the case if the item is not in the
current catalogue of OM or if alterations to such catalogue items are made on demand of
THE BUYER, OM reserves the right to deliver up to 15% more or 15% less than the quantity
ordered with the according adjustment in the price, and the quantity so delivered shall be
deemed to be in the quantity ordered. Any agreed delivery time or delivery time notified to
THE BUYER by OM is to be considered as rough only, where aviations of 14 days may
occur. Delivery times agreed or notified are not to be considered as obligation or promise to
deliver. If a fixed time for delivery is provided for in the contract, and OM fails to deliver
within such time or any extension thereof granted, THE BUYER shall be entitled to, on
giving notice in writing to OM within a reasonable time, to claim a reduction of 2% per week
of the price payable under the contract, unless it can be reasonably concluded from the
circumstances of the particular case that THE BUYER has suffered no loss. This limit shall
not apply, if the business had to be settled on a fixed date or, if the delay was caused
negligently or intentionally by OM, his agents or representatives or if there is any further
breach of essential contractual obligations. A delivery time shall only be considered as being

agreed as fixed with the consequences stipulated above, if the expression fixed or an
equivalent has been used in the written agreement and/or sales confirmation or it can be
concluded beyond doubt from other circumstances that the parties intended to agree on such
fixed delivery time. If for any reason whatever OM fails within such time to effect delivery,
THE BUYER shall be entitled by notice in writing to OM to fix a deadline after the expiry of
which THE BUYER shall be entitled to terminate the contract. Damages may only be
claimed for by the BUYER if OM or her agents or representatives intentionally or negligently
failed to fulfil the contract. OM shall nevertheless be held responsible for not fulfilling any
further essential contractual obligation. If THE BUYER fails to accept delivery on due date,
he shall nevertheless make any payment conditional on delivery as if the goods had been
delivered. OM shall arrange for the storage of the goods at the risk and cost of THE BUYER.
If required by THE BUYER OM shall insure the goods at the cost of THE BUYER. Unless
otherwise confirmed and accepted by OM in writing in the individual sales contract or
confirmation, THE BUYER has to bear all cost for packing and delivery to any place other
than the place where production or processing was finished or the place of OMs premises. If
goods are delivered by a freight forwarder in any damaged condition or if any goods are
missing, THE BUYER must obtain a protocol or report on the damage or loss from the
freight forwarder immediately without delay. Confirmations to freight forwarders concerning
complete and orderly undamaged delivery should only be made subject to detailed
examination by THE BUYER.
3. Transfer of Risk:
Risk of damage to or loss of the goods shall pass to THE BUYER as follows: According to the delivery term accepted and confirmed by OM in each individual sales order
(e.g. acc. INCOTERMS 2000). - Unless otherwise agreed at the place where production or
processing was finished or the place of OMs premises (ex works, Incoterms 2000) at the
time when the goods are leaving this place or when OM notifies THE BUYER that the goods
are available for collection, whichever is the earlier. - In the case of goods to be delivered at
OMs risk otherwise than at the place where production or processing was finished or the
place of OMs premises, at the time of delivery or, if THE BUYER wrongfully fails to take
delivery of the goods, the time when OM has tendered delivery of the goods; - in the case of
goods to be delivered at the place where production or processing was finished or the place of
OMs premises (ex works, Incoterms 2000) at the time when OM notifies THE BUYER that
the goods are available for collection.

PROCESSING AN EXPORT ORDER:

1. Having an Export Order:
Processing of an export order starts with the receipt of an export order. An export
order, simply stated, means that there should be an agreement in the form of a document,
between the exporter and importer before the exporter actually starts producing or procuring
goods for shipment. Generally an export order may take the form of proforma invoice or
purchase order or letter of credit. You have already learnt these just in the preceding section.
2. Examination and Confirmation of Order:
Having received an export order, the exporter should examine it with reference to the
terms and conditions of the contract. In fact, this is the most crucial stage as all subsequent
actions and reactions depend on the terms and conditions of the export order.
The examination of an export order, therefore, includes items like product description, terms
of payment, terms of shipment, inspection and insurance requirement, documents realising
payment and the last date of negotiation of documents with the bank. Having being satisfied
with these, the export order is confirmed by the exporter.
3. Manufacturing or Procuring Goods:
The Reserve Bank of India (RBI), under the export credit (interest subsidy) scheme,
extends pre-shipment credit to exporter to finance working capital needs for purchase of raw
materials, processing them and converting them into finished goods for the purpose of
exports. The exporter approaches the bank on the basis of laid down procedures for the preshipment credit. Having received credit, the exporter starts to manufacture / procure and pack
the goods for shipment overseas.
4. Clearance from Central Excise:
As soon as goods have been manufactured/ procured, the process for obtaining
clearance from central excise duty starts. The Central Excise and Sale Act of India and the
related rules provide the refund of excise duty paid. There are two alternative schemes
whereby 100 per cent rebate on duty is given to export products on the submission of the
proof of shipment.
The first scheme is to make payment of the excise duty at the time of removing the export
consignment from the factory and file a claim for rebate of duty after exportation of goods.
The second scheme is to remove goods from factory/warehouse without payment but under
an appropriate bond with the excise authorities. The exporter needs to apply on a form known
as AR4 or AR4A to the Central Excise Range Superintendent for obtaining excise clearance.

Form A is filed when goods are to be cleared after examination by the excise inspector. In all
other cases, form AR4A is filed.
5. Pre-Shipment Inspection:
There are number of-goods whose export requires quality certification as per the
Government of Indias notification. Consequently, the Indian custom authorities will require
the submission of an inspection certificate issued by the competent and designated authority
before permitting the shipment of goods takes place.
Inspection of export goods may be conducted under:
(i) Consignment-wise Inspection
(ii) In-process Quality Control, and
(iii) Self-Certification.
The Inspection Certificate is issued in triplicate. The original copy is for the customs
verification. The second copy of the certificate is sent to the importer and the third copy
remains with the exporter for his reference purpose.
6. Appointment of Clearing and Forwarding Agents:
On completion of the process of obtaining the Inspection Certificate from the custom
agencies, the exporter appoints clearing and forwarding agents who perform a number of
functions on behalf of the exporter.
The main functions performed by these agents include packing, marking and labeling
of consignment, arrangement for transport to the port arrangement for shipment overseas,
customs clearance of cargo, procurement of transport and other documents.
In order to facilitate the exporter in discharging his duties, the following documents are
submitted to the agent:
(i) Commercial invoice in 8-10 copies
(ii) Customs Declaration Form in triplicate
(iii) Packing list
(iv) Letter of Credit (original)
(v) Inspection Certificate (original)
(vi) G.R. Form (in original and duplicate)
(vii) AR4/ AR4A (in original and duplicate)
(viii) GP-l/GP-2 (original)
(ix) Railway Receipt/Lorry Way Bill, as the case may be

7. Goods to Port of Shipment:

After the excise clearance and pre-shipment inspection formalities are completed, the
goods to be exported are packed, marked and labeled. Proper marking, labeling and packing
help quick and safe transportation of goods. The export department takes steps to reserve
space on the ship through which goods are to be sent to the importer.
The shipping space can be reserved either through the clearing and forwarding agent
or freight broker who works on behalf of the shipping company or directly from the shipping
company. Once the space is reserved, the shipping company issues a document known as
Shipping Order. This order serves as a proof of space reservation.
If goods are sent through a road carrier to the port, no specific formality is involved.
In case, the goods are sent by rail to the port of shipment, allotment of wagon needs to be
obtained from the Railway Board.
The following documents are submitted to the booking railway yard/station:
(i) Forwarding Note (A Railway Document)
(ii) Shipping Order
(iii) Wagon Registration Fee Receipt
Once wagons have been allotted, goods are loaded, for which railways will issue
Railway Receipt (RR). Then, this receipt and other documents are sent to the clearing and
forwarding agent at the port town. At the same time, the production/export department takes
insurance policy in duplicate for risk coverage (internal as well as overseas) for the goods to
be exported.
8. Port Formalities and Customs Clearance:
Having received the documents from the export department, the clearing and
forwarding agent takes delivery of the cargo from the railway station or the road transport
company and stores it in the warehouse. He also obtains customs clearance and permission
from the port authorities to bring the cargo into the shipment shed.
The custom department grants permission for export at the office of the customs and physical
verification of goods in the shipment shed. The clearance for export is given on the Shipping
Bill.
The clearing and forwarding agent is required to submit the following documents with
the Customs House for obtaining customs clearance and permission:
(i) Shipping Bill
(ii) Contract Form
(iii) Letter of Credit, if applicable

(iv) Commercial Invoice

(v) GR Form
(vi) Inspection Certificate
(vii) AR4/AR4A Form
(viii) Packing List, if needed
After receiving documents from the export department, the clearing and forwarding
agent presents the Port Trust Document to the Shed Superintendent of the port. He obtains
carting order bringing the cargo to the transit shed for physical examination by the Dock
Appraiser.
The Dock Appraiser is presented the following documents to facilitate him in physical
examination of export goods:
(i) Shipping Bill
(ii) Commercial Invoice
(iii) Packing List
(iv) AR4/ AR4A Form and Gate Pass
(v) GR Form (duplicate)
(vi) Inspection Certificate (original)
The Dock Appraiser, after making examination, makes Let Export endorsement on
the duplicate copy of the Shipping Bill and hands over it to the Forwarding Agent. All these
documents are presented to the Preventive Officer who puts an endorsement Let Ship on the
duplicate copy of the Shipping Bill. The preventive officer supervises the loading of cargo on
board the vessel.
After the goods are loaded on board the vessel, the captain of the ship issues a receipt
known as Mates Receipt to the Shed Superintendent of the port concern. The forwarding,
agent after paying port charges, takes the delivery of the Mate Receipt. He submits to
Shipping Company and requests it to issue the Bill of Lading.
9. Dispatch of Documents by Forwarding Agent to the Exporter:
After obtaining the Bill of Lading from the Shipping Company, the clearing and
forwarding agent dispatches all the documents to his / her exporter.
These documents include:
(i) Commercial Invoice (attested by the customs)
(ii) Export Promotion Copy
(iii) Drawback Copy
(iv) Clean on Board Bill of Lading

(v) Letter of Credit

(vi) AR4/ AR4A and Gate Pass
(vii) GR Form (in duplicate)
10. Certificate of Origin:
On receipt of above documents from the forwarding agent, the exporter now applies
to the Chamber of Commerce for a Certificate of Origin and obtains it. If the goods are
exported to countries offering GSP concessions, the exporter needs to procure the GSP
Certificate of Origin from the concerned authority like Export Inspection Agency.
11. Dispatch of Shipment Advice to the Importer:
At last, the exporter sends Shipment Advice to the importer intimating the date of
shipment of the consignment by a named vessel and its expected time of arrival at the
destination port of the importer.
The following documents are also sent to the importer to facilitate him for taking
delivery of the consignment:
(i) Bill of Lading (non-negotiable copy)
(ii) Commercial Invoice
(iii) Packing List
(iv) Customs Invoice
12. Submission of Documents to Bank:
At the end of the process, the exporter presents the following documents to his bank for
realisation of his amount due to the importer:
(i) Commercial Invoice
(ii) Certificate of Origin
(iii) Packing List
(iv) Letter of Credit
(v) Marine Insurance Policy
(vi) GR Form
(vii) Bill of Lading
(viii) Bill of Exchange
(ix) Bank Certification
(x) Commercial Invoice

13. Claiming Export Incentives:

On completion of the processing of an export order at the three levels of shipment i.e.,
pre-shipment, shipment and post-shipment, the exporter claims for export incentives
admissible to him / her.
QUALITY CONTROL & PRE-SHIPMENT INSPECTION:
The main systems of export inspection and certification being followed by EIC
include Consignmentwise inspection (CWI), In-process quality control (IPQC), Selfcertification (SC), and Food Safety Management Systems based Certification (FSMSC).
Food Safety Management Systems based Certification has been aligned with international
standards on Hazard Analysis Critical Control Point (HACCP) / Good Management Practices
(GMP) / General Health Practices (GHP) in the areas of fish & fishery products, egg
products, milk products, poultry products and honey. Under CWI samples, based on a laid
down sampling plan are drawn from the consignment, offered for inspection and tested
against the specified standards. The other three schemes follow a systems approach, which
involves approval of the units followed by periodic surveillance by EIAs
Lab Testing: The samples are tested for ISO standards to ensure durability and proper
working. Many number of testing is done on each sample to deliver a quality product.
SHIPPING AND CUSTOMS FORMALITIES:
Export customs clearance formalities are so simplified now days. Export clearance
procedures are as simple as local sales procedures. After the member of GATT General
Agreement on Tariff and Trade, India has liberalized its import and export procedures and
formalities very much. Before globalization till 1992, all procedures and formalities on export
and import procedures are too complicated. Introduction of software system to file documents
electronically made simple to handle export and import procedures for both government and
traders in export import. The fast grown electronic and telecommunication industry
worldwide contributed in large way in all sectors to boost simplification of procedures and
formalities in export import trade also.
Once after preparing invoice and packing list, based on purchase order or Letter of
credit, need to arrange export customs clearance procedures, well in advance of time of
shipment mentioned in export order. We will appoint a Customs broker to complete export
customs clearance formalities. He is appointed for smooth and fast clearance procedures

under export. Invoice, Packing list, SDF declaration and other specific required documents
are sent to customs house agents for completion of necessary export customs formalities.
After receiving documents, Customs broker files shipping bill through customs online
software system electronically. This can be done at home, office or private EDI (electronic
data information) centers appointed by government, as the filing software can be downloaded
from ICEGATE electronically. The generation of shipping bill number is as per serial order
all over the country, as the said software is a centralized one. ICE GATE is the software
service provider for Customs department of Government of India for import and export
customs clearance procedures and formalities. ICE GATE opens their software system 24
hours a day to support export import trade for smooth clearance procedures in India. So the
shipping bill number the serial number of export shipping bill - generated by software is
obtained by customs broker or exporter who files online on a queue basis.
The goods read for export is moved to airport, sea port or container freight station and
unloads in to the respective yard of shipping carrier. The location yard is decided by carrier
who places the vessel/aircraft at the allocated place where in loading of goods makes easier.
Export customs procedures and formalities for inspection of goods are completed with
customs officials and enter the details of examination of goods in tosvoftware system online
for the approval of higher officials of customs. The assessment of value of goods and other
information are verified by the customs officials with necessary documentary supports if
required
After verifying all required information, customs authorize the assessment and
inspection procedures and issue Let Export Order as a proof of completion of export
customs procedures and formalities. Then, the prints of shipping bill are generated. There are
three type copies of shipping bills release this time, one for exporters copy, second one
exchange control copy which has to be submitted with Reserve Bank of India through
exporters bank, and third one for shipping carriers to move the cargo to port of final
destination.
After obtaining the prints hard copy - of said original shipping bills, the respective
customs officials involved in the said process signs on the shipping bills and return to the
exporter or their appointed Customs House Agent. Once after movement of goods from
exporting country, the shipping carrier files necessary export general manifest (EGM) with
customs and based on the same, customs department issue proof of export Export
promotion copy of shipping bill.

EP copy of shipping bill is taken as proof of export by all government authorities for
claiming any financial assistance from various government agencies. EP copy of shipping bill
is taken as a proof of export of goods to fullfill export obligation against the benefits already
obtained before exports. Another major document taken as proof of export is On board Bill
of Lading issued by carrier of goods.
Once after releasing shipping bills duly signed by customs authorities, customs house
agents delivers the respective shipping bill to carrier to move the cargo to destination.
Exchange control copy of shipping bill is submitted with bank along with other shipping
documents. The authorized dealer of exporter sends the said exchange control copy of
shipping bill to Reserve Bank of India. RBI requires exchange control copy for regulating
inward and outward remittance of foreign exchange. Exporters copy of shipping bill is
retained by exporter for their future reference.
Manual shipping bills are filed at a customs location where in no facility to file
electronically to complete necessary export customs clearance procedures and formalities.
Such shipping bills are filed in 6 copies. Original and duplicate for customs, Triplicate and
EP copy for Exporter and next two copies for carrier to load goods at port of loading.
METHODS OF RECEIVING PAYMENTS AGAINST EXPORTS
The goods are exported using secure mode to ensure the safety of both buyer and us.
Thus we prefer the method of Letters of credit for receiving payment for any export deal.
LETTERS OF CREDIT
Letters of credit (LCs) are one of the most secure instruments available to
international traders. An LC is a commitment by a bank on behalf of the buyer that payment
will be made to the exporter, provided that the terms and conditions stated in the LC have
been met, as verified through the presentation of all required documents.
The buyer establishes credit and pays his or her bank to render this service. An LC is
useful when reliable credit information about a foreign buyer is difficult to obtain, but the
exporter is satisfied with the creditworthiness of the buyers foreign bank. An LC also
protects the buyer since no payment obligation arises until the goods have been shipped as
promised.

ECGC Cover:
The risk coverage on non-payment of export proceeds by buyer like How to provide
credit to the overseas buyer? Is credit extending to importer safe? How can an exporter
provide credit to an un known buyer? What is the remedy to provide credit to an overseas
importer? Is there any insurance to cover the risk of non-payment of export goods value? Is
there any insurance to protect the exporter in non-payment of exported amount are the fear
causing factors during any export
Export Credit Guarantee Corporation is a central government undertaking body to provide
credit guarantee on the default of payments by the buyer. It works as an insurance firm who
guarantees export payment, if the buyer defaults in making payment.

Procedures with ECGC to cover insurance:

Once after finalizing the order, the buyer executes a purchase order to the seller with
the terms and conditions as agreed by both. The purchase order should contain full details of
buyer and buyers bank account details. The exporter approaches Export Guarantee
Corporation to get approval on the buyer with amount of limit. Here, the ECGC with their
available contact with overseas network finds out the credit worthiness of the said buyer and
arrives a figure of creditworthiness and inform the maximum limit of amount can be shipped

at any point of time. Export Credit Guarantee Corporation collects premium on the amount of
approval and issue insurance policy accordingly.
The exporter can apply with ECGC for insurance on shipment wise order as specific
insurance policy, or at lump sum as comprehensive policy. If an exporter obtains a specific
policy, the contract of insurance is only for that particular shipment. We as an exporter has to
pay premium only against the said shipment. If We prefer to obtain a comprehensive policy
against any buyer, We can get approval from ECGC, the amount of credit worthiness of the
said buyer.