Export Process

Created by
Rushikesh P. Sawant
Export :
The commercial activity of selling good and services to foreign
country

Exporter :
A person who exports or intends to export and an IE code
 Export Process Cycle :

Outgoing
Shipment
Exporter Prepares
for dispatch of
5 goods
The exporter &
Importer receives importer enters into
agreement
goods
9 Buyer 1 Seller
Incoming (Importer) (Exporter)
Shipment
Handing over doc Submission of post-
The importer applies to the importer shipment document 4 Transforming LC Info
for the LC to 2 8 Forwarding doc to 6 To the exporter
opening bank , if opening bank for payment
payment is LC
7

Issuing Bank 3 Advising Bank

Transmit LC through
SWIFT message
Exporter Types
1. Merchant Exporter : A merchant exporter
procures goods from the domestic market or a
manufacturer and export it.

2. Manufacturer Exporter : Manufacturer exporter is

one who manufactures goods and uses it for export .
Common terms used in export
 DGFT
 Customs House Agent (CHA)
 Freight Forwarder
 INCOTERMS
 Pre Shipment Documents
 Post Shipment Documents
 LC (Letter of Credit)
 Issuing Bank & Negotiating Bank
 Advising Bank
DGFT
 Abbreviation of DGFT is Directorate General of
Foreign Trade
 DGFT was form replace to CCI&E (Chief controller of
import & export)
 Important roles & functions of DGFT :
1. Implement EXIM Policy/Foreign Trade Policy
2. Implement Foreign Trade Procedures
3. Issue IEC Code to Exporters and Importers
CHA
 Abbreviation for CHA is Custom House Agent
 CHA is custom broker
 They help to importer as well as exporter to clear the
custom clearance formality
Freight Forwarder
 A freight forwarder is a company that arranges your
importing and exporting of goods.
 A forwarder will identify and book the best routes,
modes of transport and specific carriers , dependent on
the business requirements.
 Freight Forwarder can complete custom paperwork on
the exporter’s behalf , or pay any taxes or duties owed .
Incoterms
 International commercial terms are used to divide
transaction costs and responsibilities between buyer
and seller, published by international chamber of
commerce(ICC).
 Commonly used incoterms :
1. EXW(Ex-works)
2. FCA(Free Carrier)
3. FAS(Free along side ship)
4. FOB(Free on board)
5. CFR(Cost & freight)
6. CIF(Cost insurance & freight)
7. CPT(Carriage paid to)
8. CIP(Carriage insurance paid to)
9. DDP(Delivery duty paid)
10. DDU (Delivery duty unpaid)
Pre-shipment Documents
 The document prepare before the shipment is called as
pre-shipment documents .
 This document is prepared by the exporter .
 Pre-shipment Documents :
1. Order Confirmation
2. Proforma Invoice
3. Customs Invoice
4. Packing List
5. Shipping Bill
6. Shipping Instructions
7. DEEC/DBK declarations
 Order Confirmation : The purpose of order
confirmation is it is counter signed by the importer .
 Proforma Invoice : Proforma Invoice is prepared by
exporter & forwarded to importer for LC
establishment.
 Packing list : Is a detailed of packing information of
material
 Shipping Bill : It is document prepared from EDI system ,
it is proof payment .
 Shipping Instructions : It is a document instructing to
CHA .
Post-shipment Documents
 The document prepare after the shipment is called as post-
shipment documents.
 Purpose of post-shipment documents :
1. The importer can do the custom clearance at the destination
country
2. I can get the payment from the overseas country
Post-shipment Documents:
 Commercial Invoice
 Detailed Packing List
 Bill of Lading
 Bill of Exchange 1 & 2
 Shipment Advice
 Certificate of Origin
 BRC (Bank Realization Certificate)
 Commercial Invoice : It is document prepared by the
exporter based on the LC terms & Condition.
 Detailed Packing List : The packing list is an extension of
the commercial invoice .
 Bill of Lading :The goods are handed over to shipping
line company as an acknowledgement of receipt of good
they issue document called as bill of lading.
 Bill of Exchange : Contains due payment amount .
Payment should be done by the Importer based on Bill
of Exchange
 Shipment Advice : Is a notice to the importer on the
summary of the shipment .
 BRC (Bank Realization Certificate):Is issued by the bank
to the exporter after the export proceeds.
LC
 Abbreviation for LC is Letter of Credit
 The guarantee given by the importer bank to the
exporter bank is known as letter of credit .
 It is based on proforma invoice
Categories of LC :
1. Revocable LC
2. Irrevocable LC
3. Confirmed LC
4. Back to Back LC
5. Revolving LC
6. Transferable LC
7. Standby LC
 Revocable LC: A revocable Letter of Credit can be
amended or cancelled at any time by the importer
without the exporters consent.
 Irrevocable LC: An irrevocable Letter of Credit can
neither be amended nor cancelled without the
agreement of all parties to the credit.
 Confirmed LC: A confirmed Letter of Credit is
advising bank adds confirmation that payment made
when compliant documents are presented.
 Transferable LC: In a transferable letter of credit, the
rights and obligations of the beneficiary are transferred
to another party, usually a manufacturer or wholesaler.
 Revolving LC: The revolving credit is used for
regular shipments of the same commodity to the same
importer
Issuing Bank & Negotiating Bank

 Issuing Bank :
The bank in the importer's country where the importer has
applied for an LC.
 Negotiating Bank:
The bank where the exporter submits documents which should be
given to the importer as per the terms in the LC.
Advising Bank
 The advising bank is usually located in the beneficiary's
country.
 An advising bank's responsibility is to authenticate the
letter of credit issued by the issuer to avoid fraud