Export Procedure

International trade is a significant component. Exports are a vital component of international trade. They stimulate domestic economic activity and create employment, production, as well as revenues. Exports of goods and services are made by businesses that have a competitive advantage.

Introduction

India ranks among the top 20 countries in the world for exporting merchandise. There are many opportunities to establish a profitable export business with the Indian Government’s increased trade liberalization. An entrepreneur must understand the regulations and documentation required for export transactions to start an export business.

Governing Authorities

Foreign Trade (Development & Regulation Act, 1992) and Export-Import (EXIM Policy) govern exports. The primary governing body for a country’s export and import policies is the Directorate General of Foreign Trade.
Exporters must follow specific procedures for export trade, from the receipt of inquiries to the completion of the transaction. They need to register with the authorities to ensure that all legal requirements are met.
Exporters must follow the Reserve Bank of India guidelines. Exporters also need to obtain an Import-Export Number from the relevant regional licensing authority.

A general export procedure flows in the following manner:

Step 1. Receipt of order the exporter of goods must register with various authorities, such as the Income Tax Department and Reserve Bank of India. The exporter must also appoint agents to collect orders from foreign customers (importer). Orders are received by the Indian exporter either directly from the importer or through intermediaries.

Step 2. Here you can also get a license. This is the maximum allowed exportable quantity of goods.

Step 3. Letter of Credit The importer may ask for the credit letter, or the importer may send it along with the order.

Step 4. The rate at which the Indian rupee is compared to the American dollar. The foreign exchange rate changes from time to time. The exchange rate is set by the importer/exporter mutually.

Step 5. Every exporter of goods must submit a declaration according to the Foreign Exchange Regulation Act of India.

The declaration says:

The foreign exchange earned by an exporter from exports must be disposed of in the manner and within the time specified by RBI.
II. All shipping documents and negotiations must be made through authorized dealers in foreign currency.
III. Only approved methods will be used to collect payment for goods exported.

Step 6. Preparation for Executing the Order, The exporter should make the required arrangements
I. Marking and packing the goods for export according to the specifications of the importer.
II. Obtaining the Export Inspection Agency’s inspection certificate by arranging for the pre-shipment inspection
III. Obtaining an insurance policy from the Export Credit Guarantee Corporation to protect against credit risk.
IV. Obtaining a Marine Insurance Policy as Required.
V.Appointing a forwarding agency (also known as custom house agent) to handle customs and related matters.

Step 7. Formalities by a Forwarding Agent-
I. The forwarding agent must first apply for a permit from customs to export the goods.
II. He must provide all details about the exported goods, such as their nature, weight, quantity, and weight, to the shipping company.
III. The forwarding agent must prepare a shipping order/bill.
IV. The forwarding agent must make two copies of the port challans and pay the dues.
V. The master of the vessel is responsible for loading the goods onto the ship. The customs officers must be present to assist with loading.
VI. Once the goods have been loaded onto the ship; the master issues a receipt.

Step 8. Bill of Lading. The Indian exporter of goods approaches the shipping company with the receipt copy from the master of the vessel and, in return, receives the Bill of Lading. The bill of lading, an official receipt that provides the complete description of all goods loaded on the ship and the name of the port at which they are to be delivered, is an official receipt.

Step 9. Along with the advice note, the exporter also sends a copy of the packing list and a copy of the non-negotiable Bill of Lading.

Step 10. These documents are called the Documentary Bill of Exchange. The bank receives the Bill of Exchange from the exporter.

Step 11. These formalities begin upon submission of the bill of exchange. In general, the exporter is paid in foreign currency.