Import and Export Essay Example for Free

Im port and Export EssayPhysical Exports If the goods physic aloney go out of the country or services ar rendered outside the country then it is called as physical merchandise.Deemed Exports Where the goods do non go out of the country physically they seat be termed as deemed exports. This will be subject to certain conditions as overconfident by the DGFT. Under Deemed Exports, the goods may be supplied to the manufacturer exporter who in conclusion export a finished product of which this supply forms a part and ultimately go out of the country. E.g.Supply of fabrics to the garment exporter who exports the garments made out of the said fabric.The government may forecast from time to time the pillow slips of supplies that may be considered as deemed export. The Foreign Trade Policy gives the list of supplies considered nether the Deemed Export Category. The policies and procedures atomic number 18 different for Physical Exports and Deemed Exports as also the benefits a vailable. In a nutshell, Deemed Exports do not enjoy all the benefits that are available under Physical Export. The Foreign Trade defines exports as pickings out of India any goods by land, sea, air. Although the act does not term them as Physical Exports, we have to set up phrase to distinguish it from Deemed Exports which is gross revenue in India but considered as exports for limited purpose. Types of ExportersExporters can be basically classified into two groupsManufacturer Exporter As the exporter has the facility to manufacturer the product he intends to export and hence he exports the products manufactured by him. Merchant Exporter An exporter who does not have the facility to manufacture an item. But, he procures the same from different manufacturers or from the trade and exports the same.An exporter can be both a manufacturer exporter as well as a merchant exporter, he can export product manufactured by him or he can export items bought from the market. Once it is decid ed to export, it is mandatory on your part to follow certain procedures, rules and regulations as prescribed by various regulatory authorities such as DGFT, RBI, and usage. These procedures, rules and regulations are laid pull down in the Exim Policy 2004-09, Exchange Control Manual, Customs Act etcetera Accordingly Export accounts are involve to be prepared keeping in view of the requirement of the foreign purchasers and our regulatory authorities.INCOTERMS 2013What Incoterms Rules are11 terms of shipment and conducty provided by the International Chamber of Commerce for use in nips for the business-to-business gross revenue/purchases of tangible, portable goods, for implementation 1/1/11.Legacy to a long tradition of worldwide use since 1936.Written to reflect rather than dictate trade practice.Always abbreviated by a three character English language acronym.Always accompanied by a geographic array the more precise the better.Updated to reflect current trade practiceUs ed exclusively in sales/purchase contracts (well call these sales contracts).Increasingly considered as a re go forthment for the former Uniform commercialized Code shipment and voice communication terms (UCC2-319 through 2-324)What Incoterms Rules ArentLaw. They must be specified in order to apply.All inclusive cannot address such issues as customary operations of carrier waves, ports, trades, government regulations, etc.What Incoterms Rules DoDivide costs, risk of infections and responsibilities surrounded by venders and emptors. Guide one or the other party into subsidiary contracts required to fulfill designated tasks such as contracts of carriage and contracts of insurance.What Incoterms Rules Dont Do quotation passage of title.Address recognition of revenue.Address remedies for breach of contract.Address more than one contract. (drop shipments)Refer to ships fulminate which changes the delivery point for FOB, CFR, CIF. Incoterms is a registered trademark of the Interna tional Chamber of Commerce, registered in several countries and used with permission.Definitions lecture indicates where the risk of loss passes from seller to buyer. Shipment contract a type of sales/purchase contract under which the sellers responsibility ends when the contract goods have been handed over to a carrier (i.e., the seller delivers by cargo ships). EXW, FCA, FAS, FOB,CPT, CIP, CFR and CIF Incoterms rules are used in shipment contracts. Arrival contract a type of sales/purchase contract under which the sellers responsibility ends when the goods have arrived at the concord place (i.e., the seller delivers when goods arrive). DAT, DAP and DDP Incoterms rules are used in arrival contracts.Liner terms carrier heaps and un stretch alongs vas (used with waterborne ecstasy). Ex Works (EXW) + Named score (place where the shipment originates usually the sellers expound) divisionSeller have goods available when promised and packaged to the extent known or agreed. ve ndee everything else (pre-carriage, export clearance, briny carriage, mo clearance, on-carriage) Free Carrier (FCA) + Named Place (either place where shipment originates usually the sellers premises or another place on the sellers side.) partitionA) When accompanied by the place where the shipment originates Seller have goods available when promised, packaged to the extent known or agreed, load hoard vehicle, export clearance.Buyer everything else (pre-carriage, chief(prenominal) carriage, import clearance, on-carriage) B) When accompanied by another place on the sellers sideSeller have goods available when promised, packaged to the extent known or agreed, load delivering vehicle, pre-carriage, export clearance.Buyer everything else (unload delivering vehicle, main carriage, import clearance, on-carriage) Carriage Paid To (CPT) + Named Place (on the buyers side) crack-up Seller deliver the goods appropriately packaged to the carrier for imparting to the identifyd place of de stination and pay all transport costs thereto. (The seller delivers at the first carrier unless specified otherwise in the sales contract.), export clearance.Buyer unloading, import clearance, on carriageCarriage And Insurance Paid To (CIP) + Named Place (on the buyers side) Breakdown Seller as with CPT except seller must also provide at least minimum cover insurance in such a manner that the buyer can take over directly from the insurerBuyer unloading, import clearance, on carriageDelivered At Terminal (DAT) + Named Place (terminal on buyers side) Breakdown Seller export clearance, deliver the goods appropriately packaged and deliver at the named destination terminal and pay all transport costs thereto. Buyer import clearance, on carriageDelivered At Place (DAP) + Named Place (on the buyers side) Breakdown Seller export clearance, deliver the goods appropriately packaged at the named destination and pay all transport costs thereto.Buyer unloading, import clearance, on carriageDel ivered Duty Paid (DDP) + Named Place (on the buyers side) Breakdown Seller export clearance, deliver the goods appropriately packaged and cleared for import at the named destination and pay all transport costs thereto.Buyer unloading, on carriageFree Alongside Ship (FAS) + Named Place (alongside a vessel at port on the sellers side) Breakdown Seller delivers goods appropriately export jam-jam-packed alongside the buyer-designated vessel at the port on the sellers side, export clearance.Buyer everything else (vessel loading, main carriage, import clearance, on carriage) Free On Board (FOB) + Named Place (loaded on a vessel at a port on the sellers side) Breakdown Seller delivers goods appropriately export packed on board the buyer-designated vessel at the port on the sellers side, export clearance.Buyer everything else (main carriage, import clearance, on carriage) Cost And Freight (CFR) + Named Place (a port on the buyers side) Breakdown Seller delivers goods appropriately export pa cked on board the seller-designated vessel at the port on the sellers side and pays transportation costs to the agreed port on the buyers side, export clearance.Buyer everything else (vessel unloading import clearance, on carriage) Cost Insurance And Freight (CIF) + Named Place (a port on the buyers side) Breakdown Seller as with CFR except seller must also provide at least minimum cover insurance in such a manner that the buyer can claim directly from the insurerBuyer everything else (vessel unloading import clearance, on carriage) elusion STUDYYou are the exporter. Your factory is situated 100 km from the port. Products can be moved by rail to port for loading, port facilities are good. Insurance is easily arranged. Your country is stable. Ships are available for shipment. What delivery terms would you suggest for sales of your product for the following countries. verdant AGood infrastructure streamlined inland transportationKnown for labor disputeCountry BExcellent inland transpo rtationPort congestion from 10 to 90 daysCountry CGood port facilities good inland transportationBuyer not reliableCountry DNone of the above disadvantagesCountry is stableBuyer is reliableSHIPPING DOCUMENTSSELLERInvoice includes value of the freight, details related to payment, usance duties, insurance claims, declaration of permits and L/C negotiationsTypes of invoicesCommercial invoiceProforma invoiceConsular invoiceCustoms invoiceNon-commercial value invoicePacking list This statement gives the packing details of the goods in prescribed format. It is very useful document for customs at the time of examination and warehouse keeper of the buyer to maintain a record of inventory and to effect delivery.Essential contentsDescriptionMeasurement criterionCertificate of origin The certificate issued by local chamber of commerce indicates that the goods which are being exported are actually manufactures in a specific country mentioned therein. It is sent by the exporter to the importe r and is useful for clearance of goods from the customs authority of importing country.CARRIERSBill of Lading (B/L) The document issued by merchant vessels company acknowledging the recognise of goods mentioned in the bill for shipment on board or vessel.The B/L is the legal document to be referred in case of any dispute over the shipment. B/L can be a negotiable document. It containsThe shipping companys name and addressThe consignees name and addressThe port of loading and port of handoutShipping marks and particularsNumber of packages and goodsGross weight and net weightFreight details and name of the vesselSignature of the shipping companys agentCommon types of B/LCleandirty urinateThrough/Tran-shipmentCombine transportMasterHouseAirway Bill The receipt issued by Airlines political party or its agent for carriageof goods is a contract between the owner of the goods and the carrier. It is a proof of receipt/booking, does not specify loading.BuyerShipping guarantee (if necessa ry) Shipping Guarantee is given by the buyer in support of clearing cargo with put B/L. It also protects the carrier against any twaddle and indemnify against any claims.CARGO INSURANCECargo insurance is the document makeed from the freight earlierer used to severalize the consignee that insurance will cover the loss of damage to the cargo during transit. Reasons for InsuranceProtection against risk stop financial lossRequirement by pious platitude e.g. L/C termSelling on certain term e.g. CIFCarrier limited liabilityReduced business anxietyDocuments necessary for claimCompanys cover letterOriginal policyShipping invoicePacking listOriginal B/L or AWBSurvey reportLanding Account (unloading/discharge report)PAYMENT MODESAdvance recognition accountConsignment saleDocumentary collection1. Document Against Payment (D/P) Supplier ship goods and forward bill of diversify to buyers camber through his own swear. No credit involved and buyer obtain title of goods after payment.2. Doc ument Against Acceptance (D/A) Supplier ship goods and forward bill of exchange to buyers bank through his own bank. Credit period involved and buyer obtain title of goods before payment. earn of credit (L/C)It is the letter of undertaking by importers bank to pay overseas exporter against exporters shipping document. Shipping document must strictly adhere to the terms and conditions of the L/C.L/C ProceduresSales contract between seller and buyerBuyer open L/C with the issuing bankIssuing bank sends L/C to advising bankAdvising bank sends L/C to sellerSeller ship cargoSeller presents documents to negotiation bank for paymentNegotiating bank checks documents and forward to issuing bank Issuing bank checks and pay to negotiating bankNegotiating bank pays to SellerBuyer pays issuing bankIssuing bank releases shipping documents to buyerBuyer uses issuing documents to clear cargoTypes of L/CRevocableIrrevocable1. confirm2. unconfirmedRed clauseRevolvingTransferableBack to backAdvantages SecureFinancial assistance edge control and hold title to goodsSeller receives payment before buyer receives goodsDisadvantageOver assurance on shipping documentationNo physical inspection of goodsBank not familiar with shipping practicesSubject to fraudVery costlyADVANTAGES OF EXPOT BUSINESSCreating goodwill between nations with divergent interests.Exchange of goods inaccessible overseasEnhance domestic competitivenessIncrease sales and profitsGain global market shareExploit corporate technology and know-howExtend sales potential of existing product brace seasonal market fluctuationsEnhance potential for corporate expansionSell excess production competencyGain information about foreign competitionCHALLENGES IN EXPOT BUSINESSPolitical and commercial riskCompliance to foreign regulations and standardscultural and language differencesNon payment by foreign buyerCurrency exchange ratesDamage to goods in transitintellectual property rights