Overview of Import-Export Business
INBM Jan'14 batch
Payment modes/Letter of credit
Trade: Trade is transfer of ownership of goods or services
International trade: exchange of capital, goods and services across international borders
Export: In international trade export refers to selling goods and services produced in the home country to other countries.
The seller of such goods and services referred to as “Exporter”
Import: in international trade import reports to buying goods and services produced in a foreign country to other countries
The buyer of such goods and services is referred to as “Importer”
Two Classes of Exports:
Physical Exports: If the goods physically go out of the country or services are rendered outside the country then it is called as physical export.
Deemed Exports: Where the goods do not go out of the country physically they can be termed as deemed exports. This will be subject to certain conditions as prescribed by the DGFT. Under Deemed Exports, the goods may be supplied to the manufacturer exporter who ultimately 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 announce from time to time the types of supplies that may be considered as deemed export. The Foreign Trade Policy gives the list of supplies considered under the Deemed Export Category. The policies and procedures are different for Physical Exports and Deemed Exports as also the benefits available. In a nutshell, Deemed Exports do not enjoy all the benefits that are available under Physical Export. The Foreign Trade defines exports as taking out of India any goods by land, sea, air. Although the act does not term them as “Physical Exports”, we have to put phrase to distinguish it from “Deemed Exports” which is sales in India but considered as exports for limited purpose. Types of Exporters:
Exporters can be basically classified into two groups
Manufacturer 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 other manufacturers or from the market 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 decided 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 Customs. These procedures, rules and regulations are laid down in the Exim Policy 2004-09, Exchange Control Manual, Customs Act etc. Accordingly Export documents are required to be prepared keeping in view of the requirement of the foreign buyers and our regulatory authorities.
What Incoterms Rules Are
11 terms of shipment and delivery provided by the International Chamber of Commerce for use in contracts for the business-to-business sales/purchases of tangible, portable goods, for implementation 1/1/11.
Legacy to a long tradition of international 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 place - the more precise the better.
Updated to reflect current trade practice
Used exclusively in sales/purchase contracts (we’ll call these “sales contracts”).
Increasingly considered as a replacement for the former...
Please join StudyMode to read the full document