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1
EXPORT AND
IMPORT TRADE
PROCEDURES
Dr.A. THARMALINGAM
M.COM.,M.PHIL.,PHD
ASSOCIATE PROFESSOR
SRI RAMAKRISHNA ARTS AND SCIENCE COLLEGE
COIMBATORE-06
Ms.K.AKILA
M.COM., M.PHIL., PGDCA (PH.D)
ASSISTANT PROFESSOR
SANKARA COLLEGE OF SCIENCE AND COMMERCE
Ms.J.MANIMEGALAI
M.COM(CS).,M.COM.,M.PHIL.,(PHD)
ASSISTANT PROFESSOR
SANKARA COLLEGE OF SCIENCE AND COMMERCE
According To Bharathiar University Syllabus for Students of M.Com
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SYLLABUS
Objective : To make the students well aware about the formalities associated with export and
import
Unit I: Exports – Recent measures to boost Country’s Exports – Rules for successful exporting –
Preliminaries for starting export business – Deemed exports and its benefits – Impediments in
Export Promotion
Unit II: Different Categories of exporters - Registration of Exports – Appointing Overseas agents
– Obtaining an export license – Arranging finance for exports – Packing goods for exports –
Marketing goods for export.
Unit III: Export procedure – Insuring goods against Marine risks – Preparing export documents –
Institutional support for Exports – Compulsory quality control and pre-shipment Inspection –
Labeling – Shipping and customs clearance of goods.
Unit IV: Import Trade law in India – Preliminaries for starting Import Business – Registration of
Importers – Arranging finance for Import – Arranging letter of Credit for Imports – Balance of
Payments – Liberalization of Imports.
Unit V: Retirement of Import Documents and RBI’s directives for making payment for Imports –
Customs clearance of Imported Goods and payments of customs Duty – Imports under special
schemes.
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Dr.A.Tharmalingam is an associate professor of commerce, with 13 years of
teaching experience. He obtained his master in commerce and M.phil from
Pondicherry central university. He has attended and participated in national
and international conference. He has published more than 10 research
papers. His doctoral degree was awarded from Pondicherry University. He is
currently working in commerce with computer applications, Sri
Ramakrishna College of Arts and Science College. At present, 3 PH.Dscholars are doing
research under his guidance. And he is also an external examiner for PH.D.He has deliver guest
lecture to the various colleges.
K.Akila Devaraj is an assistant Professor of Commerce Department, with
industrial experience of more than 5 years and teaching experience of 3 year
and above. She is pursuing her PH.D inRamakrishna College of Arts and
Science College. She has attended and participated in national and
international conferences, workshopsand published more than 10 research
papers
J. Manimegalai is an assistant professor of commerce, Sankara College of
science and commerce. She has expertise in the areas of management and
accountancy. She has more than 9 years of teaching experience. She is currently
pursuing her PH.DRamakrishna College of Arts and Science College. She has
attended and participated in national and international conferences and
published more than 10 research papers.
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Content
Units Lessons Page
I Exports 1
Export Promotion Measures In India 1
Ten steps for starting export business 4
How to start export business 8
How to make export 13
Deemed export and benefits 19
Export finance 27
Financial institution offer export finance 31
II Different Categories of exporter 38
Registration of Exports 39
Appointing Overseas agents 40
Obtaining an export license 42
Arranging finance for exports 46
Packing goods for exports 47
Labeling for export 49
III Export procedure 51
Insuring goods against marine risk 54
Procedure and document for filling , claim of marine insurance 55
Preparing for export document 57
Institution supporting for exports 66
Methods of quality control 67
Pre-shipment inspection
Packing and label
Customs procedure for export 72
Documents used in export 76
IV Import Trade law in India 81
Steps involved in import the goods 82
Preliminary for starting import business 84
Arranging finance for importers 87
Trade liberalization 91
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V Retirement of import document 93
Custom clearance of import goods 94
Custom duty 96
Import incentive 98
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1
UNIT I
EXPORT
MEANING
An export is a function of international trade whereby the goods are produced in one country is
been shipped to another country for sale.
In simple term the word export means sending of goods or services produced in one country for
the usage of another country.
EXPORTER
The seller of such goods is called as exporters. Or in other words who export the goods to
another country is named as exporters.
IMPORTER
The buyer of such goods is called as Importers. Or in other words who imports the goods to
home country is named as Importers.
ADVANTAGES OF EXPORT
Export is the one of the oldest form of economic transfer and occurs on a large scale
between nations.
That has less restriction on the trade, such as tariffs and subsidies.
The ability to export goods help an economy to grow, by selling more over all goods and
services
Export are a crucial component of a country’s economy
Export facilitates international trade, they also stimulate domestic economic activities by
creating employment, production and revenues of the nation
EXPORT PROMOTION MEASURES IN INDIA
A number of institutions have been set up by the government of India to promote exports.
The exports and import functions are looked after by the Ministry of CommerceThe Government
formulates the export-import policies and programmes that give direction to the exports.
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2
The government wishes to stimulate economic growth in case when there is a increase in the
export rank and gives priorities to the export. There is, however, still strong disagreement on
how governments should intervene. For instance, it has often been argued that the best
governments can do is to eliminate the obstacles to the smooth functioning of market forces and
provide information to exporting firms about destination markets and foreign competitors. This
view is, of course, far from being unanimously shared. While policymakers continue to debate
the issue, our survey of the literature on successful strategies and practices for boosting export
has enabled us to compile a list of best practices (Belloc and Di Maio 2011):
Creation of duty drawback schemes. Among the traditional measures, the duty drawback
scheme is, as surveys of entrepreneurs’ opinions suggest, one measure that has proven to be
successful in the past. Standard duty drawback schemes can be improved by: (a) making
them accessible also to indirect exporters and extending them to imported inputs used in
production of exported final products; (b) eliminating duty pre-payment for exporting firms
in order to reduce credit requirements.
Increasing the availability of credit. The availability of short and (especially) long-term
credit is crucial to exporters. This is decisive for small and medium enterprises (SMEs), for
which the credit constraints are more binding than for large firms. Since SMEs make up the
large majority of firms in developing countries, improvements in this domain are necessary
to favour export growth.
Simplifying regulation. The government should simplify regulation related to exports; long
bureaucracy procedures negatively affect especially new exporters. At the same time,
governments should improve information collection and dissemination about foreign markets
and requirements for exporting. Actions in this category should also consider product
standards and other technical requirements imposed for exporting to developed country
markets.
Improving cooperation among economic actors. Besides traditional policy instruments,
export growth could be favored by improving cooperation among exporters and between the
government and business actors. For instance, there is nowadays increasing awareness about
the possibility of using export consortia to help SMEs access the international markets. This
may be seen as a complement to other forms of government intervention.
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3
Combining short-term and long-term export growth policies. The stimulation of export
growth requires the combination of short- and long-term policies. In this context, it is
important to also exploit the complementarily between EPPs and other domestic policies
(aimed, for instance, at enhancing productivity and technological content of domestic
products).
Strategic collaboration between different levels of government (sub-national and national level,
for instance) and the private sector is widely considered a key element for policy success.
Indeed, a pre-condition for successful EPPs is the domestic government ability, including policy
design, implementation, and enforcement and monitoring. It follows that the policy mix
suggested for a given country must be tailored on the basis of capabilities available to national
government, sub-national government and the domestic agencies. In the extreme case, this
argument could lead to very practical criteria for policy design, suggesting the (second) best
policy mix relying on considerations about the most efficient (least corrupted) governmental
institutions. Adopting such criteria could minimize resource waste and reduce the danger of
fostering powerful domestic interest groups and rent-seeking activities.
The careful analysis of the specificities of the local economic and institutional environment
suggests not borrowing policy strategies from other countries simply because they have been
successful there. Indeed, the same policy (or policy mix) implemented in two different countries
may yield completely different outcomes. In particular, the country specific institutional
environment is crucial for policy results.
Institutional and policy complementarities are important. Domestic policies may affect export
performance either directly, through the set of policy instruments with direct influence on foreign
trade, or indirectly, through the set of policy measures that have their direct influence on other
aspects of the economic systems (for instance, monetary and fiscal policies, production and price
controls, investment policies, exchange rate policies) and, in turn, stimulate foreign trade
performance. All these policy measures cannot be considered in isolation; not only does the
choice of policy matter, but also the economic and institutional context and policy mix within
which it is implemented.
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4
In conclusion, our review of the literature finds that successful export promotion policies have
clearly defined priorities, goals, and objectives. In particular, they:
enhance the domestic enabling environment for potential exporters (in terms of
infrastructures, regulation, access to finance, insurance, fiscal policies);
foster the strategic cooperation between private and public actors and among domestic
producers, exporters, and policymakers;
improve the productivity and technological content of domestic goods, and provide
incentives to nurturing innovation;
facilitate the access to credit,
serve to build the country image in foreign markets (through marketing, information
provision, advocacy);
offer targeted and tailored assistance, and rely on continuous evaluation;
are supported by monetary and fiscal policies designed to improve the enabling environment;
and
Stimulate institutional development, also considering institutional complementarities.
TEN STEPS TO SUCCESSFUL EXPORTING
1. Decide where to sell
Research is vital! Identify the markets with a little desk research. Find the consumption / import
figures of products similar to your own and the economic growth rate of a potential new market.
Look up the demographics, cultural and religious practices and your potential competition.
2. Have a plan
Your export plan should include your people.
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5
Your People
Can someone from your team drive this programme or do you need to recruit?
Your Capacity
Do you have enough capacity to meet a new market’s demands? Do you need to upscale?
Your Packaging
Will your packaging design appeal to your market? Is there a legal requirement to label things
differently or do you needs to translate your labelling?
Your Knowledge
Visit your potential new market. Showcase your products at trade fairs and build new contacts.
3. Choose a route to market
You can do one of four options:
1. Sell directly
2. Use a distributor
3. Use a sales agent
4. Create a joint venture.
Whichever option you chose, you must ensure clarity of responsibility for things like delivery
and payment and ALWAYS remember to protect your intellectual property.
4. Find the opportunities
Trade fairs are one of the best ways to find opportunities both in the UK and abroad. Meet
buyers and generate new business. Check with us about available grants to subsidies the cost of
exhibiting, or see if you can share the cost of a stand with another business.
5. Start marketing
Adverts can help you gain exposure but can be expensive. As with the UK, be mindful of the
target audience and expense vs. return on investment. Another option is to create a website with
content translated according to your target market. Global social media sites such as LinkedIn,
Face book and Twitter can also help you to promote your message quickly and free of charge.
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