import export procedure&dovumentation

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A PROJECT REPORT ON
IMPORT - EXPORT PROCEDURE AND DOCUMENTATION
SUBMITTED TO MAEER’s MIT SCHOOL OF BUSINESS
BY
AZAZAHEMAD JAT
321545.
32ND
BATCH
IN PARTIAL FULFILLMENT OF
POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)
Marketing
2014-16
MAEER’s MIT SCHOOL OF BUSINESS PUNE

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Table of
C O N T E N T S
Chapter
No.
Topic
Page
No.
deceleration from student 3
Certificate from company 4
certificate from Guide 5
Acknowledgement 6
Executive Summary 7
I Introduction 9
1.1 Company Profile 12
1.2 Objectives of study 14
1.3 Limitation of study 14
II Research Methodology 15
2.1 Secondary data 16
2.2 instruments of data collection 16
III Theoretical Background 19
3.1 Data processing and analysis 22
IV Findings 36
V Recommendation 45
VI Management Lessons 46
VII CONCLUSION 50
VIII Bibliography 51

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DECLARATION
I, Mr. Azazahemad Abdulaziz Jat
Hereby declare that this project report is the record of authentic work carried out by
me during the period from 1st
April 2015 to 31st
May 2015 and has not been
submitted to any other University or Institute for the award of any degree / diploma
etc.
Azazahemad Jat
Date

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Acknowledgement
IT IS THE MATTER OF GREAT PLEASURE AND PRIVILEGE TO BE ABLE TO PRESENT THIS
PROJECT REPORT ON IMPORT/EXPORT PROCEDURE AND DOCUMENTATION.
THE COMPILATION OF THE PROJECT IS A MILESTONE IN THE LIFE OF THE MANAGEMENT
STUDENT AND ITS EXECUTION IS INEVITABLE WITH THE CO-OPERATION OF THE PROJECT
GUIDE. I WISH TO RECORD A DEEP SENSE OF RESPECT AND GRATITUDE TO MY PROJECT
GUIDE, PROF. SHWETA SHIROLKAR FOR HER ENCOURAGEMENT TO COURSE OF MY WORK.
IT IS DUE TO THE ENDURING EFFORT AND GUIDANCE OF MY GUIDE THAT ULTIMATELY
MADE IT SUCCESS.
I ACKNOWLEDGE MY INDEBTNESS TO VARIOUS AUTHORS FOR MAKING USE OF
VALUABLE INFORMATION LIBERALLY.

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Executive Summary
This project is aimed at understanding Import -Export procedure & documentation.
It begins with what Import and export is all about and which documents are required
for Import and export
Methodology used for the data collection is secondary which is collected through
Invoices and Sales report of Company.
All the data collected is kept in a systematic manner starting from procedure to
documents required for the carried out this activity
Then the different terms of shipment and international commercial terms are
discussed in detail on which business deals are done like FOB,CIF,FCA etc. and
then covering different types of risks involved in export like currency risk, credit
risk, country risk and carriage risk is discussed.
Import Export document which are required are divided into 3 parts A. commercial
documents, B Auxiliary Documents, and c regulatory documents. Further Octroi
which is the local tax levied by the civic body on goods entering into the city.
Further Export (Quality Control and Pre-Shipment Inspection) Act 1963 were
Compulsory Quality Control and Pre-Shipment Inspection of over 1050 items of
export, Systems of Quality Control: Self-Certification, In-Process Quality Control,
Consignment Wise Inspection
And then SHIPPING AND CUSTOMS FORMALITIES (As per the Prevailing Law
i.e., ICA 62) the goods cannot be loaded on board the ship unless a formal permission
is obtained from the custom authorities.

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There are different methods of payment depending upon the terms of payment, and
each method of payment involves varying degrees of risks for the exporter. The
methods are:
Payment in advance, Documentary Bills, Letter of Credit, Open Account, Counter
Trade

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Import and export:
International trade is one of the hot industries of the new millennium. But it's not
new. Think Marco Polo. Think the great caravans of the biblical age with their
cargoes of silks and spices. Think even further back to prehistoric man trading shells
and salt with distant tribes. Trade exists because one group or country has a supply
of some commodity or merchandise that is in demand by another. And as the world
becomes more and more technologically advanced, as we shift in subtle and not so
subtle ways toward one-world modes of thought, international trade becomes more
and more rewarding, both in terms of profit and personal satisfaction.
Types of Import/Export Business:
 Export management company (EMC): An EMC handles export operations
for a domestic company that wants to sell its product overseas but doesn't
know how (and perhaps doesn't want to know how). The EMC does it all--
hiring dealers, distributors and representatives; handling advertising,
marketing and promotions; overseeing marking and packaging; arranging
shipping; and sometimes arranging financing. In some cases, the EMC even
takes title to the goods, in essence becoming its own distributor. EMCs usually
specialize by product, foreign market or both, and--unless they've taken title-
-are paid by commission, salary or retainer plus commission.

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 Export trading company (ETC): While an EMC has merchandise to sell and
is using its energies to seek out buyers, an ETC attacks the other side of the
trading coin. It identifies what foreign buyers want to spend their money on
and then hunts down domestic sources willing to export. An ETC sometimes
takes title to the goods and sometimes works on a commission basis.
 Import/export merchant: This international entrepreneur is a sort of free
agent. He has no specific client base, and he doesn't specialize in any one
industry or line of products. Instead, he purchases goods directly from a
domestic or foreign manufacturer and then packs, ships and resells the goods
on his own. This means, of course, that unlike the EMC, he assumes all the
risks (as well as all the profits).

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Company Profile:-
Freight Desk Agencies (P) Ltd. was established in 2009 and today is one of
prominent Shipping and Logistics solution provider. The company have an
established presence at all the major ports of Gujarat, India - Kandla, Mundra, and
Pipavav.
Freight Desk Agencies (P) Ltd. is involved in International Freight Forwarding,
Custom Clearance, Warehousing, transportation, Project Handling, Vessel
Chartering, and Vessel Agency.
Highly experienced staff stands ready to provide various services like
documentation, customs assistance, insurance, packing, shipping, storage and inland
transportation. Our staff handles everything from pre-shipment to post-shipment
formalities. We specialize in export packing and crating, shipping all types of cargo
from household goods to general cargo, automobiles.
Company strive to provide a high standard, timely and cost effective freight services
to the clients.
Vision
To be recognized as the leading shipping agency, freight forwarding and logistics
company nationally and internationally.
Mission
To provide cost-effective and efficient one stop solution to your every Logistics
need.

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Objectives of the Study:
• To know what is Import and Export.
• To understand about all different Documents required for Import and export
• To understand Procedure of import and export
Limitation of Study:
• The study is Conducted only on Company’s Mundra office
• Many of the Documents are very Confidential so I cannot present those
documents here

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 Collection of Data:
There are several ways of collecting the appropriate data which differ
considerably in context of money, cost, time and other sources at the disposable of
the researcher. There are two types of data:
•Primary data
•Secondary data
Primary data
Primary data are those which are collected a fresh and for the first time and thus
happen to be original in character.
•Observation
•Direct communication with respondent
•Personal interview
Secondary data
Secondary data are those which have already been collected by someone else and
have already been passed through statistical process.
In this project report secondary data is used
Methods of Data collection
 Invoice
 Sales report

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After Globalization and liberalization policies in 1992-93, Foreign Companies got
encouraged to come in India. A trend started where now doors were open for the
overseas companies in India. More FDI was allowed now. Policies took further
change in late 1990’s where more encouragement was given to the foreign
companies to invest in India, FEMA replaced FERA. Indian government started
managing Foreign Exchange instead of adopting restrictive attitude.
These policies were effective to a big extend and country conceded a big success in
order to improve performance of Balance of Payment and Balance of Trade of the
country. Outsourcing helped to generate employment where IT Sector have seen the
remarkable success that has never been faced before. Success at initial level has
given further encouragement to the foreign investors to give an eye to the other
sectors such as Retail, Real State, Commodities, Insurance, Automobile and banking
etc. Such kind of growth on global level has given a driving push to the Indian
economy in order to grow rapidly and become one of the fastest growing economies
of the world.
Talking about more positive impact of this positive change that took more than 10
years to come in to practice, this impact was exactly reverse of what happened in
early 1990’s where foreign companies came in India, but this time it was Indian
Companies that were going global and of was the proper globalization where
Indian companies were also eying other countries in the leadership of Indian
Business Houses
Shipping and Clearing Agencies plays an important role while importing or
exporting of goods. They make work easier to a big extend both for Importer and
exporter. They take responsibility for all legal and operational complications faced
while doing cross country trade. Followings are some responsibilities of shipping
and Clearing Agencies.

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 Furnish, whenever required by the Licensing Authority, an authorization
from each of the firms or persons by whom he is employed to act as their
Customs Agent.
 He knows that a client has not complied with the law or has made any error
in or omission from any documents which the law requires such client to
execute, advise his client promptly of the fact of such non-compliance, error
or omission and immediately bring the matter to the notice of the
appropriate officer of Customs in writing.
 Not appear, plead or act in any proceedings. Under Sections 179, 193, 194 or
196 of the Customs Act’1969, for and on behalf of any person other than the
person for whom he acted as licensee in relation to matters out of which the
proceedings have arisen.

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Theoretical Background
Shipping and Clearing Agencies plays an important role while importing or
exporting of goods. They make work easier to a big extend both for Importer and
exporter. They take responsibility for all legal and operational complications faced
while doing cross country trade. Followings are some responsibilities of shipping
and Clearing Agencies.
 Furnish, whenever required by the Licensing Authority, an authorization
from each of the firms or persons by whom he is employed to act as their
Customs Agent.
 He knows that a client has not complied with the law or has made any error
in or omission from any documents which the law requires such client to
execute, advise his client promptly of the fact of such non-compliance, error
or omission and immediately bring the matter to the notice of the
appropriate officer of Customs in writing.
 Not appear, plead or act in any proceedings. Under Sections 179, 193, 194 or
196 of the Customs Act’1969, for and on behalf of any person other than the
person for whom he acted as licensee in relation to matters out of which the
proceedings have arisen.
 Exercise due diligence to ascertain the correctness of any information which
he imparts to a client with reference to any Customs business.
 Intimate to the Licensing Authority any change of address immediately after
such change is affected.
 promptly pay over to Government when due, all sums received for payment
of any duty, tax or other debt or obligation owing to the Government and
promptly account to his clients any money received for them from

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Government, or received from them in excess of Governmental, or the other
charges properly payable in respect of the clients Customs business.
 not procure or attempt to procure, directly or indirectly, information from
Customs records or other Government sources of any kind to which access is
not granted by proper authority
Three Major Features of custom clearance
 Clearing and forwarding of goods that comes by foreign post.
 Goods cleared through Sea-ports.
 Goods cleared through Airports
Essential services provided by C&F Agencies
 Providing warehousing facility to the exporters for warehousing the goods
before their transportation to the docks/port.
 Transportation of goods to the docks and arrangements of warehousing at
the port.
 Arrangement of containers required for shipment of the goods.
 Booking of shipping space or air freighting.
 Advising the exporter as regards the relative cost of sending the goods by
different airlines/shipping lines as well as selection of the route of the
flight/ sea route.
 Arranging for marine/cargo insurance of the shipment. Preparation and
processing of shipping documents required for custom clearance.
 Arranging for various endorsements/issue of certificates from various
agencies.
 Providing assistance in the packing of the shipment.

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 Forwarding the documents to the exporter for their negotiation with the
bank.
Some Optional Services are
 Providing warehousing facilities abroad at least in some of the major
international markets in case the importer refuses to take the delivery of the
goods for any reason.
 Providing assistance to bring the goods back to India if the situation so
demands.
 Providing assistance to locate the goods in case of shipment is misplaced or
the cargo is stranded at some port.
 Making arrangements for assessment of damage to the goods to title claim
with the insurance company.

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DATA
PROCESSING AND
ANALYALISIS

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Import/Export Procedure:
Image source: Google

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Import and Export Documents:
Importer and Exporter Both have to prepare Documents accordingly
There are mainly 3 types of Documents
Commercial Documents
Financial Documents
Government Documents
Documents Prepared by Exporter:
Commercial Documents:
• Quotation :
An offer to sell Goods and should state clearly the Price, Details of quality quantity,
trade terms, Delivery terms and payment terms.
 Sales Contract:
An agreement between the buyer and the seller stipulating every details of the
transaction. It is a legally binding document. It is therefore advisable to seek legal
advice before signing the contract.
 Commercial Invoice:
It is a formal demand note for payment issued by the exporter to the importer for
goods sold under a sales contract. It should give details of the goods sold, payment
terms and trade terms. It is also used for the customs clearance of goods and
sometimes for foreign exchange purpose by the importer.

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 Packing List:
A list with detailed packing information of the goods shipped.
 Inspection Certificate:
A report issued by an independent surveyor (Inspection Company) or the exporter
on the specifications of the shipment, including quality, quantity, and/or price, etc.;
required by certain buyer and countries.
Insurance Certificate:
An insurance policy is an insurance document evidencing insurance has been taken
out on the goods shipped, and it gives full details of the insurance coverage. An
insurance certificate certifies that the shipment has been insured under a given open
policy and is to cover loss of or damage to the cargo while in transit.
Fumigation Certificate:
A pest control certificate issued to certify that the concerned products have been
undergone the quarantine and pre-shipment fumigation by the approved fumigation
service providers.
Consular invoice:
A document required by some foreign countries, showing shipment information
such as consignor, consignee, and value description, etc. Certified by a consular
official of the importing country stationed in the foreign country, it is used by the
country's customs officials to verify the value, quantity and nature of the shipment.

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Financial Documents:
Stand By Credit:
An arrangement between customer and his bank by which the customer may enjoy
the convenience of cashing cheques, up to a value. Or a credit set up between the
exporter and the importer guaranteeing the exporter will pay the importer a certain
amount of money if the contract is not fulfilled. It is also known as performance
bond. This is usually found in large transactions, such as crude oil, fertilizers,
fishmeal, sugar, urea, etc.
Instruction of Collection:
An instruction given by an exporter to its banker, which empowers the bank to
collect the payment subject to the contract terms on behalf of the exporter.
Bill of exchange:
An unconditional written order, in which the importer addressed to and required by
the exporter to pay on demand or at a future date a certain amount of money to the
order of a person or bearer.
Government Documents:
Export Deceleration:

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A statement made to the Director of Customs at port of entry/exit, declaring full
particulars of the shipment, e.g. the nature and the destination/exporting country of
the ship's cargo. Its primary use is for compiling trade statistics.
Export License:
A document issued by a relevant government department authorizing the imports
and exports of certain controlled goods.
Custom invoice:
A document specified by the customs authorities of the importing countries stating
the selling price, costs for freight, insurance, packing and payment terms, etc., for
the purpose of determining the customs value.
Documents Made by Importer
Shipping Guaranty:
Usually a pre-printed form provided by a shipping company or the bank, given by
an importer's bank to the shipping company to replace the original transport
document. The consignee may then in advance take delivery of goods against a
shipping guarantee without producing the original bill of lading. The consignee and
the importer bank will be responsible for any loss or charges occurred to the shipping
company if fault is found in the collection. It is usually used with full margin or trust
receipt to protect the bank's control to the goods.
Documentary Credit:

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A bank instrument began (issuing or opening bank), at the request of the buyer,
evidencing the bank's undertaking to the seller to pay a certain sum of money
provided that specific requirements set out in the D/C are satisfied.
Trust Receipt:
A document to release a merchandise by a bank to a buyer (the bank still retains
title to the merchandise), the buyer, who obtains the goods for processing is
obligated to maintain the
Sales contract:
An agreement between the buyer and the seller stipulating every details of the
transaction. It is a legally binding document. It is therefore advisable to seek legal
advice before signing the contract.
Promissory Note:
A financial instrument that is negotiable evidencing the obligations of the foreign
buyer to pay to the bearer.
Import Deceleration:
A statement made to the Director of Customs at port of entry/exit, declaring full
particulars of the shipment, e.g. the nature and the destination/exporting country of
the ship's cargo. Its primary use is for compiling trade statistics.

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Import License:
A document issued by a relevant government department authorizing the imports
and exports of certain controlled goods.
Documents made by other person:
Dock receipt:
A receipt to confirm the receipt of cargo on quay/warehouse pending shipment.
The dock receipt is used as documentation to prepare a bill of lading. It has no
legal role regarding processing financial settlement.
Bill of Leading:
An evidence of contract between the shipper of the goods and carrier. The customer
usually needs the original as proof of ownership to take possession of the goods.
There are two types: a STRAIGHT bill of lading is non-negotiable and a negotiable
or shipper's ORDER bill of lading (also a title document) which can be bought, sold
or traded while goods are in transit and is used for many types of financing
transactions.
Sea way Bill:
A receipt for cargo which incorporates the contract of carriage between the shipper
and the carrier but is non-negotiable and is therefore not a title document.

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Packing Note:
A list providing information needed for transportation purpose, such as details of
invoice, buyer, consignee, country of origin, vessel/flight date, port/airport of
loading, port/airport of discharge, place of delivery, shipping marks / container
number, weight / volume of merchandise and the fullest details of the goods,
including packing information.
Shipping Bill:
Shipping bill is the main customs document, required by the customs authorities for
granting permission for the shipment of goods. The cargo is moved inside the dock
area only after the shipping bill is duly stamped, i.e. certified by the customs.
Shipping bill is normally prepared in five copies:-
 Customs copy.
 Drawback copy.
 Export promotion copy.
 Port trust copy.
 Exporter's copy.
Contents of Shipping Bill
 Name and address of the exporter.
 Name and address of the importer.
 Name of the vessel, master or agents and flag.
 Name of the port at which goods are to be discharged.

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 Country of final destination.
 Details about packages, description of goods, marks and numbers, quantity
and details of each case.
 FOB price and real value of goods as defined in the Sea Customs Act.
 Whether Indian or foreign merchandise to be re-exported
 Total number of packages with total weight and value.
Significance of Shipping Bill
a) Shipping bill is the main customs document, required by the customs
authorities for granting permission for the shipment of goods.
b) The cargo is moved inside the dock area only after the shipping bill is
duly stamped, i.e. certified by the customs.
c) Duly endorsed shipping bill is also necessary for the collection of
export incentives offered by the government.
d) It is useful to the Customs Appraiser while determining the actual value
of goods exported.
A.R.E. 1 form (Central excise): this form ARE-1 is prescribed under Central
Excise rules for export of goods. In case goods meant for export are cleared directly
from the premises of a manufacturer, the exporter can avail the facility of exemption
from payment of terminal excise duty. The goods may be cleared for export either
under claim for rebate of duty paid or under bond without payment of duty. In both
the events the goods are to be cleared under form A.R.E-1 which will show the
details of the goods being exported, the relevant duty involved and if the duty is paid

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or goods being cleared under bond, details of goods being sealed either by the
exporter or Central Excise officials etc.
Exchange Control declaration Form (GR/PP/SOFTEX): under the exchange
control regulations all exporters must declare the details of shipment for monitoring
by the Reserve Bank of India. For this purpose, RBI has prescribed different forms
for different types of shipments like GRI, PP forms etc. These declaration forms
must be presented to the customs officials at the time of passing of export
documentation. Under the EDI processing of shipping bill in the customs, these
forms have been dispensed with and a new form SDF has to be submitted to the
customs in the place of above forms.
Export Application: this is the application to be made to the customs officials
before shipment of goods. The prescribed form of the application is the Shipping
Bill/Bill of Export. Different types are required for shipment like ex-bond, duty free
goods, and dutiable goods and for export under different export promotion schemes
such as claims for duty drawback etc.
Vehicle Ticket/Cart Ticket/Gate Pass etc.: before the goods are being taken inside
the port for loading, necessary permission has to be obtained for moving the vehicle
into the customs area. This permission is granted by the Port Trust Authority. This
document will contain the detail of the export cargo, name and address of the
shippers, lorry number, marks and number of the packages, driver’s license details
etc.
Bank Certificate of Realization: this is the form prescribed under the Foreign
Trade Policy, wherein the negotiating bank declares the fob value of exports and for
the date of realization of the export proceeds. This certificate is required for

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obtaining the benefit under various schemes and this value of fob is reckoned as fob
value of exports.
D. Other Document:
 Black List Certificate: it certifies that the ship/aircraft carrying the cargo has
not touched the particular country on its journey or that the goods are not from
the particular country. This is required by certain nations who have strained
political and economic relations with the so called “Black Listed Countries”.
 Language Certificate: Importers in the European Community require a
language certificate along with the GSP certificate in respect of handloom
cotton fabrics classifiable under NAMEX code 55.09. Generally four copies
of language certificate are prepared by the concerned authority who issues
GSP certificate. Three copies are handed over to the exporter. A copy is sent
along with the other documents for realization of export proceeds.
 Freight Payment Certificate: in most of the cases, the B/L or AWB will
mention the transportation and other related charges. However if the exporter
does not want these details to be disclosed to the buyer, the shipping company
may issue a separate certificate for payment of the freight charges instead of
declaring on the main transport documents. This document showing the
freight payment is called the freight certificate.
 Insurance Premium Certificate: this is the certificate issued by the
Insurance Company as acknowledgement of the amount of premium paid for
the insurance cover. This certificate is required by the bank for arriving at the
fob value of the goods to be declared in the bank certificate of realization.

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 Combined Certificate of Origin and Value: this certificate is required by
the Commonwealth Countries. This certificate is printed in a special way by
the Commonwealth Countries. This certificate should contain special details
as to the origin and value of goods, which are useful for determining import
duty. All other details are generally the same as that of Commercial Invoice,
such as name of the exporter and the importer, quality and quantity of the
goods etc.
 Customs Invoice: this is required by the countries like Canada, USA for
imposing preferential tariff rates.
 Legalized Invoice: this is required by the certain Latin American Countries
like Mexico. It is just like consular invoice, which requires certification from
Consulate or authorized mission, stationed in the exporter’s country.
8. OCTROI
 Octroi is the local tax levied by the civic body on goods entering into the city.
 There are three procedures for clearing goods which are meant for export.

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Procedure – 1, Export on payment of octroi duty and refund thereof after
export.
Pay the Octroi Duty and apply for refund of payment made.
 At Octroi Naka form B is issued with cash receipt for the payment of Octroi
Duty.
 Cargo is moved to the docks.
 At Docks Octroi officer prepares form “C” & endorses Shipping Bill Number
& Steamers Name.
 After shipment exporter prepares claim for refund by submitting following
documents:
 Covering Letter for refund of Octroi Duty.
 Original receipt of Octroi paid.
 Original Form B.
 Original Form C.
 Invoice under which material was bought to the city.
 Export invoice issued by the Exporter to the importer.
 Export Promotion Copy of Shipping Bill – Photo Copy.
 Bill of Lading or Airway Bill Copy.

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Procedure – 2, Export without payment of Octroi Duty.
N Form Procedure.
 Prepares form N in 3 copies.
 Checking of documents Shipping Bill, Carting order, Export Invoice by
Octroi officer.
 Under taking that the goods will be cleared for export within 7 days of
clearance through the octroi post.
 Octroi officer at Docks will endorse the Shipping Bill number & shipment
details on N form.
 Proof of export... N form with above endorsement to be submitted to the Head
Office along with copies of Shipping Bill, Bill of Lading, Export Invoice etc.
Procedure – 3
E.P (Export Promotion) Form.
 Registration form + IEC / RCMC + CA Certificate.
 Number will be allotted.
 Fees Rs. 500/-
Documents Checked
 Factory Challan cum Invoice.
 ARE –1.
 EP forms 3 copies.
 Export order.
 Shipping Bill.

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According to Foreign trade policy 2015-20
Mandatory Documents Required For Export of goods from India
• Bill of lading
• Commercial invoice cum packing list
• Shipping bill
Mandatory Documents Required For Import of goods into India
• Bill of leading
• Commercial invoice cum Packing list
• Bill of entry
o As per Foreign trade Policy Government reduce the mandatory Documents
The Term on which business deals are done
FOB {+the named port of origin)
Free on Board: The delivery of goods on the board the vessel at the named port of
origin (Loading) at seller’s expense. Buyer is responsible for the main
carriage/freight, cargo insurance and other costs and risks. In the export quotation,
indicate the port of origin (loading) after the acronym FOB, for example FOB
Vancouver and FOB Shanghai.

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CIF {+named port of destination}
Cost, Insurance and Freight: The cargo insurance and delivery of goods to the
named port of destination (discharge) at the seller’s expense. Buyer is responsible
for the import customs clearance and other costs and risks.
FCA {+the named point of departure}
Free Carrier: The delivery of goods on truck, rail car or container at the specified
point (depot) of departure, which is usually the sellers premises, or a named railroad
station or a named cargo terminal or into the custody of the carrier, at seller’s
expense. The point (depot) at origin may or may not be a customs clearance center.
Buyer is responsible for the main carriage/freight, cargo insurance and other costs
and risks.
In the air shipment, technically speaking, goods placed in the custody of an air carrier
are considered as delivery on board the plane. In practice, many importers and
exporters still use the term FOB in the air shipment. The term FCA is also used in
the RO/RO (roll on/roll off) services
In the export quotation, indicate the point of departure (loading) after the acronym
FCA, for example FCA Hong Kong and FCA Seattle. Some manufacturers may use
the former terms FOT (Free on Trucks) and FOR (Free on Rail) in selling to export-
traders.

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Risk Involved:
Currency Risks:
As regards covering the currency risk, due to the exchange rate fluctuations, you can
request your banker to book a forward contract.
Credit Risks:
You can cover your credit risk against the foreign buyer by insisting upon opening
a letter of credit in your favor. Alternatively one can avail of the facility offered by
various credit risk agencies. A specific insurance cover can also be obtained from
ECGC (Exports Credit & Guarantee Corporation) to cover your country risk besides
covering credit risk.
Country Risk:
ECGC provides cover to protect the exporter from country risks. A detailed
procedure how an exporter can get himself protected against the above risks are
given in separate chapters later.
Carriage Risk:
The carriage risk can be covered by taking an appropriate general insurance policy.

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Payment method
A. PAYMENT IN ADVANCE
This method does not involve any risk of bad debts, provided entire amount has been
received in advance. At times, a certain per cent is paid in advance, say 50% and the
rest on delivery. This method of payment is desirable when:
 The financial position of the buyer is weak or credit worthiness of the
buyer is not known.
 The economic/ political conditions in the buyer’s country are unstable.
 The seller is not willing to assume credit risk, as the case of open account
method.
However, this is the most unpopular methods as a foreign buyer would not be willing
to pay advance of shipment unless:
 The goods are specifically designed for the customer, and
 There is heavy demand for the goods (a seller’s market situation).

41
DOCUMENTARY BILLS:
Under this method, the exporter agrees to submit the documents to his bank along
with the bill of exchange. The minimum documents required are
 full set of bill of lading
 commercial Invoice
 Marine Insurance policy and other document, if required.
There are two main types of documentary bills:
 Documents against Payment,
 Documents against Acceptance.
Documents against payment (D/P): The documents are released to the importer
against payment. This method indicates that the payment is made against Sight Draft.
Necessary arrangements will have to be made to store the goods, if a delay in
payment occurs.
The risk involved that the importer may refuse to accept the documents and to pay
against them. The reason for non-acceptance may be political or commercial ones.
In India, ECGC covers losses arising out of such risks. Under this system, as
compared to D/A, the exporter has certain advantages:
 The document remain in the hands of the bank and the exporter does not
lose possession or the ownership of goods till payment is made,
 Other reason may include that the exporter may not be able to allow credit
and wait for payment.

42
Documents Against acceptance (D/A): The document are released against
acceptance of the Time Draft i.e. credit allowed for a certain period, say 90 days.
However, the exporter need not wait for payment till bill is met on due date, as he
can discount the bill with the negotiating bank and can avail of funds immediately
after shipment of goods.
In case of D/A as compared to D/P bills, the risk involved is much greater, as the
importer has already taken possession of goods which may or may not be in his
custody on the maturity date of the bill. If the importer fails to pay on due date, the
exporter, will have to start civil proceedings to receive his payment, if all other
alternatives fails. The risk involved can be insured with ECGC.
LETTER OF CREDIT (L/C):
This method of payment has become the most popular form in recent times, it is
more secured as company to other methods of payment (other than advance
payment).
A letter of credit can be defined as “an undertaking by importer’s bank stating that
payment will be made to the exporter if the required documents are presented to the
bank within the variety of the L/C”.
Generally, though exporters are complacent once they get the letter of Credit on hand
feeling that their payment is secured, let me say it is as much a dubious instrument
as is a safe instrument.
If one does not understand the implications of the terms and condition of a letter of
credit, the provisions under UCP 500, how co-operative are the exporter’s bank and

43
how good are the L/C opening bank and the reimbursement bank, he is sure to land
in trouble at once stage or another.
There are ample cases of frauds under the Letter of Credit. More and more ingenious
methods are adopted to circumvent the provisions of UPC 500 by fair or foul means.
Hence, even the safety and security under the Letters of Credit may prove to be no
better than a mirage for a man in the desert.
Hence, sufficient care is to be taken by the exporter to ensure that instrument is
received in order and the conditions of the L/C can be well complied with, and there
are no clauses of ambiguity.
CONTENTS OF A LETTER OF CREDIT
A letter of credit is an important instrument in realizing the payment against exports.
So, needless to mention that the letter of credit when established by the importer
must contain all necessary details which should take care of the interest of Importer
as well as Exporter. Let us see shat a letter of credit should contain in the interest of
the exporter. This is only an illustrative list.
 name and address of the bank establishing the letter of credit
 letter of credit number and date
 The letter of credit is irrevocable
 Date of expiry and place of expiry
 Value of the credit
 Product details to be shipped
 Port of loading and discharge

44
 Mode of transport
 Final date of shipment
 Details of goods to be exported like description of the product, quantity, unit
rate, terms of shipment like CIF, FOB etc.
 Type of packing
 Documents to be submitted to the bank upon shipment
 Tolerance level for both quantity and value
 If L/C is restricted for negotiation
 Reimbursement clause

45
Recommendations
• Company need to work according to Foreign Trade Policy 2015-20. It is
observed that requirement of Document according to new policy is less then
requirement of Documents according to 2009-14 policy.
• Company need to Have a separate employees for import and export
• Company should expands in other ports in India.

46
Management lessons
1. Hard work will always work:
Working hard towards your work will always prove
helpful. It help me because I worked hard to get work done such as
carting, stuffing and preparation of documentation.
2. Be confident enough to accept your faults:
If you go wrong anywhere then accept it because it
reduces the chance of defaults and loss.
3. Learn from past:
Trying not to repeat your mistakes and learning from
them is the best technique to improve.
4. Education is best investment you can make :
After working in the company I realized that
whatever I have learnt was useful in some or the other way.
5. Never make decision in hurry:
Steps taken in hurry always results in loss. This
was my experience when I got the wrong document signed. It also
causes loss of time.
6. Give respect to others at work place:
Be it your junior or senior respect them and they
will respect you back. This the way we maintain good official
relationship.
7. Don’t discriminate at work place:
There is no one superior or inferior to you. Never
discriminate anyone and listen to everyone.
8. Don’t be afraid to start:
Be it a new thing for you, just give it a start it
might be helpful for you.

47
9. Calculate and then take risk:
Taking risk in business is a part of it but being
calculative about it takes you to success.
10.Boss is not always right:
Though the boss is always right but cross
checking the instructions given by him and then politely telling the
truth to the boss will be beneficial for the business.
11.Don’t approach employees randomly:
Don’t go for all that politics which is going on in
the company.
12.Explore as much as possible:
Search and explore for option wherever possible.
As more options will mean the selection of the optimum one.
13.Be clear with your objective as an intern you almost every time cross
path with someone:
Be sure about the work given to you and if
possible restate it to your boss or the person who have assigned you
the work.
14.Pay attention to detail:
Be attentive to each and every instruction and
work given to you. If not understood then ask even the minutest
detail of it.
15. Always focus on time management:
Time management is a must else you lose on
business because the time of ships arriving at ports, their halt time
and leaving time is fixed.
16.Always learn to adopt:
Learn to adopt to changes be it the environment
you work in or the people you work for.
17. Gratitude and appreciation is matter: This works well for the
customers as they response you quickly.

48
18.Be hungry for knowledge if you don’t ask you don’t get :
Ask to avoid mistakes and clarify your queries.
19. Working with different personalities:
At the work environment you have to work with
different people and manage to work well with them because you
have no option.
20.Use quantitative support to make decisions:
Analyzing the data for better results minimizes the
risk.
21.Don’t be overly helpful if you are new in organization:
This is true because then existing people try to
take advantage of you.
22.When things get complicated, go back to basics:
Do not complicate things when you are
already in complications, just go back to basics and check for
defaults.
23. Continuously make network in organization it always helps you:
It helps to build good relationship both
personal and official.
24.Consider a person senior to you more knowledgeable:
The person senior to you is always more
powerful at his knowledge.
25.Days always fill up faster than you’d expect:
Be ahead of the time and plan well in advance
26.Stop multitasking when you are new :
Concentrate on few things rather than working
for more tasks.
27. More workforce doesn’t mean more productivity :
Sometimes only one person is more than
enough to handle the task, many people lead to mismanaging the
task.

49
28.Always take notes :
It is better to take notes and look up at them when
you are in need.
29. Always seek feedback:
Ask for the valuable feedback and work
according to it.
30.Clear all dues in time :
Clear all the duties assigned to you well in time.
Punctuality matters.

50
Conclusion
After doing study for 2 months for understanding Export Process and Import-Export
Documentation, I would like to conclude that Globalization is spreading its wings
throughout whole world and India is not remained untouched in anyways. After
liberalization of Indian economy in early 1990’s, growth has been remarkable,
especially after introduction of new FDI Policies in late 1990’s.
As result export was encouraged and a lot of new players came forward to do
global trade and International Business became one of the rapidly growing fields in
India. From past few months growth has been slow down to a little extent because
of global recession but hopefully soon it will pick up the pace again.
Custom house agents are the main chain for Importing-Exporting goods. They
facilitate the documentation part of it which is again very complicated. They also
help to arrange containers and clearing the shipment of imported goods. They have
to remain in continuous contacts with customs and excise.

51
Bibliography
Books:
 Foreign Trade policy
 Export import procedures and documentation- by Thomas E Johnson &
donna l bade
 Documents received from Organization
Websites:
 www.fdapl.in
 www.infodriveindia.com

import export procedure&dovumentation

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