Import and Export Essay Example for Free

Im mien and Ex expression EssayPhysical Exports If the goods physic altogethery go out of the country or go argon 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 order by the DGFT. Under Deemed Exports, the goods may be supplied to the manufacturer exporter who ultimately export a end 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 betoken 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 argon 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 frame phrase to distinguish it from Deemed Exports which is gross sales in India exclusively 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 other manufacturers or from the marketplace and exports the same.An exporter can be some(prenominal) 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 m andatory on your part to follow certain procedures, rules and regulations as prescribed by various regulatory governance 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 text files are required to be prepared keeping in view of the requirement of the foreign vendees and our regulatory authorities.INCOTERMS 2013What Incoterms Rules Are11 terms of shipment and delivery provided by the International Chamber of Commerce for use in urge ons for the business-to-business sales/purchases of tangible, portable goods, for implementation 1/1/11.Legacy to a long tradition of internationalist use since 1936.Written to reflect rather than dictate trade practice. incessantly abbreviated by a three character English language acronym.Always accompanied by a geographic place the more precise the better.Updated to reflect current trade practiceUsed exclusively in sales/p urchase contracts (well call these sales contracts).Increasingly considered as a replacement for the former Uniform technical Code shipment and delivery terms (UCC2-319 by means of 2-324)What Incoterms Rules ArentLaw. They must be specified in order to apply.All inclusive cannot address such issues as customary operations of mail carriers, ports, trades, government regulations, etc.What Incoterms Rules DoDivide cost, dangers and responsibilities between traffickers and buyers. Guide one or the other party into subsidiary contracts required to fulfill designated tasks such as contracts of outfit and contracts of insurance.What Incoterms Rules wearyt DoAddress passage of title.Address recognition of revenue.Address remedies for breach of contract.Address more than one contract. (drop shipments)Refer to ships educate which changes the delivery point for FOB, CFR, CIF. Incoterms is a registered trademark of the International Chamber of Commerce, registered in several countries a nd used with permission.DefinitionsDelivery 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 ecstasy). 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 agreed place (i.e., the seller delivers when goods arrive). DAT, DAP and DDP Incoterms rules are used in arrival contracts.Liner terms carrier fill up and unloads vas (used with waterborne transport). Ex Works (EXW) + Named Place (place where the shipment originates usually the sellers premise) segmentationSeller have goods available when promised and case to the completion known or agreed. Buyer everything else (pre-carriage, export clearance, main carriage, en tailment clearance, on-carriage) Free Carrier (FCA) + Named Place (either place where shipment originates usually the sellers premises or another place on the sellers side.) BreakdownA) When accompanied by the place where the shipment originates Seller have goods available when promised, packaged to the extent known or agreed, load collecting vehicle, export clearance.Buyer everything else (pre-carriage, main carriage, substance 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, outcome clearance, on-carriage) posture Paid To (CPT) + Named Place (on the buyers side) Breakdown Seller deliver the goods appropriately packaged to the carrier for transportation to the denoted place of destination 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 distribute insurance in such a manner that the buyer can acquire 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 traced 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 carriageDelivered Duty Paid (DDP) + Named Place (on the buyers side) Bre akdown 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 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 packed 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) lawsuit 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. field AGood infrastructure efficient inland transportationKnown for labor disputeCountry BExcellent inland transportationPort congestion from 10 to 90 long timeCountry CGood port facilit iesEfficient inland transportationBuyer not reliableCountry DNone of the above disadvantagesCountry is stableBuyer is reliableSHIPPING DOCUMENTSSELLERInvoice includes value of the cargo, details related to payment, customs 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 exertion delivery.Essential contentsDescriptionMeasurementQuantityCertificate 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 importer and is useful for clearance of goods from the customs authority of importing country.CARRIERSBill of Lading (B/L) The document issued by shipping company acknowledging the pass 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 dischargeShipping 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/LCleandirtystaleThrough/Tran-shipmentCombine transportMaster manseAirway Bill The receipt issued by Airlines Company 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 necessary) Shipping Guarantee is given by the buyer in support of clearing cargo with put B/L. It also protects the carrier against any fraud and indemnify against any claims.CARGO INSURANCECargo insurance is the document obtained from the freight awayer used to mark off the consignee that insurance will cover the loss of damage to the cargo during transit. Reasons for InsuranceProtection against riskPrevent financial lossRequirement by fix 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 report landing Account (unloading/discharge report)PAYMENT MODESAdvanceCredit accountConsignment saleDocumentary collection1. Document Against Payment (D/P) provider ship goods and forward bill of exchange to buyers fix through his own commit. No credit involved and buyer obtain title of goods after payment.2. Document 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. garner 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. Confirmed2. unconfirmedRed clauseRevolvingTransferable hindquarters to backAdvantagesSecureFinancial assistanceBank control and hold title to goodsSeller receives payment before buyer rece ives goodsDisadvantageOver somatic trust on shipping documentationNo physical inspection of goodsBank not familiar with shipping practicesSubject to fraudVery costlyADVANTAGES OF EXPOT line of businessCreating goodwill between nations with divergent interests.Exchange of goods unavailable overseasEnhance domestic competitivenessIncrease sales and profitsGain global market shareExploit corporate technology and know-howExtend sales potential of existing productStabilize seasonal market fluctuationsEnhance potential for corporate expansionSell excess production capacityGain 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 transit quick-witted property rights