Export & Import Internship Report

1. A STUDY ON
EXPORT-IMPORT PROCEDURES AT TEJAS NETWORKS,
PUDUCHERRY
A Project Report Submitted in Partial Fulfillment of the Requirements for the award
of Degree, Master of Business Administration in International Business
Submitted by
Mr. Vishal Kumar
Reg. no: 14382064
Under the Guidance of
Dr. M. BANUMATHI
Associate Professor
DEPARTMENT OF INTERNATIONAL BUSINESS
PONDICHERRY UNIVERSITY
PONDICHERRY – 605 014
(2014-16)

2. ACKNOWLEDGEMENT
Apart from the efforts of me, the success of this project depends largely on the
encouragement and guidelines of many others. I take this opportunity to express my gratitude to
the people who have been instrumental in the successful completion of this project.
I take immense pleasure in thanking Mr. P SRIDHARAN, Head of the Department
of International Business who has supported me to complete this project. I wish to express
my deep sense of gratitude to my Internal Guide, Dr. M. BANUMATHI, Associate
Professor, and Department of International Business for her kind guidance, cooperation,
and useful suggestions, which helped me to complete the project on time.
I wish to express my profound sense of gratitude to my guide Mr. Gnanasekharan
HR Manager, Tejas Networks, Puducherry for providing required facilities throughout
my internship and for the valuable guidance bestowed by him.
Finally, I thank my parents, friends and almighty for their constant support and
encouragement throughout the project
VISHAL KUMAR

3. DECLARTION
I hereby declare that this internship project report titled “A Study on
Export-Import Procedures at Tejas networks, Puducherry” is submitted to the
Department of International Business, School of Management, Pondicherry
University is based on the original work done entirely by and is completely based on
my own observations and research. It hasn’t previously been formed basis for award
of any other Degree, Diploma, Fellowship or any other similar title.
The facts presented in this study are true to the best of the knowledge and
understanding.
Place: Signature of Student
Date:

4. 1. INTRODUCTION
Export refers to the process of marketing goods and services to consumers in
foreign countries. It involves various activities from the receipt of an order till
the receipt of payment of goods which are exported to foreign country.
Marketing is a social process by which individuals and groups obtain what they
need and want through creating, offering, exchanging products and services of
value with others”.
Export Marketing directs the flow of a company’s goods and services
to consumers or users in more than one nation. Exports are vital for the growth
of economy. As the countries depend on one another for one thing or other
exports and imports are essential to make an economy strong and vibrant. For
India exports are important because they help in earning the much sought after
foreign exchange.
The changed scenario of business left us with a huge market to
explore. There is no restriction for place/market. It’s the same for an industry
like steel. Export is the easy way to enter the foreign market. There is a
continuous effort made by companies to expand markets by increasing exports.
Basically there are 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.

5. 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.
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 2015-20, 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.
The Indian telecom industry has been one of the best performing
industry groups in the recent years. In order to facilitate the sector several
reforms have been introduced in the sector during the past decade. The National

6. Telecom Policy of 1994 and the New Telecom Policy of 1999 (NTP-99) has
been the driving force of the development and liberalization in this sector. Since
its inception, Department of Telecommunication (DoT) is formulating
developmental policies for driving the growth of the telecom sector.
2. COMPANY PROFILE
Tejas Networks creates end to end transport solutions built on optical networking
technology. Tejas’ transport solutions are being successfully deployed today in
all major telecom networks in India and in over 50 countries across the world.
These solutions cover traditional SDH/SONET, Carrier Ethernet, transition
solutions like Carrier Ethernet over SDH/SONET High capacity C/DWDM
solutions as well as a common Network Management System backed by 24x7
global support.
Tejas has been globally recognized as a leading technology company. A
Red Herring Global 100 Award Winner company, Tejas Networks has won
awards such as Deloitte Technology India Fast-50 India 5 years in a row,
Deloitte Fast-500 Asia 4 years in a row and is studied as a high-tech company
from India in a case at Harvard Business School. For its product excellence,
Tejas has won the ‘Distinguished Product Company’ and award in ‘Innovation’
from NASSCOM, and award for ‘Best Electronic Product of the Year, 2010’
from the Indian Semiconductor Association (ISA). For its R&D excellence,
Tejas has won the CSIR, DSIR and TEMA awards for R&D excellence, the top
awards given to any technology company in India as well as the ELCINA-Dun &
Bradstreet award for R&D excellence.
Vision

7. To build a pioneering, innovation-driven, global networking product Company
Mission
To innovate leading-edge, yet pragmatic, telecommunications products and
solutions that provide the highest value to our customers worldwide.
Values
We are committed to
 Delivering outstanding value to customers across the world
 Staying on the leading edge of telecommunication product innovation
 Blending best of both worlds-differentiated value at optimal cost
 Innovating to optimize capex and opex for our customers
People
We are a company of entrepreneurs. We strive to instill in our members,
a proactive, innovative and go-getting culture and seek to encourage 5 values in
every member - Customer value, Achievement value, Recognition value,
Education value and Social value.
Quality
Quality in our work and in the products we create is the cornerstone of
our value proposition. Tejas Networks is the only Indian telecom equipment
company to be certified by TL9000 as the Telecom Quality Management
System. Tejas Networks is also ISO 9001:2000 certified.
Innovation
Innovation is a core value. Spans from technology and product to
business model to innovative people practices.
History
Established in the year 2000, is a pioneering telecommunications
company started by a passionate team of three global technologists. Since then,

8. Tejas Networks has become a leading provider of end-to-end optical transport
solutions to telecom service providers. Tejas customers include telecom carriers
(telcos) offering fixed telephony, mobile services, enterprise connectivity and
ISP services. These carriers are spread across verticals like telecom, utilities,
media and defence. Tejas helps customers get Future Ready. Today. TM by
enabling a smooth migration from legacy TDM to new-age packet based
transport with minimal capex and opex spend. Tejas is a market leader in the
highly competitive Indian telecom market and is ranked amongst top-ten
companies in the global Optical aggregation market, with products deployed in
over 60 countries.
Tejas has over 70% of its workforce deployed in R&D with a
bulk of the R&D team coming from premier institutes in India such as IISc, IITs
and NITs. Tejas has won many awards for its R&D capabilities and innovative
telecom products.
Milestones
2014
 Wins VTPC Export Excellence Award from Govt. of Karnataka
2013
 Ships 300,000th unit
 Launches TJ1400 PTN and TJ1600 PTN portfolio
 Deploys the largest greenfield PTN network in SE Asia
 Expands its footprint in Latin America, Middle East and North Africa
 Wins Economic Times Award 2013 for Most Innovative Telecom
Product
2012
 Ships 2,50,000th unit

9.  Expands its footprint in Africa
 Launches the vSave100 Energy Management Solutions
 Files the 100th patent
 Wins the Prime Minister’s Diamond Jubilee Technology Award for
Innovation, for the2nd time
 vSave100 wins Aegis Graham Bell Award for Innovation in Green
Telecom
 vSave100 solution wins the IESA Technovation Award for 2012
 Mr Sanjay Nayak, CEO & MD of Tejas Networks wins the IESA
Sarabhai Award for 2012
2011
 Ships 2,00,000th unit
 Rolls out PTN products based on MPLS-TP technology
 Deploys it’s POTP products in many tier 1 3G Networks in India
 Wins partner of the year award from Airtel, India’s No 1 mobile operator
 Wins the Government of India’s TCOE Award of Excellence in Telecom
Products
 Expands it’s footprint in South and Central Americ
 Mr. Sanjay Nayak, CEO & MD, wins ELCINA – EFY Electronics Man
of the Year Award
 Wins Aegis Graham Bell Innovative Telecom Product Award
 Wins the ISA Best Electronic Product of the year award
 Wins EFY Electronic Organization of the Year Award
 Wins NASSCOM Innovation Award 2011 for it’s POTP product line
2010
 Ships 1,50,000th unit
 Launches portfolio for Defence
 Establishes Optical Networking Center of Excellence at JNTU Kakinada

10.  CTO Dr. Kumar N Sivarajan named ‘Techno Visionary’ by Indian
Semiconductor Association (ISA)
 Wins NASSCOM Innovation Award for ‘New Technology
Advancement’
 Wins ISA Best Electronic Product of the Year Award
2009
 Launches Carrier Ethernet Aggregation switches
 First to demonstrate Open Ring ERPS with an MPLS core at Carrier
Ethernet World Congress, Berlin
 Wins Deloitte Fast-500 Asia for the fifth year in a row
 Wins Deloitte Technology Fast-50 India for the fourth year in a row
2008
 Launches TJ2000 Carrier Ethernet platform with Carrier Ethernet Access
Switches
 Launches DWDM portfolio
 First to demonstrate ERPS (Ethernet Ring Protection Switching) at
Carrier Ethernet World Congress, Berlin
 One of the first commercial multi-point PBB-TE implementations
 Wins TEMA award for R&D excellence
 Wins Elcina D&B Award for Excellence in Exports
2007
 Ships 100,000th MEF compliant Ethernet port
 Case on Tejas Networks written by Harvard Business School
 Receives Metro Ethernet Forum (MEF) certification for its packet-aware
optical products
 Wins Elcina D&B Award for Excellence in R&D
 Wins TEMA award for Excellence in Innovation

11.  Named Emerging Company of the Year, 2007 by Voice & Data
magazine
 Part of Business Today’s “Top 10 IT company in India”
2006
 Globally one of the first L2 solutions to be MEF certified
 Wins CSIR Diamond Jubilee Technology Award
 Wins IETE Corporate Award for Excellence in Telecommunications
 Wins Deloitte Fast-500 Asia
 Part of Business Today’s “Top 20 companies to watch in 2006”
2005
 Named Red Herring Asia 100 winner
 Wins Deloitte Technology Fast-50 India
 Named ‘Distinguished Product Company’ by NASSCOM
 Opens new headquarters in Bangalore. Minister of Communications &
IT,
 DayanidhiMaran inaugurates.
2004
 Wins TEMA award for excellence in R&D in Electronics
 CTO Dr. Kumar N Sivarajan wins ‘Technovators’ award from MIT
 Gets ISO 9001:2000 Certification
2003
 Bags ten new customers in one year
 TJ100 used to build the first phase of RailTel’s National Optical
 Network. Link inaugurated by Minister for Railways,
 Mr. Nitish Kumar.
2002

12.  First commercial deployment of L1 Ethernet over SDH/SONET based on
ITU standards
 Ranked as ‘Most Promising Next Gen Companies” by Computer
Today(date TBD)
2001
 Launches TJ100 family of versatile, carrier-class optical access products
 Signs up the first customer, Tata Power
 Named amongst “India’s 25 upstarts” by Silicon India
2000
 Tejas Networks established in a rented basement by Sanjay Nayak, Dr.
Kumar N Sivarajan andArnob Roy in Bangalore with capital investment
by Dr. GururajDeshpande.
2.1 Products

13. Fiber optics has become the de facto medium for backhaul of voice
and data in the networks across the world today. The global optical fiber
deployment stands at over 100 million miles today. The global optical
networking market is estimated to be $15 billion and is expected to grow to $24
billion in the next 5 years (Source: Ovum).
Tejas Networks offers end-end transport solutions to customers worldwide to
help migrate them to next generation networks. Designed and built in world-class R&D
facilities in India, Tejas products are deployed in every major telecom network in the
world’s fastest growing and second largest telecom market, India and in over 50
countries around the world. Tejas has developed & delivered a range of high quality
Optical Transmission and Carrier Ethernet equipment. Our Next-Gen SDH/SONET
equipment is available in line rates ranging from STM-1/OC-3 to STM-64/OC-192, with
a very rich set of service interfaces and optics options. In addition to this Tejas also
offers a range of C/DWDM equipment as well as Carrier Ethernet platforms. Tejas R&D
has been awarded with the top R&D awards such as the CSIR, DSIR award and the
ELCINA Dun & Bradstreet award. Tejas products have won innovation awards and
‘Best Electronic Product’ awards from renowned bodies like NASSCOM and Indian
Semiconductor Association. Tejas has been recognized as a ‘Distinguished Product
Company’ and has received global recognition as a ‘Red Herring 100 company’.

14. 3. EXPORT MANAGEMENT
Procedure
1. Seller and Buyer conclude a sales contract, with method of payment
usually by letter of credit (documentary credit).
2. Buyer applies to his issuing bank, usually in Buyer's country, for letter of
credit in favor of Seller (beneficiary).
3. Issuing bank requests another bank, usually a correspondent bank in
Seller's country, to advice, and usually to confirm, the credit.
4. Advising bank, usually in Seller's country, forwards letter of credit to
Seller informing about the terms and conditions of credit.
5. If credit terms and conditions conform to sales contract, Seller prepares
goods and documentation, and arranges delivery of goods to carrier.
6. Seller presents documents evidencing the shipment and draft (bill of
exchange) to paying, accepting or negotiating bank named in the credit
(the advising bank usually), or any bank willing to negotiate under the
terms of credit.

15. 7. Bank examines the documents and draft for compliance with credit terms.
If complied with, bank will pay, accept or negotiate.
8. Bank, if other than the issuing bank, sends the documents and draft to the
issuing bank.
9. Bank examines the documents and draft for compliance with credit terms.
If complied with, Seller's draft is honored.
10. Documents release to Buyer after payment, or on other terms agreed
between the bank and Buyer.
11. Buyer surrenders bill of lading to carrier (in case of ocean freight) in
exchange for the goods or the delivery order.

16. 3.1 Processing of an Export Order
Step-1 Confirmation of Export Contract
An export contract should be as clear as possible. It should clearly define the
duties and responsibilities of the parties; determine the exact point at which the
title and/or risk change from seller to buyer. The various elements of an export
contract are as follow:
1. Product, Standards and Specifications
2. Quantity

17. 3. Inspection
4. Total Value of the Contract
5. Terms of Delivery/Commercial Terms
6. Taxes, Duties and Charges
7. Period of Delivery Shipment/Part Shipment etc
8. Packing Labeling and Marking
9. Terms of Payment-Amount, Mode & Currency
10. Discounts and Commissions
11. Licenses and Permits
12. Insurance
13. Documentary Requirement
14. Guarantee
15. Force Majeure or Excuse for Non-Performance of Contract
16. Remedies.
17. Arbitration.
Besides these main elements, an export contract may contain other
elements desired by the parties to the contract. Export order should be confirmed
by the exporter only after the terms and conditions of the L/C have been found to
be in order.
This is the most crucial stage. All subsequent actions and reactions will
depend on the terms and conditions of the export contract. It should be ensured
that the contract has been entered into in accordance with the prevalent export
promotion policies of the country and the foreign exchange regulations. The
export order must specify the mode of the payment in unmistakable terms such
as letter of Credit, Documents of Payment, Documents against Acceptance, etc.

18. The specifications stipulated by the importer in the export order and the L/C such
as delivery schedule, packing, inspection, marking, etc., must be strictly adhered
to. The documents required by the foreign buyer must be prepared and submitted
to the negotiating bank in the exact specified form and manner.
Step -2 Sourcing of Export Order
Upon confirmations of the export order preparations for the dispatch of
goods are started. A ‘Delivery Note’ (in duplicate) or ‘Production Order’ is sent
to the Work Manager or the Factory manager. This note should contain the
description of the goods as has been given in the export order, along with a copy
of the instructions given by the importer. The date by which the goods must be
manufactured, the date by which the necessary formalities must be completed,
the requisite time margins to be given and the shipment must be clearly intimated
to Works manager. While sourcing the goods from suppliers, merchant exporter
has to lay down clear cut specifications of quality norms because the ultimate
accountability to the buyer is of the exporter only. In case of poor quality, the
exporter may not be in position to get repeat order from the foreign customers
who have wide choice of the exporters in the world market.
Required quantity is produced in fully by production unit after the
recommendation of production samples in accordance with order sample.
Produced quantity is delivered to Packing Department for dispatching
operations.
Step 3 Dispatching
As the Production unit delivers the goods to Packing Department, the
following procedures are to be followed in order to dispatch the goods:-
1) Packing
The Packing Incharge receives the importer’s instructions for packing from the
Merchandiser and covers the following operations:

19. i. Final finishing of the goods(final passing, clipping etc)
ii. Tagging & Folding(according to importer’s instructions)
iii. Packing
2) Labeling
Specific marketing and labeling is used on report shipping cartons & containers
to:
i. Meet shipping regulations
ii. Ensure proper handling
iii. Conceal the identity of contents
iv. Help receivers identify shipments
In overseas buyer usually specifies export marks that should appear on the cargo
for easy identification by receivers. Many markings may be needed for shipment.
Exporters need to put the following markings on cartons to be shipped:
 Shipper’s mark
 Country of origin
 Weight marking(in Lbs or Kgs)
 No. of packages & size of cases
 Cautionary markings such as ‘this side up ’ or ‘use no hooks’ (In English
and in language of country of destination)
 Port of entry
3) Inspection
After packing and labeling, goods are inspected by the inspection
agent or buying agent on behalf of importer. That means importer sends his own
agency to inspect the goods. The inspector has right to open any of the carton or
bale to verify the goods in accordance with invoice, packing list and desi red
quality scale.
If he finds any defect he can send these goods for processing again,
otherwise, he issues Inspection Certificate. If buyer demands handloom
certificate then exporter ask textile committee to inspect the consignment and
provide them handloom inspection certificate. This certificate can be helpful to

20. suit against importer in case of disputers or undue rejection of goods by
importer.
4) Containerization
A container is an article of transport equipment, strong enough for the
repeated use, to facilitate handling and carriage of goods by one or other modes
of transport.
Normally containers having following dimensions are used in handloom field:-
a. 20 ft. 26 cbm
b. 40 ft. 54 cbm
c. 30 ft. 60 cbm (high cube)
5) Locking of Containers
Before locking the container, excise authorities select 10% of rolls as
samples and inspect them. The samples are sent for further sub-mission to
customs. After examination of cargo, the excise seal along with the seal of
shipping line on the container and endorse the excise invoice, AR-2 form, gate-
pass etc. The main check point in the excise documents are:-
Name & Address of Consignee
Destination
Description of goods & Specifications
FOB value of goods
Quantity
Movements of goods (from -- to --)
Container no. & Truck no.
Identification marks & Excise no.
For additional security of goods, in transit, the doors of container are locked with
the iron rods with seals. In case of any shortage reported by the buyer and when
a claim is required to be filled, excise endorsed documents play extremely
crucial role.

21. Step 4: Shipping of Goods
1. Reservation of Space:
Every exporter must reserve the space at the port before shipment. It gives
easiness to the exporter to load the material in the vessel. It is nothing but storing
the goo ds at the port before loading.
2. Transport of goods from Factory to the port:
After completion of the rolling of material in the factory, the material
should transport the goods from factory to port by road or by rail. It
depends on the cost, quantity of goods and demand.
3. Customs clearance:
The exporters should get customs clearance from customs department
before shipment. The customs department by examining the documents
like Commercial Invoice, Packing List, Original and duplicate copy of
AR4 form, Original of the inspection certificate, Duplicate GR form.
4. Let ship Order:
The exporter can get order for loading the material after examining the
goods.
5. Issue of Mate’s receipt:
After completion of loading the material into the ship, the master of the
vessel issues the MR certificate.
6. Issue of bill of lading:
It talks about the quantity of the material and weight of the material. This
certificate issued by the charter party or agent at the port.
5: Post Shipment Procedures
1. Dispatch of documents by Agent to the Exporter:
After shipment, the documents will be dispatched to the exporter by the
agent for further reference.
2. Sending shipment advice to the importer:
The exporter should send the shipment advice to the importer after
completion of the shipment at the port. The exporter should send these
following documents. They are:
a) Anon-negotiable copy of the bill of leading

22. b) Commercial list
c) Packing list
d) Customs invoice
3. Negotiations and Collection:
Every exporter must send the documents to the bank for negotiation and
collection after completion of the shipment procedure. By our look of the
documents, the bank will issue the amount to the exporter.
4. Claiming Duty Drawback / DEPB:
The exporter should claim either duty draw back/DEPB for export
benefits. These benefits issued by the government through DGFT.

23. Export Procedure Flow Chart
3.2. TERMS OF SHIPMENT – INCOTERMS
The Inco terms rules or International Commercial Terms are a series of
pre-defined commercial terms published by the International Chamber of
Commerce (ICC) that are widely used in International commercial transactions
or procurement processes. A series of three-letter trade terms related to common
contractual sales practices, the Inco terms rules are intended primarily to clearly
communicate the tasks, costs, and risks associated with the transportation and
delivery of goods.
The Inco terms rules are accepted by governments, legal authorities,
and practitioners worldwide for the interpretation of most commonly used terms
in international trade. They are intended to reduce or remove altogether
uncertainties arising from different interpretation of the rules in different
countries. As such they are regularly incorporated into sales contracts
worldwide.
The eighth published set of pre-defined terms, Incoterms 2010 defines
11 rules, and are subdivided into two categories based only on method of
delivery. The larger group of seven rules applies regardless of the method of
transport, with the smaller group of four being applicable only to sales that solely
involve transportation over water.
EXW – Ex Works (named place of delivery)
The seller makes the goods available at his/her premises. The buyer is
responsible for uploading. This term places the maximum obligation on the
buyer and minimum obligations on the seller. The Ex Works term is often used
when making an initial quotation for the sale of goods without any costs
included. EXW means that a seller has the goods ready for collection at his
premises (works, factory, warehouse, plant) on the date agreed upon. The buyer
pays all transportation costs and also bears the risks for bringing the goods to
their final destination. The seller does not load the goods on collecting vehicles
and does not clear them for export. If the seller does load the goods, he does so at
buyer's risk and cost. If parties wish seller to be responsible for the loading of the

24. goods on departure and to bear the risk and all costs of such loading, this must be
made clear by adding explicit wording to this effect in the contract of sale.
FCA – Free Carrier (named place of delivery)
The seller delivers goods, cleared for export, to the buyer-designated
carrier at a named and defined location. This is used for any mode of transport.
The seller must load goods onto the buyer's carrier. The key document signifying
transfer of responsibility is receipt by carrier to exporter.
CPT – Carriage Paid To (named place of destination)
The seller pays for carriage. Risk transfers to buyer upon handing goods
over to the first carrier at place of shipment in the country of export. This term is
used for all kind of shipments.
CIP – Carriage and Insurance Paid to (named place of destination)
The containerized transport/multimodal equivalent of CIF. Seller pays for
carriage and insurance to the named destination point, but risk passes when the
goods are handed over to the first carrier.
DAT – Delivered at Terminal (named terminal at port or place of
destination)
The Seller delivers when the goods, once unloaded from the arriving
means of transport, are placed at the Buyer's disposal at a named terminal at the
named port or place of destination. "Terminal" includes any place, whether
covered or not, such as a quay, warehouse, container yard or road, rail or air
cargo terminal. The Seller bears all risks involved in bringing the goods to and
unloading them at the terminal at the named port or place of destination.
DAP – Delivered at Place (named place of destination)
Can be used for any transport mode, or where there is more than one
transport mode. The seller is responsible for arranging carriage and for
delivering the goods, ready for unloading from the arriving conveyance, at the
named place. (An important difference from Delivered At Terminal DAT, where
the seller is responsible for unloading.)
DDP – Delivered Duty Paid (named place of destination)

25. Seller is responsible for delivering the goods to the named place in the
country of the buyer, and pays all costs in bringing the goods to the destination
including import duties and taxes. The seller is not responsible for unloading.
This term is often used in place of the non-Incoterm “Free In Store (FIS)". This
term places the maximum obligations on the seller and minimum obligations on
the buyer.
FAS – Free alongside Ship (named port of shipment)
The seller must place the goods alongside the ship at the named port. The
seller must clear the goods for export. Suitable only for maritime transport but
not for multimodal sea transport in containers (see Incoterms 2010, ICC
publication 715). This term is typically used for heavy-lift or bulk cargo.
FOB – Free on Board (named port of shipment)
The buyer must advance government tax in the country of origin as
commitment to load the goods on board a vessel designated by the buyer. Cost
and risk are divided when the goods are actually on board of the vessel. The
buyer must clear the goods for export because he did not pay for the goods in the
country of origin. The term is applicable for maritime and inland water way
transport only but not for multimodal sea transport in containers (see Incoterms
2010, ICC publication 715). The seller must instruct the buyer the details of the
vessel and the port where the goods are to be loaded, and there is no reference to,
or provision for, the use of a carrier or forwarder. This term has been greatly
misused over the last three decades ever since Incoterms 1980 explained that
FCA should be used for container shipments.
It means the buyer pays for transportation of goods to the port of
shipment, loading cost. The buyer pays cost of marine freight transportation,
insurance, uploading and transportation cost from the arrival port to destination.
The passing of risk occurs when the goods are in buyer account.
CFR – Cost and Freight (named port of destination)
Seller must pay the costs and freight to bring the goods to the port of
destination. However, risk is transferred to the buyer once the goods are loaded

26. on the vessel. Insurance for the goods is not included. This term is formerly
known as CNF (C&F, or C+F). Mari-time transport only.
CIF – Cost, Insurance and Freight (named port of destination)
Exactly the same as CFR except that the seller must in addition procure
and pay for the insurance. Mari-time transport only Freight.
3.3 METHODS OF PAYMENT
There is no predefined definition of personal import. In general a
personal import is a direct purchase of foreign goods from overseas mail order
companies, retailers, manufacturers or by an individual for the purpose of
personal use.
The most common terms of purchase are as follows:
 Consignment Purchase
 Cash-in-Advance (Pre-Payment)
 Down Payment
 Open Account
 Documentary Collections
 Letters of Credit
Consignment Purchase
Consignment purchase terms can be the most beneficial method of
payment for the importer. In this method of purchase, importer makes the
payment only once the goods or imported items are sold to the end user. In case
of no selling, the same item is returned to the foreign supplier. Consignment
purchase is considered the most risky and time taking method of payment for the
exporter.
Cash-in-Advance (Pre-Payment)
Cash in Advance is a pre-payment method in which, an importer the
payment for the items to be imported in advance prior to the shipment of goods.
The importer must trust that the supplier will ship the product on time and that
the goods will be as advertised. Cash-in-Advance method of payment creates a

27. lot of risk factors for the importers. However, this method of payment is in
expensive as it involves direct importer-exporter contact without commercial
bank involvement.
In international trade, Cash in Advance methods of payment is usually done
when –
 The Importer has not been long established.
 The Importer's credit status is doubtful or unsatisfactory.
 The country or political risks are very high in the importer’s country.
 The product is in heavy demand and the seller does not have to
accommodate an Importer's financing request in order to sell the
merchandise
Down Payment
In the method of down payment, an importer pays a fraction of the total
amount of the items to be imported in advance. The down payment methods
have both advantages and disadvantages. The advantage is that it induces the
exporter or seller to begin performance without the importer or buyer paying the
full agreed price in advance and the disadvantage is that there is a possibility the
Seller or exporter may never deliver the goods even though it has the Buyer's
down payment.
Open Account
In case of an open account, an importer takes the delivery of good and
ensures the supplier to make the payment at some specific date in the future.
Importer is also not required to issue any negotiable instrument evidencing his
legal commitment to pay at the appointed time. This type of payment methods
are mostly seen where when the importer/buyer has a strong credit history and is
well-known to the seller. Open Account method of payment offers no protection
in case of non-payment to the seller. There are many merits and demerits of open
account terms. Under an open account payment method, title to the goods
usually passes from the seller to the buyer prior to payment and subjects the
seller to risk of default by the Buyer. Furthermore, there may be a time delay in
payment, depending on how quickly documents are exchanged between Seller

28. and Buyer. While this payment term involves the fewest restrictions and the
lowest cost for the Buyer, it also presents the Seller with the highest degree of
payment risk and is employed only between a Buyer and a Seller who have a
long-term relationship involving a great level of mutual trust.
Documentary Collections
Documentary Collection is an important bank payment method under,
which the sale transaction is settled by the bank through an exchange of
documents. In this process the seller's instructs his bank to forwards documents
related to the export of goods to the buyer's bank with a request to present these
documents to the buyer for payment, indicating when and on what conditions
these documents can be released to the buyer. The buyer may obtain possession
of goods and clear them through customs, if the buyer has the shipping
documents such as original bill of lading, certificate of origin, etc. However, the
documents are only given to the buyer after payment has been made
("Documents against Payment") or payment undertaking has been given - the
buyer has accepted a bill of exchange issued by the seller and payable at a certain
date in the future (maturity date) ("Documents against Acceptance").
Documentary Collections make easy import-export operations within low cost.
But it does not provide same level of protection as the letter of credit as it does
not involve any kind of bank guarantee like letter of credit.
Letter of Credit
A letter of credit is the most well-known method of payment in
international trade. Under an import letter of credit, importer’s bank guarantees
to the supplier that the bank will pay mentioned amount in the agreement, once
supplier or exporter meet the terms and conditions of the letter of credit. In this
method of payment, plays an intermediary role to help complete the trade
transaction. The bank deals only in documents and does not inspect the goods
themselves. Letters of Credit are issued subject to the Uniforms Customs &
Practice for Documentary Credits (UCPDC) (UCP). This set of rules is produced
by the International Chamber of Commerce and Industries (CII).
Documents against Acceptance

29. Instructions given by an exporter to a bank that the documents
attached to the draft for collection are deliverable to the drawee only against his
or her acceptance of the draft.

30. 4. EXPORT DOCUMENTATION
4.1 Export Invoice
The Need
An invoice is the basic document which gives full details of the contents
of the shipment and serves as seller‘s bill of goods and sets out the terms of sale.
An invoice usually means a Commercial invoice. An exporter must prepare this
document which will fully identify the overseas shipment and serve as a basis for
the preparation of all other documents.
There is no standard form for an invoice and it is the exporter's choice
to design his own form. The invoice is prepared for the buyer abroad. Any
special requirement of the importer must be duly complied with.
Components
The specimen invoice given below indicates the components of invoice. The
following are the essential details which should be available in the invoice
Name and address of the exporter
Invoice number and date
Buyer’s and Seller’s Order numbers
Name and address of the overseas customer Name of the vessel and sailing
date
Unit price and total value
Terms of payment
Insurance reference
Customs and consular declaration
Shipping marks and number on packages
Quantities and description of commodities
Net weight and gross weight as well as measurement in metric units
Specification of packing
Terms of sale (FOB, CIC, C&F, FAS, etc,)
Bill of lading number
Letter of credit number and date.
Import license number and date.

31. 4.2 PACKING LIST
An exporter must ensure proper packing of export cargo for the safe
transportation. He may use a different types of packing material to safeguard the
cargo from possible damages, once the packing is completed, they exporter
prepares a document known as packing list. It describes following details
Total no. of packs in consignment and their contents.
Nature of packing material used
Identification marks if any
Number for packs
Handling institution if any
Any other information required for the safe carriage of goods.
A copy of packing list is usually sent to the buyer in order to inform him about
the contents of the consignment. If the goods are sent by container, a copy of the
packing list is pasted inside the container at visible place. This is to ensure the
safe handling of cargo at the destination.
4.3 BILL OF LADING
Definition
A Bill of Lading is a document issued and signed by a shipping company or its
agents. Acknowledging that the goods mentioned in the bill of lading have been
duly received for shipment, or shipped on board a vessel, and undertaking to
deliver the goods in the same order and condition as received, to the consignee,
or his order or assignee, provided that freight and other charges specified in the
bill of lading have been duly paid. The specimen Bill of lading is shown in the
next page.
Purposes
A Bill of lading serves the following purposes:
 It is a recei pt for goods received by the shipping company.

32.  It contains the terms of the contract between the shipper and the shipping
company, between stated points at a specified charge; and
 It is a certificate of ownership to the goods.
 The requirements which must be fulfilled to make the bill of lading
negotiable:
 It must be made out to the order of the shipper
4.4 BILL OF EXCHANGE
Definition
It is defined as ―an unconditional order in writing, addressed by one person
to another, signed by the person giving it, requiring the person to which it is
addressed to pay on demand or at a fixed or determinable future time a sum
of money, to or to the order of a specified person, or to bearer‖.
4.5 GR/PP/VPP/COD FORMS
Regulations
GRJPP/VPP/COD Forms are submitted to the customs authorities according to
the exchange control regulations. Section 18 of foreign Exchange Regulations
Act, 1973 and para 11 B. 1 of Exchange Control Manual 1987 states that all
exporters other than those exporting to Nepal and Bhutan are required to submit
a declaration in the prescribed from duly supported by such evidence as may be
prescribed or so specified and true in all material particulars.
Value of Goods
It should also include the details of the amount representing: The full export
value of the goods; or If the full export value of the goods is not ascertained at
the time of export, the value which the exporter, having (regard to the prevailing
market conditions expects to receive on the sale of goods in the overseas
markets, and affirms in the said declaration that the full export value of the goods
(whether ascertained at the time of export or not) has been, or will within the
prescribed period be, paid in the prescribed manner.
Purposes
The specific purpose for which the specific forms should be used are as given
below

33. GR; for all shipments (except by post)
PP; for exports by post parcel
PP/COD; for collection of proceeds through post office. COD means cash on
Delivery.
Submission
The forms should be submitted in duplicate. The original copy is meant for the
customs authorities and the duplicate is lodged with an authorized dealer (AD)
along with other documents for realisation of export proceeds from the foreign
buyer. The copy which is retained by the customs authorities is sent to the
Exchange Control department of the Reserve Bank of India; RBI the duplicate
submitted to the AD, is also sent to the RBI after the documents are negotiated.
4.6. Letter of Credit
Definition
A commercial letter of credit is issued by a bank at the request of a buyer of
merchandise whereby the bank itself undertakes to honour drafts drawn upon it
by the seller of the merchandise concerned. Thus, the letter of credit, (LC)
substitutes the bank‘s promise to pay for that of the importer. All the
requirements specified in the LC must be met including the furnishing of
documents, delivery dates, product specification, etc. before the seller can
receive payment.
The three essential parties to commercial letter of credit are:
 The opener or importer or the buyer who opens the credi t
 The issuer-the bank that issues the letter of credit, and
 The beneficiary-the seller in whose favour the credit is opened.
The specimen LC is shown in the next two pages.
Types of LC
There are several types of LCs. Required according to the specific requirements
in the foreign trade. Some of them are described below.
1. Revocable and Irrevocable LC: Now-a-days revocable letter of credit is
rather rare because it means that the terms of the credit can be cancelled
or amended by an overseas buyer through the issuing banker without

34. prior notice to the exporter. Even when the buyer becomes a bankrupt it
cannot be revoked; only when the seller agrees it can be revoked. The
issuing banker is at liability to revoke even without giving notice. An
irrevocable LC is never confirmed. If it provides for the documents and if
the draft is accepted for payment within the prescribed time, the issuing
banker loses his right to revoke. Majority of letters of credit are
irrevocable which means that once the buyer‘s conditions in the letter
have been agreed to by an exporter, they constitute a definite undertaking
by the buyer‘s bank and cannot be revoked without the exporter‘s
agreement. If it is not confirmed the LC is unconfirmed.
2. Confirmed and Unconfirmed LC: A Confirmed LC carries the
confirmation of another bank, generally, in the country of the exporter.
This type of confirmation binds the confirming banker to negotiate the
drafts drawn under the credit provided the terms and conditions thereof
are fulfilled.
3. Without Recourse and with Recourse: A ‗without recourse to drawer‘
LC is one under which the negotiating bank cannot have a recourse
against the exporter if the draft is subsequently not taken up or
reimbursed by the issuing bank provided, of course, the negotiation is
without recourse.
4. LC Sight and Usance: Documentary credit may provide for payment at
sight or for acceptance of a usance bill of exchange by either issuing bank
in a buyer‘s country or the correspondent bank in exporter‘s country. If
the LC is not an at sight LC, it will be a usance LC.
5. Transferable LC: A transferable LC is one which can be transferred by
the beneficiary named therein favour of another party. A credit can be
transferred only when it is expressly designated as transferable by the
issuing bank. The letter of credit permit & partial shipments or
transshipments if necessary.
4.7. Certificate of Origin
Certificate of origin serves as an evidence to show the actual country of
origin of the goods. It is signed in the exporting country by the consul of the

35. importing country or by the exporter or by the Chamber of Commerce on the
basis of required regulation.
4.8. Inspection Certificate
As per the Export Act, 1963, the exporter has to submit an application in the
prescribed form in duplicate, sending the original to Export, Inspection
Agency and duplicate to the Export Inspection Council, seven days in
advance of the expected date of shipment. The application form contains
details of shipment. Including technical requirement including specifications
as stipulated in the export contract. The goods are inspected and certificate
issued, if found in order after inspection.
4.9 Shipping Bill
A Shipping bill is required by the customs. There are separate forms of shipping
bills for free good, and goods for which there is a claim for drawback of duty. It
is prepared in duplicate. It is only after the shipping bill is stamped by the
customs that the cargo is allowed to be carted to the docks. There are a number
of items such as the name of the vessel, master or agent,' country of destination,
description of goods, quantity and weight, value, etc., which are included in this
form.
4.10 Mate’s Receipt
The commanding officer of the ship will issue a receipt called the "mate's
receipt" for goods. When the cargo is loaded on the ship. It is first handed over to
the port trust authorities so that all port dues are paid by the exporter to the port
trust. After making payment of all port dues, the merchant or agent will collect
the mate receipt from the port trust.
4.11 Documents For Claiming Export Assistance
In order to claim Export Assistance, the exporter has to complete certain
formalities as per the procedure laid down and furnish required information in
various forms and documents prescribed by the Government. Export Promotion
Council, etc. for claiming export assistance. The necessary documents required

36. for submission for claiming export assistance are discussed in the ensuing
paragraphs.
Application for Registration
Registered exporters are required to register themselves with appropriate
registering authority such as Export Promotion Councils, Commodity Boards
and Chief Coritroller of imports and Exports for availing the benefit of export
assistance. The application for registration should be accompanied by a
certificate from the exporter. Banker in regard to his financial soundness. If the
firm is having branches, the application for registration should be made only by
the Head Offices. The registration authority shall, if satisfied, issue a certificate
of registration to the exporter.
Import License for Raw Materials Intermediates Including:
1. Components and Spares: Application for import licence should be
made only by the registered exporters whether merchant-exporter or
manufacturer expor1er, in the prescribed form to the licensing authority
under whose jurisdiction the Head Office of the registered exporter is
situated. Application for import licence will be made in respect of the
exports made during the preceding period according to the procedure laid
down. The application should reach the licensing authority within one
month after the period to which the exports relate and should be
accompanied by the following documents:
(i) Treasury challan showing the payment of application fee.
(ii) The documents of export in the name of the registered exporter
are require as mentioned below:
(a) Shipping bill duly authenticated by customs:
(b) Bill of Lading:
(c) Invoices duly attested by the negotiating bank.
(iii) Original with a certified copy of the valid actual user licence on
which the items applied for are based.
2. Cash Assistance On Selected Export Products: Government gives cash
assistance to promote exports of certain export products. The purpose of
the assistance is to neutralize the disadvantages, which result from prices

37. and high import duties, so that they could meet competition in the foreign
markets. Application for grant of cash assistance should be made in the
prescribed form and sent along with shipping bill duly authenticated by
customs, bill of lading, and invoices duly attested by the negotiating
bank.
3. Drawback Of Import And Excise Duties: The scheme of drawback of
import and excise duties has been formulated by the Government with the
object of relieving the Indian exporter of the burden of import and excise
duties on the products exported, so as to put him on par, in the matter of
competitive position, with foreign competitors.
4. General Surety For Executing Bond (Form B-1): The excisable goods
can be exported outside India either under claim for rebate of excise or
under Bond. The difference between these two procedures is that in the
case of former the duty is first paid and its refund claimed after export,
and in the latter case, the goods are allowed to be exported without
payment of duty provided a bond is executed in Form B-1 (General
Security).
5. AR-4 Form: Each consignment is required to be presented to the Central
Excise Officer having jurisdiction over the factory together with an
application in form AR-4 for claiming rebate of excise duty. On the basis
of the endorsement of the collector or concerned officer‘s endorsement
the exporter will claim the rebate of excise duty if he has already paid, or
discharged his obligation to that extent in case he has executed the bond.
6. Drawback Shipping Bill: Shippers are required to give the details of the
goods intended to be exported under claim of drawback in a shipping bill
which should clearly be marked ―Under claim for drawback‖ in order to
take advantage of the drawback of import duty on the products
exported.Four copies of the drawback-shipping bill are normally
prepared. Exporters should furnish the information under the various
columns in the drawback-shipping bill so that the drawback is allowed
early.

38. 7. Drawback Bill: Drawback bill is required in addition to the shipping bill.
It furnishes information about the date of presentation of original bill of
entry, number and date of the drawback shipping bill, marks and number
on the packages, description of goods, weight and quantity of the goods,
amount of drawback etc. This has to be certified by the Collector of
Customs to the effect that the amount of the bill does not exceed the
amount of import duty paid on the goods specified therein and drawback
has not been allowed on the same article in any previous bill.

39. 5. IMPORT DOCUMENTS
Packing List
Invoice: An invoice or bill is a commercial document issued by a seller to
the buyer, indicating the products, quantities, and agreed prices for products or
services the seller has provided the buyer. An invoice indicates the buyer must
pay the seller, according to the payment terms. The buyer has a maximum
amount of days to pay these goods and are sometimes offered a discount if paid
before.
Sales Contract
Letter of Credit: L/C also known as Documentary Credit is a widely used
term to make payment secure in domestic and international trade. The document
is issued by a financial organization at the buyer request. Buyer also provides the
necessary instructions in preparing the document. The International Chamber of
Commerce (ICC) in the Uniform Custom and Practice for Documentary Credit
(UCPDC) defines L/C:-"An arrangement, however named or described, whereby
bank (the Issuing bank) acting at the request and on the instructions of a
customer (the Applicant). A key principle underlying letter of credit (L/C) is that
banks deal only in documents and not in goods. In this system Importer receives
all the original documents only after making the payment.
Bill of Entry: A declaration by an importer or exporter of the exact nature,
precise quantity and value of goods that have landed or are being shipped out.
Prepared by a qualified customs clerk or broker, it is examined by customs
authorities for its accuracy and conformity with the tariff and regulations.
Certificate of Origin
Bill Of Lading

40. Sea Worthy Certificate: A certificate issued by a classification society
surveyor to allow a vessel to proceed after she has met with a mishap that may
have affected its seaworthiness. It is frequently issued to enable a vessel to
proceed, after temporary repairs have been affected, to another port where
permanent repairs are then carried out.
Beneficiary Certificate: The beneficiary certificate is provided in response
to details required and requested by the buyer/importer.The beneficiary's
certificate is a document issued by the beneficiary of the international trade
transaction, often in conjunction with a documentary collection or documentary
credit/ letter of credit (L/C).The beneficiary, normally the exporter, will provide
the beneficiary certificate evidencing a certification that certain actions have
been complied with or documents supplied.

41. 6. FINDINGS
STANDARD CHARTARD bank is acting as the export banker.
The Company also does deemed exports.
The Company export their goods under the MEIS, Merchandise Exports
from India Scheme under FTP.
The Company goes for 3PLs. They go with “DHL, GATI, HALL MARK,
FEDEX” for transportation.
Also in Cargo tracking & information dissemination to the customer from
sailing or dispatch to delivery
Ocean load delivers varied shipping services to suit Clients' requirements of
timely delivery and cost.

42. CONCLUSION
Documentation is a key means of conveying information from one person or
company to another, and also serves as permanent proof of tasks and actions
undertaken throughout the export process. Documentation is not only required
for your own business purposes and that of your business partner, but also to
satisfy the customs authorities in both countries and to facilitate the
transportation and payment for goods sold. If the documentation is complete,
accurate, agreed upon by the parties involved and signed by each of these of
these parties (or their representatives), the document will represent a legally
binding document.

43. BIBLIOGRAPHY
1. INDIAN FOREIGN TRADE 2015 – 2020
2. Export Import Management- Justin And Rajiv
3. Export Management – P.K.Kurana
WEBLIOGRPHY
1. www.tejasnetworks.com
2. www.eximbankindia.com
3. www.ecgc.com
4. www.export.gov
5. www.unzco.com
6. www.infodriveindia.com
7. www.informaworld.com
8. www.oceanload.com