Chapter 01 Export-Import Trade

Chapter 01Export-Import Trade MKT417

Export-Import Trade • Creation of appropriate institutional framework and supportive environmental facilitates the growth of external trades . • Sustainable growth in exports can only be accelerated by conducive framework. • The attitude of the government, a very important aspect for faster pace, is poised in that direction to make the framework achieve the sustained growth, removing the bottleneck s hindering the path of progress and development. MKT417

Trade Policy • Trade policy is one of the many economic instruments for achieving economic growth. • The basic twin objectivesof the trade policy have been to promote export and restrict imports to the level of foreign exchange available in the country. • The inherent problems of the country have been non availability shortage of crucial inputs like industrial raw materials, supporting relevant technology and required capital goods. MKT417

Trade Policy (continued) • The problem can be removed by imports but continuous imports are neither possible or desirable. • The gap between exports and imports is financed through borrowing and foreign aids • The basic objectives of the trade policy resolves round the instruments and techniques of export promotion and import management. MKT417

Foreign Trade • Foreign trade is recognized as the most significant determinants of economic development of a country, all over the world. • Foreign trade of country consists of inward and outward movement of goods and services, which results into out flow and inflow of a foreign exchange. • Necessary responsive framework to make exports compete globally, is essential. MKT417

Foreign Trade (continued) • In order to harness these gain from trade, the transaction cost, in turn dependent on the framework support, involved need to be law for trading within the country and for international trade. • International trade is a vital part of development strategy and it can be effective instrument of economic growth, employment generation, and poverty alleviation. MKT417

Chapter 2Export Preliminaries Course: MKT417 Faculty: Samy Ahmed MKT417

Introduction In order to enter into export business, certain preliminary steps have to be taken by every business organization. The setting up of an export firm is completed in two steps. They are: • Establishing a business firm and • Obtaining the import-exporter code number for the business firm and completing other registrations. MKT417

Establishing a business firm There are various formalities and registrations to be made with different authorities before an exporter can enter into export business and accept an export order. These are: • Selection of name of firm • Approval of name of firm • Registration of organization MKT417

Opening a bank account • Obtaining permanent account number • Registration with sales tax authorities • Importer-exporter code number • Registration cum membership certificate • Registration under central excise law • Registration with other authorities • Registration for business identification number • Export licensing MKT417

Chapter 03 Documentation framework- Aligned documentation system MKT417

Aligned documentation system(ADS) Objective: The primary objective has been to ensure benefits to everyone in the international trade chain from easier documentation. To enter information on an easy basis and access the information with greater convenience, ADS is adopted. MKT417

Advantages of ADS • Dispenses conventional documentation preparation • Easier to complete and access • Benefit to all parties • Better image MKT417

For the purpose of documents aligned system, documents have been classified into two categories: • Commercial documents • Regulatory documents MKT417

Commercial documents The documents which are directly connected to buyer-seller, importer-exporter and shipments. Objectives The objectives of commercial documents are: 1. To effect physical transfer of goods from the exporter’s place to the importer’s place. 2. To transfer property and title of goods from the exporter to the importer and 3. Realization of export proceeds from the exporter to the importer. MKT417

Commercial documents(cont.)Principal Export Documents These are the eight documents, which are required to be sent by the exporter to the importer. These are known as Principal Export Documents. They are: (i) Commercial invoice (ii) Packing list (iii) Certification of inspection/quality control (where required) (iv) Bill of lading/Combined Transportation Documentation (v) Shipping Advice (vi) Certificate of origin (vii) Insurance Certificate/Policy (In case of CIF export sales contract) (viii) Bill of Exchange. MKT417

Commercial documents(cont.) Auxiliary Export Documents The remaining eight documents, other than principal export documents, are known as auxiliary export documents. They are: (i) Proforma invoice (ii) Intimation for Inspection (iii) Shipping Instructions (iv) Insurance Declaration (v) Shipping Orders (vi) Mate’s Receipt (vii) Application for Certificate of Origin and (viii) Letter to the Bank for Collection/Negotiation of Documents. MKT417

REGULATORY DOCUMENTS Regulatory pre-shipment export documents are those which have been prescribed by different government departments and bodies in the context of export trade. These documents are meant to comply with the various rules and regulations under relevant laws governing export trade such as export inspection, foreign exchange regulations, export trade control and customs etc. MKT417

There are 9 regulatory documents associated with the pre-shipment stage of an export transaction. Out of them, only 4 have been standardized. The regulatory documents are as follows: (1) Gate Pass-I/Gate Pass II: The Central Excise Authorities prescribe them. (2) ARE-1: These are Central Excise forms. Earlier, AR4 and AR5 Forms have been used. In their place, ARE 1 form , now, is used. (3) Shipping Bill/Bill of Export: They are standardized and prescribed by the Central Excise Authorities. • For export of goods. • For export of duty free goods. • For export of dutiable goods. • For export of goods under claim for duty drawback. MKT417

(4) Export Application/Dock Challan: Standardized and prescribed by the Port Trust Authorities. (5) Receipt for Payment of Port Charges: Standardized. (6) Vehicle Ticket. (7) Exchange Control Declaration Forms: GR/PP forms are standardized and prescribed by RBI. (8) Freight Payment Certificate. (9) Insurance Premium Payment Certificate. MKT417

Chapter 01 Export-Import Trade