Export Trade - Procedure of Export Trade

1. Registration: 

• Obtain Import-Export Code (IEC) from DGFT.
• PAN Card from the Income Tax Department.
• Register with Export Promotion Councils and the GST Department.

2. Appointment of Agent: Sometimes, exporters use international agents or set up sales offices abroad to find and secure orders.

1. Receipt of Order:  Ensure all order terms and buyer requirements are clear; verify any restrictions in the importing country.
2. Letter of Credit: Request that the buyer arrange a Letter of Credit (L/C), a bank’s payment guarantee.
3. Pre-shipment Finance: Obtain bank finance to cover production and procurement costs.
4. Production of Goods: Manufacture or purchase goods as per order requirements.
5. Packaging: Use quality packaging to ensure safety and promote the product.
6. ECGC Cover: Take insurance from the Export Credit Guarantee Corporation to protect against payment risks.
7. GST Formalities: Clear tax and regulatory requirements.
8. Marine Insurance: For sea transport, get insurance for goods in transit.
9. C&F Agents: Appoint a Clearing and Forwarding Agent for customs and logistics.

1. Processing of Documents: Prepare shipping bill and other required documents.
2. Examination of Goods: The C&F agent assists in customs inspections and obtains the necessary clearances.
3. Loading of Goods: Goods are loaded onto the vessel. Issuance of a Bill of Lading (a shipping document).

1. Shipment Advice: Inform the importer about the dispatch, and send copies of the shipping documents.
2. Documents for Payment: Submit all export documents to the bank to receive payment.
3. Export Incentives: Claim government benefits, such as duty drawback and GST refunds.
4. Follow-up: Maintain communication with the importer for feedback and future business.

A Mumbai exporter receives an order for 1,000 cotton shirts from Australia.

• Registers for IEC and other certificates.
• Confirms the order and receives a Letter of Credit from the Australian buyer’s bank.
• Produces and packs shirts securely.
• Ensures the goods, completes GST registration, and hires a C&F agent.
• Goods clear customs and are loaded onto a ship. A Bill of Lading is issued.
• After shipment, the exporter sends payment documents to their bank and receives payment. A follow-up message is sent to the buyer for customer satisfaction.

• Export follows four structured stages: Preliminary, Pre-shipment, Shipment, and Post-shipment.
• Major documents: IEC, L/C, Shipping Bill, Bill of Lading, Insurance Certificate.
• Secure packaging and documentation prevent losses and delays.
• Insurance and ECGC cover protect against risks.
• Timely follow-up and incentives help in business continuity.