A Ten Step Export Process Flow Chart
Step 1 –Identification of Export Product & Export Market
First of all you need to decide on the kind of export activities you will be involved in. For example, if you have a manufacturing unit of one commodity and you want to export it, you would be a manufacturer exporter. If you are sourcing/purchasing one commodity from someone else and want to export it you would be a merchant exporter.
If you are manufacturing one commodity in your own manufacturing unit and you also want to source / purchase another commodity from someone else and export it along with your
Step 1
Identification of Export Product
& Export Market
Step 2
Engaging with State Government Facilitation Bodies
Step 3
Initial Registrations
Step 4
Export Trade Registrations
Step 5
Obtaining an Export Order
Step 6
Banking Procedures, Arranging Trade Finance and Insurance
Step 7
Getting Export Goods Ready
Step 8 Shipping/Logistics
Documentation
Step 9
Export Closure and Claiming Export benefits
Step 10
Reviewing the first consignment
manufactured commodity, you would be a merchant cum manufacturer exporter. If you have a service like IT software development service and you wish to export the software development service you would be known as a service exporter.
The trade statistics available on the website of the Commerce Department would help you understand the demand of products and the countries where they are being exported. You may take the help of the following websites to identify your product, if you have not decided on one and the country where you may like to export.
1. Research and identify the PRODUCTS/SERVICES
(https://commerce.gov.in/trade-statistics/)
2. Research and Identify the MARKET/COUNTRY (https://exportpotential.intracen.org/en)
Prepare a Business Plan
Product Identification for
Export
Market Research on the Product
Product
Evaluation
Market
Identification
MANUFACTURER EXPORTER MERCHANT EXPORTER
MERCHANT CUM
MANUFACTURER EXPORTER SERVICE EXPORTER
Decide on the basis of research
Your choice of product must ensure
Remember
Product Sampling and Evaluation: The sample of the product should be of high quality, with a neat, purposeful and appealing packaging conforming to international standards and supported with an appropriate brochure.
Step 2 –Engaging with State Government Facilitation Bodies
Engaging with State Govt. facilitation bodies will help you to choose the correct course of action in Export business and will also direct you to the right place and persons related to export business. Some of these facilitation bodies are named below.
Growth prospects and sustainability of the product.
Profitability of the product.
Competition facing the product.
Policy regulations pertaining to the product.
International quality standards pertaining to the product.
To Assess the target market/ country- Analyze consumption, demographic and economic trends.
To Analyze the demand of a product in that country beforehand.
To Analyse the standards and certification requirements of a product in every country you identify because the perception of quality and service related to a product/service varies across nations based on requirements of the customers.
To Test the demand
Director of Industries, Government of West Bengal
– An exporter in West Bengal may visit the office of the District Industries centre (2 Barrackpore Road Barasat PO, Nabapally, Kolkata, West Bengal 700126) which is the advisory body and single-point mechanism to aid and assist the exporters, and also to facilitate clearances from other departments, thereby mitigating the issues faced by potential exporters with the relevant authorities in the Central as well as the State Government
West Bengal Industrial Development Corporation Limited (Export Facilitation Centre) – An exporter in West Bengal may also visit the Export Facilitation Centre of West Bengal Industrial Development Corporation Ltd. in collaboration with Indian Institute of Foreign Trade providing all kinds of support to the entrepreneurs of West Bengal venturing into the export business.
West Bengal Trade Promotion Organisation (WBTPO)
– An exporter in West Bengal may also visit West Bengal Trade Promotion Organization. WBTPO is the premier agency of the West Bengal State’s Commerce and Industries Department to promote trade, commerce and services for overall economic
District Industries Centre, Government of West Bengal
West Bengal Industrial Development Corporation Limited (Export Facilitation Centre)
West Bengal Trade Promotion Organisation (WBTPO)
development across the state. It is a joint venture of West Bengal Industrial Development Corporation (WBIDC) and Kolkata Municipal Corporation (KMC). WBTPO is committed to building enduring partnerships to create, manage, develop and build a platform for organizing national and international exhibitions, conferences, business meets with allied public utilities and social infrastructure.
Step 3 - Initial Registrations
For a new entrepreneur or start up in West Bengal, it is advised to open a Proprietary Firm/LLP (Limited Liability Partnership). For Registration under Company Act, the entrepreneur needs to apply to ROC located at Nizam Palace, Kolkata
Trade License is a certificate that is essential to start or carry on a particular trade or business for which it is issued. For Issuance of Trade License (Permanent Certificate of Enlistment) the applicant have to apply through online mode only in e-district portal (http://edistrict.wb.gov.in).
Select a name for your proposed
Firm/LLP
Registration under Company Act
Prepare a Partnership Deed
Obtain a Trade Licence OR
Step 4 - Export Trade Registrations
Having a bank account with a PAN is mandatory and registration regulatory bodies and export promotion councils are necessary before starting the export business. These activities and relevant processes are detailed below.
Open an Account with a Bank
Start a Current account with any banker based in West Bengal authorized to deal in foreign exchange. The procedures are simple and can be done online or at the branch concerned. The following link of one of the banks gives an idea of the guidelines.
https://corp.onlinesbi.com/cinbreg/caoguidelines.htm
Obtain a Permanent Account Number (PAN)
By visiting Income Tax Department in the name of the Firm/Company, you may obtain it from any of the Income-Tax jurisdictional office in West Bengal. Online application can be made either through the portal of NSDL ( https://tin.tin.nsdl.com/pan/index.html) or through the portal of UTITSL (https://www.pan.utiitsl.com/PAN/index.jsp).
Open a Bank Account
• Apply to SBI located at respective district
Obtain IEC from DGFT
• Apply to Aayakar Bhavan located at Chowringhee, Kolkata
Registration with GST Office
• Apply to Kar Bhawan located at Heritage Building Kolkata Obtain a PAN from
Income-Tax Authorities
• Apply to DGFT located at Esplanade, Kolkata
Registration with Export Promotion Council to get
RCMC
Registration with GST/Sales Tax authorities
GST-Intra state and Inter-state: It is important to understand that all goods have a component of GST whether for import or export or local purchase. As per the World Trade Organisation, the product cost should not contain the duties, cess and taxes of the goods. Hence when goods are purchased, the exporter pays GST and either manufactures them and claims input tax credit on goods exported or when it is exported directly, he provides as a supporting document:
➢ an RCMC of the related Export Promotion Council and does not pay GST provided it is exported within 90 days or
➢ LUT, Letter of undertaking where the Commissioner allows goods to be exported without payment of GST or
➢ Payment of IGST where the same is claimed after exports are complete.
For obtaining exemption, one needs to be registered with the office of GST in West Bengal. An entrepreneur may apply online at https://reg.gst.gov.in/registration/.
For information and guidance on GST registration, you may contact their office at GST Bhawan, Rash Behari Ave, Narkelbagan, Sector C, East Kolkata Twp, Kolkata, West Bengal 700107.
Also an important aspect is the E-Way Bill, an Electronic Way bill for movement of goods that is generated on the Portal and which is under the State Government. When goods move from the toll-facilitation area which are the borders of the States, the goods which are bound for exports or imported goods pass through borders which are not bound under the IGST or CGST/SGST jurisdiction.
Apply for an Importer Exporter Code (IEC) to be issued by DGFT
This can be applied by a potential Exporter/Importer, online on dgft.gov.in. The fees for this can be paid online. The IEC is issued in 24 hours and has a Life-long validity. The IEC is PAN based. This IEC will be valid for all its branches as is mentioned on the IEC certificate. For any assistance on application, you may visit the office of Additional Director General of Foreign
Trade, (4, Esplanade East, Kolkata-700069, E-Mail: [email protected], Website:
https://www.dgft.gov.in/CP/).
Obtaining an RCMC from FIEO or other relevant Export Promotion Council or Commodity Board
To avail concession and to be facilitated, one must obtain Registration cum Membership Certificate (RCMC) from FIEO or the respective Export Promotion Council or Commodity Board. Some of these organisations located in Kolkata, West Bengal are:
Sl No.
Name Address & Telephone Number Website
1 EXPORT
PROMOTION COUNCIL FOR HANDICRAFT
53/1, Sambhunath Pandit Street, Second Floor
(opp. Bangur institute of Neuroscience
& Psychiatry), KOLKATA - 700025 91-33-2419174491-33-241
https://www.epch.in/
2 FEDARATION OF INDIAN EXPORT ORGANISATION (FIEO)
Express Tower, 6th Floor, 42A, Shakespeare Sarani
(Junction of Rawdon Street and Shakespeare Sarani),
Kolkata-700 017
Phone: +91-33-40084890/91 Fax: +91-33-22805781
www.https://www.fieo.org/
3 ENGINEERING EXPORT PROMOTION COUNCIL
‘Vanijya Bhawan’, 1st Floor
International Trade Facilitation Centre 1/1, Wood Street
Kolkata 700016
Phone : (+91 33) 22890651/52 Fax : (+91 33) 22890654
https://www.eepcindia.org/
4 CAPEXIL CHEMICAL
& ALLIED PRODUCTS
Vanijya Bhavan (3rd Floor),
International Trade Facilitation Centre 1/1, Wood Street,
KOLKATA-700016, INDIA.
Ph: 033-22891721, 22, 23
http://capexil.org/
5 THE PLASTICS EXPORT PROMOTION COUNCIL
Vanijya Bhavan, ITFC 1/1 Wood Street, Kolkata West Bengal 700 016, INDIA +91-33-2283 4497 / 2283 4498 +91 93310 78058
https://www.plexconcil.org/
6 COUNCIL OF LEATHER EXPORTS
1B, First Floor, “Duckback House”, 41, Shakespeare Sarani,
Kolkata – 700 017.
Tel: +91-33-22835479/80.
Fax: +91-33-22877270.
http://leatherindia.org/
7 APPAREL EXPORT PROMOTION COUNCIL
Plot No. 3B,LA Block, Sec-III, Salt Lake City, Kolkata- 700 098 Phone - 033-23359820
https://www.aepcindia.com/
8 SHELLACH EXPORT PROMOTION
COUNCIIL
1/1 2nd Floor, Vanijya Bhavan, International Trade Facilitationcen, Wood Street, Kolkata, West Bengal 700016
Phone: 033 2283 4417
http://www.shefexil.org/
9 SPICES BOARD 195a, Park Street, Park Street Phone · 033 2280 4304
http://www.indianspices.com/
10 AGRICULTURE AND PROCESSED FOOD PRODUCTS EXPORT DEVELOPMENT AUTHORITY
Mayukh Bhawan, 4th Floor, Bidhan Nagar (Salt Lake), Kolkata - 700091 (W.B.), Landmark- Near Bikash Bhawan, Salt Lake
Phone: +91- 033-23378363
https://apeda.gov.in/apedawebsite/
11 EXPORT PROMOTION
COUNCIL FOR EOUs AND SEZ UNITS
Falta Special Economic Zone CN 1,cn block,Salt lake,
Sec V Kolkata West Bengal 700091
https://www.epces.in/
12 GEM & JEWELLERY EXPORT
PROMOTION COUNCIL
1/1, ITFC Building, 6th Floor, Wood Street, Dr M.L.K. Sarani, Park Street area, Kolkata, West Bengal 700017 Phone: 033 2282 3630
https://gjepc.org/
13 TEA BOARD INDIA 14, B.T.M. Sarani (Brabourne Road) Kolkata 700 001
Phone No. +91 33 2235 1331
http://www.teaboard.gov.in/
14 BASIC CHEMICALS PHARMACEUTICALS
& COSMETIC EXPORT PROMOTION COUNCIL
“KRISHNA Building”, 8th Floor, Room No. 812,
224A, Acharya Jagadish Chandra Bose Road, Kolkata - 700017
Phone: +91 -33-22805791
https://chemexcil.in/
Step 5 - Obtaining an Export Order
Following are the few basic steps that an exporter needs to follow in order to get an export order.
After identification of your proposed products and markets, it is time to start looking out for potential buyers and customers. You need to build a robust marketing strategy and plan.
Remember that your export marketing strategies are only as effective as they are relevant to the buyer’s/customer’s lives.
Traditional Marketing
Online Marketing
Export Marketing
Strategy /Plan
Identifying potential buyers/customers
There are several ways of doing this. You may contact Trade representatives in India and Overseas or Export Promotion Councils and Commodity Boards. You may look up International Trade Directories, as also participate in Global Trade Fairs and exhibitions, both within the country as well as overseas. Most Export Promotion Councils have a list of their international events on their website. Friends and personal contacts overseas may also help you in doing this. You may visit the FIEO or council offices or the Export Facilitation Centre in WBIDCL.
The decision to select distributors versus brokers, wholesalers, agents, retail channels etc is very important. Setting a roadway for your marketing is a critical factor because decisions on sales and pricing will impact your overall profitability.
E-Commerce and Exports
It occurs when we obtain export orders over the Internet and we carry out exports on-line. E- Commerce has proved to be a learning platform for many new exporters. For SME exporters in West Bengal, who may be having limited resources, e - commerce would offer benefits as compared to standard export marketing practices wherein the reach is to a large number of potential buyers across the world without any requirement to have a physical presence overseas.
Upon completion of a contract you have to ensure delivery of your export items to the consignee. You may ship your products through the mechanism of Customs agents and Cargo forwarders. E-commerce platforms, such as Ebay (sellglobal.ebay.in) & Etsy (www.etsy.com) provide a complete service with courier and payment gateways. Some buyers may agree to remit the payment in advance through the routine online mechanism of internet banking, credit- cards, which are all permissible.
Taking active part in Global Trade-Fairs and Expos
Marketing Access Assistance (MAI – Marketing Access Initiative) is a government grant/subsidy provided to exporters for their export promotional activities such as for participation in overseas and global Trade Fairs and Exhibitions as also the Buyer Seller Meets,
organized by Export promotion councils, to preliminarily find out markets for export of their specific items and goods to be sent from India in the initial phase. The fairs may be of various types such as B2B (Buyer to Buyer), B2C (Buyer to Customer). The fairs could also be retail fairs where sale is allowed. For example, events of APEDA can be seen through this link
http://apeda.gov.in/apedawebsite/trade_promotion/International_trade_event_2020_21.ht m
West Bengal Exporters having exports up to FOB value of Rs. 30 crores, and having minimum 12 Months Membership with the concerned Export Promotion Council are eligible for MAI and have to claim their air fare reimbursement after successful completion of the event within a period of 90 days of return to India. The participation of an eligible exporter, as per MAI guidelines would be subject to an upper ceiling to a maximum of two MAI Events in a Year.
The Reserve Bank of India (RBI) permits opening of a temporary foreign currency account abroad to enable exporters to deposit the overseas sales earnings as also facilitate operations of the account through the stretch of their entire stay overseas. However, the remaining balance needs to be repatriated back to the country within thirty days of completion of the Fair. Details thereof need to be submitted to the respective Bank or Authorised dealer.
Negotiation of Price
Pricing and contract/trading terms for a new export market are both very critical. Regular and promotional price points, specific trading terms and overall profitability must be taken into consideration. Your pricing strategy must include a provision for changes in the prices of products in order to convince the potential buyers to place an order for the product or even try the product. Pricing strategies would include discounts, promotions etc.
Quantity & Delivery schedules
Keeping to delivery schedules is extremely important in international trade in order to sustain your business. In a world of competition, any failure in meeting time schedules would lead to losing business.
International markets look for sustainability, consistency, quality and volumes. Export is not about shipping one consignment. It is a common trend that new exporters are not able to meet the requirement of volumes after the initial consignments. It is therefore important to get into exports only if you have the capacity to meet the demand of large volumes.
Firming up Export Order and Signing an export contract
All export transactions are made through Export Sale Contract. An export contract is a written document on the basis of which the seller or exporter exports the goods or services to the overseas purchaser or importer for a certain price. There is no standardised language of an export contract as the contents may change in respect of every country or even every transaction and may be dependent on the product or service itself. Some of the basic inclusions in an export contract are as follows:
I. Name and details of exporter or importer II. Product standards and specifications
III. Nature, manner of the required inspections and the inspection agency.
IV. Terms of delivery as applicable
V. Total value of the Order or legal Contract including the payment currency, applicable taxes and duties
VI. Units of measure in both figure and words.
VII. Specifications on packaging, labeling and marking of the product.
VIII. Terms and conditions for export including the delivery date IX. Shipment of cargo and terms thereof
X. Payment Terms
XI. Insurance Terms and scope of coverage
XII. Product coverage including warrantees offered XIII. Arbitration terms and dispute-settlement mechanism
XIV. Force majeure provisions XV. Signature of the parties
Step 6 – Banking Procedures, Arranging Trade Finance and Insurance
Banking Regulations for Exports
The banking regulations that govern the export of goods and service are specified in the Foreign Exchange Management Act 1999 (FEMA).
Handling / Reporting of export/import transactions from clearance by the Customs Authorities till realisation and repatriation of proceeds to India are done at different levels with Reserve Bank of India as under
1
2
Follow the Banking Regulations for Export
Obtain Trade Finance from a Bank dealing in Foreign Exchange
3
Obtain Insurance coverage with Export Credit Guarantee Corporation (ECGC)
Customs
The shipping bill needs to be furnished in duplicate to the concerned Customs Commissioner.
After verification and attestation, the authority returns to the exporter one copy of the shipping bill marked ‘Exchange Control Copy’ for depositing to the Bank within 21 days from the date of export for negotiation of the shipping documents. The export data is transmitted electronically to the RBI server through the ICEGATE (Indian Customs Electronic Gateway).
Software exporters submit Softex forms in duplicate to the STPI/SEZ for certification within a period of thirty days on a monthly basis transmitted in electronic format to RBI.
Authorized Dealer
Export/Import Data Processing and Monitoring System regularly keeps a watch and track of the trade transactions.
Trade Agreement / ACU Mechanism
Indo-Myanmar Trade agreement – Under this agreement trade with Myanmar can be carried out in any freely convertible currency, as also the ACU mechanism.
Indo-Iran trade agreement– Under this agreement trade with Iran can be carried out in any freely convertible currency, as also the ACU mechanism, in respect of the eligible items.
Indo-Bhutan trade agreement – Under this agreement trade with Bhutan can be carried out in any freely convertible currency, as also under the Indian Rupees mechanism.
Indo-Myanmar border trade agreement – Under this agreement trade with Myanmar can be carried out in any freely convertible currency, as also in any permissible currency.
Customs
Goods Service (Software)
Exports
Authorised Dealer
Export / Import Data Processing
& Management System
Trade Agreement /ACU Mechanism (Asian Clearing
Union)) Indo-Myanmar
Trade
Indo-Iran Trade
Indo-Bhutan Trade Border Trade with Myanmar
Sale proceeds from International Trade Fairs/ Exhibitions
EEFC (Exchange Earners Foreign
Currency Account)
Receipt of advance against
exports
Export of goods under various
schemes including SEZ’s
Extension of time
Exporter Caution List
to Bank
Receipt of advance against exports
FEMA regulations provide for shipment of export cargo within a year from the receipt of advance payment. In addition, the rate of interest, on such advance payment does not exceed London Inter-Bank Offered Rate - LIBOR + 100 basis points; as also it is essential that the export and shipment documents are routed through the Bank through which advance payment has been received.
In case of export of goods by Special Economic Zones (SEZs), exporter may carry out job work outside the SEZ boundaries and thereafter export goods from there itself subject to realization of export proceeds. Further, Banks permit units in Domestic Tariff Areas (DTA) to buy foreign exchange for payment for DTA supplies to SEZs.
Extension of Time
Generation of Exporter Caution List to Bank is system-driven. The Exporter’s name is displayed in the system to mark as ‘caution’ if any of their shipping bills are not realized for the period of 2 years and no payment extension is reported in EDPMS. Banks will have an option to download marked ‘caution’ and use them for their further processing. Once the bill is closed or extension given, the exporters will be de-cautioned.
Exim Bank
The Exim Bank is a financial institution and their financial instruments include Buyers’ Credit, Corporate Banking, Lines of Credit, Investment Finance as also Project exports. In addition their services include assistance in identifying buyers in overseas markets, advisory services and research and analysis.
Export Credit and Insurance
Export Credit and Insurance is a financial support, guarantee and insurance support provided to facilitate exporters. To compete in international markets, exporters need to make credit
concessions to their buyer that evidently affects their liquidity. Hence exporters need to scout for external trade finance at soft terms post-shipment.
• Operating risk - Exporters must be in the know of the buyer country requirements in terms of industrial law or import regulations. This would differ from country to country.
Adherence to buyer country rules will help reducing operating risks.
• Political risk - Political instability in a country due to civil war or a trade embargo could result in delays & payment defaults.
• Legal risk - Every country has its own legal requirements and processes. This could include product liability laws, safety and health laws, dispute resolution laws etc. An exporter must be aware of the legal requirements, failing which a legal risk would arise.
• Currency risk - Adverse changes in currency rates are common risks in doing overseas business. This could result in loss of your earning or profit. Currency ‘Hedging’ is a way to protect such a situation.
It is therefore essential for each exporter to understand the importance of Risk Management of credit. It is the method of identifying, analysing, quantifying and measuring the risk potential, to enable manage the credit activities as also mitigate higher risks in the credit process.
Risks Involved Operating
Risk
Legal Risk
Currency Risk Political
Risk
In doing so, it is important to:
It is necessary to select and negotiate the implementation of appropriate security tools.
Exporters need to safeguard their export proceeds in respect of any of the above-mentioned risks which may result in payment risk on account of the overseas buyers.
Hence, credit insurance for exports hedges an exporter’s risks in this regard.
Export credit insurance schemes
Export credit insurance policies are offered by ECGC (Export Credit Guarantee Corporation, under Ministry of Commerce) and also by private commercial risk insurance companies.
ECGC has effective schemes for
• Instruments to cover exporters on account of non-payment by the overseas buyers
• Instruments to Banks in respect of lending risk of the exporters
• Credit insurance covers after due diligence of the buyers
1. Know your Customer 2. Analyse Financial & Non-Financial Risks and Assess Opportunities & Threats
3. Monitor Business Relationship
Visit ECGC sub Office (AC Market Complex, 9th floor, 1 Shakespeare Sarani, Kolkata)to know about their risk coverage schemes
Take a risk assessment report on your overseas buyer from one of the credit rating or business information companies like Dun & Bradstreet/ Rubix Data Sciences /any other credit rating agency
Monitor the buyers financial and non financial status periodically even after commencing business with them.
Step 7–Getting Export Goods Ready
Once your finance and insurance has been arranged and contract/order is in place, you need to get your goods ready as per the standards, packaging and quantity specified in the contract and arrange for secure storage/warehousing. Irrespective of whether you manufacture the goods or source the goods, international standards, packaging specifications must be adhered to.
Quality control against the standards, inspection and certification are the most important aspects for exporters and helps manufacturers navigate global market requirements more easily and gain global market access and participate in high–level value chains.
The standards have been divided into two categories:
1. Process standards and certifications ISO, EIC etc.
2. Product standards and certifications e.g. USFDA, BIS etc Some certification examples are mentioned below:
Export Inspection Agency:It facilitates exports through Quality Control and inspection and covering commodities for compulsory pre-shipment inspection and certification, such as agricultural products and food, marine, chemicals, rubber products, minerals, steel products, jute, footwear etc. The major functions of EIA/EIC includes:
o Inspection of quality of goods
o Grant of certificate of origin
o Testing of products
Bureau of Indian Standards monitors and implements standards in India and import of foreign products. Bureau of Indian Standards has been nominated as the organisation which lays down the rules for various products trade in India such as household goods, cement, food &
food products.
FSSAI establishes the food safety and compliance system for food in India and some of its compliances are drawn from CODEX. If you are importing food items, you would require to have a FSSAI certification.
Wildlife Crime Control Bureau (WCCB) customs ensure that proper certification from WCCB is given prior to export so that products such as tiger claws, musk deer, elephant or rhino tusks and wild flowers are not traded internationally and WCCB checks the same from its list of endangered species or animals.
Organic product Certification: Food products which have been farmed within the country organically may obtain an ‘India Organic’ certification mark. This mark indicates conformity to the standards laid down for such organic products.
ASTM International, an organisation of repute is responsible for creating, developing and publishing technical standards for several items.
USFDA (United States Food and Drugs Administration) is the body for certifying safety standards for all food and drugs which are consumed in the US, For example export of honey to US would require this certification.
The Codex Alimentarius Commission develops and adopts food standards that serve as a reference for international food trade. Protect consumers' health; Ensure fair practices in international food trade. For example, Export of honey to EU would require this certification.
Food Standard Agency: In Britain, this is where processed food system compliances are established and disseminated world-wide. Similarly in Australia, New Zealand, Japan, there are several major laws governing food and agricultural products.
International Standards Organisation (ISO): This is mainly a body for the compliance of processes in line with the standards which are established by various bodies such as ASTM, CODEX Alimentarius etc.
REACH: Registration, Evaluation, Authorisation and Restriction of Chemicals ensures removal and restrictions in the usage of chemicals in apparel, like Azo-dyes, stain-repelling chemicals as also nickel and Chromium in leather items.
Federal Food, Drug, & Cosmetic Act: This certification is to ensure that the products are not
adulterated or misbranded and as per purchasers specifications. An Assam exporter exporting cosmetics to US would require to ensure this.
Halal Certification: It is a green dot certification, states that the food or the products are permissible in Arabian countries.
Pantone Colour standardized colour reproduction system ensures that colours follow a unique coding system.
Evidently, Quality and adherence to Standards of export products is mandatory to enter and to sustain in the international market as export markets have stringent rules and laws especially with respect to export certification, logistics, ethics and social compliances and non-trade barriers.
An Example:
Export of Ginger & Turmeric
Export of Dried ginger to USA needs to comply with the specifications on cleanliness, as indicated by the American Spice Trade Association (ASTA) as also the (FDA). These specifications include standards in the samples sent for analysis such as count of dead insects, mammalian excreta, insect infestation etc. Exports of dried ginger to USA which do not conform to these specifications are liable to be stopped and subjected to reconditioning (cleaning to remove the defect).
Similarly banned pesticides cannot be used. Ginger additionally needs to be dried on clean surfaces to avoid contaminations. Furthermore the packaging should be clean, dry and only new bags must be ensured.
Organic products, especially those manufactured through environment-friendly methods, attract a lot of attention of buyers and qualify for easy entry into international markets.
Packaging and labelling of Export Goods- Packaging is an important part in the process of exports. Avoiding damage to your goods is the main purpose of packaging. You need to prevent the goods from being tampered or stolen. The mode of transport that you choose would also impact the condition of the goods while being transported. If your goods have wooden packaging, you need to ensure the requirements for fumigation etc. Dangerous goods have a specific type of packaging requirement and perishable goods or food would have their specific packaging requirements.
Labelling on export goods should include the following:
o Shipper's mark and weight mark o Country of origin
o Total number of packages
o Handling and cautionary marks, such as ‘fragile cargo’
o Port of entry
o Labels in respect of:
o Hazardous materials o Usage
o Recycling or disposal ofpackaging
For example, the packaging requirements for the export of honey are as follows:
o Must be kept cool and fresh o Exported quickly
o Maintain export packaging in 300 kg drums
o Internally lacquered with food-grade material/wax coating o Exclusion of air from the drums
o Avoid storage under conditions of high temperature
Ware housing: A warehouse for export goods is a storage premise for goods for subsequent shipment to another country. Warehouses could be Government owned customs bonded warehouses or private warehouses. Customs bonded warehouse (bonded warehouse) is a licensed premise where manufacturing and other operations such as packaging, labelling and repacking can be carried out on deferred payment of customs duty.
Pack houses: To ensure appropriate international standard and quarantine safety in exports of agricultural and horticultural products, an integrated facility such as of pack house is very important. This includes the following activities: cargo-handling and temporary packing and stacking, grading, sorting washing and includes checks such as treatment, cooling, inspection and quarantine. This assists in maintaining product standards required for quality, safety and hygiene while also maintaining traceability.
An exporter exporting agricultural/horticultural produce, such as ginger, turmeric, chillies, fresh fruits to EU countries must ensure registration with the State Agriculture or Horticulture wing to identify the:
o Farmer or his farm
o Crops grown and the location thereof o Expected production
It is imperative for an exporter to procure his stock of fruits and vegetables from such registered farmers alone, as also assist them with mandated technical know-how as stocks from unregistered farmers and farms will not be acceptable and liable to be rejected.
Certificate of Origin: This certificate is issued by authorized Export promotion councils and Chambers of Commerce and is essential for exporters in India to prove that the commodities being exported are of Indian origin and is particularly important for an exporter claiming duty benefits against the product, based on the trade agreements signed between India and the respective countries. The certificate is signed by the exporter and certified to be true and correct. This has been made online. There are two categories: preferential and non-preferential. An exporter may get it issued by FIEO or by Indian Chamber of Commerce or any other Council.
Step 8 - Shipping/Logistics Documentation
Processing of shipping documents through a Custom House Agent (CHA)
Prepare Export documents-shipping Bill/Commercial Invoice/Packing List
Despatch of Goods (Logistics) by Air/Sea/Rail/Road/Post/Courier
Obtain Customs clearances through a CHA
Obtain all Shipping documents-Bill of Lading/Mate’s Receipt, Shipping/Airway Bill
Preparing export documents and Processing of shipping documents
It needs to be ensured that there is an effective method for the timely delivery of exported items as also there is a consistency in the delivery mechanism with a digitised monitoring mechanism of the location of the goods, documentation coordination within the export logistics chain for customs clearance is very important.
Clearance of goods at the Customs end needs to be handled professionally and is initiated with filing of a Shipping-bill. The primary prerequisites for customs clearance include and commence with the basic registrations such as IEC certificate, as aforementioned, FE dealer code, Bank account details and reference or a licence for the concerned export promotion measures under the Foreign Trade Policy.
There is a mechanism by the Customs authorities to appoint licensed Customs House Agents (CHA) for facilitating examination, documentation and export-import clearance of goods. Only those who are licensed by local Customs are allowed to operate in that Customs station.
Ports- Air/Water/Land
Inland Container Depot (ICD)
Container Freight Station (CFS)
Container Corporation of India (CONCOR)
Customs House
Agents (CHA) Customs Bank Forwarders
Inspection
Agencies GST Weighment
CHAs in West Bengal
The Exporters can contact Calcutta Customs House Agents' Association and get the list of CHAs in West Bengal. http://www.cchaakolkata.org/member-details.aspx#
ASIAN FREIGHT UNIT OF ESANFREIGHT & TRAVELS PVT. LTD.
Address: ROOM NO. 10, 7TH FLOOR, COMMERCE HOUSE, 2, GANESH CH. AVENUE, KOLKATA -700 013 Phone No: 9874596096
Email ID: [email protected] Contact Person: SURESH GOPALKA
ATLAS LOGISTICS PVT.LTD.
Address: 2/2 TOWN SHEND ROAD,1ST FLOOR, BHOWANIPUR,KOLKATA- 700025 Phone No: 9903914590 / 9836621690
Email ID: [email protected] Contact Person: SAUMITRA PALODHI
Logistics Documentation would include:
i) Preparing invoice and packing list
ii) If goods are eligible for claiming exemption VAT /CST, exporter fills in form 15 / Form H
iii) If goods are eligible for claiming exemption of excise duty, exporter fills in ARE1 iv) If goods are non -schedule items, a ‘no objection certificate’ from the respective office
needs to be obtained
v) If the buyer specifies, a certificate needs to be obtained called the “COO” (Certificate of Origin) from the relevant Export Promotion Council
vi) Quality certification/Inspection certification of certain items as per requirement
vii) Filing the shipping bill based on the nature of the export goods, namely duty free goods/dutiable goods/goods claiming for duty drawback/duty free goods ex bond- from bonded warehouse
Once the goods have departed from India, it is the responsibility of the exporter to ensure submission of the export documents to the bank within a period of 21 days from the shipment date. This enables the Bank to report to RBI of the receipt of the export documents as well the subsequent realisation of export proceeds.
CFS (Container Freight Station): They are located within a radius of five Km of the port wherein examination and documentation of the goods could take place. The purpose is to decongest the port. The CFS’s have within it, Terminal Handling facilities, Customs facilities, parking bay for trucks and most importantly CHA offices, canteens and other facilities. The CFS could either be product specific or multi-product.
CONCOR (Container Corporation of India) handles container transportation of merchandise throughout India. They have their own trains and rakes consisting of 80-120 wagons each carrying TEUs from inland to port and sometimes direct to port to facilitate loading onto the ships from there.
Forwarders: Forwarders are transporters of export import goods and their role is limited to same. They are not CHAs but operate in tandem with them.
Ports: There are about 200 sea ports and 50 land customs in India apart from highly facilitated cargo complexes in airports. The Government has also mooted the idea of inland waterways to facilitate trade by using river connectivity and also by way of connecting rivers both domestically and internationally. Railway is a major mode of connectivity. The rail connectivity to Bangladesh is rendered to be more economical.
ICD (Inland Container Depot) facilitates the movement of goods in various land locked districts and are located within 175 km from the main port.
An important aspect of any export consignment is weighment of goods. It is defined that the
goods should weigh exactly the same in the order with a margin of +/- 10% or as defined. Any deviation of the system leads to disputes. Hence there are various weighment processes that are followed which is (i) at the factory/warehouse of despatch, (ii) while on the way to the port and (iii) at the gate of the port to check whether the weight conforms to the one as stated in the packing list at the factory.
Ex Factory -Export Logistics Flow- Summarized
1. Export goods manufactured and ready at factory 2. Documentation readiness:
• Prepare invoice and packing list
• If goods are eligible for claiming exemption VAT /CST, exporter fills in form 15 / Form H
• If goods are eligible for claiming exemption of excise duty, exporter fills in ARE1
• If goods are non -schedule items, a ‘no objection certificate’ from the respective office needs to be obtained
• If the buyer specifies, a certificate needs to be obtained called the “COO”
(Certificate of Origin) from the relevant export promotion council or a designated Chamber of Commerce.
• If the product so requires, a testing/inspection certificate of standards
• Export packages/cartons must have:
▪ Numbering in order
▪ Bar coding
▪ Shipping bill/airway bill details
3. Once the goods are at the port the exporter hands over following documents to the C&F /CHA:
a) Invoice b) packing list c) ARE 1 copy
d) Any other declaration
4. On receipt of above documents, CHA files the shipping bill through Customs online system, i.e. EDI (Electronic Data Interchange). CHA may download it from the Customs portal called ICEGATE which is very efficient and menu-driven mechanism. This portal also known as the “Indian Customs Electronic Gateway”, provides e-filing services to all the stakeholders.
5. CHA files the shipping bills based on the nature of the export goods:
a) duty free goods b) dutiable goods
c) goods claiming for duty drawback
d) duty free goods ex bond- from bonded warehouse
6. Goods may enter the dock area only upon submission of a declaration and a check list in the format prescribed.
7. The export cargo is then weighed at the Port. This measured weight should match with Packing list and shipping bill
8. For inspection by customs
a) Customs verifies quantity of goods and original documents are handed over to an appraiser. The appraiser assigns an officer to examine the goods. If the officer is satisfied, the officer issues a LEO (Let Export order)
b) If goods are already cleared at factory by manufacturer, under supervision of an Excise officer, then ARE1 must be submitted to Customs.
c) Customs officer certifies that goods have been exported. This is used as proof of export for releasing bond that had been executed by the exporter with Excise.
9. CHA then hands over the duly signed copy of the Shipping bill to the steamer agent
10. The officer of the Customs responsible for the loading of container / vessel, gives an approval ‘Shipped on board’. This is endorsed on the ‘Exporters copy’ of the Shipping bill.
11. Once goods are loaded; the vessel captain issues a ‘Mates receipt’ to the port authorities 12. Port authorities calculate the port charge and hand it over to the CHA/C&F agent.
13. CHA makes the port payment and obtains the ‘BL’ (Bill of lading) or Airway bill from the agent of the Shipping Company.
14. Customs officer signs the hard copy prints of the original shipping bills and returns them to the CHA
15. Once the goods have departed from the exporting country, the shipping line files the EGM (Export General Manifest) with customs.
16. On the basis of EGM filed customs issues the EP (Export Promotion) copy of shipping bill
17. EDI system then generates the Shipping bill and copies are signed by Customs & CHA 18. Once the shipment formalities are completed, the exporter negotiates the export bill
through his Bank (authorized dealer) within a prescribed period of 21 days from the export date.
19. The negotiating bank scrutinizes the shipping documents and forwards them to the importer’s banker to enable him to clear the shipment.
20. The authorized dealer bank then ensures receipt of export proceeds and then issues e- BRC (Electronic Bank Reconciliation Certificate)
21. Exporter submits proof of export (signed ARE1) to Central Excise and gets the export obligation discharged. The export process is then complete.
Step 9–Export Closure and Claiming Export benefits
On departure of the goods from India, the shipping bill is submitted to the Customs Commissioner. Upon verification, the Customs hand over one copy of the Shipping bill known as the ‘Exchange Control or EC Copy’ for onward submission by the exporter to the Bank
Negotiate Shipping documents with your Forex dealing Bank within 21 days
Obtain Customs clearances through a CHA
within a prescribed period of 21 days from export for negotiation of shipping documents. The export data is transmitted electronically to the RBI server through the ICEGATE (Indian Customs EDI Gateway). Software exporters submit Softex forms in duplicate to the STPI/SEZ for certification within a prescribed 30 days period and transmitted in an electronic format to RBI.
Claiming DGFT Benefits: An application for claiming incentives/benefits under DGFT Schemes has to be filed online with a digital signature.
An authorisation for duty free import of raw materials and any other inputs required in the manufacture of export goods as also capital goods (machinery) is available for manufacturers and merchant exporters from the DGFT offices.
Step 10 - Reviewing the first consignment
Feedback is an essential element of exports and this exercise would assist you to improvise, modernize your products and processes to enable you to penetrate your export markets further as also to venture into newer markets. It will also help modify and improve on internal policies and processes.
Value addition to your product will provide you with a competitive advantage. For instance, if you are exporting ginger, production of a powdered form or flakes to fill a niche market can potentially be sold at a premium by marketing it to specific consumers and businesses.
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Obtain Feedback from your Buyer
Consider Value Addition of your Product
