Risks in EX-IM

Commercial Risk
Lack of knowledge about foreign markets Inadaptability of the product Longer transit time Preference changes Competition

Political Risk
Changes in political power Civil wars, rebellion Wars between countries Capture of cargo during war

Cargo Risk
Storms Fire Ship hijackers

Credit Risk
Selling on the credit Exporter must have sufficient fund to offer the credit to the importer Exporter should be prepared to take credit risk ECGC

Foreign Exchange Risk

Invoicing in the Indian Rupees L/C Forward Contract

Clearance of Import Cargo

Overseas suppliers invoice, duly signed Packing list B/L Custom house Agents declaration Import License, If necessary Copy of L/C Insurance Policy Test report, industrial license, exemption order, COO- if required

Procedure
Submission of B/E to custom house B/E sent to the appraisal section On the basis of the examination report, the apprising officer assesses the B/E. B/E is then sent to the assistant commissioner Now actual duty is computed taking consideration of exchange rates

 CHA/ Importer pays the duty at the nominated bank Appeal can be raise within specified time limit After payment, documents are handed over to the shed appraiser, who after examination will release the cargo.

Clearance of Export Cargo

Documents handling to the custom house The assessing officer will check the value of the export including DEPB, EXIM policy etc Shipping bill is passed by export department, the cargo is presented to the shed appraiser for physical examination. Shed appraiser gives a Let Export order Now, Exporter or Importer can load the goods on the vessel

Export Incentives Schemes

Duty Authorization Scheme
Advance Authorization Scheme Duty free import authorization scheme

Duty remission scheme

Duty drawback scheme
Section 75, Custom Act, - Goods to be exported Duty drawback scheme = custom duty + excise duty

Duty drawback on Re-export DEPB

Export Promotion Capital Goods

Procedure to claim
Directorate of drawback, If rates are fixed- All Industry Rate (AIR) If rates are not fixed show the details brand rates. It is counted on the % of FOB Value