TITLE

“ EXPORT-Import Procedure And Documentation - the

particulars of freight forwarding business”

at

Minerals And metals trading corporation (mmtc)

1
 Certificate of Approval

The following Summer Project Report titled ―EXPORT-IMPORT PROCEDURE AND

DOCUMENTATION- THE PARTTICULARS OF FREIGHT FORWARDING BSINESS" at
Minerals And Metals Trading Corporation(MMTC Ltd) is hereby approved as a certified study in
management carried out and presented in a manner satisfactory to warrant its acceptance as a
prerequisite for the award of Post-Graduate Diploma in Business Management for which it has
been submitted. It is understood that by this approval the undersigned do not necessarily endorse or
approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer
Project Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner Mrs. Sartaj Khera ___________________

2. PG Summer Project Co-coordinator Mr. U. E. Rao ______________

2
 Certificate from Summer Project Guides

This is to certify that Ms. TANJU ROY, a student of the Post-Graduate Diploma in Business
Management, has worked under our guidance and supervision. This Summer Project Report has the
requisite standard and to the best of our knowledge no part of it has been reproduced from any other
summer project, monograph, report or book.

Mrs. Sartaj khera Mr. Koushik Paul ,General Manager {Minerals)

Sri SIIM, Vasant Kunj Export of Minerals
New Delhi
Date

Mr. Abhishek Sanyal, Dy.Manager

Gold Division (Import)

Mrs. Nurzat Salam, Dy.Manager

Non Ferrous Metal(Import)

3
 Acknowledgement

Preservation, Inspiration and motivation have always played a key role in the success of any venture.
In the present world of competition and success, training is like a bridge between theoretical and
practical working; willingly I prepared this particular Project.
First of all I would like to thank the supreme power, the almighty God, who is the one who has
always guided me to work on the right path of my life.
I would like thank Mr Thiyagrajan,Chief General Manager(East Zone) &Mr. Subrata Paul,General
Manager for their inspiration and believe on me.
I would also like to thank my Mentors Mr.Koushik Paul,General Manager(Minerals); Mr. Abhishek
Sanyal, Deputy Manager(Gold Division);Mrs.Nurzat Salam,General Manager(NFM) and my Project
Guide Mr.U.E.Rao,Senior Manager(Personal and Law) who have been the greatest support in
completing this project. Without their constant feedback, this project would not have been a reality.

This project would not have seen the light of the day without the support of our faculty mentor Mrs
Sartaj Khera ,she has been of great help in guiding us through the various stages of our project.

Constructive criticism and feedback would be highly appreciated.

TANJU ROY
20090158
Sri SIIM, Vasant kunj, New Delhi

4
 Table Of Contents

Table of contents Page No

Executive Summary 6-7
Objective to the Study 8
Scope of the Study 9
Introduction to the study 10-23
Company Profile 24-45
Introduction to Export Import 46-60
Import Procedure and Documentation 61-74
Export Procedure and Documentation 75-94
Research Methodology 95-103
Data Analysis and Representation 104-109
Findings 110
Limitations of the Project 111
Suggestions 112
Conclusion 113
Bibliography 114

5
 EXECUTIVE SUMMARY

Today‘s rapidly changing business environment is creating intense competition among

corporations markets are changing faster now than in any other time in history. Product life
cycles are shortening and businesses must compete globally.

Documentation perform a key role in any trade. The freight forwarder is

the architect of the international transport and plays an important role in the growth of the
international trade in India by facilitating exporters, shippers, importers, customs/ports
authorities etc.

The export and import industry will continue to benefit from growth in
trade and certain structural advantages over carriers . Value is driven by financial
performance is driven strategic position. Strategic position must assessed in a disciplined
manner , which examines the discrete and interrelated activities within a forwarder value
chain to understand sources of synergy and options to increase value.

The Indian economy is one of the fastest growing in the world, but the boom is not
without its stops, starts, and bottlenecks, all of which also make themselves felt in the
country‘s freight transport sector. In fact, according a recent study by the Confederation of
Indian Industry, the country needs US$330bn in infrastructure investment over the next five
years to sustain its economy‘s growth at 8% annually. Inadequate port facilities, poor road
infrastructure and frequent power cuts prevent Indian industries from operating efficiently
and expanding sales. India needs to increase its spending on infrastructure projects to 8% of
the country‘s gross domestic product from 4.6% now. In fact, despite these obstacles, its
India Freight Transport Report concludes the country will reach average annual freight traffic
growth of 10.2% in the 2007-2011 periods.

Strong economic and foreign trade growth is underpinning the

freight upturn. In the road freight sector, demand is boosted by door-to-door logistics, the
move to higher value/lower bulk shipments, the rising size of the vehicle fleet and the new
impetus to improve and extend the network, using private sector highway operators and
build-transfer-operate (BOT) schemes. Rail will experience steady but less spectacular
growth given the predominance of the state-controlled Indian Railways. All other transport
modes should experience faster growth, with international air cargo turnover performing
strongly as more private airlines join the market. Sea transport through India‘s major ports
6
will also perform well. A major factor over the next few years driving change will be the
rising competitive pressures from cargo operators among India‘s immediate neighbours and
main trading partners.

For the 2007-2011 forecast period we expect the transport and communications sector to
continue outpacing the economy as a whole. It will achieve average annual growth of 7.7%,
versus 7.4% for overall GDP. The total value of transport and communications GDP will rise
to US$91.8bn in nominal terms by 2011, representing 7.6% of India‘s GDP.

India has an ability to improve the freight forwarding due to his better quality of
product. We improve the skill development in labour. To huge investment in research and
development .
We revise the market strategy for the expending for freight forwarding. Government of India
provides better facilities for its freight forwarder. Last few years this seek industry of India
we improve the technology for the production of better quality of product. I hope India
improve its freight forwarding for its policies.

7
 OBJECTIVE OF THE STUDY

 To know the Export and Import industry very well

 To analyze the market potential for providing the services
related with import export to the customers.
 To know the requirement of the customers
 To know the Export/Import Documentation.
 To analyze the present position of MMTC in the Global trade.
 To set up brand image of MMTC in segmented market.
 To know about market movement
 To analyze the present services and their application

8
 SCOPE OF THE STUDY

The study gives me a wide exposure of areas like Industry awareness,

company, competitions, Market position, customer expectations and market
demands in Freight Forwarding.

What are the current trends and their application and also scope of improvement in
it?

It also gives me a deep understanding of the logistics industry about both domestic
as well as foreign market.

9
 INTRODUCTION TO THE STUDY

Today, business is acknowledged to be international and there is a general expectation that

this will continue for the foreseeable future. International business may be defined simply
as business transactions that take place across national borders. This broad definition
includes the very small firm that exports (or imports) a small quantity to only one country, as
well as the very large global firm with integrated operations and strategic alliances around the
world. Within this broad array, distinctions are often made among different types of
international firms, and these distinctions are helpful in understanding a firm's strategy,
organization and functional decisions (for example, its financial, administrative, marketing,
human resource, or operations decisions). One distinction that can be helpful is the
distinction between multi-domestic operations, with independent subsidiaries which act
essentially as domestic firms, and global operations, with integrated subsidiaries which are
closely related and interconnected. These may be thought of as the two ends of a continuum,
with many possibilities in between.
International business grew over the last half of the twentieth century partly because of
liberalization of both trade and investment, and partly because doing business internationally
had become easier. In terms of liberalization, the General Agreement on Tariffs and Trade
(GATT) negotiation rounds resulted in trade liberalization, and this was continued with the
formation of the World Trade Organization (WTO) in 1995. At the same time, worldwide
capital movements were liberalized by most governments, particularly with the advent of
electronic funds transfers. In addition, the introduction of a new European monetary unit, the
euro, into circulation in January 2002 has impacted international business economically. The
euro is the currency of the European Union, membership in March 2005 of 25 countries, and
the euro replaced each country's previous currency. As of early 2005, the United States dollar
continues to struggle against the euro and the impacts are being felt across industries
worldwide.
In terms of ease of doing business internationally, two major forces are important:
1. Technological developments which make global communication and transportation relatively
quick and convenient; and

2. The disappearance of a substantial part of the communist world, opening many of the world's
economies to private business.

10
 1. DOMESTIC VS. INTERNATIONAL BUSINESS

Domestic and international enterprises, in both the public and private sectors, share the
business objectives of functioning successfully to continue operations. Private enterprises
seek to function profitably as well. Why, then, is international business different from
domestic? The answer lies in the differences across borders. Nation-states generally have
unique government systems, laws and regulations, currencies, taxes and duties, and so on, as
well as different cultures and practices. An individual traveling from his home country to a
foreign country needs to have the proper documents, to carry foreign currency, to be able to
communicate in the foreign country, to be dressed appropriately, and so on. Doing business
in a foreign country involves similar issues and is thus more complex than doing business at
home. The following sections will explore some of these issues. Specifically, comparative
advantage is introduced, the international business environment is explored, and forms of
international entry are outlined.

2. THEORIES OF INTERNATIONAL TRADE AND INVESTMENT

In order to understand international business, it is necessary to have a broad conceptual

understanding of why trade and investment across national borders take place. Trade and
investment can be examined in terms of the comparative advantage of nations.
Comparative advantage suggests that each nation is relatively good at producing certain
products or services. This comparative advantage is based on the nation's abundant factors of
production—land, labor, and capital—and a country will export those products/services that
use its abundant factors of production intensively. Simply, consider only two factors of
production, labor and capital, and two countries, X and Y. If country X has a relative
abundance of labor and country Y a relative abundance of capital, country X should export
products/services that use labor intensively, country Y should export products/services that
use capital intensively.
This is a very simplistic explanation, of course. There are many more factors of production,
of varying qualities, and there are many additional influences on trade such as government
regulations. Nevertheless, it is a starting point for understanding what nations are likely to
export or import. The concept of comparative advantage can also help explain investment
flows. Generally, capital is the most mobile of the factors of production and can move

11
relatively easily from one country to another. Other factors of production, such as land and
labor, either do not move or are less mobile. The result is that where capital is available in
one country it may be used to invest in other countries to take advantage of their abundant
land or labor. Firms may develop expertise and firm specific advantages based initially on
abundant resources at home, but as resource needs change, the stage of the product life cycle
matures, and home markets become saturated, these firms find it advantageous to invest
internationally.

3. THE INTERNATIONAL BUSINESS ENVIRONMENT

International business is different from domestic business because the environment changes
when a firm crosses international borders. Typically, a firm understands its domestic
environment quite well, but is less familiar with the environment in other countries and must
invest more time and resources into understanding the new environment. The following
considers some of the important aspects of the environment that change internationally.
The economic environment can be very different from one nation to another. Countries are
often divided into three main categories: the more developed or industrialized, the less
developed or third world, and the newly industrializing or emerging economies. Within each
category there are major variations, but overall the more developed countries are the rich
countries, the less developed the poor ones, and the newly industrializing (those moving from
poorer to richer). These distinctions are usually made on the basis of gross domestic product
per capita (GDP/capita). Better education, infrastructure, technology, health care, and so on
are also often associated with higher levels of economic development.
In addition to level of economic development, countries can be classified as free-market,
centrally planned, or mixed. Free-market economies are those where government intervenes
minimally in business activities, and market forces of supply and demand are allowed to
determine production and prices. Centrally planned economies are those where the
government determines production and prices based on forecasts of demand and desired
levels of supply. Mixed economies are those where some activities are left to market forces
and some, for national and individual welfare reasons, are government controlled. In the late
twentieth century there has been a substantial move to free-market economies, but the
People's Republic of China, the world's most populous country, along with a few others,

12
remained largely centrally planned economies, and most countries maintain some
government control of business activities.
Clearly the level of economic activity combined with education, infrastructure, and so on, as
well as the degree of government control of the economy, affect virtually all facets of doing
business, and a firm needs to understand this environment if it is to operate successfully
internationally.
The political environment refers to the type of government, the government relationship with
business, and the political risk in a country. Doing business internationally thus implies
dealing with different types of governments, relationships, and levels of risk.
There are many different types of political systems, for example, multi-party democracies,
one-party states, constitutional monarchies, dictatorships (military and nonmilitary). Also,
governments change in different ways, for example, by regular elections, occasional
elections, death, coups, war. Government-business relationships also differ from country to
country. Business may be viewed positively as the engine of growth, it may be viewed
negatively as the exploiter of the workers, or somewhere in between as providing both
benefits and drawbacks. Specific government-business relationships can also vary from
positive to negative depending on the type of business operations involved and the
relationship between the people of the host country and the people of the home country. To
be effective in a foreign location an international firm relies on the goodwill of the foreign
government and needs to have a good understanding of all of these aspects of the political
environment.
A particular concern of international firms is the degree of political risk in a foreign location.
Political risk refers to the likelihood of government activity that has unwanted consequences
for the firm. These consequences can be dramatic as in forced divestment, where a
government requires the firm give up its assets, or more moderate, as in unwelcome
regulations or interference in operations. In any case the risk occurs because of uncertainty
about the likelihood of government activity occurring. Generally, risk is associated with
instability and a country is thus seen as more risky if the government is likely to change
unexpectedly, if there is social unrest, if there are riots, revolutions, war, terrorism, and so on.
Firms naturally prefer countries that are stable and that present little political risk, but the
returns need to be weighed against the risks, and firms often do business in countries where
the risk is relatively high. In these situations, firms seek to manage the perceived risk through
insurance, ownership and management choices, supply and market control, financing

13
arrangements, and so on. In addition, the degree of political risk is not solely a function of the
country, but depends on the company and its activities as well—a risky country for one
company may be relatively safe for another.
The cultural environment is one of the critical components of the international business
environment and one of the most difficult to understand. This is because the cultural
environment is essentially unseen; it has been described as a shared, commonly held body of
general beliefs and values that determine what is right for one group, according to Kluckhohn
and Strodtbeck. National culture is described as the body of general beliefs and values that
are shared by a nation. Beliefs and values are generally seen as formed by factors such as
history, language, religion, geographic location, government, and education; thus firms begin
a cultural analysis by seeking to understand these factors.
Firms want to understand what beliefs and values they may find in countries where they do
business, and a number of models of cultural values have been proposed by scholars. The
most well-known is that developed by Hofstede in1980. This model proposes four
dimensions of cultural values including individualism, uncertainty avoidance, power distance
and masculinity. Individualism is the degree to which a nation values and encourages
individual action and decision making. Uncertainty avoidance is the degree to which a nation
is willing to accept and deal with uncertainty. Power distance is the degree to which a
national accepts and sanctions differences in power. And masculinity is the degree to which a
nation accepts traditional male values or traditional female values. This model of cultural
values has been used extensively because it provides data for a wide array of countries. Many
academics and managers found this model helpful in exploring management approaches that
would be appropriate in different cultures. For example, in a nation that is high on
individualism one expects individual goals, individual tasks, and individual reward systems
to be effective, whereas the reverse would be the case in a nation that is low on
individualism. While this model is popular, there have been many attempts to develop more
complex and inclusive models of culture.
The competitive environment can also change from country to country. This is partly because
of the economic, political, and cultural environments; these environmental factors help
determine the type and degree of competition that exists in a given country. Competition can
come from a variety of sources. It can be public or private sector, come from large or small
organizations, be domestic or global, and stem from traditional or new competitors. For the
domestic firm the most likely sources of competition may be well understood. The same is

14
not the case when one moves to compete in a new environment. For example, in the 1990s in
the United States most business was privately owned and competition was among private
sector companies, while in the People's Republic of China (PRC) businesses were owned by
the state. Thus, a U.S. company in the PRC could find itself competing with organizations
owned by state entities such as the PRC army. This could change the nature of competition
dramatically.
4. INTERNATIONAL ENTRY CHOICES
International firms may choose to do business in a variety of ways. Some of the most
common include exports, licenses, contracts and turnkey operations, franchises, joint
ventures, wholly owned subsidiaries, and strategic alliances.
Exporting is often the first international choice for firms, and many firms rely substantially
on exports throughout their history. Exports are seen as relatively simple because the firm is
relying on domestic production, can use a variety of intermediaries to assist in the process,
and expects its foreign customers to deal with the marketing and sales issues. Many firms
begin by exporting reactively; then become proactive when they realize the potential benefits
of addressing a market that is much larger than the domestic one. Effective exporting requires
attention to detail if the process is to be successful; for example, the exporter needs to decide
if and when to use different intermediaries, select an appropriate transportation method,
preparing export documentation, prepare the product, arrange acceptable payment terms, and
so on. Most importantly, the exporter usually leaves marketing and sales to the foreign
customers, and these may not receive the same attention as if the firm itself under-took these
activities. Larger exporters often undertake their own marketing and establish sales
subsidiaries in important foreign markets.
Licenses are granted from a licensor to a licensee for the rights to some intangible property
(e.g. patents, processes, copyrights, trademarks) for agreed on compensation (a royalty
payment). Many companies feel that production in a foreign country is desirable but they do
not want to undertake this production themselves. In this situation the firm can grant a license
to a foreign firm to undertake the production. The licensing agreement gives access to foreign
markets through foreign production without the necessity of investing in the foreign location.
This is particularly attractive for a company that does not have the financial or managerial
capacity to invest and undertake foreign production. The major disadvantage to a licensing
agreement is the dependence on the foreign producer for quality, efficiency, and promotion
of the product—if the licensee is not effective this reflects on the licensor. In addition, the

15
licensor risks losing some of its technology and creating a potential competitor. This means
the licensor should choose a licensee carefully to be sure the licensee will perform at an
acceptable level and is trustworthy. The agreement is important to both parties and should
ensure that both parties benefit equitably.
Contracts are used frequently by firms that provide specialized services, such as
management, technical knowledge, engineering, information technology, education, and so
on, in a foreign location for a specified time period and fee. Contracts are attractive for firms
that have talents not being fully utilized at home and in demand in foreign locations. They are
relatively short-term, allowing for flexibility, and the fee is usually fixed so that revenues are
known in advance. The major drawback is their short-term nature, which means that the
contracting firm needs to develop new business constantly and negotiate new contracts. This
negotiation is time consuming, costly, and requires skill at cross-cultural negotiations.
Revenues are likely to be uneven and the firm must be able to weather periods when no new
contracts materialize.
Turnkey contracts are a specific kind of contract where a firm constructs a facility, starts
operations, trains local personnel, then transfers the facility (turns over the keys) to the
foreign owner. These contracts are usually for very large infrastructure projects, such as
dams, railways, and airports, and involve substantial financing; thus they are often financed
by international financial institutions such as the World Bank. Companies that specialize in
these projects can be very profitable, but they require specialized expertise. Further, the
investment in obtaining these projects is very high, so only a relatively small number of large
firms are involved in these projects, and often they involve a syndicate or collaboration of
firms.
Similar to licensing agreements, franchises involve the sale of the right to operate a complete
business operation. Well-known examples include independently owned fast-food restaurants
like McDonald's and Pizza Hut. A successful franchise requires control over something that
others are willing to pay for, such as a name, set of products, or a way of doing things, and
the availability of willing and able franchisees. Finding franchisees and maintaining control
over franchisable assets in foreign countries can be difficult; to be successful at international
franchising firms need to ensure they can accomplish both of these.
Joint ventures involve shared ownership in a subsidiary company. A joint venture allows a
firm to take an investment position in a foreign location without taking on the complete
responsibility for the foreign investment. Joint ventures can take many forms. For example,

16
there can be two partners or more, partners can share equally or have varying stakes, partners
can come from the private sector or the public, partners can be silent or active, partners can
be local or international.

The decisions on what to share, how much to share, with whom to share, and how long to
share are all important to the success of a joint venture. Joint ventures have been likened to
marriages, with the suggestion that the choice of partner is critically important. Many joint
ventures fail because partners have not agreed on their objectives and find it difficult to work
out conflicts. Joint ventures provide an effective international entry when partners are
complementary, but firms need to be thorough in their preparation for a joint venture.
Wholly-owned subsidiaries involve the establishment of businesses in foreign locations
which are owned entirely by the investing firm. This entry choice puts the investor parent in
full control of operations but also requires the ability to provide the needed capital and
management, and to take on all of the risk. Where control is important and the firm is capable
of the investment, it is often the preferred choice. Other firms feel the need for local input
from local partners, or specialized input from international partners, and opt for joint ventures
or strategic alliances, even where they are financially capable of 100 percent ownership.
Strategic alliances are arrangements among companies to cooperate for strategic purposes.
Licenses and joint ventures are forms of strategic alliances, but are often differentiated from
them. Strategic alliances can involve no joint ownership or specific license agreement, but
rather two companies working together to develop a synergy. Joint advertising programs are
a form of strategic alliance, as are joint research and development programs. Strategic
alliances seem to make some firms vulnerable to loss of competitive advantage, especially
where small firms ally with larger firms. In spite of this, many smaller firms find strategic
alliances allow them to enter the international arena when they could not do so alone.
International business grew substantially in the second half of the twentieth century, and this
growth is likely to continue. The international environment is complex and it is very
important for firms to understand this environment and make effective choices in this
complex environment. The previous discussion introduced the concept of comparative
advantage, explored some of the important aspects of the international business environment,
and outlined the major international entry choices available to firms. The topic of
international business is itself complex, and this short discussion serves only to introduce a
few ideas on international business issues.

17
a) Reasons for international business – for corporate and country
The current scenario for 'International Business in India' is more than heartening. With
stupendous growth of more than 7% annually, improvement and stabilization of relations
with neighboring countries and record setting rise of its stock indexes, India continues to grab
international attention. It is destination of opportunity with its high-potential workforce and
burgeoning middle class and as an increasingly dynamic competitor.
India being a multi-cultural, multi-lingual and multi-religion state, it is not advisable to
formulate a uniform business strategy. The eastern part of the country is known as the 'land
of the intellectuals' and is regarded as the cultural hub of the country. The southern part is
known for its technology acumen and western part is the commercial-capital of the country.
The north is where the political power sits and operates the country. ' International Business
Opportunity in India ' exists in ares like -
 Information Technology and Electronics Hardware.
 Telecommunication.

 Pharmaceuticals and Biotechnology.

 R&D.

 Banking, Financial Institutions and Insurance & Pensions.

 Capital Market.
 Chemicals and Hydrocarbons.
 Infrastructure.

 Agriculture and Food Processing.

 Retailing.

 Logistics.

 Manufacturing.

 Power and Non-conventional Energy.

Sectors like Health, Education, Housing, Resource Conservation & Management Group,
Water Resources, Environment, Rural Development, Small and Medium Enterprises (SME)
and Urban Development are untapped and offers huge scope. With highest numbers of
technical, medical, business management graduates and highest numbers of PhD‘s coupled
with an energetic English speaking mass India offers 'services' with 50-70% less cost from
their western counterparts.
For 'International Business in India' bodies like CII, FICCI and different Chambers of
Commerce provides a variety of business facilitation services by -

18
 Closely working with Government and business promotion organizations in India and the
respective partner countries.
 Also hosts high-level Government dignitaries and help build close working relationships
between Governments and business organizations.
 It also exchanges business delegations, joint task forces and identify bilateral business co-
operation potential and make suitable policy recommendations to Governments.
With opportunities galore for ' International Business in India' the trend is mind boggling. '
India International Business' community along with Indian Domestic Business community
is steadily emerging as the Knowledge Capital of the world. The World Bank and different
rating organizations have forecast that at 7-8% of Economic growth, she will be worlds
second largest economy by 2050.
5. Why Should The World Community Believe In India Now?
It is undeniably true that for many years India's role in international affairs was marginal. Its
image was poor; the economy was plodding along at the "Hindu growth rate" of 3.5 percent
for much of the time after the country gained its independence in 1947. Matters reached a
crisis point in mid-1991, when for the first time ever India seemed on the verge of defaulting
on its international loans. The credit rating agencies had drastically lowered the country's
ratings. The Gulf War had reduced foreign exchange remittances to a trickle. Profligate
spending during the 1980s resulted in huge budget deficits and runaway inflation.
On the political front, the nation was rocked by sectarian violence, witnessed the collapse of
two unstable coalition governments, and was traumatized by the tragic assassination of the
former prime minister, Rajiv Gandhi. By this time India was at a crossroads. She either could
be blind to economic realities and face disaster in the long run, or act swiftly to put her house
in order. Fortunately India chose the second option, even though it entailed pain in the short
term. The outlook of the Indian establishment underwent a sea change. The socialist
shibboleths of the failed past were discarded; capitalism, profits, privatization, and
consumption were no longer considered dirty words. The disintegration of the Soviet Union
meant that India could no longer rely on subsidized handouts from its former ally; socialism
as an ideology was in serious disrepute. It finally dawned on Indian politicians that in a
rapidly globalizing world economy, India would lag far behind other developing countries
unless it took drastic steps. To quote Landau (1994), "India only needed to look at its
neighbor, China, to realize that its isolationist policies were misguided."

19
After decades of disappointment, frustration, and disturbed conditions, India is beginning to
turn the comer. Under the government of P.V. Narasimha Rao, which took over in June 1991,
the technocrat finance minister Dr. Manmohan Singh began the onerous task of reforming an
economy emasculated by decades of socialism, state planning, red tape, and protectionism. It
now appears that India is serious about this task. Despite efforts by vested interests to scuttle
them, the Indian government has largely pressed on with its reforms. And despite defeats
suffered by his Congress party in state elections that were blamed in part on hardships caused
by the reforms, the then Indian Prime Minister insisted that the program would continue.

PEST factor and impact on international business

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and
describes a framework of macroenvironmental factors used in environmental scanning. It is
also referred to as the STEP, STEEP or PESTLE analysis (Political, Economic, Socio-
cultural, Technological, Legal, and Environmental). Recently it was even further extended to
STEEPLED, including ethics and demographics.

It is a part of the external analysis when doing market research and gives a certain overview
of the different macroenvironmental factors that the company has to take into consideration.
Political factors include areas such as tax policy, employment laws, environmental
regulations, trade restrictions and tariffs and political stability. The economic factors are the
economic growth, interast rates, exchange rates and inflation rate. Social factors often look at
the cultural aspects and include health consciousness, population growth rate, age
distribution, career attitudes and emphasis on safety. The technological factors also include
ecological and environmental aspects and can determine the bassiers to entry, minimum
efficient production level and influence outsourcing decisions. It looks at elements such as
R&D activity, automation, technology incentives and the rate of technological change.
The PEST factors combined with external microenvironmental factors can be classified as
opportunities and threats in a SWOT analysis

20
 Economic
Environment

Political
Social Business Environment

Technological
Environment

a) Risk analysis
b) Decision to overcome or managing risks – a live current case

3. Investment management in International business.

a) Foreign Direct Investment

b) Offshore Banking

c) Foreign exchange dealings and numerical in business

d) Resource mobilization through portfolio / GDR / ADR

Globalization

In today's era of Globalization, companies have to face many challenges along with the
benefits of globalization. Following are the main challenges of globalization for the
companies doing international business.

Productivity: Productivity is improved by producing in countries where production is most

efficient. However, this often means workers in one country lose jobs as their work moves to
more efficient locations.

Consumers: Consumers benefit from a wider array of competitively priced goods. However,
they have less control over supplies coming from abroad than over goods produced
domestically.

21
Employment: Employment may increase as economic growth and specialization take hold.
However, domestic employment fluctuates according to foreign conditions (such as
economic crises elsewhere that reduce demand for domestically produced goods).

The Environment: As global consumption increases due to globalization, more natural

resources deplete. Differing environmental standards across countries create opportunities for
businesses to exploit resources in countries with the least amount of environmental protection
regulation.

Monetary and Fiscal Conditions: As money moves more freely, it is better able to seek out
the best investment opportunities on a global scale. However, governments have less control
over the inflow and outflow of funds. Furthermore, capital seems to be flowing more freely
to countries with lower tax rates and less regulatory restrictions, putting additional pressures
on national fiscal and monetary policies.

Sovereignty: Globalization may undermine national sovereignty in two ways: First, contact
with other countries creates more cultural borrowing and may dilute a country's cultural
uniqueness. Second, countries are concerned that important decisions may be made abroad by
foreign owners of domestically located firms.

a) Concept and Practices

b) Role of global organization and global managers
c) Stages of building Global and competitiveness
d) Global competitive advantages of India – sector and industries – Case study

International organization and their role in international business

WTO

WORLD TRADE ORGANISATION (WTO)

The WTO was established on January 1, 1995. It is the embodiment of the Uruguay Round
results and the successor to GATT. 76 Governments became members of WTO on its first
day. It has now 146 members, India being one of the founder members. It has a legal status
and enjoys privileges and immunities on the same footing as the IMF and the World Bank. It
is composed of the Ministerial Conference and the General Council. The Ministerial
Conference (MC) is the highest body. It is composed of the representatives of all the
22
Members. The Ministerial Conference is the executive of the WTO and responsible for
carrying out the functions of the WTO. The MC meets at least once every two years.
The General Council (GC) is an executive forum composed of representatives of all the
Members. The GC discharges the functions of MC during the intervals between meetings of
MC. The GC has three functional councils working under its guidance and supervision
namely:
a) Council for Trade in Goods.
b) Council for Trade in Services.
c) Council for Trade Related Aspects of Intellectual Property Rights (TRIPs).
Director-General heads the secretariat of WTO. He is responsible for preparing budgets and
financial statements of the WTO. WTO has now become the third pillar of United Nations
Organization (UNO) after World Bank and International Monetary Fund.
Objectives Of WTO
In its preamble, the Agreement establishing the WTO lays down the following objectives of
the WTO.
1. Its relation in the field of trade and economic endeavor shall be conducted with a view to
raising standards of living, ensuring full employment and large and steadily growing volume
of real income and effective demand, and expanding the production and trade in goods and
services.
2. To allow for the optimal use of the world‘s resources in accordance with the objective of
sustainable development, seeking both (a) to protect and preserve the environment, and (b) to
enhance the means for doing so in a manner consistent with respective needs and concerns at
different levels of economic development.
3. To make positive efforts designed to ensure that developing countries especially the least
developed among them, secure a share in the growth in international trade commensurate
with the needs of their economic development.
4. To achieve these objectives by entering into reciprocal and mutually advantageous
arrangements directed towards substantial reduction of tariffs and other barriers to trade and
the elimination of discriminatory treatment in international trade relations.
5. To develop an integrated, more viable and durable multilateral trading system
encompassing the GATT, the results of past trade liberalization efforts, and all the results of
the Uruguay Round of multilateral trade negotiations.

23
 COMPANY PROFILE

BACKGROUND

Minerals and Metals Trading Corporation, was set up in 1963 as a canalizing agency for
export of minerals & ores and import of metals. Over the years, import and export of various
other items like fertiliser raw material and finished fertilisers, steel, agro products, diamond,
bullion, coal and hydrocarbon etc. were progressively added to its portfolio. In 1993, MMTC
became a public limited company and changed its name to MMTC Ltd. Government of India
(GoI) holds majority shareholding (99.33%) in MMTC. Since the early 1990‘s, on account of
liberalization policies adopted by GoI most of the items of import and export canalised for
trade through MMTC, were decanalized and placed under open general license. From about
18 items canalized in 1991 currently only two items remain canalized ie exports of iron ore of
64% and above iron content (exclusively through MMTC) and imports of urea (along with
other canalizing agencies.) MMTC has been awarded the ‗Premier Trading House‘ status and
stands as a leading International trading house in India. It has consistently won various
prestigious awards for export performance. MMTC has got a comprehensive infrastructure
for bulk cargo handling, well developed arrangements for rail and road transportation,
warehousing, port and shipping operations, giving it complete control over trade logistics.
MMTC has an extensive domestic and international network of offices and other centers. The
company‘s countrywide domestic network is spread over 85 regional, sub-regional, port and
field offices, warehouses and procurement centers. MMTC is a board managed company.
The board is headed by full time Chairman and Managing Director Shri Sanjiv Batra and
assisted by five full time directors. There are two part time ex officio directors from the
department of commerce and industries, GoI. The Board in turn is supported by a team of
executives who have varied long experience in the industry. As on January 1, 2008 the total
employee strength stoodat 1976.

MMTC has a wholly owned subsidiary MMTC Transnational Pte Ltd (MTPL) based in
Singapore. Its principal activities are trading in minerals, metals, fertilizers, agricultural
products, coal and hydrocarbons, jewellery etc.

OPERATIONS OF THE COMPANY

MMTC‘s trading portfolio mainly comprises metals and industrial raw material, precious
metals, gems & jewellery, agro products, fertilizers/fertilizer raw material, coal & hydro-
carbons. It imports and distributes nonferrous metals, fertilizers, diamonds, gold and
emeralds and exports minerals and ores. MMTC‘s business operations span across six major
divisions viz. Minerals, Metals, Precious Metals, Agro Products, Fertilisers and
Hydrocarbons. MMTC is the country‘s largest exporter of minerals with product portfolio
mainly comprising iron ore, chrome ore and
manganese ore. These products are mainly exported to traditional markets like Japan, China
and South Korea against competition from Brazilian and Australian suppliers. MMTC is
country‘s single largest trader of metals. The metal export includes pig iron produced by
NINL. Healthy industrial growth over the last two years has resulted in increased demand for
base metals and
industrial raw material in the country. MMTC is one of the largest importers of finished
fertilizers and fertilizer raw material in India. Import of urea continues to remain canalised

24
through MMTC along with other agencies. Agro-business comprises export and import of
agro
commodities such as rice, wheat, wheat flour, soyameal, pulses, sugar, processed foods and
plantation products like tea, coffee, jute etc. Hydrocarbon group primarily deals in import of
coking coal, low ash metallurgical (LAM) coke and superior kerosene oil (SKO). MMTC is
country‘s leading importer of LAM coke in India for its clientele comprising cement,
fertilizer, steel companies and thermal power plants. MMTC was the first nominated agencies
for import of
bullion and precious metals. Precious metal, gems & jewellery recorded the highest turnover
during 2006-07.

INDIA'S LARGEST TRADING GIANT

Established in 1963, MMTC, one of the two highest foreign exchange earner for India, is a
leading international trading company with a turnover of over US$ 7 billion.

It is the largest international trading company of India and the first Public Sector Enterprise to be
accorded the status of "FIVE STAR EXPORT HOUSE" by Govt Of India for long standing
contribution to exports.

MMTC is the largest non-oil importer in India.

MMTC's diverse trade activities encompass Third Country Trade, Joint Ventures, Link Deals - all
modern day tools of international trading.

Its vast international trade network, which includes a wholly owned international subsidiary in
Singapore, spans almost in all countries in Asia, Europe, Africa, Oceania and Americas, giving
MMTC a global market coverage.

25
INDIA'S LEADING EXPORTER OF

MINERALS

MMTC is major global player in the minerals trade and is the single largest exporter of minerals
from India. With its comprehensive infrastructural expertise to handle minerals, the company
provides full logistic support from procurement, quality control to guaranteed timely deliveries of
minerals from different ports, through a wide network of regional and port offices in India, as well
as international subsidiary.

MMTC has won the top export award from Chemicals and Allied Products Export Promotion
Council (CAPEXIL) as the largest exporter of minerals from India for the eighteenth year in a
row.

ONE OF THE WORLD'S LARGEST BUYER OF FERTILIZERS

As a leading player in fertilizers and fertilizer raw

material, MMTC has become a major fertilizer marketing
company in India, through planned forward integration of
its import activities with the direct marketing of Urea,
DAP, MOP, Sulphur, Rock Phosphate, SSP and other
farming and agricultural inputs.

26
THE SINGLE LARGEST BULLION TRADER IN THE INDIAN
SUBCONTINENT

MMTC is the largest importer of gold and silver in the Indian

sub continent, handling about 146 MT of gold and 1250 MT of
silver during 2008-09. MMTC supplies gold on loan and
outright basis basis to the exporter, bullion dealers
and jewellery manufacturers on all India basis. MMTC
has retail jewellery & its own branded Sterling Silverware
(Sanchi) showrooms in all the major metro cities of India.
MMTC also supplies branded hallmarked gold and studded
jewellery. Assay and hallmarking units have been set up at New Delhi, Ahmedabad & Kolkata for testing
the purity of gold and gold articles duly accredited with Bureau of Indian Standards .

Besides organizing major jewellery exhibitions in India & abroad, MMTC also has a medallion
manufacturing unit for minting of Gold/SIlver medallions. MMTC has its online retail website
www.mmtcretail.com.

THE BIGGEST IMPORTER OF NON FERROUS METALS & INDUSTRIAL

RAW MATERIAL TO INDIA

MMTC is India's largest seller of imported non-ferrous

metals viz. copper, aluminium, zinc, lead, tin and nickel. It
also sells imported minor metals like magnesium,
antimony, silicon and mercury, as also industrial raw
materials like asbestos and also steel and its products.
MMTC imports quality products conforming to
international specifications like ASTM or BSS or LME
approved brands.

Major institutional customers of MMTC in India are

accredited with ISO-9002 status. MMTC sources its
metals from empanelled suppliers including producers and traders throughout the world.

MMTC is a proud winner of gold trophy for exports of Engineering and Metallurgial product in
non-SSI Sector and also awarded the All India Trophy for highest export in the category of prime
metal by EEPC.

27
GROWING INTEREST IN AGRO PRODUCTS WORLDWIDE

MMTC is amongst the leading Indian exporters and

importers of agro products. The company's bulk exports
include commodities such as rice, wheat, wheat flour,
soyameal, pulses, sugar, processed foods and plantation
products like tea, coffee, jute etc.

MMTC also undertakes extensive operations in oilseed

extraction, from the procurement of seeds to the
production of de-oiled cakes for export, as well as the
production of edible oil for domestic consumption. It also
imports edible oils. MMTC has won the gold trophy from
FIEO for highest exports in agritulcture & plantation product in non-SSI Sector.

GENERAL TRADING

MMTC also handles items like textiles, Mulberry raw silk, building materials, marine products,
chemicals, drugs and pharmaceuticals, processed foods, hydro carbons, coal and coke.

Information on above can be supplied on request. MMTC also exports engineering products.

AN INTEGRATED GLOBAL TRADER WITH BULK HANDLING

CAPABILITIES

Its comprehensive infrastructure for bulk cargo handling,

with well developed arrangements for rail and road
transportation, warehousing, port and shipping, operations,
gives MMTC complete control over trade logistics, both
for exports and imports.

The company's countrywide domestic network is spread

over 75 regional, sub-regional, port and field offices,
warehouses and procurement centres.

28
BROADBASED ACTIVITIES BEYOND TRADING

MMTC's progress in the recent past has taken it from

monopoly status to a competitive open market player
making a strong thrust towards broad basing its sphere of
activities, while consolidating its core areas of business.

To create synergy between its manufacturing, trading and

technology partners and to bring optimum efficiency and
expertise to its operations worldwide, MMTC has
promoted along with government of Orissa, a million
tonnes capacity Iron & Steel plant and a 0.8 million tonne
capacity Coke Oven battery with by product recovery
plant and a captive power plant of 55 MW capacity.

SUPPORT SERVICES

MMTC lays emphasis on human resources development and

related activities. Several training programmes are conducted
to upgrade managerial skills in the latest developments in
trade management, export marketing, general management.

COMPUTERIZATION

MMTC has a Systems & ERP Division comprising a highly professional team to cope with the highly
competitive environment. MMTC's operational offices are all equipped with modern computing tools.
ERP has been implemented. A user friendly intranet based Knowledge Management Solution has been
made available to officials.

29
SOCIAL AND WELFARE ACTIVITIES

MMTC's social and welfare activities promote welfare of

the employees through various schemes like sports
activities, liberal loan facilities like house building
advance, conveyance loan, house hold loan, marriage
advance, etc. MMTC also provides subsidized canteen
facilities, medical treatment, residential accommodation in
some of the major cities for its employees. MMTC also
takes care of employees' families through merit
scholarship, tuition fee reimbursement, etc.

MMTC is committed towards environmental upkeepment

through aforestation in the mining areas, development of tribal areas and infrastructure
development through rail links, port facilities, etc.

NETWORK OF OFFICES

Its vast international trade network, includes.

One wholly owned international subsidiary in Singapore- MMTC Transnational Pte. Ltd. (MTPL)

13 Regional offices

East Zone : Kolkata, Bhubaneshwar

West Zone : Mumbai, Goa, Ahmedabad

North Zone : Delhi, Jhandewalan (Delhi), Jaipur

South Zone : Bangalore, Bellary, Chennai, Hyderabad, Vizag

Sitemap

CORPORATE MISSION

As the largest trading company of India and a major trading company of Asia, MMTC aims at
improving its position further by achieving sustainable and viable growth rate through excellence
in all its activities, generating optimum profits through total satisfaction of shareholders,
customers, suppliers, employees and society.

CORPORATE VISION

Responsibilities beyond trading contributing to the welfare of communities in which it operates in

a natural element of MMTC activities.

30
CORPORATE OBJECTIVES

1. To be a leading International Trading House in India operating in the competitive global

trading environment, with focus on "bulk" as core competency and to improve returns on
capital employed.
2. To retain the position of single largest trader in the country for product lines like minerals,
metals and precious metals.
3. To promote development of trade-related infrastructure.
4. To provide support services to the medium and small scale sectors.
5. To render high quality of service to all categories of customers with professionalism and
efficiency.
6. To streamline system within the company for settlement of commercial disputes.
7. To upgrade employee skills for achieving higher productivity.

Metal and Mineral Trading Corporation deals in the following products.

Minerals:

Among minerals MMTC deals in the following items such as iron ore, magnesium ore,
chrome ore, mud, chemicals, bauxite, talc gypsum, silica sand etc. MMTC’S mineral sale
share only on FOB sales only.

MMTC continues to be the largest supplier of Iron Ore, handling about 15% of India’s total
exports. It exports iron ore to Japan, China, South Korea, and Middle East etc.

MMTC Limited, India‘s first Super Star Trading House, continues to be the country's
leader in mineral exports for four decades now. During the last decade, MMTC could
withstand the stiff competition in the world market by its continuous and persistent efforts
in diversifying its markets, enlarging its product range, expanding extensively its
infrastructure facilities and expertise in mineral operations, and by attaching utmost care and
importance to its trade commitments as also the quality of service and products.

MMTC has been consistently striving to enhance its competitiveness in the area of value
addition. It has set up a crushing and screening plant at Banehatti in Bellary Hospet Sector not
only to source higher value realization in the international market but also to compete with the
international suppliers like Australia and Brazil in the markets like Japan and South Korea has
provided further fillip to value addition to minerals. The 1.1 million ton Steel Plant consumes
about 2 million tons of various types of minerals annually being supplied by MMTC. The
company has also taken an initiative to link import of capital equipments required for
modernizing mining activities in the country to promote export of minerals. The import of the
earthmoving equipments was linked to export of Iron Ore under EPCG scheme.

31
MMTC'S UNIQUE POSITION

Four Decades of Global Excellence

MMTC continues to lead India's foray in mineral

exports with global success for four decades by
redefining standards of global excellence by
customer satisfaction worldwide. It continues to
be the largest supplier of Iron Ore, handling about
15% of India‘s total exports.

MMTC has managed with commendable elan the

bulk operations spread across far - flung areas in the mineral rich states of the country and by
exporting minerals from all the major ports of India, thus utilizing the extensive network of
infrastructure facilities.

MMTC's drive for excellence is reinforced by its marketing thrust in traditional markets like
Japan and S. Korea and Pakistan. MMTC is the catalyst in developing the Chinese market
for Indian Iron Ore.

MMTC, India's largest foreign trade enterprise, reiterates its commitment to augment India's
share in the global market for minerals and ores. For our consistent and sustained performance in
the global arena, we deeply thank our valued patrons, associates and partners who have helped us
reach the pinnacle of global standards.

MMTC -THE MINERALS SUCCESS STORY

COMMITMENTS WITH THE BUYER

MEETING INTERNATIONAL STANDARDS

MMTC‘s role in the Nation‘s mineral export does not stop with increasing the volume.
MMTC has been making certain strategic plans which would facilitate in not only sustaining
the present sevel of exports but, also equip the country to meet the challenges of larger volume
of exports in future.

One of the bottlenecks in increasing the Indian Iron Ore exports is the deficiency in port
facilities especially in the East-Coast where the operations are free from the vagaries of
weather like, closing of port operations during the monsoon period in Goa, Mangalore,
32
Bellikari etc. In this direction, MMTC has been successful in obtaining an exclusive right to
develop a temporary Iron Ore Terminal at Ennore near Chennai. This facililty has
become operational from July‘04. MMTC had already made shipments of over 0.5 million tons
from Ennore Port despite various teething problems. MMTC is also in constant dialogue with
the various Ministries , Railways, Ports and exporters to assess the development potential for a
comprehensive infrastructure requirements for larger volume of exports. MMTC will continue
to play a vital role in these directions.

ITEMS OF TRADE

IRON ORE

MANGANESE ORE

CHROME ORE

OTHERS
(Mud Chemicals, Barytes, Bentonite, Bauxite, Talc, Gypsum, Feldspar, Quartz/Silica Sand,
Garnet Sand, Kaolin (China Clay), Vermiculite)

LOGISTIC SUPPORT

At all the loading ports, MMTC ensures proper receipt, stacking, quality control and delivery
of the cargo into the vessels for shipment. The entire arrangement guarantees delivery of
minerals & ores contracted in continuous manner all around the year.

All ports are equipped with mechanical loading facilities.

MECHANICAL BERTH AND HANDLING FACILITIES

Vizag Outer Chennai Outer Marmagao

Paradip
Harbour Harbour Berth (9)**

OUTER CHANNEL
M - Meters
Length 1400 M 5900 M 4500 M 2020 M

Width 250 M 244 M 250 M 190 M

33
Depth 19 M 19.2 M 13.7 M 15 M

INNER/ENTRANCE

Length 1250 M 780 M - 1100 M

Width 250 M 220 M - 160 M

Depth 19 M 18.6 M 13.1 M 12.8 M

TURNING BASIN

Diameter 610 M 549 M 480 M 520 M

Depth 18 M 17.4 M 11.3 M 12.8 M

BERTH

Length 263 M 222 M 222 M 155 M

Depth 17.5 M 17.4 M 11.3 M 13.2 M

LOADER

200 M
Travelling Distance 225 M 200 M 138.7 M
(by 2 loaders)

Outreach 27 M 21.9 M 21.5 M 27.1 M

Clear Height 21 M 20.55 M 20.3 M 18.9 M

4000 4000 2500

Loading Rate 4000 MT/Hr
MT/Hr x 2 MT/Hr x 2 MT/Hr

LOA 270 M 274 M 335 M 260 M

Beam 48 M 47.8 M 50 M 40 M

12.8 M
Sailing Draft 16.5 M 16.2 M 13 M # (12 M during
Mar-Nov)

34
1. # in conjunction with tide.

2. ** Remains closed for shipment of fines during 15th May to end September (Monsoon) only
washed lump shipments can be effected. Sailing drafted limits to 11 mt. during monsoon. No
night navigation also during monsoon.
3. Vessels of less than 35,000 DWT loaded in midstream, either by Transfer vessel or by
ships/grabs or manually, for which facilities exist.

DESTINATION OF EXPORTS

MMTC exports Iron ore to Japan, South Korea, China, Middle East etc. The export is both on the
basis of long term and annual spot contracts.

LEADER IN MINERAL EXPORTS

MMTC's performance in mineral trade has been acknowledged by the CAPEXIL (Chemicals
and Allied Products Export Promotion Council) by conferring the nation's highest award for
excellence in mineral exports 13th time in succession.

MODE OF SALES

MMTC's mineral sales are on FOB basis only.

Minerals

Precious Metals

Fertilizers

Metals

Agro Products

Coal & Hydrocarbon

General Trading

MTPL

NINL

Precious metals

MMTC is India’s premier bullion trader. MMTC precious metals division is on to a range of
activities such as imports, exports, and domestic retail trade. It is an authorized agency of
Government of India for import of gold, silver, platinum, palladium, rough diamond,
35
emeralds, rubies and other precious stones and supplies these items to the jewellers in India
for domestic sales and exports. It is one of the custodians of the Diamond Plaza Customs
Clearance Center in Mumbai.

The company also operates an in-house assaying and hallmarking unit at New Delhi for
testing purity of gold.

MMTC has received Bureau of Indian Standards (BIS) certification for its assaying and
hallmarking unit at Jhandewala Bagh, New Delhi. MMTC also has a unit in New Delhi for
manufacturing its own brand of gold and silver medallions since the year 1996 MMTC is
India's Single Largest Trader of metals. It's metals division imports and exports Non-
Ferrous metals, Industrial raw materials, Steel items, Pig Iron, Non Ferrous metals scrap
and Iron and Steel scrap etc. MMTC's share of import in India's import of refined base
non-ferrous metals in terms of value is about 20%.

MMTC import items such as Copper, Aluminium, Zinc, Lead, Tin, Nickel, Antimony,
Silicon, Magnesium, Mercury, Industrial Raw Materials, Noble metals and Ferro alloys, Pig
Iron, Slag, Steel scrap, HR Coils, CRGO and Steel item.

MMTC is the largest importer of gold and silver in the Indian sub continent, handling about 146
MT of gold and 1250 MT of silver during 2008-09. MMTC supplies gold on loan and outright
basis basis to the exporter, bullion dealers and jewellery manufacturers on all India basis. MMTC
has retail jewellery & its own branded Sterling Silverware (Sanchi) showrooms in all the major
metro cities of India. MMTC also supplies branded hallmarked gold and studded jewellery.

Assay and hallmarking units have been set up at New Delhi, Ahmedabad & Kolkata for testing
the purity of gold and gold articles duly accredited with Bureau of Indian Standards .

Besides organizing major jewellery exhibitions in India & abroad, MMTC also has a medallion
manufacturing unit for minting of Gold/SIlver medallions.

FERTILIZERS

MMTC Limited is one of the largest importers of Fertilizers in India. It imports finished
fertilizers, fertilizer intermediaries and fertilizer raw materials.

AGRO PRODUCTS

MMTC Limited is a global player in the Agro trade, with its comprehensive infrastructural
expertise to handle agro products. MMTC Limited provides full logistic support from
procurement, quality control to guaranteed timely deliveries of agro products from different
parts of India through a wide network of regional and port offices in India and its contacts
abroad. It trades in the items such as wheat, rice, maize, soya bean, sugar, edible oil and
pulses
MMTC

COAL AND HYDROCARBON PRODUCTS

Coal and Hydrocarbon is identified as one of the core areas of business for MMTC and
Steam coal is identified as a thrust product for import. Coal and Hydrocarbon is identified
36
as one of the core areas of business for MMTC and Steam coal is identified as a thrust
product for import.

PRICING POLICY
While price (per unit) of ‘primary commodities’ such as, agricultural products and minerals
is observed to be determined by the market forces of demand and supply, the price of
‘manufactures’ is determined /administered by firms based on teh average /marginal cost to
accommodate profits. The margin of ‘mark-up’ in turn, depends on the degree of monopoly
is thus able to charge a higher margin of mark-up compared to a competitive firm.

If a public sector has a monopoly in supply ,it may fix its price at the level that will
maximize the mark –up as well as the gross profits .that may not ,however ,happen since the
government may intervene to moderate the price in the interest of consumers or the user
industries .In general ,the governments fix/administer the price in the interest the price of
goods (and services) being produced by public sector entities based on
(a) The true costs of goods and services,
(b) Cross subsidization between one group and another or between one sector and another,
(c) Below the costs if that can stimulate demand under conditions of excess/ unutilized
capacity,
(d) Differential prices norm for peak and off-peak demand and
(e) Different prices /multi-tariffs to include discounts for purchase of larger volumes or for
various other incentives.

The public sector enterprises in India have had to work under the price regime, for goods
and services produced by them, administered by the Government. Paradoxically, while these
central public sector enterprises had to avail the government approval for fixing their
prices, they have been price takers for the inputs they utilised for their respective outputs.
As such, if the output prices were not raised and the inputs cost went up, this led to losses to
these enterprises. Better capacity utilisation meant larger losses to the enterprises. This
situation was reviewed in the wake of post- 1991 economic liberalisation. With the
dismantling of administered price mechanism there after the price of products and services
of these central public sector enterprises are now determined on economic grounds and by
the market forces. The paragraph will briefly discuss the policies of LAM COKE by the
public sector enterprises.

The central Government was empowered under the CCO (colliery control order), 1945 read
with the Essential Commodities Act, 1955 to fix the grade wise and colliery wise prices of
coal. The pricing of coal has been completely deregulated after the Colliery Control Order,
2001 notified w.e.f 1st January 2000 rescinding the Colliery Control Order, 1945. Under the
Colliery Control Order, 2000, the Central Government has no power to fix the prices of coal
and coal companies themselves are competent to fix grade–wise prices of coal produce by
them based on economic grounds. The extant pricing policy in regard to coal supply to
power and other sectors is under examination of the Government. In respect to coking coal
and LAM COKE imported from abroad,
Importers are free to determine their selling prices in the domestic market without any
restrictions.

37
 BUSINESS REVIEW FOR 2006-07

MINERALS

Despite the pressure of availability of ores for export, and constraint of infrastructure and
logistics, MMTC maintained its leadership position in export of minerals through aggressive
marketing efforts, enhanced customer focus tapping of emerging opportunities, especially in
China.
During the year 2006-07, South Korea, China and Japan were the key markets where
MMTC exported minerals.
Minerals group of the company contributed a turnover of Rs.27661.1 million during the
year reaching the highest ever registered by the company in this segment. The said
performance of the minerals group of the year 2006-07 includes exports of Rs.27384.91
million and domestic trade of Rs.276.19 million. In quantitative terms, the exports
made by the group include 81.29 lakh tones of Iron Ore valued at Rs. 19012.19 million,1.72
lakh MT. of Manganese Ore valued at Rs. 408.81 million, 6.48 MT. of Chrome concentrates
valued at Rs. 5050.81 million and 4.03 lakh MT. of Chrome Ore valued at Rs. 2913.10
million.
MMTC

Metals and Industrial Raw Material

With robust growth witnessed in industrial & infrastructure sector leading to increased
surge in demand for base metals and industrial raw material during the year 2006-07, the
metals group of the company contributed Rs.18873.60 million to MMTC’s turnover during
2006-07 posting a noteworthy growth of about 22% over the previous fiscal. The
contribution of the group comprised of export of Pig Iron and Slag produced by NINL-a
MMTC promoted Iron & Steel plant worth Rs.5446.84 millions, import of Non-Ferrous
Metals and Industrial Raw Materials worth Rs.8479.23 million and domestic trade of
Rs.4973.53 millions including sales of Pig Iron produced at NINL worth Rs. 2779.86
millions.

With projections of Industrial and infrastructure sector to continue being on upward trend,
the prospects of MMTC,s growth seems to be optimistic. To avail of the emerging
opportunities, the group has been realigning its strategies/
business model for further consolidation and tapping of new products/markets, focussing on
its core products/markets, entering into its strategic alliances with producers of NFM
besides improving further on customer relationship management , unrelenting focus on
Institutional clientele and deeper market access.
MTC

38
The highlights of the performance during 2006-07 as summarized below.

2006 – 2007 2005 –

2006
(Rs. In
millions)
Exports 34131 29254
Imports 186074 117858
Other trade earnings 445 16512

Net sales / Trading earnings 233461 163934

Trading Profit 2497 2218
Profit Before Taxes 1893 1679
Profit After Taxes 1268 1083
Dividend
(i) In trim Dividend on Equity Shares 125 125
(ii) Proposed Dividend 125 125
(iii) Dividend Tax 39 35
Reserves and Surplus 8321 78333

ORPORATE OBJECTIVES
NEELACHAL ISPAT NIGAM LIMITED (NINL)
Neelanchal Ispat Nigam Limited (NINL),a company promoted by MMTC Limited ,a
US$1.5 Billion Golden Super Star Trading House of India, Industrial Promotion and
investment Corporation of Orissa Limited (IPICOL) and MECON Limited is setting up
an Iron and Steel Plant, with manufacturing capacity of 4,92,000 tonnes of Pig Iron,
2,76,000 tonnes of Billets and 3,00,000 tonnes of Wire Rods at Kalinga Nagar Industrial
Complex ,village Duburi ,District Jajpur, Orissa.
To meet the Coke and Power requirements of Neelanchal Ispat Nigam Limited, MMTC
has promoted another Joint Venture Company namely Konark Met Coke Limited in
collaboration with IPICOL and Orissa Mining Corporation (OMC), to produce
5,75,000 tonnes of Coke for Neelanchal Ispat Nigam Limited and 2,36,000 tonnes of
Coke for sale in domestic and overseas markets. The capacity of Power Plant is 62.50
MW.
Over the years MMTC has become the acknowledged market leader in facilitating
export of Indian Iron Ore. Today, MMTC Limited is India’s largest exporter of
minerals and ores, handling about one third of India’s total exports of around 15
million tonnes per annum. Neelanchal Ispat Nigam Limited (NINL) & Konark Met
Coke Limited (KMCL) form part of MMTC’s strategic initiative of creating synergy
between its minerals and metal trading activities.
Neelanchal Ispat Nigam Limited represents a major investment by MMTC to develop
captive supply sources of minerals and metal for enhancing exports and increasing
domestic trading activities and at the same time realising greater value addition for
Orissa’s vast mineral wealth. Besides, MMTC will, as the exclusive marketing agent,
use its strength and presence in global markets to market all of NINL’s products in
India and abroad.

39
MMTC’s contribution as the main promoter starts with procurement of raw materials
like iron ore and coal, to closely monitor the eventual manufacture and supply of
finished products that meet the diverse requirements of end users for quality products .
It will be our endeavor to work in tandem with consumer industries to provide them
with a market savvy, innovative and flexible product mix and be in virtual control of
the entire value addition chain.

KONARK MET COKE LIMITED (KMCL)

Konark Met Coke Limited (KMCL) is setting up coke Oven Battery, By-Product Plant
and Captive Power plant adjacent to NINL. Low Ash Metallurgical (LAM) Coke
produced by KMCL will be sold to NINL for production of Iron & Steel and surplus
Coke will be sold in domestic and overseas markets.

Industry overview

Global demand for LAM coke grew at an average annual rate of 6.4%, during 2000-06,
as against global supply at a rate of 6% (avg. annual industry capacity utilisation being
85%) during the same period. 91% of the global demand was from markets situated in
Asia, Europe and CIS during the said period. China is the World’s largest producer of
LAM coke, but with rising domestic demand from steel industries, it has largely cut
down its exports thereby resulting in acute shortage of coke availability. On the other
hand, India features as the net importer of Met coke due to increasing economic activity
and substantial thrust on infrastructure spending. Majority of Indian steel industries do
not possess captive coke manufacturing facility and thus rely on imported coke to meet
their requirement. World over, the demand supply gap is significantly growing,
attracting more players to enter this segment to reap the benefits. However, players
owning large technically-compliant manufacturing capacities, possessing strong
linkages for raw material sourcing and adopting prudent financial policies can alone
withstand the competition and grow consistently in the coke manufacturing segment.
Power:- As per the Ministry of Power (MoP), GOI, the total installed capacity of
electric power generating stations was 1,35, 006.63 MW as on Jul. 31, 2007 in India.
This total capacity consisted of 33775.76 MW (24.8%) hydro power based capacity,
86,935.84 MW (64.5%) thermal power-based capacity, 4120 MW (3.1%) nuclear power
based capacity and 10175.03 MW (7.6%) from other sources (including wind). India is
an energy deficit country. During July 2007, India December 2007 faced an energy
shortage of approximately 7.9% of total energy requirements and 13.4% of peak
demand requirements. The peak demand during 2006-07 was around 272 MW which is
expected to be 320 MW in FY08, as per industry sources.

Prospects

Future growth prospects of the company mainly depend on the successful completion of
the IPO. The widening gap in demand supply of coke coupled with few players in this
segment is likely to provide huge opportunities to the company. Additionally, backward
integration in the form of coal mine acquisitions through group support is likely to
extend synergy to its operations.

40
**The coal and hydrocarbons business of MMTC mainly comprises Lam coke, coking
coal and steam coal. MMTC is one of the largest importers of LAM COKE in India.
LAM COKE is imported by MMTC for various customers like NINL, SAIL, RINL,
KIOCL, and IDCOL and also for some private companies.

RISK MANAGEMENT

MMTC has its comprehensive risk management policy in place specifying procedures to
identify and minimize various risks associated with its operations. The policy is approved by
Board of directors and regularly monitored by committee of senior officials.

FINANCIAL ANALYSIS

During FY07 MMTC recorded highest ever turnover when y-o-y growth rate was 42%. The
growth was mainly achieved due to 73% jump in precious metal turnover. During FY07, the
fixed assets have increased mainly due to addition of plant and machinery (Rs.70 cr) for the
Wind mill at Karnataka and five railway wagon rake (Rs.55 cr). Profitability margins
declined over the years as the product portfolio has shifted towards precious metals which are
typically lower margin compared to other products in the portfolio. MMTC continues to
remain zero long-term debt. company in FY07. It has extended a corporate guarantee of
Rs.830 cr (as on Mar.31, 2007) for NINL to various banks and financial institutions for
securing principal and interest in respect of loans to NINL. The working capital loans have
increased in line with increased scale of operations resulting in increase in overall gearing as
on Mar.31, 2007.

9MFY08 performance:

MMTC recorded PAT of Rs.116 cr on total income of Rs.16,984 cr during 9MFY08. The
PAT margin during the period has improved to 0.68% compared to 0.47% during the same
period previous year mainly due to increased turnover of commodities with better margins i.e
minerals and hydrocarbons.

41
42
43
44
45
 INTRODUCTION TO EXPORT AND IMPORT

General Provisions

Goods are imported in India or exported from India through sea, air or land. Goods can come
through post parcel or as baggage with passengers. Procedures naturally vary depending on
mode of import or export. Procedures discussed in this Chapter are applicable for imports by
sea, air or land, but not as baggage or postal despatch.

ENTRY – ‗Entry‘ in relation to goods means an entry made in a Bill of Entry, Shipping Bill
or Bill of Export. It includes (a) label or declaration accompanying the goods which contains
description, quantity and value of the goods, in case of postal articles u/s 82 (b) Entry to be
made in case of goods to be exported (c) Entry in respect of goods imported which are not
accompanied by label or declaration made as per provisions of section 84. [section 2(16)].

AMENDMENT TO DOCUMENTS - Importer, exporter or 'Person In charge' have to submit

various documents to customs authorities like Bill of Entry, Import Manifest, Export
Manifest etc. Some times, it may become necessary to amend the document due to various
reasons like change in classification, clerical mistake in document, change in unloading /
loading plan of vessel etc. In such case, permission to amend these documents have to be
obtained from customs authorities. [section 149]. Such permission can be given if there are
no fraudulent intentions.

In case of bill of entry, shipping bill or bill of export, it can be amended after clearance only
on the basis of documentary evidence which was in existence at the time the goods were
cleared, warehoused or exported, and not on basis of any subsequent document. [proviso to
section 149].

Customs Station - Imported goods are permitted to be unloaded only at specified places.
Similarly, goods can be exported only from specified area. In view of this, definitions of
‗Customs Station‘ is important.

Customs area means all area of Customs Station and includes any area where imported goods
or export goods are ordinarily kept pending clearance by Customs authorities. Thus,
‗Customs Area‘ could include some area even outside the ‗Customs Station‘. Customs
Station means (a) customs port (b) inland container depot (c) customs airport and (d) land
customs station.

Section 7 of Customs Act empowers CBEC (Board) to appoint * Customs ports * Customs
airports * Places for inland container depots * Coastal ports. These are appointed by issuing a
notification. Section 8 authorises Commissioner of Customs to approve proper places in any
customs port, customs airport or costal port for unloading and loading of goods or for any
class of goods and specify the limits of customs area. Thus, the place (city / town / village
etc.) is approved by CBEC, while exact location within that city / town / village is approved
by Commissioner of Customs.

46
 EXIM PROCESS

Approach Client for Exim

inquiry

Inquiry raised by Client for

Import/Export (Sea/Air)

Make Entry in Inquiry Register

Request for quote (RFQ) to

Suppliers

Supplier to quote at best rates

with negotiations

Prepare Comparison Statement

for Quotations received from
suppliers

Select the supplier on the basis

of Statement

Prepare Quote for Client and

Submit to the Client

Negotiations
with Client Revision

Approved
Approval of Quote from Client

Forward the Customer

Confirmation to Operation
Team.
47
Received Customer Confirmation from AGM

Get Shippers Contact Details with Order Confirmation / PO from Client and
inform the same to supplier and get overseas agent details

Give our overseas agents details to Shipper as well as client

Get Scan Document from Client / Shipper

Get Shipment Pickup Confirmation from Supplier/ Suppliers agent and

inform it to client

Get Booking status of shipment from Supplier and forward it to client

Get Pre-Alert from Supplier and submit it to Client

Get suppliers Bill along with CAN (ensure AILSPL name appears) and
submit CAN with AISPL Invoice to Client

Ensure Supplier files B/E and sends the checklist. Forward it to client for
approval. Collect the delivery address details from client & gives to supplier.

Upon checklist approval, AILSPL submits the DD details to the client collect
the DD and hand it over to supplier.

Follows up with the supplier for customs clearance and delivery.

Collect Octroi amount from the client (if applicable) and follows up with the
supplier for confirmation of delivery.

Get set of Bill of Entry/ documents from supplier and forward it to client.

48
 Basic Knowledge for Freight forwarding

INCOTERMS

Inco terms are ICC's standard definitions of trade terms and are internationally recognized as
indispensable evidence of the buyer's and seller's responsibilities for delivery under a sales
contract.

TABLE 1

EXW FCA FAS FOB CFR CIF CPT

Free Free Cost

Free Cost & Carriage
Ex Works Alongside Onboard Insurance
SERVICES Carrier Freight Paid To
Ship Vessel & Freight

Warehouse Storage Seller Seller Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller Seller Seller

Loading Charges Buyer Seller Seller Seller Seller Seller Seller

Buyer/
Inland Freight Buyer Seller Seller Seller Seller Seller
Seller*1

Terminal Charges Buyer Buyer Seller Seller Seller Seller Seller

Forwarder‘s Fees Buyer Buyer Buyer Buyer Seller Seller Seller

Loading On Vessel Buyer Buyer Buyer Seller Seller Seller Seller

Ocean/Air Freight Buyer Buyer Buyer Buyer Seller Seller Seller

Charges On Arrival At
Buyer Buyer Buyer Buyer Buyer Buyer Seller
Destination

Duty, Taxes & Customs

Buyer Buyer Buyer Buyer Buyer Buyer Buyer
Clearance

49
Delivery To Destination Buyer Buyer Buyer Buyer Buyer Buyer Buyer

*1. There are actually two FCA terms:

FCA Seller's Premises where the seller is responsible only for loading the goods and not
responsible for inland freight; and
FCA Named Place (International Carrier) where the seller is responsible for inland
freight.

TABLE 2

CIP DAF DES DEQ DDU DDP

Delivered
Carriage Delivered Delivered
Delivered Ex Quay Delivered
Insurance At Duty
SERVICES Ex Ship Duty Duty Paid
Paid To Frontier Unpaid
Unpaid

Warehouse Storage Seller Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller Seller

Loading Charges Seller Seller Seller Seller Seller Seller

Inland Freight Seller Seller Seller Seller Seller Seller

Terminal Charges Seller Seller Seller Seller Seller Seller

Forwarder‘s Fees Seller Seller Seller Seller Seller Seller

Loading On Vessel Seller Seller Seller Seller Seller Seller

Ocean/Air Freight Seller Seller Seller Seller Seller Seller

Charges On Arrival At Destination Seller Buyer Buyer Seller Seller Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer Buyer Seller

50
Delivery To Destination Buyer Buyer Buyer Buyer Seller Seller

The 13 INCOTERMS

What are INCOTERMS?

Inco terms are a set of simple three letter codes which represent the different ways
international shipments may be organized. They allow sellers and buyers from different
cultures and legal systems to decide at what point the ownership and paying for freight,
insurance and customs costs transfer from one to the other.

Who decides what INCOTERMS mean?

The International Chamber of Commerce has set up strict definitions for each incoterm.
Choosing a suitable incoterm allows the buyer and seller to negotiate a price best suited to
their needs and to be confident that there will be no confusion over who pays the costs. To
ensure that the latest version is being used shipping contracts should refer to "INCOTERMS
2000".

When should INCOTERMS be used?

It is not compulsory to use incoterms. However when things go wrong and disputes arise it is
much easier to sort out who is responsible for what if incoterms have been written into the
shipping contract. To be safe, incoterms should be decided upon in the negotiation phase of
any international purchasing contract.

How do INCOTERMS work?

Each INCOTERM is a three letter acronym related to where the seller's responsibility ends.
They should be written into the purchasing or shipping contracts. Some incoterms require the
changeover point to be named. As well as buyer and sellers there are "carriers". They are the
people who have a contract to transport the goods by land, sea, air or a combination of

51
modes. A seller will be given a bill of lading, way bill or carrier's receipt, that document can
be used to prove that the goods have been taken on by the carrier.

There are four groups of INCOTERMS - "E", "F", "C" & "D"

The incoterms are:

 E term:

 EXW - EX Works

 F terms:

 FCA - Free Carrier

 FAS - Free Alongside Ship
 FOB - Free on Board

 C terms:

 CFR – Cost and Freight

 CIF – Cost Insurance and Freight
 CPT – Carriage Paid To
 CIP – Carriage and Insurance Paid To

 D terms:

 DAF – Delivered At Frontier

 DES – Delivered Ex Ship
 DEQ – Delivered Ex Quay
 DDU – Delivered Duty Unpaid
 DDP – Delivered Duty Paid

52
Group:E
used where the seller does not want to arrange transport.

EXW - "Ex-Works" means the seller's only responsibility is to make the goods available at
the seller's premises, i.e., the works or factory. The seller is not responsible for loading the
goods on the vehicle provided by the buyer unless otherwise agreed. The buyer bears the full
costs and risk involved in bringing the goods from there to the desired destination.
"Ex works" represents the minimum obligation of the seller.

Group:F-
used where the seller can arrange some transport within his/her own country.

FCA - Free Carrier, This term has been designed to meet the requirements of multi-modal
transport, such as container or roll-on, roll-off traffic by trailers and ferries. The seller fulfils
his/her obligations when the goods are delivered to the custody of the carrier at a named
point. If no precise point can be named at the time of the contract of sale, the parties should
refer to the place where the carrier should take the goods into its charge. The risk of loss or
damage to the goods is transferred from seller to buyer at that time.

FAS - Free alongside Ship, requires the seller to deliver the goods alongside the ship on the
quay. From that point on, the buyer bears all costs and risks of loss and damage to the goods.
F.A.S. requires the buyer to clear the goods for export and pay the cost of loading the goods.

FOB - Free On Board vessel, named ocean port of shipment.

The goods are placed on board the ship by the seller at a port of shipment named in the sales

53
agreement. The risk of loss of or damage to the goods is transferred to the buyer when the
goods pass the ship's rail (i.e., off the dock and placed on the ship).
The seller pays the cost of loading the goods. –

Group:C-
used where the seller can arrange and pay for most of the freight charges up
to the foreign country.

CFR - (or C&F) Cost and Freight, Named ocean port of destination,
requires the seller to pay the costs and freight necessary to bring the goods to the named
destination, but the risk of loss or damage to the goods, as well as any cost increases, are
transferred from the seller to the buyer when the goods pass the ship's rail in the port of
shipment. Insurance is the buyer's responsibility.

CIF - Cost, Insurance and Freight, named ocean port of destination.

This is CFR with the additional requirement that the seller procure transport insurance
against the risk of loss or damage to goods. The seller must contract with the insurer and pay

54
the insurance premium. Insurance is generally important in international shipping because
transport companies have restricted liability for loss or damage.

CPT - freight/Carriage paid to, named place or port of destination.

This term means the seller pays the freight for the carriage of the goods to the named
destination. The risk of loss or damage to the goods and any cost increases transfers from the
seller to the buyer when the goods have been delivered to the custody of the final carrier, and
not at the ship's rail. Accordingly, "freight/carriage paid to" can be used for all modes of
transportation, including container or roll-on roll-off traffic by trailers and ferries. When the
seller is required to furnish a bill of lading, way bill, or carrier receipt, the seller duly fulfils
its obligation by presenting such a document issued by the person contracted with for
carriage to the main destination.

CIP - Carriage and Insurance Paid To named place or port of destination.

This term (also abbreviated CIP) is the same as "freight/carriage paid to" but with the
additional requirement that the seller has to procure transport insurance against the risk of
loss or damage to the goods during the carriage. The seller contracts with the insurer and
pays the insurance premium.

Group:D-
used where the seller can pay for most of the delivery charges to the
destination country.

DAF - Delivered at Frontier, named place of destination, by land, not unloaded.

This term means that the seller's obligations are fulfilled when the goods have arrived at the

55
frontier but before the customs border of the country named in the sales contract. The term is
primarily used when goods are carried by rail or truck. The seller bears the full cost and risk
in delivering the goods up to this point, but the buyer must arrange and pay for the goods to
clear customs.

DES - Delivered Ex-Ship, named port of destination, not unloaded.

This term means the seller makes the goods available to the buyer on board the ship at the
destination named in the sales contract. The seller bears the full cost and risk involved in
bringing the goods there. The cost of unloading the goods and any customs duties must be
paid by the buyer.

DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared.

This term means the seller has agreed to make the goods available to the buyer on the quay or
the wharf at the destination named in the sales contract. The seller bears the full cost and
risks in delivering the goods to that point including unloading. There are two variations of ex
quay contracts: "ex quay duty paid" and "ex quay duty on buyers account." In the first, the
duty is paid by the seller. In the second, the duty also is paid by the seller, but the buyer must
reimburse the seller.

DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
This term Delivered duty paid or under these terms, the seller fulfils his obligation to deliver
when the goods have been available to the buyer nucleated for import at the point or place of
the named destination. The seller bears all costs and risks involved in bringing the goods to
the point or place of named destination. There is no obligation for import clearance.

DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.
This term represents the seller's maximum obligation. The term "DDP." is generally followed
by words indicating the buyer's premises. It notes that the seller bears all risks and all costs
until the goods are delivered. This term can be used irrespective of the mode of transport. If
the parties wish to make clear that the seller is not responsible for certain costs, additional
word should be added (for example, "delivered duty paid exclusive of VAT and/or taxes").

56
57
 Figure 1

TYPES OF CONTAINERS – 40’

40' Dry Freight 45' High Cube Dry

40' Open Top 40' Flat Rack

58
 TYPES OF CONTAINERS – 40’

40' Collapsible Flat Rack 40' Platform

40' Reefer 40' High Cube Reefer

CONTAINER INFORMATION

40 FT. STANDARD CONTAINER

Dimensions: Length Width Height

Overall
40' = 12192 mm 8' = 2438 mm 8' 6" = 2591 mm

Internal
39' 5.25" = 12022 mm 7' 5.625" = 2352 mm 7' 10.25" = 2395 mm

Door Opening
7' 8.25" = 2343 mm 7' 5.75" = 2280 mm

Weights:

Max. Gross 67200 lbs = 30480 kg

Tare 8600 lbs = 3900 kg

Max. Payload 58600 lbs = 26580 kg

Cube: 2392 cu. ft. = 67.7 m3

59
 TYPES OF CONTAINERS – 20’

20' Dry Freight 20' Open Top

20' Flat Rack 20' Tank

FIGURE 2

CONTAINER INFORMATION

40 FT. "High Cube"

Dimensions: Length Width Height

Overall
40' = 12192 mm 8' = 2438 mm 9' 6" = 2895 mm

Internal
39' 3.25" = 12022 mm 7' 8.5" = 2352 mm 8' 10.25" = 2700 mm

Door Opening
7' 5.75" = 2340 mm 8' 5.75" = 2585 mm

Weights:

Max. Gross 67200 lbs = 30480 kg

Tare 9150 lbs = 4150 kg

Max. Payload 58050 lbs = 26330 kg

Cube: 2697 cu. ft. = 76.4 m3

60
 EXPORT-IMPORT PROCEDURE AND DOCUMENTATION

Import Procedures and Documentation

Procedures have to be followed by ‗person-in-charge of conveyance‘ as well as the importer.

WHO IS 'PERSON IN CHARGE' - As per section 2(31), 'person in charge' means (a) In case
of vessel - its master (b) In case of aircraft - its commander or pilot-in-charge (c) In case of
train - its conductor or guard and (d) In case of vehicle or other conveyance - its driver or
other person in charge.

The significance of this definition is -

He is responsible for submitting Import Manifest and Export Manifest

He is responsible to ensure that the conveyance comes through approved route and lands
at approved place only.
He has to ensure that goods are unloaded after written order, at proper place. Loading also
has to be only after permission.
He has to ensure that conveyance does not leave without written order of Customs
authorities.
He can be penalised for (a) Giving false declaration and statement (b) shortages or non-
accounting of goods in conveyance

Procedure to be followed by the Carrier - The 'person in charge of conveyance' (carrier of

goods) has to follow prescribed procedure.

Arrival at customs port/airport only - Section 29 provides that person-in-charge of a vessel or

an aircraft entering India shall call or land at customs port or customs airport only. It can land
at other place only if compelled by accident, stress of weather or other unavoidable cause. In
such case, he should report to nearest police station or Customs Officer. While arriving by
land route, the vehicle should come by approved route to ‗land customs station‘ only.

Import Manifest / Report- Person-in-charge of vessel, aircraft or vehicle has to submit Import
Manifest / Report. [also termed as IGM - Import General Manifest]. (In case of a vessel or
aircraft, it is called import manifest, while in case of vehicle, it is called import report.) The
import manifest in case of vessel or aircraft is required to be submitted prior to arrival of a
vessel or aircraft. Import report (in case of vehicle) has to be submitted within 12 hours of
arrival at the customs station. If the report / manifest could not be submitted within
prescribed time, person-in-charge or any person specified as responsible by a notification is
liable to penalty upto Rs 50,000. Such penalty will not be imposed if the excise officer is
satisfied that there was sufficient cause for the delay. [section 30(1)].

IGM can be submitted electronically through floppy where EDI facility is available.

IMPORT MANIFEST IS REQUIRED TO BE SUBMITTED BEFORE ARRIVAL OF

AIRCRAFT OR VESSEL - Section 30(1) of Customs Act provides that Import Manifest
should be filed before arrival of ship or aircraft. Normally, the Agents submit the Import

61
Manifest before arrival, so that maximum possible formalities are completed before vessel or
aircraft arrives. This also enables importers to file ‗Bill of Entry‘ in advance.

Grant of Entry Inwards by Customs Officer - Unloading of cargo can start only after Customs
Officer grant ‗Entry Inwards‘. Such entry inwards can be granted only when berthing
accommodation is granted to a vessel. If there is heavy congestion at port, shipping berth
may not be available and in such case, ‗Entry Inwards‘ cannot be granted. This date is highly
relevant for determining rate of customs duty applicable.

Carrier responsible for shortages during unloading - If the goods are short landed, the carrier
is liable to pay penalty upto twice the amount of duty payable on such short landed goods. It
has been held that tally sheet prepared by Port Trust authorities on unloading of goods is a
statutory document and should be accepted in preference to steamer survey - Scindia Steam
Navigation v. CC - 1988 (33) ELT (CEGAT) followed in re India Steamship Co. Ltd. - 1992
(57) ELT 510 (GOI).

IMPORT DOCUMENT

Following explanation gives us an up-to-date picture of Import documents and Ihe use and
requirement of each document:

1. IMPORT ORDER: An Import order is a commercial transaction which is not only

important to the importer and Exporter, but is also of concern to their respective countries,
since it affects the Balance of Payment position of both Ihe countries. It is therefore, not
just a matter of product, manufacturing, packing, shipment and payment, but also of one
of concern to licensing authorities, exchange control authorities and banks dealing in
foreign exchange. The Importer is required lo produce copies of Import order to various
Government department/Financial institution e.g. obtaining import licenses when the
product is covered under the restricted items or canalized items for Imports, arranging
import finance and dealing with customs offices and exchange control authorities etc. for
various purposes,

2. ORDER ACCEPTANCE: Order acceptance is another important document prepared by the

Exporter confirming the order received from the overseas Importer. Under the order
acceptance the Exporter gives his confirmation to the order placed by the Importer and
commits a specified time. Sometimes, the Exporter needs a copy of his order acceptance
signed by the Importer. The order acceptance normally covers the name and address of the
Exporter, the name and address of the consignee, port of shipment, country of final
destination, the description of goods, quantity, price and each and total amount of the
order, terms of delivery, freight and insurance details, terms of payment, mode of transport,
62
 packing and marking details etc, A common format of Export price quotation, proforma
invoice and order acceptance is used by many Exporters.

3. LETTER OF CREDIT: At the request of the Importer his hank issues a letter of credit
in favour of the Exporter through its correspondent in the country of the Exporter giving
him authority to draw bills up lo a particular amount (as per the contract price) covering a
specified shipments of goods and assuring him of payment against the delivery of shipping
document The operations of letters of credit have been regulated and are govern by UCP 500
of International Chamber ofCommerce, Paris.

4. TRANSPORT DOCUMENTS -

- Ocean Freight -various types of Bill of Lading

- Air Freight- Airway Bill/Air Consignment Note

- Rail/Road-Railway Receipt/Consignment Note

- Post-Way Bill issued by Foreign Post Office

- Courier- Courier Receipt/Way Bill

5. CERTIFICATE OF ORIGIN: Many counties require a certificate from the overseas

supplier stating the origin of goods and certified by the Chamber of Commerce or any
other recognized authority in the Exporter's country.

6. PACKING LIST/NOTE: A packing list/note includes the date of packing, connecting invoice
number, order number, details of shipping such as the name of the steamer. Bills of Lading
number and date of sailing, case number to which the list/note relates, details of goods such as
quantity and weight and item wise details, packing list helps the Importer or his agents to clear
the goods easily from customs author ities/ports.

7. CERTIFICATE OF INSPECTION; Certificate of Inspection is issued by the Inspection

authorities in die Exporter's country certilying that the goods have been inspected under the
recognized quality control standards and satisfies the conditions relating to control and
inspection as applicable to it and is export worthy. The Importer may also demand for a
certificate of inspection from his own designated inspection agency in the Exporter's
country is required.
63
8. CERTIFICATE OF MEASUREMENT; Freight can be charged either on the basis of weight or
measurement. When it is charged on weight basis, the weight declared by the overseas supplier is
accepted. This certificate contains the name of the vessel, Ihe port of destination, description of
goods, quantity, length, breath, deplh etc. of the packages.

9. COMMERCIAL INVOICE; An invoice is a document drawn by the Exporter on his

overseas Importer which contains the details description of goods consigned, the consignor's
name, the consignee's name, the name of steamer, number and date of bill of lading, order
acceptance or contract number and date, country or origin, marks and number and
number of packages, special marking, if any quantity shipped, selling price to the
purchaser for each unit and total, terms of payment, terms of sale {FOB, C&F, CIF,FAS), amount
of freight and insurance if applicable, Import license number, particular about packing,
consular and customs declaration. Invoice is a prima facie evidence of the conlract of sale and
purchase and should be strictly in accordance with the sale and purchase contract and must be
signed by the Exporter or by the person acting on his behalf.

I0. FREIGHT DECLARATION: Freight declaration is required to be obtain from the overseas
supplier, in berth the cases, when the Importer agrees to pay the freight or the overseas supplier pays
the freight

11. BILL OF ENTRY: The bill of entry is a document, prepared by the Importer or his
clearing agent in the prescribed from under Bill of Entry Regulation, 1971, on the strength
of which clearance of Imported goods can be made. The different kinds of Bill of Entry
used tor following purposes:

(a) Bill of Entry for goods Imported for home consumption (white coloured): This
kind of Bill of Entry is used where the Imported goods are cleared from the port
on payment of customs duty.

(b) Bill of Entry For warehouse (yellow coloured): This kind of Bill of Entry is
also known as 'Warehousing or Into Bond Bill of Entry' used where the duty is
not paid but the Imported goods are transferred to customs recognized bonded
warehouses.

(c) Bill of Entry for Ex-Bond clearance for home consumption (green coloured):
This kind of Bill of Entry is used where the Importer intend to clear the dutiable
64
 goods from a Bonded warehouse, which were warehoused under a particular unit
for home consumption or end usance.

Documents requirement for air / sea freight import TABLE 4.1

Documents No. of copies

P. O. 1

Shipping Instructions 1

Commercial Invoice 2

Packing List / Packing Slip 2

HAWB / HBL 2

M.S.D.S. (in case of D.G. / Non D.G., chemical products) 2

In case of D.G. : to obtain UN class number from shipper and

accordingly make the shipment booking with airline / shipping line 1

HAWB / HBL 1

Commercial Invoice 1

Packing List / Packing Slip 1

Copy of P. O. 1

Original Certificate of Origin 1

Drawing / Product catalogue / Technical write-up 1

M.S.D.S. (in case of D.G. / Non D.G., chemical products) 1

In case of D.G. : UN class number from shipper. 1

65
IMPORT PROCEDURE

IMPORT AND CUSTOMS CLEARANCE PROCEDURES

The procedures followed along with all aspects of documentation and clearance from customs
authority can be explained as follows

1. The CHA on behalf of Importer fills the request from for the use of terminal for Imports.
With the request form; the Importer or CHA submitted some additional documents. These
documents are -

- Bill of Jading or Airway bill

- Commercial invoice

- Packing List

2. As per the requirements of the Importer, the customer relation executive (CR)
provides Ihe required services and fills the charges sheet. They payment of the same is to be
paid to ICD ADVANCE.

3. The ICD'S Import in-chorge generates specific and unique Index Number tor the
particular request,

4. The documentation procedures start with the generation of Index Number, following
documents are generated -

- Job-Order form No. # 5-6 copies

- No objection certificate form No. # 13-3 copies

- Gate pass form No, # 2-3 copies

5. Job order is a statement of request made by the CR Imports of ICD to port trust manager to
make necessary arrangements to unload the container from the ship or vessel and load it
on the trailer so that it can be brought to ICD. All the 6 copies are distributed among
various authorities as follows -

- 1 copy to customs department, Pune.

66
 - 1 copy to CHA / Importer

- 1 copy to transporter

- 2 copies to shipping line or NVOCC

- 1 copy from which is to be submitted to port trust authority

- 1 copy remains with Dynamic Logistics for the records

6. 1 copy of NOC is submitted to deputy commissioner (customs), as a request to bring

the container to the dry-port, ICD. The charges tor the same are debited from the
account of importer. The duplicate copy of NOC is sent to port trust authority after
being signed by customs authority. The triplicate copy of NOC remains with ICD.

7. From the 3 copies of Gale Pass, one is sent to chief superintendent (octroi) so as to
facilitate the transportation from port to ICD, 1 copy is given to transporter and 1
copies goes to gate in-charge to let the trailer enter the premises.

8. The CHA, forthe purpose of custom clearance submits the bill of entry to the customs
authority.

9. The Bill of entry submitted by CHA is then compared with Import General
Manifest (IGM) submitted by the NOVCC or carrier itself. After comparison the bill
has been assigned a specific number.

10. After the assignment, of a specific identification number CHA gives the bill of entry
to appraiser who checks the classification of goods, value of goods and duty
applicable on the same- First the appraiser checks the document submitted by the
CHA thoroughly, if he feels the physical examination necessary, he indicates the
examiner for the same. In the normal case it is carried down sequentially. After the
assessment the appraiser signs the bill of entry. Once the appraiser signs Ihe B.CXE.
the CHA fills challan and pays the customs duty.

11. Now Ihe CHA approaches the examiner to carried out physical examination order is a
statement of instruction to ICD that the cargo is to be de-stuffed for the purpose of

67
 physical examination by the cusloms authority and not for the final delivery to the
Importer as he had not yet cleared the dues of shipping line.

12. Alter the checking the examination order imports in-charge prints de-stuffed sheet so as to
instruct yard in-charge to arrange for de-stuffing and customs examination of imported cargo,

13. The custom examiner opens the packet, which he desires and randomly examines the weight,
quantity and order specifications mentioned in the documents backing the particular Import
shipment. If all the goods are found as per order, the goods are considered customs cleared.

14. The remaining procedure contains no complication as |he CHA submits the deliver)'
order to the ICD office and takes issue note. The cargo is de-sluffed from the container
in the case of ICD de-stuffing, while in the case of factory de-stuffing the yard in-
charge has been instructed to let the container go to factory for de-stuffing.

Procedure by Importer –

The importer importing the goods has to follow prescribed procedures for import by
ship/air/road. (There is separate procedure for goods imported as a baggage or by post.)

Bill of Entry - This is a very vital and important document which every importer has to
submit under section 46. The Bill of Entry should be in prescribed form. The standard size of
Bill of Entry is 16" × 13". However, for computerisation purposes, 15" × 12" size is
permitted. (Mumbai Customs Public Notice No. 142/93 dated 3-11-93).

Bill of Entry should be submitted in quadruplicate – original and duplicate for customs,
triplicate for the importer and fourth copy is meant for bank for making remittances.

Under EDI system, Bill of Entry is actually printed on computer in triplicate only after ‗out
of charge‘ order is given. Duplicate copy is given to importer.

Types of Bill of Entry - Bills of Entry should be of one of three types. Out of these, two types
are for clearance from customs while third is for clearance from warehouse.

BILL OF ENTRY FOR HOME CONSUMPTION - This form, called ‗Bill of Entry for
Home Consumption‘, is used when the imported goods are to be cleared on payment of full
duty. Home consumption means use within India. It is white coloured and hence often called
‗white bill of entry‘.

BILL OF ENTRY FOR WAREHOUSING - If the imported goods are not required
immediately, importer may like to store the goods in a warehouse without payment of duty
under a bond and then clear from warehouse when required on payment of duty. This will
68
enable him to defer payment of customs duty till goods are actually required by him. This
Bill of Entry is printed on yellow paper and often called ‗Yellow Bill of Entry‘. It is also
called ‗Into Bond Bill of Entry‘ as bond is executed for transfer of goods in warehouse
without payment of duty.

BILL OF ENTRY FOR EX-BOND CLEARANCE - The third type is for Ex-Bond clearance.
This is used for clearance from the warehouse on payment of duty and is printed on green
paper. The goods are classified and value is assessed at the time of clearance from customs
port. Thus, value and classification is not required to be determined in this bill of entry. The
columns in this bill of entry are similar to other bills of entry. However, declaration by
importer is not required as the goods are already assessed.

RATE OF DUTY FOR CLEARANCE FROM WAREHOUSE - It may be noted that rate of
duty applicable is as prevalent on date of removal from warehouse. Thus, if rate has changed
after goods are cleared from customs port, customs duty as assessed on yellow bill of entry
and as paid on green bill of entry will not be same.

Mention of BIN on Bill of Entry – A BIN (Business Identification Number) is allotted to each
importer and exporter w.e.f. 1.4.2001. It is a 15 digit code based on PAN of Income Tax
(PAN is a 10 digit code). [Earlier an EC (Import Export code) number issued by DGFT was
required to be mentioned on Bill of Entry].

Filing of Bill of Entry - Normally, Bill of Entry is filed by CHA on behalf of the importer.
Customs work at some ports has been computerised. In that case, the Bill of Entry has to be
filed electronically, i.e. through Customs EDI system through computerisation of work.
Procedure for the same has been prescribed vide Bill of Entry (Electronic Declaration)
Regulations, 1995.

Documents to be submitted by Importer - Documents required by customs authorities are

required to be submitted to enable them to (a) check the goods (b) decide value and
classification of goods and (c) to ensure that the import is legally permitted. The documents
that are essentially required are : (i) Invoice (ii) Packing List (iii) Bill of Lading / Delivery
Order (iv) GATT declaration form duly filled in (v) Importers / CHAs declaration duly
signed (vi) Import Licence or attested photocopy when clearance is under licence (vii) Letter
of Credit / Bank Draft wherever necessary (vii) Insurance memo or insurance policy (viii)
Industrial License if required (ix) Certificate of country of origin, if preferential rate is
claimed. (x) Technical literature. (xi) Test report in case of chemicals (xii) Advance License /
DEPB in original, where applicable (xiii) Split up of value of spares, components and
machinery (xiv) No commission declaration. – A declaration in prescribed form about
correctness of information should be submitted. – Chapter 3 Para 6 and 7 of CBE&C’s
Customs Manual, 2001.

The Noting is now done electronically in large ports, while it is done manually in small ports.
Thoka Number (Serial Number) is given while noting the Bill of Entry.

Electronic submission under EDI system – Where EDI system is implemented, formal
submission of Bill of Entry is not required, as it is generated in computer system. Importer
should submit declaration in electronic format to ‗Service Centre‘. A signed paper copy of
declaration for non-repudiability should be submitted. Bill of Entry number is generated by

69
system which is endorsed on printed check list. Original documents are to be submitted only
at the stage of examination.

Assessment of Duty and Clearance

The documents submitted by importer are checked and assessed by Customs authorities and
then goods are cleared. Section 2(2) defines ‗assessment‘ as follows – ‗Assessment‘ includes
provisional assessment, reassessment and any order of assessment in which the duty assessed
is Nil. Thus, ‗assessment‘ includes ‗Nil‘ assessment.

Noting of Bill of Entry - Bill of Entry submitted by importer or Customs House Agent is
cross-checked with ‗Import Manifest‘ submitted by person in charge of vessel / carrier. It is
noted if the description tallies. ‗Noting‘ really means taking on record by customs officer.
This date is relevant for determining rate of customs duty. Thoka number (serial number) is
given in the import section. Otherwise, it is returned for clarifications. In case of EDI system,
noting is done by the system itself which also generates bill of entry number.

Date of presentation of bill of entry is highly relevant and the rate of duty as applicable on
this date will be considered for calculating the duty payable. Bill of Entry is accepted only
after proper scrutiny vis-a-vis import manifest and various declarations given in bill of entry
and attached documents like invoice, bill of lading etc. If such documents are not attached,
the authorities can refuse to accept the Bill of Entry, and hence submission of such
incomplete Bill of Entry cannot be taken as date of presentation of Bill of Entry - Simla
Agencies v. CC - 1993 (63) ELT 248 (CEGAT).

Prior Entry of Bill of Entry - After the goods are unloaded, these have to be cleared within
stipulated time - usually three working days. If these are not so removed, demurrage is
charged by port trust/airport authorities, which is very high. Hence, importer wants to
complete as many formalities as possible before ship arrives. Proviso to Section 46(3) of
Customs Act allows importer to present bill of entry upto 30 days before expected date of
arrival of vessel. In such case, duty will be payable at the rate applicable on the date on
which ‗Entry Inward‘ is granted to vessel and not the date of presentation of Bill of Entry, but
rate of exchange will be as prevalent on date of submission of bill of entry. - confirmed in
CC, New Delhi circular No 64/96 dated 10.12.1996 and CBE&C circular No 22/97-Cus
dated 4.7.1997.

Assessment of Customs duty - Section 17 provides that assessment of goods will be made
after Bill of Entry is filed. Date stamp of receipt is put on the ‗Bill of Entry‘ and then it is
sent to appraising department either manually or electronically.

There are various Appraising groups for different Chapter headings. Each group is under an
Assistant/Deputy Commissioner. Group consists of ‗Examiners‘ and ‗Appraisers‘.

APPRAISING THE GOODS - Appraiser has to (a) correctly classify the goods (b) decide the
Value for purpose of Customs duty (c) find out rate of duty applicable as per any exemption
notification and (d) verify that goods are not imported in violation of any law. He can call for
any further documents that may be required for assessment. If he is of the opinion that goods
have to be examined for appraisal, he will issue an examination order, usually on the reverse
of Bill of Entry. If such order is issued, the Bill of Entry is presented to appraising staff at
docks / air cargo complexes, where the goods are examined in presence of importer‘s
70
representative. Assessment is finalised after getting the report of examination. – Chapter 3
Para 11 and 12 of CBE&C’s Customs Manual, 2001.

VALUATION OF GOODS - As per rule 10 of Customs Valuation Rules, the importer has to
file declaration about full 'value' of goods. If the assessing officer has doubts about the truth
and accuracy of 'value' as declared, he can ask importer to submit further information, details
and documents. If the doubt persists, the assessing officer can reject the value declared by
importer. [rule 10A(1) of Customs Valuation Rules]. If the importer requests, the assessing
officer has to give reasons for doubting the value declared by importer. [rule 10A(2)]. If the
value declared by importer is rejected, the assessing officer can value imported goods on
other basis e.g. value of identical goods, value of similar goods etc. as provided in Customs
Valuation Rules. [This amendment has been made w.e.f. 19.2.98, as per WTO agreement.
However, it has been held that burden of proof of under valuation is on department]. - -
Assessing Officer should not arbitrarily reject the declared value and increase the assessable
value. He should follow due process of law and issue appealable order. – MF(DR) circular
No. 16/2003-Cus dated 17-3-2003.

APPROVAL OF ASSESSMENT - The assessment has to be approved by Assistant

Commissioner, if the value is more than Rs one lakh. (in cases covered under ‗fast track
clearance for imports‘, appraiser is also authorised to approve valuation). After the approval,
duty payable is typed by a ―pin-point typewriter‖ so that it cannot be tampered with. As per
CBE&C circular No. 10/98-Cus dated 11-2-1998, Assessing Officer should sign in full in
Bill of Entry followed by his name, preferably by rubber stamp.

EDI ASSESSMENT – In the EDI system, the cargo declaration is transferred to assessing
officer in the groups electronically. Processing is done on the screen itself. All calculations
are done by the system itself. If assessing officer needs clarification, he can raise a query.
The query is printed at service centre and importer replies through service centre. Facility of
tele-enquiry about status of documents is provided in major customs stations. Under EDI,
normally, documents are inspected only after assessment. After assessment, copy of Bill of
Entry is printed at service centre. Final Bill of Entry is printed only after ‗Out of Charge‘
order is given by customs officer. – Chapter 3 Para 18 to 22 of CBE&C’s Customs Manual,
2001.

PAYMENT OF CUSTOMS DUTY - After assessment of duty, necessary duty is paid.

Regular importers and Custom House Agents keep current account with Customs department.
The duty can be debited to such current account, or it can be paid in cash/DD through TR-6
challan in designated banks.

After payment of duty, if goods were already examined, delivery of goods can be taken from
custodians (port trust) after paying their dues. If goods were not examined before assessment,
these have to be submitted for examination in import shed to the examining staff. After shed
appraiser gives ‗out of charge‘ order, delivery of goods can be taken from custodian.

First and second system of assessment - There are two systems of assessment. Section 17(2)
provides for assessment after examination of goods and section 17(4) provides for assessment
on basis of documents, followed by inspection and testing of goods.

―First appraisement system‖ or 'first check procedure' is followed if the appraiser is not able
to make assessment on the basis of documents submitted and deems that inspection is
71
necessary. Goods are examined first and then these are assessed. This method is followed
only if assessment is not possible on basis of documents. - - The importer himself may also
request 'first check procedure', if he cannot give all required details regarding description /
value of goods. He has to make request for first check examination at the time of filing of
Bill of Entry or at data entry stage in case of EDI. He has to give reason for seeking first
appraisement. The examination order is recorded on Bill of Entry and then returned to
importer / CHA. It is then presented to import shed for examination. The shed appraiser /
Dock examiner examines the goods as per examination order and records his findings. If
samples are required, they are taken out. In case of EDI system, the report of examination is
given in the computer itself. The goods are then assessed to duty by appraiser. - Chapter 3
Para 23 of CBE&C’s Customs Manual, 2001.

In ―Second Appraisement System‖ or 'second check procedure', which is normally followed,

assessment is done on basis of documents and then goods are examined. Such examination is
not mandatory. It is done on selective basis on the basis of ‗risk assessment‘ or specific
intelligence report. Section 17(4) of Customs Act specifically provides that if initially
assessment is done on basis of documents, re-assessment can be done after examination or
testing of goods or otherwise, if it is found subsequent to examination or testing or otherwise,
that any statement made on Bill of Entry or any information supplied is not true in respect of
matter relevant to assessment of duty.

First appraisement is generally carried out in following cases - * If complete documents are
not submitted * Goods are to be tested for correct classification * Goods are re-imported *
Goods are damaged or deteriorated and abatement is claimed * Goods are abandoned and
remission of duty is applied for * When goods are provisionally assessed * When importer
himself requests for examination of goods before payment of duty.

EXAMINATION OF GOODS - Examiners carry out physical examination and quantitative

checking like weighing, measuring etc. Selected packages are opened and examined on
sample basis in ‗Customs Examination Yard‘. Examination report is prepared by the
examiner.

Accelerated Clearance of Imports and Exports Scheme (ACS) – Finance Minister, in his
budget speech on 28-2-2003, had announced a ‗self assessment scheme‘ for importers and
exporters. As per the scheme, importer will himself determine classification of goods
including claim for exemption benefits. Computer System will calculate the duty based on his
declaration. Physical inspection of imported goods will be done by risk-assessment and
management techniques on a computer based system and not on the orders of customs
examining staff. Audit of import documents will not be by existing system of concurrent
audit but will be done by post-clearance audit, as prevalent in developed countries.

Subsequently, a Accelerated Clearance of Import and Export Scheme (ACS) has been
announced vide MF(DR) circular No. 30/2003-Cus dated 4-4-2003. The scheme is
announced through administrative instructions, without making any change in statutory
provisions. Hence, the scheme is not same as ‗self removal‘ under Central Excise. Presently,
the scheme is introduced on trial basis at Air Customs, Sahar (Mumbai), ICD, New Delhi and
Chennai Sea Customs.

In case of imports, the scheme will be open to all status holders under EXIM policy, Central
and State Government PSUs and other importers who have been importing for at least two
72
years and have filed at least 25 Bills of Entry in preceding year. - - In case of exports, the
scheme will be open to all status holders under EXIM policy, EOU/STP/EHTP units whose
goods have been sealed in presence of customs/excise officers, Central and State Government
PSUs, manufacturer-exporters who have been exporting for at least two years and have filed
at least 25 Shipping Bills in preceding year and bulk exporters. - - Certain sensitive items
have been excluded from the provisions. Importer/exporter intending to avail this facility has
to make application to Commissioner. The clearances will be subject to post clearance audit.

Provisional Assessment - Section 18 of Customs Act, 1962 provide that provisional

assessment can be done in following cases (a) when Customs Officer is satisfied that
importer or exporter is unable to produce document or furnish information required for
assessment (b) it is deemed necessary to carry out chemical or other tests of goods (c) when
importer/exporter has produced all documents, but Customs Officer still deems it necessary
to make further enquiry. In such cases, assessment is done on provisional basis. The
importer/exporter has to furnish guarantee/security as required by Customs Officer for
payment of difference if any. Goods can be cleared after payment of duty provisionally
assessed and after providing the security. After final assessment, difference is paid by
importer or refunded to him as the case may be. If the imported goods were warehoused after
provisional assessment, the Customs Officer may require importer to execute a bond for
twice the difference in duty, if duty finally assessed is higher [section 18(2)(a)]. The bond is
called as 'P D Bond' (Provisional Duty Bond). The bond is with security or surety. Bank
guarantee can also be given as a security.

Checking of duty drawback / license documents - Documents in respect of Duty Entitlement

Pass Book (DEPB), advance license, duty drawback etc. will be checked.

Execution of bond and payment of duty - Once the duty is assessed, the bill of entry is
returned to importer. The Bill of Entry should be presented to comptist for calculation and
pinpointing of the duty. If bond has to be executed, it will be taken in bond section.

Payment of duty - If goods are to be removed to a warehouse, duty payment is not required.
The goods can be taken to a warehouse under bond, without payment of duty. However, if
goods are to be removed for home consumption, payment of customs duty is required. CHA
or the importer can take it for payment of customs duty. Large importers and CHA have P.D.
accounts with customs. Duty can be paid either in cash or through P.D. account. P. D.
account means provisional duty account. This is a current account, similar to PLA in central
excise. The importer or CHA pays lumpsum amount in the account and gets credit on the
amount paid. He can pay customs duty by debiting the amount in P.D. (Provisional Duty)
account. If the importer does not have an account, he can pay duty by cash using TR-6
challan. Of course, payment through PD account is very convenient and quick.

The duty should be paid within five working days (i.e. within five days excluding holidays)
after the ‗Bill of Entry‘ is returned to the importer for payment of duty. [section 47(2)]. (Till
11-5-2002, the period allowed was only 2 days).

Interest for late payment - If duty is not paid within 5 working days as aforesaid, interest is
payable. Such interest can be between 10% to 36% as may be notified by Central
Government. [Section 47(2) of Customs Act, 1962.]. - - Interest rate is 15% w.e.f. 13-5-2002.
[Notification No. 28/2002-Cus(NT) dated 13-5-2002] Earlier, interest rate was 24% p.a,
w.e.f. 1-3-2000, as per notification No. 34/2000-Cus(NT)].
73
Disposal if goods are not cleared within 30 days - As per section 48 of Customs Act, goods
must be cleared within 30 days after unloading. Customs Officer can grant extension.
Otherwise, goods can be sold after giving notice to importer. However, animals, perishable
goods and hazardous goods can be sold any time - even before 30 days. Arms & ammunition
can be sold only with permission of Central Government.

Out of Customs Charge Order - After goods are examined, it is verified that import is not
prohibited and after customs duty is paid, Customs Officer will issue ‗Out of Customs
Charge‘ order under section 47. Goods can be cleared from customs area only on receipt of
such order. This is an ‗adjudicating order‘ within the meaning of Customs Act, even if it is
passed by Appraiser and not by Assistant Commissioner.

Demurrage if goods not cleared - Heavy demurrage is payable if goods are not cleared from
port within three days.

Import of software through data communication - Import of software through data

communication / tele-communication is permitted. Since such imports are not available for
physical verification, proper accountal in books should be maintained. Unit intending to
import software through datalink is required to inform estimated annual requirement to
Development Commissioner of EOU / Director of STP. This should be approved by him.
[what for ?]. After import of software through internet, written information should be
submitted to Director of STP / Development Commissioner of EOU and importer shall get a
certificate. This certificate should be submitted to Assistant / Dy Commissioner of Customs
within 48 hours, along with Bill of Entry and certificate from Development Commissioner of
EOU / Director of STP. He will issue 'out of charge' order. The documents such as invoice
etc. will be routed through bank. - MF(DR) circular No. 58/2000-Cus dated 10-7-2000.

Relevant Date for Rate and Valuation of Customs Duty - Section 15 of Customs Act
prescribes that rate of duty and tariff valuation applicable to imported goods shall be the rate
and valuation in force at one of the following dates. (a) if the goods are entered for home
consumption, the date on which bill of entry is presented (b) in case of warehoused goods,
when Bill of Entry for home consumption is presented u/s 68 for clearance from warehouse
and (c) in other cases, date of payment of duty.

CONCEPT OF TERRITORIAL WATERS NOT RELEVANT - It may be noted that concept

of ‗ date of entering into territorial waters‘ is not relevant for purposes of determination of
rate of customs duty.

74
Export Procedures and documentation

Procedures have to be followed by (a) ‗person-in-charge of conveyance‘ and (b) the exporter. The
procedures are similar to procedures for import, of course, in reverse direction.

NO STOPPAGE OF EXPORT CONSIGNMENT - Exports are vital for our economy. Any
stoppage in export consignment means loss of export orders to the exporter and loss of foreign
exchange to the country. Hence, it has been provided that movement of export consignment will
not be interrupted and no export consignment shall be withheld for any reason whatsoever. In case
of any doubt, customs authorities may ask for an undertaking that the export is on sole
responsibility of the exporter. [Highlights of EXIM policy 1997-2002 as amended on 13.4.1998].

Procedures by person in charge of conveyance – Any new airline, shipping line, steamer agent
should be registered in Customs Systems for electronic processing of shipping bills etc.

The ‗person in charge of conveyance‘ has to follow prescribed procedures.

Entry Outward - The vessel should be granted ‗Entry Outward‘. Loading can start only after entry
outward is granted. (section 39 of Customs Act). Steamer Agents can file ‗application for entry
outwards‘ 14 days in advance so that intending exporters can start submitting ‗Shipping Bills‘. This
ensures that formalities are completed as quickly as possible and loading in ship starts quickly.

LOADING WITH PERMISSION - Export goods can be loaded only after Shipping Bill or Bill of
Export, duly passed by Customs Officer is handed over by Exporter to the person-in-charge of
conveyance. In case of baggage and mail bags, shipping bill is not necessary, but permission of
Customs Officer is required (section 40).

Export Manifest - As per section 41, an Export Manifest/Export Report in prescribed form should
be submitted before departure. [The report is popularly called as ‗Export General Manifest‘ -
EGM]. The details required are similar to import manifest. Such manifest/report can be amended or
supplemented with permission, if there was no fraudulent intention. Such report should be declared
as true by the person-in-charge signing the export manifest. This report is not required if the
conveyance is carrying only luggage of occupants.

EXPORT DOCUMENTS

Following explanations gives an up-to-date picture of Export Documents and the use

EXPORT ORDER:

An order is a commercial transaction, which is also of concern Lo their respective countries, since it
affects the balance of payment position of both Ihe containers. It is therefore, not just a matter of
product, manufacturing packing, shipment and payment but also one of the concern to licensing
authorities, exchange control authorities and banks dealing in export trade. The exporter is required
to produce copies of export order to various Government departments/financial institutions e,g.

75
obtaining export licenses when the product is covered under the restricted items or canalized items
for export, availing post-shipment finance and other incentives and dealing with inspection
authorities, insurance underwriters, customs offices and exchange control authorities etc, for various
purposes.

ORDER ACCEPTANCE:

The order acceptance is another important commercial document prepared by the exporter confirming the
acceptance of order placed by the importer, Under mis document he commits the shipments of goods
covered at the agreed price during a specified time. The order acceptance normally covers the name
and address of the exporter, name and address of the consignee, port of shipment, country of final
destination, the description of goods, quanlily, price each and total amounts of the order, terms of delivery,
details of freight and insurance, mode of transport, packing and marking details, term of payment etc.

MATE'S RECEIPT:

Mate's receipt is issued by the chief of vessel after the cargo is loaded and it contains the name of shipping
line, vessel, port of loading, port of discharge, place of delivery, marks and numbers, numbers and kind of
containers, description of goods, container status/seal number, gross weight, condition of cargo at the time of
its receipt on board the vessel and shipping bill number and date. The mate's receipt is of a transferable
nature and must be presented immediately at die shipping company^ office to be exchange into bill of
lading,

BILL OF LADING:

The bill of lading is a document issued by the shipping company or its agent acknowledge the
receipt of goods mentioned in the bill of shipment on board the vessel and undertaking to the delivers
the goods in the like order of assignee, provided the freight and other charges specified in the bill of
A lading and as soon as the exporter obtains the mate receipt, he should prepare the bill of lading in the
fonns obtained Irom the shipping company or its agent. The exporter or his shipping agent has to fill up
the is form with relevant details from the shipping agent has to fill up this form with relevant details such as
the name of the consigner, date and place of shipment, name and destination of the vessel the
description, quantity and destination of goods, marks and numbers, invoice number, GR number, gross and
net weight, number of packages and amount of freight etc.

76
AIRWAY BILL/AIR CONSIGNMENT NOTE: Airway bill is the receipt issued by the airline
company for the carriage of goods under certain terms and conditions. airway bill is not treated, as a
document of title is not issued in negotiable form airway bill is generally issued in 3 copies. 1 copy
each is for the carrier, consignee and ,he consignor, Indian exchange control discourancc consignments
of goods in
the name of cither importer, buyer or his agent if the export is not covered under a
letter of credil wilh such requirement. Since the goods are delivered to the consignee mentioned in the
airway bill, after identifying himself as the party numed in the airway bill as consignee or receiver of
the goods, against payment of charges, if any, to hold the control over the goods until payment or the
commitment for payment is made, the exporter should consign the goods in the name of the foreign
correspondent bank.

CERTIFICATE OF QRlGIN: The exporter should obtain certificate of origin from any recognized
chamber of commerce, Export Promotion Council or " Government Department on payment of a
small fee.

G.S.P. CERTIFICATE: The EEC countries comprising France, Germany, Belgium,

Luxembourg, Netherlands, Italy, UK, Ireland, Denmark and Greece have adopted the generalized system
of preferences. Under GSP manufacturers and semi manufacturers from developing countries
including India will be entitled to a concessional rate of import duty in Ihese countries.

PACKING LIST:

A packing list should include (he date of packing, connecting invoice number, order number, details of
shipping such as the name of the steamer, bill of lading, number and dale of sailing, case number to
which the list relates, details of goods such as quantity and weight and item wise details. Normally 12
copies of packing list should be prepared. The 1*' is to be kept inside the package, copies to be sent with
shipping documents, 3 copies to the agent and 2copies retained by the exporter,

CERTIFICATE OF INSPECTION:

It is issued by the Inspection Agency Concerned, certifying that the consignment has been
inspected as required under Export Quality Control and Inspection Act. 1963 and satisfies the
conditions relating the quality control and inspection as applicable to it and is certified export worthy,

77
CERTIFICATE OF MEASUREMENT:

Freight can be charged either on the "*" basis of weight or measurement. When it is charged on weight
basis, the weight 9 declare by the exporter is accepted. However a certificate of measurement from the
Indian Chamber of Commerce or any other approved organization may be obtained by the exporter and
given to the shipping company for calculation of necessary freight.

SHIPPING ORDER:

Shipping order is issued by the shipping line intimating the " exporter about the reservation of the space of
shipment of cargo through a particular vessel from a specified date.

CART/LORRY TICKET:

The Ticket is prepared for admittance of cargo through the port gale. This is also known as 'Vehicle Ticket or
Gate Pass1. This includes the details of export cargo i.e, shippers name, cart number, marks on packages,
quantity and description.

COMMERCIAL INVOICE:

An invoice is a document which contains the detailed description of goods consigned, the
consignor's name, the consignee name, ^ name of acceptance or contract number and date, country of
origin, marks and number and number of packages, special marketing if any, quantity shipped, selling price
to the purchaser for each unit and total, terms of payment, terms of sale (FOB, C&E GIF, FAS), amount of
freight and insurance if applicable, import license number, particulars about packing, consular and customs
declaration.

SHIPPING BILL:

Shipping bill is an important document required by customs authorities for following shipment. It is
prepared by the exporter and it contains the name of the vessel, master or agents, flag, port at which goods
are to be discharged,
country of final destination, exporter's name and address, details about packages,
number and description of goods, marks and numbers, quantity, details about each
case, FOB price, real value as defined in Ihe sea customs act, whether Indian or
Foreign merchandise to be re-exported, total number of packages with total weight
and value and the name and address of the importer.
78
• The shipping bills are of following types:

Duty Free Shipping Bill:

This type of shipping bill printed on White paper and used for the goods for which neither duty nor
fees are applicable. It is also used for the goods manufactured out of materials imported under the
duly free import.

Dutiable Shipping Bill:

This type of shipping bill is used tor goods subjected to export duty, which cither entitled or not
entitled for drawback. This shipping bill is used separately in respect of which export duly is levied
on the basis of market price and tariff assessed value and printed on Yellow paper for all goods
except Mica and Jute.

Drawback Shipping Bill: If the export of goods is simultaneously by duly free and subject to
export duty, this type of shipping bill is compulsory lo be used whether alone with any other
shipping hill. This type of shipping bill is printed on trie Green paper.

Shipping Bill For Shipment EX-BOND:

In case of goods imported for re-export and kept In-Bond, this type of shipping bill is used which
is printed on Yellow paper.

FREIGHT DECLARATION:

Freight declaration is to be attached to the export documents, if the importer agrees to pay the
freight, when the exporter pays the freight, he also should submit the same declaration.

79
EXPORT PROCEDURE

Obtaining 1EC Number

Processing an export order

Entering into export contract

To examine the export contract

Instruction to the factor/ supplier

Proof of offsetting to PHARMEXCIL,

Quality control inspection

Central Excise Clearance

80
Dispatch of the documents to the export
department of the firm by the factory
office

Induction of the OIA in the logistics

Pre requisites, prior to stuffing in the

container

Issurance of mate’s receipt and bill

of lading

Certificate of origin

Preparation of various sets of

documents

Shipment advice to the importer

Certificate of origin

Presentation of document to bank

81
 At the bank, these documents are
processed in the following manner

Rebate of central excise duty and

duty drawback

Summation of an dosed documents

Indomitable, keeping no scope of uncertainty or changes in the purchase order pm the part of the
buyer) and where necessary drawing attention of importer to the discrepancies in the terms and
condition on the contract/ letter of credit Lo avoid the problems later.

Instruction lo Ihe Victor/supplier- If the above-mentioned documents are in order, delivery mote
(in duplicate) containing the specifications and other details of the order is sent to factor for the
manufacture and dispatch of the export cargo to Ihe port of shipment

Proof of offsetting to PHARMRXCL- As soon as exports has been made copies of following
documents in duplicate are sent to the PHARMEXC1L to meet the fulfillment of the offsetting
constraint. They are-
a)Invoice (one copy)
b) Packing list

c) Visa/Special custom invoice

d) Shipping bill (EP Copy)
Qualsiv control Inspection- When the production is being done the packing and
folding department of the exporter makes an inspeclion of the quality of goods that whether or not
it confirms to the requirements of the purchase order.

82
Central Excise Clearance- when production schedule is over and the goods are ready for dispatch at the
factor}' doors, and the AR,E form with six copies depicting
the description of the goods and its value is prepared. Of the total seven copies, six. Copies arc of
administrative importance, three of which (original, duplicate, triplicate) arc sent to the excise
department and remaining the company retains three,

Dispatch of the documents to the export department of the f i r m by Ilic factory office- the factory
office prepares a dispatch advice and sends sit lo the export department along with the following
documents; Railway receipt/lorn' receipt AR.-4 form (original & duplicate) Duplicate copy of delivery note
signed by the factory office it states that the consignment has been sent lo the stale town.

Induction of Ihe CHA (Custom House Agont> in the logistics- As soon as the goods arc ready to
clear the factory gates Ihe management of the cargo goes into the hands of CHA, who further
looks upon the future course "of action vis-a-vis the indomitable, keeping no scope of uncertainty
or changes in the purchase order pm the part of Ihe buyer) and where necessary drawing
attention of importer Lo the rtgj discrepancies in the terms and condition on the contract/ letter
of credit Lo avoid the problems later.

Procedures to be followed by Exporter – Export procedures have been summarised in Chapter 3

Part II of CBE&C‘s Customs Manual, 2001.

Every exporter should take following initial steps -–

1. Obtain BIN (Business Identification Number) from DGFT. It is a PAN based number
2. Open current account with designated bank for credit of duty drawback claims
3. Register licenses / advance license / DEPB etc. at the customs station, if exports are
under Export Promotion Schemes

Exporter has to submit ‗shipping bill‘ for export by sea or air and ‗bill of export‘ for export by
road. Goods have to be assessed for duty, even if no duty is payable for most of exports, as ‗Nil
Duty‘ assessment is also an assessment.

Shipping Bill to be submitted by Exporter - Shipping Bill and Bill of Export Regulations
prescribe form of shipping bills. It should be submitted in quadruplicate. If drawback claim is to
be made, one additional copy should be submitted. There are five forms : (a) Shipping Bill for
export of goods under claim for duty drawback - these should be in Green colour (b) Shipping
Bill for export of dutiable goods - this should be yellow colour (c) shipping bill for export of
duty free goods - it should be white colour (d) shipping bill for export of duty free goods ex-bond

83
- i.e. from bonded store room - it should be pink colour (e) Shipping Bill for export under DEPB
scheme - Blue colour.

The shipping bill form requires details like name of exporter, consignee, Invoice Number, details
of packing, description of goods, quantity, FOB Value etc. Appropriate form of shipping bill
should be used.

Relevant documents i.e. copies of packing list, invoices, export contract, letter of credit etc. are
also to be submitted. In case of excisable goods, from ARE-1 prepared at the time of clearance
from factory should also be submitted.

Customs authorities give serial number (called 'Thoka Number') to shipping bill, when it is
presented.

Excise formalities at the time of Export - If the goods are cleared by manufacturer for export, the
goods are accompanied by ARE-1 (earlier AR-4). This form should be submitted to customs
authorities. The Customs Officer certifies that the goods under this form have indeed been
exported. This form has then to be submitted to Maritime Commissioner for obtaining ‗proof of
export‘. The bond executed by Manufacturer-exporter with excise authorities is released only
when ‗proof of export‘ is accepted by Maritime Commissioner or Assistant Commissioner,
where bond was executed.

Duty drawback formalities - If the exporter intends to claim duty drawback on his exports, he has
to follow prescribed procedures and submit necessary papers. The procedures are discussed in
the chapter on ‗Export Incentives'. He has to make endorsement of shipping bill that claim for
duty drawback is being made. If he fails to do so due to genuine reasons, Commissioner of
Customs can grant exemption from this provision. [proviso to rule 12(1)(a) of Duty Drawback
Rules].

G R / SDF / SOFTEX Form under FEMA - Reserve Bank of India has prescribed GR / SDF form
under FEMA. ―G R‖ stands for ‗Guaranteed Receipt‘ form, while SDF stands for 'Statutory
Declaration Form‘). SDF form is to be used where shipping bills are processed electronically in
customs house, while GR form is used when shipping bills are processed manually in customs
house.

Other documents required for export - Exporter also has to prepare other documents like (a)
Four copies of Commercial Invoice (b) Four copies of Packing List (c) Certificate of Origin or
pre-shipment inspection where required (d) Insurance policy. (e) Letter of Credit (f) Declaration
of Value (g) Excise ARE-1/ARE-2 form as applicable (h) GR / SDF form prescribed by RBI in
duplicate (i) Letter showing BIN Number.

RCMC certificate from Export Promotion Council - Various Export Promotion Councils have
been set up to promote and develop exports. (e.g. Engineering Export Promotion Council,
Apparel Export Promotion Council, etc.) Exporter has to become member of the concerned
Export Promotion Council and obtain RCMC - Registration cum membership Certificate.

84
Check in customs – Document submitted is processed by customs authorities, and following are
checked - Chapter 3 Para 39 of CBE&C’s Customs Manual, 2001. –

Value and classification of goods under drawback schedule in case of drawback shipping bills
Export duty / cess if applicable
Advance License shipping bills are checked to ensure that description in invoice and final
product specified in Advance License matches. If necessary, samples may be drawn and
assessment may be done after visual inspection or testing
Exportability of goods under EXIM policy and other laws - Some exports are totally
prohibited under various Acts e.g. items restricted or prohibited under Foreign Trade
(Regulation) Act; antiques; art treasures; Arms; narcotics etc. Some items like tea, coffee and
coir products can be exported only against authorisation/licence under respective Acts.

Examination of goods before export - After shipping bill is passed by export department, the
goods are presented to shed appraiser (exports) in dock for examination. Goods will be examined
by examiner. This inspection is necessary (a) to ensure that prohibited goods are not exported (b)
goods tally with description and invoice (c) duty drawback, where applicable, is correctly
claimed.

Let Export Order by Customs Authorities - Customs Officer will verify the contents and after he
is satisfied that goods are not prohibited for exports and that export duty, if applicable is paid,
will permit clearance. (section 51) by giving ‗let ship‘ or ‗let export‘ order.

GR-1, ARE-1, octroi papers, quota certification for export etc. are also signed. Exporter‘s copy
of shipping Bill, GR-1, ARE-1 etc. duly certified are handed over to exporter or CHA. Drawback
claims papers are also processed. - Chapter 3 Para 43 and 60 of CBE&C’s Customs Manual,
2001.

Processing under EDI system – Under EDI system, declarations in prescribed form are to be
filed through ‗Service Centre‘ of customs. After verification, shipping bill number is generated
by the system, which is endorsed on printed checklist generated for verification of data. Goods
are inspected at docks on the basis of printed check list. All documents are submitted to Customs
Officer along with checklist. If goods and documents are found in order, ‗let export‘ order is
issued. Then two copies of Shipping Bill are generated – one customs and other exporter‘s copy.
Exporter‘s copy is generated only after EGM (Export General Manifest) is submitted by shipping
agent. These are signed by CHA and customs officer and then by Appraiser. SDF, ARE-1, octroi
papers, quota certification for export etc. are also signed. Exporter‘s copy of Shipping Bill, SDF,
ARE-1 etc. duly signed are handed over to exporter or CHA. - Chapter 3 Paras 42 to 60 of
CBE&C’s Customs Manual, 2001.

Conveyance to leave on written order - The vessel or aircraft which has brought imported goods
or which carry export goods cannot leave that customs station unless a written order is given by
Customs Officer. Such order is given only after (a) export manifest is submitted (b) shipping
bills or bills of export, bills of transhipment etc. are submitted (c) duties on stores consumed are
paid or payment of the same is secured (d) no penalty is leviable (e) export duty, if applicable, is

85
paid. - - Such permission is not required if the conveyance is carrying only luggage of
occupants.

Other Customs Procedures

Besides the aforesaid procedures, various other procedures have been prescribed. These are
mainly to be followed by the person in charge of conveyance.

Boat Notes - If the vessel has to unload only a small cargo, it may not spend time in having berth
in the port. If the small cargo is to be sent to shore, it may be loaded in a small boat and sent to
shore. As per section 35, such small boat must be accompanied by a ‗Boat Note‘. Boat Notes
Regulations provide that such Boat Notes will be issued by Customs Officer. It will be
maintained in duplicate and should be serially numbered. Boat Note should be in prescribed
form.

In case of export, if small export cargo is to be loaded in ship through small boat, no Boat Note is
required if the cargo is accompanied by the ‗Shipping Bill‘, otherwise, Boat Note is required.
Boat Note is also required for transhipment of cargo, i.e. transfer from one ship to another or for
re-shipment.

Transit Goods - Section 53 provide that any goods imported in any conveyance will be allowed
to remain on the conveyance and to be transited without payment of customs duty, to any place
out of India or any customs station. However, all these goods must be mentioned in import
manifest or import report submitted by person in charge of conveyance. Such goods should not
be ‗prohibited goods‘ under section 11 of Customs Act. [The conveyance may be vehicle, ship or
aircraft]. After transit, the goods may go to another customs station.

On arrival at customs station, the goods will be liable to customs duty as if it is first importation
in India. - section 55.

Transhipment of Goods - Goods imported in any customs station can be transhipped without
payment of duty, u/s 54 of Customs Act. Transhipment means transfer from one conveyance to
another. [The conveyance may be vehicle, ship or aircraft]. Such transhipment may be to any
major port or airport in India. The goods can be transhipped to any other customs station in India
if customs officer is satisfied that the goods are bonafide intended for transhipment to any
customs station. The facility is available at all customs ports and Inland Container Depots
(ICDs). [Notification No. 50/95-Cus(NT) dated 6-9-95].

Goods to be transhipped must be specified in Import Manifest or Import report and a ‗Bill of
Transhipment‘ should be submitted to Customs Officer. In case of goods being transhipped
under an international treaty or bilateral agreement between Government of India and
Government of a foreign country, a Declaration of Transhipment shall be submitted instead of
Bill of Transhipment. [section 54(1)]. [India has such bilateral agreement with Nepal].

86
Such goods should not be ‗prohibited goods‘ under section 11 of Customs Act. The goods should
be sealed during transhipment by customs officer. A bond has to be executed for the purpose.
After execution of bond, a certificate from customs officer has to be submitted within one month
that goods have been properly transferred. [Goods Imported (Conditions of Transhipment)
Regulations, 1995]. On arrival at customs station, they will be liable to customs duty as if it is
first importation in India. - section 55.

TRANSIT AND TRANSHIP - Distinction between transit and transhipment is that in 'transit'
goods continue to be on same vessel, while in transhipment, goods are transferred to another
vessel / vehicle. Hence, procedures are also different.

Coastal goods - Coastal goods means goods transported from one port in India to another port in
India, but does not include imported goods. Thus, coastal goods means goods taken by ship from
one Indian port to another. No export or import is involved, but control is necessary to ensure
that coastal goods are not diverted illegally for export.

LOADING OF COASTAL GOODS - The Consignor should submit bill of coastal goods to
Customs Officer (section 93). Form of the bill has been prescribed. These will be loaded by
master of vessel only after ‗bill of coastal goods‘ is passed (section 93). Master of Vessel will
carry an ‗Advice Book‘ where entries will be made by Customs Officer. This ‗Advice Book‘ has
to be presented for inspection of Customs Officers, if called for. After loading, the vessel can
leave only after obtaining written order from Customs Officer. As per notification No 15/98-NT
dated 27.2.1998, exemption has been granted for delivery of 'Advice Book' at each port of call.
However, the 'Advice Book' will have to be submitted for inspection on board of vessel, when
called for.

UNLOADING OF COASTAL GOODS - Unloading of coastal goods should be done only at

Customs Port or coastal port appointed by CBEC under section 7 of Customs Act. On arrival, all
bills relating to goods which are to be unloaded will be delivered to Customs Officer. Unloading
can be done only after obtaining permission from Customs Officer. Customs Officer can inspect
goods and ask for questions and documents relating to goods. Goods will be unloaded at
approved place under supervision of Customs Officer.

Documentation process required person with lot of knowledge of this field.

1. The CHA on the behalf of exporter fills the request form for the use of terminals for exports.
With the request form; the exporter or CHA submitted some additional documents. These
documents are packing list and commercial invoice.

2. As per the requirements of the exporter the Export Customer Relation Officer (CR) provide the
required services and the fill the charges sheet. The payment of the same is to be paid to ICD in
advance.

87
3. The ICD'S export in-charge generate specific and unique index number for the particular request.

4. For the movement of empty container the CR issues form number # 12 to the transfer, Mumbai.

5. The transporter picks up the empty container of a particular shipping line and sends it to the factory
of an exporter for stuffing.

6. Then the container get stuffed and brought to ICD for the required the documentation procedure
and customs examination and clearance procedure.

7. Following documents arc generated -

(a) If the factory of the exporter lies outside the PCMC area, 3 copies of loaded container
gate pass are generated -

- 1 copy is sent to chief superintendent of PCMC octroi post.

- 1 copy is given to transporter.

- 1 retains with gate in charge of ICD.

(b) If the factory lies in the PCMC. 3 copies of empty container gate pass along with 3 copies
of loaded container gate pass are generated. All of them are distributed to the
authorities as same as above. These documents fulfill the octroi requirement and serve
as an instruction lo gale in-charge to let the container come inside the premises of the
company for custom examination and clearance.

8. The CHA on the behalf of exporter submits the shipping bills to the customs department. Shipping
bill is a statement showing the specification of the goods to be exported.

9. The role of customs department start from this stage. First the appraiser watches the
documents submit Led by the CHA thoroughly, if he feels the physical examination
necessary, he indicates the examiner for the same. In the normal case it is carried down

88
 sequentially. After the assessment the appraiser signs the shipping bill, invoice and packing
list- Once the appraiser signs. The CHA fills challan and pays die customs duty.

10. The appraiser then gives order for the physical examination of the goods to be exported. The
Inspector goes in export warehouse and examination the goods and cross checks them with
packing list, commercial invoice and shipping bill, after physical examination the customs
department allows to clear the cargo for exports. The bottle seal is put to the container.

11. The duty signed transference copies are given lo in a sealed and stamped envelope,

12. ICD export in-charge, after receiving commercial invoice, shipping bill transicrcncc copies
generates following documents -

(a) Job Order - 6 copies

- 1 copy to customs department, Pune.

- 1 copy to CHA/lmporter

- 1 copy to transporter.

- 2 copies Lo shipping line or NVQCC (Non Vessel Operating Common Carrier)

LCL EXPORTS & CUSTOMS CLEARANCE PROCEDURE

1. CHA on behalf of exporter Fills the request form tor the use of terminal for export and submits
commercial invoice and packing list along with It.

2. The details are then feed in CFS management system in order to generate a specific and
unique Index number tor the particular shipment.

3. Exports in-charge generates 3 copies of gate pass bulk for allowing ihe truck loaded with
goods enter inio the premises of the ICD.

89
4. 1 copy of this gate pass is sent to chief superintendent octroi post, PCMC. 1 copy has been given
to transporter and 1 copy remains with ICD gale in-charge,

5. After the arrival of the break bulk goods, export in-charge generates issue note for warehouse
in-charge to assign a specific location in export warehouse. Security guard present notes the
records of number of packets and location assigned down there in activity slip.

6. Warehouse in-charge ensures the location of consignment, as each separate consignment is

stacked in a separate segment divided in with in the export warehouse. These segments arc
equally divided sections of the dimension 25 meter * 25 meter (L*B) segregated by a thick
yellow line.

7. After the customs clearance and examination procedure (same as FCL export) goods are permitted to
be stuffed in the closed CBT (closed body truck).

8. Next step involves the generation of letter for the customs department, Dronagiri which is the place from
where the LCL goods are consolidated and converted into FCL for loading it on the vessel.

9. Same as above 6 copies of job order are generated out, such as 1 copy to customs department,
Drouagiri, 1 copy to CI1 A/Importer.

1 copy to transporter.

2 copies to shipping line or NVOCC (Non Vessel Operating Common Carrier).

1 copy for port trust authority. 1 copy remains with Dynamic Logistics for the records.

10. Exporter in-charge also generated 3 copies of gate pass for allowing the CBT to leave the
premises of ICD. From these 3 copies, 1 is sent lo chief superintendent of octroi post PCMC, 1
given to transporter and 1 copy remains with gate in-charge.

11. CHA submits the transference copies to the ICD export in-charge in a sealed and stamped
envelope.

90
12. The CBT is allowed to depart from the premises of ICD after checking gate pass.

13. These goods are consolidated in a 20 feet or 40 feel container at Dronagirl and finally loaded
on the vessel.

AIR EXPORT PROCEDURES

1. CHA/Exporter fills the request form for the use of terminal for exports along with the airway bill,
commercial invoice, packing list and shipping bill.

2. Feeding the CFS management system with relevant details of the particular consignment
generates the index number.

3. Further 3 copies of gate pass are generated and distributed to the authorities accordingly (as
above),

4. 1 copy of this gale pass is sent to chief superintendent octroi post, PCMC. I copy is given to
transporter and 1 copy remains with 1CD gate in-charge.

5. After the arrival of the break bulk goods, export incharge generates issue note for warehouse
security guard present notes the record of number of packets and location assigned down there
in activity slip.

6. There is a special location for air cargo in the export warehouse, as it needs special attention. Here at
export warehouse of it is two segments at extreme right corner of the warehouse.

7. CHA approaches the customs department for the apprising and inspection of cargo in order to
gel it cleared. He obtains shipping bills and transference copies duly signed by the authorities and
further submits the same with the exports in-charge of 1CD office.

8. The stuffing sheet is sent to warehouse in-charge to make arrangement for stuffing the cargo in the CBT.

91
9. Following documents are prepared for ftirthcr movement of air cargo -

- Export General Manifest 6 copies

- Inland Way Bill - 3 copies

- Transit Permit - 6 copies

10. Export general manifest is a consolidated report of the cargoes stuffed In one CRT, Transit
permit is the statement showing the transportation of loaded CBT to Sahar air cargo
complex; Inland way bill is a document serves same purpose as shipping bill serves in
shipping,

11. The documents are distributed accordingly to the authorities concerned (same as above).

12. CHA submits the transference copies along with EGM and transit permit duly signed by the
customs authority, sealed and stamped. These transference copies arc sent Sahar air cargo
complex for customs for customs formalities at Airport,

13. The gate pass is generated and CBT is allowed to proceed for SACC, Mumbai,

Documents requirement for export by air - clearance and

forwarding

Documents No. of copies

Shipping Instructions 1

Commercial Invoice 5

Packing List / Packing Slip 5

92
SDF form 2

ARE1 / ARE4, C. Excise gate pass 2

N Form 4

M.S.D.S. (in case of D.G. / Non D.G., chemical products) 2

In case of D.G. : to obtain UN class number from shipper and

accordingly make

the shipment booking with airline / shipping line 1

TABLE 4.3

Documents requirement for export by sea - FCL (factory

stuffing) - clearance and forwarding

SDF form 2

ARE1 / ARE4, C. Excise gate pass 4

N Form (if applicable) 2

M.S.D.S. (in case of D.G. / Non D.G., chemical products) 2

C. Excise examination report on back of invoice. (in case of

LCL, the same is not required) 5

Packing List / Packing Slip 2

93
Note : Ensure that customer holds the valid Factory

Stuffing Permission for FCL factory stuffed containers

Post shipment export documents

Original set of Bill of Lading OR sea waybill / AWB (as the

case may be) 1

Customs attested Invoice and Packing List 1

Customs attested SDF form 1

Original copy of Shipping Bill 1

Customs attested ARE1 / ARE4 1

EP copy of shipping bill 1

94
RESEARCH METHODOLOGY

Meaning of research

Research in common parlance refers to a search for knowledge. One can also define research as a
scientific and systematic search for pertinent information on a specific topic. In fact, research is
an art of scientific investigation. The advanced learner‘s dictionary of current English lays down
the meaning of research as a careful investigation or inquiry especially through search for new
facts in any branch of knowledge.

Objective`

The purpose of research is to discover answers to questions through the application of scientific
procedures. Though each research study has its own scientific purpose, we may think of research
objectives as falling into a number of following groups:

1. To gain familiarity with a phenomenon or to achieve new insights

2. To portray accurately the characteristics of a particular individual, situation or a group
3. To determine the frequency with which something occurs or with which it is associated
with something else.
Types of research

 Descriptive research
 Analytical research
 Applied research
 Fundamental research
 Quantitative research
 Qualitative research
The above mentioned are the various types of research which a researcher can apply in order to
achieve one desired objective. Therefore to achieve the objectives of my research I have used
descriptive research.

This is based on proper research design to meet the objectives of the study.

95
ANALYSIS OF INDIAN TRADE

A review of India‘s foreign trade since the commencement of planning reveals the following
important points:

1. Both exports and imports have grown considerably.

2. Except for two years (1972-73) and (1966-77), in all years since 1951 imports were larger than
exports.

3. Until about the mid 1980sthe export performance of India was very poor in

Comparison with other countries in general; it was very poor even in comparison with several
other developing countries. This is clear from the following facts:

a) The share of India in the total world exports fell from about 2 per cent in 1950 to 0.4 per
cent in 1980. Since the mid eighties, there has, however, been some improvement. In
2002 it was 0.8 per cent and the target set by the Ministry of Commerce is one per cent
by 2007.
b) India the 13th largest exporter in 1950 but there were 28 countries above India in 2005.
This marks a slight improvement over the recent past.
c) India‘s merchandise exports as a percentage of GDP had been stagnating around 5 per
cent. Although it has improved since the liberalization, it is still very low (little above 13
per cent) even in comparison with many other developing countries.

96
SHARE OF INDIA IN WORLD EXPORT

TABLE 5.1

Year Share (%)

1950 2.0

1960 1.2

1970 0.7

1980 0.4

1990 0.5

2000 0.7

2006 1.0

2007 1.0

2008 1.0

4) The terms of trade have, on the whole, been favorable to India, although there was
deterioration in a number of years.
5) There has been a very significant change in composition of India‘s exports. Manufactured
products one account for over three-fourths of the exports as against the dominance of primary
commodities in the early period.

97
6) They have been significant changes in the direction (i.e. the source of imports and destination
of exports) of India ‗s foreign trade.

TABLE 5.2

INDIA’S EXPORT DURING LAST 8 YEARS

Years Export (in millions) Growth Rate

2000 44560 21.0

2001 43627 -1.6

2002 52719 20.3

2003 63843 21.1

2004 83563 30.8

2005 103091 23.4

2006 115849 26.29

2007 1241600 28.27

98
 On X-Axis 1cm = Year

On Y-Axis 1cm = $20 billion

Figure 5.1

INDIA'S EXPORTS
140
124.6
120 115.849
103.091
100
83.563
Export in billions

80
63.843
60 52.719
44.56 43.827 export (
millions)
40

20

0
2000 2 3 4 5 6 7years 8

Merchandise export of the country nearly doubled to US$ 124.6 billion in the ending 2007-08 from
63.84$ billion from 2004 an annual compounded growth of 25 per cent compared to 12.73 present in
the previous years during 2007-08.

Objective-

On the first day in my company, I came across the knowledge of Export and Import.

To understand well about the condition of the current market, the company management decided to
have a marketing research for one week. While doing marketing research, initially I collected / gathered

99
the list of industry in and around Kolkata and started sending them our company profile via e-mail. At
the beginning our focus was to reach at existing customers who are in need of imported raw materials.
We identified the exact need of such customers through our extensive market research. Then approach
towards the new customers and made enquiry from them that whether they are in need of metals. We
found that the new customers do not get the up to mark and cost effective services from the reputed
Logistics companies or reputed freight forwarders. The main reason identified is the volume of their
export or import shipment is very less; as a result the giant players in freight forwarding are seems to
have less focus on such clients because they generally look for the / interested in the clients who are
having huge activities / more volume of export or import shipments. And hence, identifying this exact
need of new customers, I have started targeting these customers because of which these customers
would be getting the same excellent service level as ―A‖ category customers get from giant freight
forwarders and at the same time my company would also be getting a good business. If more number of
customers, more number of shipments. Like-wise, I had started focusing on these customers.

I met with many clients and by discussing the queries I got to know the requirement of people and
what kind of services is required. I was visiting 5-6 clients everyday and giving company presentation
about our services. The queries I collected from client about what kind of services they want, got
discussed in evening with GM (General Manager)-Minerals.

After solving the Queries, I tried to tap the client. As I knew the clients requirement
or services they want, accordingly I mailed the competitive Quotes to the clients and kept following up
with them till I convert them into business. I with my Project Guide was giving the services to existing
clients as well as focusing on new customer. To be a good and ―go getter‖ marketing person in
International Freight Forwarding / EXIM field, the person should be well versed / aware of the
international trade and activities carried out on day to day basis. While marketing / selling of products
of International Freight Forwarding / EXIM, any type / kind of queries or questions are expected from a
customer. Similarly there are also few customers who are unaware of the activities but they are in
urgent need to export or import their product. In such situation, the marketing & sales person must be in
a position to provide a proper and fare guidance to the customer. Below are the basic and important
knowledge path ways that not only a marketing & sales person but any person in International Trade /
Logistics should be aware of.

100
Freight forwarding-

A freight forwarder is a third party logistics provider. A third party logistics forwarder dispatches
shipments via asset-based carriers and books or otherwise arranges space for those shipments. Carrier
types include waterborne vessels, airplanes, trucks or railroads.

Freight forwarders typically arrange cargo movement to an international destination. Also referred to as
international freight forwarders, they have the expertise that allows them to prepare and process the
documentation and perform related activities pertaining to international shipments. Some of the typical
information reviewed by a freight forwarder is the commercial invoice, shipper's export declaration, bill
of lading and other documents required by the carrier or country of export, import, or transshipment.
Much of this information is now processed in a paperless environment.

Custom clearance-

It is procedural activities which are performed by government personnel. The shipment has to clear all
the norms of custom clearance. Custom clearance differs from country to country. Tariff classifications,
value declaration, and duty management can increase costs. Customs and security initiatives have
imposed new regulations on companies that make it more challenging than ever to trade internationally.

Transportation-

It is the movement of people and goods from one location to another. Transport is performed by various
modes, such as air, rail, road, water, cable, pipeline and space.

Infrastructure consists of the fixed installations necessary for transport, and may be roads, railways,
airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations,
warehouses and seaports.

Market Research

I did work for Business Development through Market Research. Firstly I collected data of
companies that are producing goods and doing deal in Import and Export.

101
For collection of data I prepare questionnaire of 3rd party, 4th party, warehouse and freight

Forwarding. So that I could know that whom are doing work in this segment.

Then I divide market in segments.

Like:- Type A, Type B, and Type C

Type A:- For big industries

Type B:- For medium industries

Type C:- For small industries

After this I search the market that were are situated this type of industries around Kolkata
City.

Primary Data

Industrial area under Kolkata

1. Durgapur 2. Howrah 3. Hoogly

These are the main industrial area where companies have their industrial plant.

In this area 40% companies are belonging to the SSI.

They basically produce through import some goods like: -

1. Agriculture
2. Manufacturing goods from imported chemicals.
3. Handicrafts
4. Handlooms
5. Gems & jewels
6. Leather & Footwear
7. Bio – technology
8. Engineering products
9. Information Technology
102
 10. Ready made products
55% companies have activity of import and export with mostly by sea.

Secondary Data

Kolkata Business & Industries – Categories

Agriculture (27)

Automotive(43)

Chemicals(13)

Computers(154)

Construction(38)

Electrical & Electronic(80)

Financial Services(41)

Industrial Goods(117)

Medical & Hospital(16)

Plant & Machinery (83)

Scientific Instruments (16)

Services (23)

Tools & Equipment (29)

Transportation & Logistics (12)

103
 DATA ANALYSIS AND REPRESENTATION

1)Queuing which industry you are coming under? TABLE 6.1

Industries No of companies

Agriculture 27

Automotive 43

Chemicals 13

Computers & It 154

Construction 38

Electronics & Electricals 80

Financial services 41

Industrial goods 117

Medical & hospital 16

Plant & Machinery 83

Scientific instrument 16

Services 23

Tools & equipment 29

Transportation & Logistics 12

104
No of companies

Figure.1

Agriculture
Automotive
23 12
16 13 Chemicals
29 27 43
Computers & It
83
Construction
154
16 Electricals & Electronics
Financial Services
117
38 Industrial goods
41 80 Pharmaceutical
Plant & Machinery
Scientific instrument
Services
Tools & Euipment
Transportation & Logistics

105
2)Are you doing Import Export activity? TABLE 6.2

Exim unit Non Exim unit

55% 45%

45%
Exim
Non Exim
55%

Figure 6.2

Pie chart showing that 55% company are dealing Export , Import activities and 45% are
not dealing .

106
3)Which type of cargo‘s deal? TABLE 6.3

Normal Perishable Hazardous

60% 12% 28%

28%

Normal
Perishable
Hazardous
60%

12%

Figure 6.3

Basicaly chemical industries produces hazardous goods and doing exim that are 28%.

Normal goods are 60%

Perishable goods are 12%

107
4)Using FCL or LCL cargo. ? Table

FCL LCL

60% 40%

40%

FCL
LCL

60%

Figure 6.4

60% companies are use FCL (Full Container Load ) these are the large scale companies and
seal the containner in company premises.

Remaining 40% are mainly SSI unit these are seal in port.

108
5)Over all requirments of Exports . Table

Current Future requirment Not requirment Own forwarder

requirment

55% 12% 15% 18%

c 60%
o
N m 50%
O p
a 40%
o n
f i 30% 55%
e
s 20% Series1

10%
12% 15%
0% 18%

Current
requirment Future
requirment Not
requirment Own
requirment

Figure 6.5

Current requirment of companies 55% Future requirment is 12% Not requirment is 15%
Own Forwarder 18% .

109
 FINDINGS

From the analysis of the data I collected during the study I present following
Findings:

 Being a Public Sector Enterprise the awareness level about MMTC among the existing
customers is high.
 Most customers trust MMTC because of its goodwill good services and govt. sector.
 Satisfaction level of existing customers is satisfactory, however for the future prospects
more changes and efforts have to be taken.
 Location of MMTC is good as targeted to the customer.The office is situated at the port
areas so it is very easy and convincible for the customers.
 There is almost more than 50% retention of customers visited the store before as per the
analysis.
 The competitors of MMTC are the private sector players.
 A good range of loyal customers deals with MMTC.
 MMTC basically trades in the following two basis of sales:
a) High Sea Sales
b) Ex-Godown Sales
In case of import of Non Ferrous metals MMTC preferred High Sea Sales over Ex-
godown sales in order to save sales tax and the lengthy custom clearance procedure.
 In times of economic slowdown the business of MMTC is not much effected because of
its strong grip in Bullion trading.
 Gold trading brings much revenue to MMTC though there is much fluctuations in gold
price throughout the year.
 The marketing team of NFM works the most in bringing new customers to the company
by visiting the office of the clients and making them aware of the goods that MMTC can
offer.
 MMTC shows enough responsibilities towards its employees by providing them with
different facilities. It gives a light and friendly working environment.

110
 LIMITATION OF PROJECT

There was some limitation during the project.

1. As the training is done at MMTC Kolkata so I cannot cleary understand the whole trading
structure of the company because as per the government guidelines mostly import is allowed
at Kolkata port.
2. Permission was restricted at the sea and air port of the company due to high security.
3. The selection of clients dealing with MMTC was random so it can be biased.
4. Being a Public Sector it has some protocols which are needed to be followed strictly.
5. Difficulty in lack of functioning proved as a hurdle in our research.

111
 SUGGESTION AND CONCLUSION

SUGGESTIONS

From the Internship I found some new techniques that are applicable for better
Improvements.

1. Company should establish back office for internal support.

2. Company should start some sales promotional activity for better attraction in customer‘s
memory.
3. Company should introduce its own jewellery business by its own brand name rather than
merging with other brand name. It can succeed because of its goodwill and being a govt sector.
4. Company should focus on the transportation services.
5. Company should focus on B & C type customers for better profit.
6. Company should increase marketing executive team.
7. To concentrate on advertisement.
8. Above can be done by expanding its expertise network, also by improving quality of services
at a competitive price.
9. Also impact should make effort to make aware to customers about new trends in 3pl /4pl also
telling them benefit of outsourcing.
10. .Last but not least impact should focus on slowly to big customers so that it can expand the size
of business and can create Brand name in market for itself.
11. The vertical decision making system need to be changed and the views of the lower level staff
must also taken into account.
12. The lengthy process or protocol of documentation of reporting to the Corporate Office need to
be reduced.

112
CONCLUSIONS
The progressive trade liberalisation implemented by government since 1991 has resulted in the almost
complete dismantling of all quantitative controls on import of merchandise. Trade, an important
dimension of global integration, has risen steadily as a proportion of GDP.During 2006-07, Indian
economy grew by 9.4% due to robust growth in manufacturing and services sector. India‘s merchandise
exports and imports (in US$, on customs basis) grew by 22.6 per cent and 24.5 per
cent respectively in 2006-07. In the first nine months of the current year 2008, exports reached US$111
billion, nearly 70 per cent of the year‘s export target. During April-September 2007, the major drivers
of export growth were petroleum products, engineering goods and gems and jewellery. Outlook for
MMTC is directly linked to economic environment. MMTC‘s long experience, large network and
infrastructure are likely to support its leading position in the near future.
The eastern India states of Jharkhand, Orissa, Chhattisgarh and West Bengal, where the iron mines are
located, have got the biggest amount of investment. On the western front, states like Gujrat and
Karnataka also have some big ticket investments and in the south, there are Tamil Nadu and Andhra
Pradesh. In both the southern states, the existing players, SISCOL (JSW) and Vizag Steel (RINL)
respectively are increasing capacities.

Jharkhand and Orissa have attracted the biggest investments and the best companies too. They have
multinationals like Arcelor Mittal, Posco and Sinosteel, and domestic giants like Steel Authority of
India Ltd. (SAIL), Tata Steel, Essar and JSW. Big names are queeing up at Chhattisgarh too. SAIL,
RINL and NMDC have joined hands for green field projects.
MMTC
West Bengal may not have any iron ore, but being located next to the iron ore belt, has attracted good
investment. JSW and Bhushan are setting up plants. SAIL is rebuilding the IISCO, the country‘s oldest
plant, into modern integrated unit. Massive investments are already being announced.

This apart, Corporate groups have already expressed their interest in entering the steel industry. White
goods major,
Videocon, belonging to Venugopal Dhoot, has signed a MOU with the West Bengal government for
setting up a 3-million ton plant steel and India‘s non-ferrous giant, Sterlite, after the successful
acquisition of Sesa Goa Ltd., now wants to set up a 5-million ton unit in Orissa‘s Keonjhar district.

Meanwhile, as investors were drawing up their plans and hunting for sites, an unwanted competition
grew between the states. It is not new but this one grew ugly. States having mineral resources were
against giving it to units located outside their boundaries. The myopic leadership of these states is busy
creating hurdles to stop the outflow of resources but hardly concentrated on creating a world class
infrastructure which would make them the natural choice of the entrepreneur. Maybe it is high time that
these states realise that cooperation, rather than unhealthy competition, is the need of the day.

113
 BIBLIOGRAPHY

Reference books

1. International Logistics

By Devid Pierre

2. International Trade and Export Management

By Francis Cherunilam
3. Export Import Procedures and Documentation
By Dr.khushpat S.Jain

Referred website

1) www.mmtclimited.com
2) www.indiamart.com
3) www.google.com
4) Wikipedia.com
5) Yahoo.com

114
115