CHAPTER - 1

1.1. INTRODUCTION OF THE STUDY

At the outset it must be mentioned that improved system of documentation for announced
by government of India on 31- march 1991 is fine and should be adopted by the exporters as for
as possible. Documentation in export trade plays very significant role from the very beginning
when an exporter gets an order from a foreign buyer to the final stage when the exporter seeks
cash assistance and other incentives offered by the government. Documentation facilitates the
smooth flow of physical goods and payment thereof across national frontiers. At every step
during exporting, one or the other document is required. The exporter cannot more any further
without documents. A distinguishing feature of international trade is the complex paperwork.
Therefore many small exporters are frightened by the extent and complexity of documentation.
Export documentation plays a vital role in international marketing as it facilitates the smooth
flow of goods and payments thereof across national frontiers. A number of documents
accompany every shipment. These documents must be properly and correctly filled. Export
documentation is however, complex as the number of documents to be filled-in is large, so also
is the number of concerned authorities to whom the relevant documents are to be submitted.
Incorrect documents a may lead to non-delivery of goods to the importer you may get the correct
documents after some time but in the meantime storage charge may have to be paid. Advisable to
take the help of shipping and forwarding agents who will obtain and fill out the documents
correctly as well as arrange for transportation. But every exporter should have adequate
knowledge about export documents and procedures.

India has a mission to capture 2% of the global share of trade by 2010, up from the
present level of less than 1%. Export is one of the lucrative business activities in India. The
government also provides various promotional schemes to the exporters for earning valuable
foreign exchange for the country and for meeting their requirements for importing modern
technology and essential inputs. Besides, the income from export business is also exempted to
the specified extent under the Income Tax Act, 1961, Refund of Central Excise and Custom Duty
on export is also made under the Duty Drawback Scheme of the Government. There is no Sales
Tax on products meant for exports.

Exports can be of goods which can be moved physically from one country to another or
can be of service rendered. Detailed list of services are given in the Foreign Trade Policy
covering more than 160 items e.g. Insurance, Hospital, Postal and Telecommunication etc.

TWO CLASSES OF EXPORTS:

Physical Exports: If the goods physically go out of the country or services are rendered
outside the country then it is called as physical export.

Deemed Exports: Where the goods do not go out of the country physically they can be
termed as deemed exports. This will be subject to certain conditions as prescribed by the DGFT.
Under Deemed Exports, the goods may be supplied to the manufacturer exporter who ultimately
export a finished product of which this supply forms a part and ultimately go out of the country.
E.g. Supply of fabrics to the garment exporter who exports the garments made out of the said
fabric.

The government may announce from time to time the types of supplies that may be
considered as deemed export. The Foreign Trade Policy gives the list of supplies considered
under the Deemed Export Category. The policies and procedures are different for Physical
Exports and Deemed Exports as also the benefits available. In a nutshell, Deemed Exports do not
enjoy all the benefits that are available under Physical Export. The Foreign Trade defines exports
as taking out of India any goods by land, sea, air. Although the act does not term them as
“Physical Exports”, we have to put phrase to distinguish it from “Deemed Exports” which is
sales in India but considered as exports for limited purpose.
TYPES OF EXPORTERS:

Exporters can be basically classified into two groups

 Manufacturer Exporter: As the exporter has the facility to manufacturer the product he
intends to export and hence he exports the products manufactured by him.
 Merchant Exporter: An exporter who does not have the facility to manufacture an item.
But, he procures the same from other manufacturers or from the market and exports the
same.

An exporter can be both a manufacturer exporter as well as a merchant exporter, he can

export product manufactured by him or he can export items bought from the market.

Once it is decided to export, it is mandatory on your part to follow certain procedures, rules
and regulations as prescribed by various regulatory authorities such as DGFT, RBI, and
Customs. These procedures, rules and regulations are laid down in the Exim Policy 2004-09,
Exchange Control Manual, and Customs Act etc. Accordingly Export documents are required to
be prepared keeping in view of the requirement of the foreign buyers and our regulatory
authorities.
FOOD INDUSTRY

Food industry is a complex, global collective of diverse business that supply

much of the food and food energy consumed by the world population only subsistence farmer’s
those who survive on what they grow can be considered outside of the scope of the modern food
industry.

Regulation: local, regional, national and international rules regulation for food
production and sales includes food quality, food safety, marketing, advertising and industry
lobbying activities

Food production includes the Method and techniques for transform raw
ingredients into food for human consumption food processing take clean, has vested or slough
level and butchered components and uses them to produce marketable food products. There are
several different says in which food can be produced.

The Indian food industry is poised for huge growth, increasing etc contribution
in world food trade every year. In India food has come a high profit industry by reason of the
scope it offer’s for value addition particularly with the food processing industry getting
recognized as a high-priority area in this liberalization era. The role of Indian govt is
instrumental in the growth and development of the industry. The govt through the ministry of
food processing industries is making all efforts to encourage investment in the sector

MAJOR CHALLENGES FOR THE INDIAN FOOD INDUSRTY

 Consumer education that processed food can be more nutritious.

 Backward- forward integration from farm to consumer.
 Development of marketing channels.
 Development of linkages between industry, government and institutions.
 Taxation lines with other nations.
 Unprocessed foods are susceptible to spoilage by biochemical process microbial attack
and infestation. The right post harvest practices such as food processing techniques, proper
packaging, and transportation and strange can play a significant role in spoilage and extending
shelf life.
Presently, the organization addressing the educational and research and
development requirements are too few, and there is pressing need for supplementing their
efforts. According to the India food and drink report 2008 by research analysis the food that, by
2014,India’s processed food output likely to grow by 44.2% to touch US $ 90.1billion.

Figure 1.1.2 Indian Food Export Partners, 2015

India: Food Export Partners, 2015

23.9
25

20 UAE
PERCENTAGE (%)

12.8 11.78 MALASIYA

15
UK
10
4.23 4.6 AMERICA
5 EUROPE

0
COUNTRY

India’s Trade Profile

In the last decade, trade with the rest of the world has been buoyant, registering robust
growth. While value of trade has increased considerably, the composition of trade basket remains
little changed and direction of trade has registered some shifts between FY03 and FY13.
Exports’ profile
Exports growth Indian exports have grown at a robust annual average rate of 21.3%
(CAGR) between FY03 and FY13; the value of exports rising from USD 52.7 billion in FY03 to
300.2 billion in FY13 (Exhibit 1).
The export value of FY13, comes marginally lower than the peak of USD 305.7 billion recorded
in FY12, consequent on global demand drying up to certain extent in the face of economic
uncertainty and moderation in global growth.
 1.2. NEED OF THE STUDY

International trade in services, which makes up a major share of the invisible account of
the Balance of Payments, has been growing fast. It increased from $800 billion in 1990 to about
$1435 billion in 2000 and to about $1.8 trillion in 2003. During the 1980‘s trade in services grew
faster than that of the goods increasing its share in the total global trade from 17 per cent in 1980
to 20 per cent in 1990. The share of services in the total global trade remained more or less the
same (about one-fifth) since then. In 2003, while the merchandise trade grew by 4 per cent, the
services trade increased by 12 per cent. The combined trade in goods ($7.3 trillion) and services
($2.8 trillion) crossed $19.6 trillion in 2014.

This research is an insight in to the mind of the business, with the help of which the
organizations will become aware of their pitfalls and in turn can also make improvements in
foreign trade regarding the level of satisfaction of the business towards their offerings in the
foreign trade policies & practices.

This basic need of this project is to know the export procedure and documentation with
regard to SONA exporters.
 1.3. OBJECTIVE OF THE STUDY

 To identify the different procedure relating to export of goods.

 To know the various documents used for shipment.
 To explicitly state the steps in documentation.
 To identify the various problems involved in filling documents.
 To know different type of container used in shipment.

 To know what are the documents required before and after sailing the cargo.
 1.4. SCOPE OF THE STUDY

 Size and location of different markets, not only in India but also overseas.

 The prospects for growth or construction for the current markets being served.

 New mantras of emerging segments.

 Marketing and manufacturing capabilities of competitors.

 Most suitable entry timing.

 The current and prospective competitive position.

 Chances of improvement of current channels.

 1.5. LIMITATIONS OF THE STUDY

 Not an exact science

 Limitation of time

 Erroneous findings

 Not exact tool for forecasting

 In experience research staff

 Narrow conception of marketing research

 CHAPTER – II

COMPANY PROFILE

Name of the company : SONA’S EXPORTERS

Plant : Changaramkulam , chiyyanur
Eranamkulam –Kozhikode NH
Products : Food products and snacks

Trade Name : SONA’S

Customer : individuals outside India

ABOUT THE COMPANY

SONA EXPORTERS (an ISO-22000 : 2005 certified company) has been established
in Kerala since 1998.specialized in manufacturing and exporting of a variety of Indian snacks.
Today the brand name “SONA’S” has been gained house hold popularity in
Kerala and Middle East market and they proud to continue to be market leader Indian snacks
segment
SONA’S is having an area of 1000sq.ft which is located at Changaramkulam, Chiyanoor,
Eranamkulam,and Kozhikode NH. They have skilled staff and transport facility.

SONA’S is an ISO-22000:2005 certified company stringent quality control standard is

the key ingredient of the product. Quality control starts from the selection of raw materials to
manufacturing finished products. Only the finest quality of ingredients is used. A part from
supplying to home base Kerala snacks, they also export to nations of Middle East UK and other
countries.
QUALITY CERTIFICATIONS

In the area of consumers dominance of “Quality is getting a lot of attention”

ISO
ISO (International Organization for Standardization) is the world largest
developers of standard. Although ISO’s principle activity is the development of technical
standards. ISO standards also have important economic and social repercussions. ISO standard
make a positive difference not just to engineers and manufactures for which they solve in
production, distribution but to society also.
The International standards, which ISO develop are very useful to industrial and
business organizations of all types, to government and other regulatory bodies, to trade officials,
to conforming assessment professionals, top suppliers and customers of product and services is
both public and private sectors and ultimately to prepare in general in their role consumers and
users.
QUALITY CERTIFICATION
ISO 22000:2005 Food Safety System Managements
Fssai Food Safety Standard Authority of India
Maintenance

Outsource weekly maintenance

Machinery maintenance
MAINTENANCE CYCLE

Maintenance cycle weekly maintenance machinery maintenance

Post controlling

Out source
 .ORGANISATIONALCHART

PROPREITOR

General Manager

PRODUCTION FINANCE EXPORT HR PURCHASE QUALITY

MANAGER MANAGER MANAGER MANAGER MANAGER CONTROL
MANAGER

ASST.HR STORE ASSISTANT

SUPERVISORS ASSISTANCE ASSISTANTS MANAGER KEEPER MANAGER
k

employees
WORKERS

MISSION

 The continued pursuit of excellence in relation to the quality of its products, reliability of
supply and building of close links with its vast clientele.

 To strive hard to uphold its reputation as leader in F.M.C.G.

  To abide by rigorous ethical and legal standards in our strategies and in our day-to-day
business activities.

 To diversify into other segments.

 To generate a climate of loyalty and mutual respect among our employees.

 To sustain long standing relationship crucial for onward march with focus on accelerated
growth and development.

VISION

 To be a premium Company with a clear focus in future.

 To develop market opportunities by creating new and innovative products.

 To become the market leader in Agribusiness and provide the world markets with healthy
food.

 To employ path breaking technology in all our ventures.

 Aspire for, and achieve, leadership in existing areas of operation. Simultaneously, raise
resources and capabilities to move into new areas
SONA EXPORTERS Overseas Buyers share

Their high profile customers are not only happy but also satisfied which has earned them

recognition and unflattering loyalty from prominent buyers overseas.

Overseas Buyers of the firm

12%

8% UAE
UK
11%
CANADA

69% OTHER

Figure 2.1
 CHAPTER- III

REVIEW OF LITERATURE

Review of literature shows the previous studies carried out by researcher in this field in
order to gain insight into extent of research. The research problem can be more understood and
made specific referring to theories, reports, records and other information made in similar
studies. This will provide the researcher with the knowledge on what lines the study should
processed and serve to narrow the problem.

THOMAS A COOK(1994) says, “one of the major pitfalls in an international sale is the quality
of the documentation supporting the transaction. A mistake in spelling, execution, language or
number of copies will cause substantional delays in obtaining clearance and require additional
expenditure to complete the process”

Many potential exporters shy away from exporting due to the fear of the potential headaches
caused by export documentation. In reality, while the process is completed and has a steep
learning curve which the right approach and support from several resources the process can be
simplified and the inherent obstacles lifted.

Most of the necessary documents required for an export transaction are the invoice. Packing list,
export documentation and bill of lading. Other documents that may be required include: payment
instruments (letter of credit, sight draft), health/sanitary certificates, certificate of origin,
export/import licenses. SGS inspection certificates, carnets (customs passes), certificate of
insurance and required import documents.

In addition to knowing the specific documents the exporter will need to know language, the
number of copies required signatories, format, consularization and the shipping instructions”

LAUREL DELANCY (2006) describes AES direct, a free online process for filling shipper’s
export declarations. AES stands for Automated Export System. Here are some highlights:
 1. Ensure export compliance – It returns a confirmation number to verify that you
successfully filed your export documentation.
2. Corrects errors – Get immediate feedback when data is omitted or incorrect. And correct
errors at any time.
3. Eliminates paper review – Eliminate time delays of holding paper.
4. Stays up-to-date with trade agreements – AES conforms to NAFTA and GATT, making
it easier to do business in multiple countries.
5. Evaluates and measures potential markets – provide accurate and timely export statistics.

KOUCH AND JOHN (2007) says, the subsequent need is to reduce the risk of loss to the small
business exporter if and mitigate these risks of loss, which result from two sets of risk of loss
event perils:

1. Foreign “commercial” Risk of Loss Events

This event occurs in the foreign client’s inability or failure to pay invoices due to
Bankruptcy/insolvency, slow-Pay Behaviour ( Protected Default) , Devaluation of foreign
currency

2. Foreign “Political” Risk of Loss Events

This event occurs when a foreign county’s regulations and statutes allow confiscation of goods,
Suspension of import licenses, War, Civil Strife, Rebellion, Currency Inconvertibility

Sales made under irrevocable letter of credit (LCs) are a traditional tool used to mitigate risk of
loss. An LC places U.S exporter’s bank and their foreign customer’s bank inside the trade
transaction, reducing the risk of loss of both parties for failure of either one to live up to the
export sales/purchase contract. The exporter’s commercial bank will assist with LCs if the bank
provides international banking services or if the bank uses another correspondent bank that
maintains an international banking department. There are drawbacks to LCs. Not all foreign
buyers can pay under an LC because of the high fees, Often 2-3% of shipment value. An LC
requires a credit relationship between the foreign importer and its bank, which might precious
working capital from the foreign buyer’s other local credit needs.
CORINNECAPHELL(2009)says, ‘True Cost of Exporting’ is the cost of export documentation,
a necessary expense that can be eased by knowing what’s required. Here are some ways to
tighten up on export documentation.

Organizing the right documentation and paperwork makes the export process similar, smoother
and cheaper. When it comes to a paper trail in export, it doesn’t matter if you are shipping large
volumes or just sending a few samples the goods have to get there and the exporter has to get
paid. Not having right paperwork can result in an importer not being able to accept the goods and
the exporter not being paid, which is costly in terms of time and money.

Export documentation covers the spectrum of: shipping documents, commercial documents,
inspections, permits and consular stamps. Each preparation time, courier costs and fees with its
associated risks of mistakes adding to delays and considerable costs.

Documentation must be precise slight discrepancies or omissions may prevent merchandise from
being exported, result in non-payment, or even in the seizure of the exporter’s goods by customs.
Most documentation is routine for freight forwards and customs brokers, but the exporter is
ultimately responsible for the accuracy of its documents. The number and kind of documents the
exporter must deal with varies depending on the destinations of the shipment. Because each
country has different import regulations, the exporter must be careful to provide all proper
documentation. It is important to do your with customs, your to be fully aware of the procedures
per product and per country of export.

It would be a waste of time and money to go through researching the specific needs of
your export and not having the internal knowledge to implement a process. Training yourself and
your staff in the intricacies of export including documentation, logistics, finance as well as
cultural issues can make the difference between being successful for years to come or failing
after the first shipment.
International trade carries high levels of risk. Knowing how to avoid the pitfalls is the key to
success.
POSNER AND MARTIN (2000) in his study found that it is surprising that many traders do not
use Inco terms to help them draft their export documentation. The International Chamber of
Commerce's (which has an international membership from over 130 countries) Guide to Inco
terms 2000 is a superb helpline to the companion Inco terms 2000, which came into force on 1
January 2000. A definition of EXW EX Works says there is not only a color chart showing the
seller's primary duty but it also describes the documents required, the optional documents that
may be required and the buyer's primary duty.
 CHAPTER - IV

RESEARCH METHODOLOGY

MEANING:
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.

DEFINITION:

According to CLIFFORD WOODY Research comprises defining and redefining

problems, formulating hypothesis or suggested solutions, collecting, organizing and evaluating
data; making deductions and reaching conclusions; and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis.

RESEARCH DESIGN

Our primary objective of doing this project is to get the first hand knowledge of
functioning of an export unit. Since we are not comparing two different entities on the basis of
their financial results, rather we are learning the export procedure. Hence exploratory research
design is the need of the hour.
Further there are few reasons which made me to use Exploratory Qualitative research:
 It is not always desirable or possible to use fully structured or formal methods to obtain
information from respondents.
 People may be unable & unwilling to answer certain questions or unable to give truthful
answers.
 People may be unable to provide accurate answer to question that tap their sub
consciousness.

COLLECTION OF DATA:

There are several ways of collecting the appropriate data which differ considerably in context of
money, cost, time and other sources at the disposable of the researcher. There are two types of
data:
  Primary data
 Secondary data

PRIMARY DATA

Primary data are those which are collected a fresh and for the first time and thus happen
to be original in character.
 Observation
 Direct communication with respondent
 Personal interview

SECONDARY DATA

Secondary data are those which have already been collected by someone else and have
already been passed through statistical process.

 Invoice
 Sales report

RESEARCH TOOLS USED

 In Primary data, Qualitative research through In-Depth Interviews has been adopted. For
interviews non–structured open-ended questions were used.
 In Secondary data, both internal & external research was done. For internal research Ready
to use documents available with the organization were used. For external research Internet
website & published books were consulted.
 Using the sales turnover of past five years, simple percentage are calculated for basic
styles and for the company’s buyers.
 Using the statistical technique of least square method future trend for this concern has been
forecasted
 CHAPTER - V

ANALYSIS AND INTERPRETETION

Pre-Shipment Procedure

 On receiving the requisition & purchase order from merchant (See Annexure 3 and 4),
documentation department issues an invoice. Two invoices are prepared i.e. commercial
invoice & custom invoice. Commercial invoice is prepared for the buyer & Custom
invoice is prepared for the Custom authorities of both the countries.
 Packing list is prepared which details the goods being shipped.
 GSP certificate is prepared if the consignment is exported to EU or countries mentioned in
the GSP list.
 Buying house inspects the goods & issues an inspection certificate.
 Certificate of origin is also issued and attached, if required.
 Following documents are given to Customs for their reference:
 Custom Invoice
 Packing list
 IEC certificate
 Purchase Order or L/C, if required.
 Custom annexure
 On receipt of above documents, customs will issue clearance certificate.
 After custom clearance a set of documents with custom clearance receipt are sent along
with the consignment to the forwarder. Forwarder books the shipment & as per the size of
the cartons calculates CBM & decides which container to be used.

 Following documents are sent to buying house for their reference, as per buyer’s
requirement:
 Invoice
 Packing List
 GSP (if exports to Europe)
 Certificate of Origin (if required)
 Wearing Apparel sheet
 A copy of FCR/ Airway Bill/ Bill of Lading
 Buying house then intimates the buyer about the shipment & gives the details
regarding it. Buying house will send a set of these documents to the buyer.
 Buyer collects the consignment from the destination port by showing the following
documents:
 Invoice
 Packing List
 Bill of lading/ FCR/ Airway Bill

 On shipment of goods, exporter will send the documents to the importer’s bank.
Post-Shipment Procedure

 A foreign buyer will make the payment in two ways:

 TT ( telegraphic transfer) i.e. Wire Transfer – (Advance payment, as per the clause –
50% advance & remaining 50% on shipment)
 Letter of Credit
 If the payment terms are a confirmed L/C then the payment will be made by the foreign
bank on receiving the following documents:
 Invoice
 Packing list
 B/L
 Any other required by the buyer or the country of import.
 The payment terms can be:
 At Sight
 Within 15 days from Bill of Lading or Airway Bill date.
 Within 30 days from Bill of Lading or Airway Bill date.
 Within 60 days from Bill of Lading or Airway Bill date.
 Within 90 days from Bill of Lading or Airway Bill date.
 After shipment, exporter sends the documents to the buyer’s bank for payment. As the
buyer’s bank receive the documents it will confirm with the buyer for release of payment.
On confirmation, it will make the payment in the foreign currency. The transaction will be
Bank to Bank.
 The domestic branch will credit the exporter’s account, as against the respective purchase
order or invoice, in Indian rupees by converting the foreign currency as per the current
bank rate.
 If the payment is through wire transfer, the payment will be made as per the terms agreed
by the exporter (Advance payment, as per the clause – 50% advance & remaining 50% on
shipment).
Export Documents

An export trade transaction distinguishes itself from a domestic trade transaction in more
than one way. One of the most significant variations between the two arises on account of the
much more intensive documentation work. The documents mentioned in the pre & post shipment
procedure are discussed below:

1. Invoice: It is prepared by an exporter & sent to the importer for necessary acceptance. When
the buyer is ready to purchase the goods, he will request for an invoice. Invoice is of 3 types:
a. Commercial invoice: It is a document issued by the seller of goods to the buyer raising
his claim for the value of goods described therein, it indicates description of goods,
quantity, value agreed per unit & total value to be paid. Normally, the invoice is prepared
first, & several other documents are then prepared by deriving information from the
invoice.
(See Annexure 5)
b. Consular invoice: It is certification by a consul or Government official covering an
international shipment of goods. It ensures that exporter’s trade papers are in order & the
goods being shipped do not violate any law or trade restrictions.
c. Customs invoice: It is an invoice made on specified format for the Custom officials to
determine the value etc. as prescribed by the authorities of the importing country.

2. Packing list: It shows the details of goods contained in each parcel / shipment. Considerably
more detailed and informative than a standard domestic packing list, it itemizes the material
in each individual package and indicates the type of package, such as a box, crate, drum or
carton. Both commercial stationers and freight forwarders carry packing list forms. (See
Annexure 6)

3. Certificate of Inspection: – It is a type of document describing the condition of goods and

confirming that they have been inspected. It is required by some purchasers and countries in
order to attest to the specifications of the goods shipped. This is usually performed by a third
party and often obtained from independent testing organizations. (See Annexure 7)
4. Certificate of Origin: Importers in several countries require a certificate of origin without
which clearance to import is refused. The certificate of origin states that the goods exported
are originally manufactured in the country whose name is mentioned in the certificate.
Certificate of origin is required when: - (See Annexure 8)
 The goods produced in a particular country are subject to’ preferential tariff rates in the
foreign market at the time importation.
 The goods produced in a particular country are banned for import in the foreign market.

5. GSP: It is Generalized System of Preference. It certifies that the goods being exported have
originated/ been manufactured in a particular country. It is mainly useful for taking
advantage of preferential duty concession, if available. It is applicable in countries forming
European Union. It has total of 12 columns to be declared by the exporter. They are:
1. Exporter’s name, address and country
2. Importer’s name, address and country
3. Means of transport and route
4. For official use(to be filled by the officials)
5. Item no.
6. Marks and no. packages
7. No. and kind of packages and description of goods
8. Origin criterion
9.Gross weight or quantity
10. No. and date of invoice
11. For certification of competent authority- in this column the competent authority will stamp
and sign for the certification of the form.
12. Declaration by the exporter – in this column the exporter declares the above details
mentioned are correct and country where the goods produced for export and name of the
importing country and then stamped and signed by the authorized representative of exporter with
place an date.
This form A GSP is sent between the countries, which have bilateral agreements. This
certified original form will be used by importing country to import the consignment with
deduction in import duty.
6. IEC Certificate: It is an Import-Export Code Certificate issued by DGFT, Ministry of
Commerce, and Government of India. It is a 10 digit code number. No exports or imports
will be affected without the IEC code. It is mandatory for every exporter. (See Annexure 1)

7. Wearing Apparel Sheet: It is like a check list which gives the detail regarding the content &
design of the product packed. (See Annexure 4)

8. Bill of Lading: The bill of lading is a document issued by the shipping company or its agent
acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods
in the like order and condition as received, to the consignee or his order, provided the freight
and other charges as specified in the bill have been duly paid. It is also a document of title to
the goods and as such, is freely transferable by endorsement and delivery. (See Annexure 9)
A bill of lading normally contains the following details:

 The name of the company

 The name and address of the shipper / exporter
 The name and address of the importer / agent
 The name of the ship
 Voyage number and date
 The name of the ports of shipment and discharge
 Quality, quantity, marks and other description
 The number of packages
 Whether freight paid or payable
 The number of originals issued
 The date of loading of goods on the ship
 The signature of the issuing authority.

9. Airway Bill: An airway bill, also called an air consignment note, is a receipt issued by an
airline for the carriage of goods. As each shipping company has its own bill of lading, so
 each airline has its own airway bill. Airway Bill or Air Consignment Note is not treated as a
document of title and is not issued in negotiable form.

10. Mate's Receipt: Mate's receipt is a receipt issued by the Commanding Officer of the ship
when the cargo is loaded on the ship. The mate's receipt is a prima facie evidence that goods
are loaded in the vessel. The mate's receipt is first handed over to the Port Trust Authorities.
After making payment of all port dues, the exporter or his agent collects the mate's receipt
from the Port Trust Authorities. The mate's receipt is freely transferable. It must be handed
over to the shipping company in order to get the bill of lading. Bill of lading is prepared on
the basis of the mate's receipt. It contains information relating to ;

 Description of packages.
 Condition of goods / packages loaded on the vessel.
 Name of the vessel
 Date of loading
 Port of delivery
 Name of the address of the shipper exporter
 Name and address of the importer / consignee.
 Other required details.

Importance of Mate’s receipt:-

The main importance of mate’s receipt is that is serves as an acknowledgement of

the goods loaded on the ship. After loading, the goods remain in the custody of the captain /
mate of the ship.
1. It enables the agent of the exporter to pay port trust dues. After making payment of port
dues, the agent collects the mate’s receipt and submits it to the customs preventive
officer.
 2. It enables the shipping agent of the exporter to present the mate’s receipt to the customs
preventive officer to record the certificate of shipment of all copies of shipping bill and
other documents.
3. The export agent can obtain bill of lading on the basis of mate’s receipt from the shipping
company.

11. Shipping Bill: Shipping bill is the main customs document, required by the customs
authorities for granting permission for the shipment of goods. The cargo is moved inside the
dock area only after the shipping bill is duly stamped, i.e. certified by the customs. Shipping
bill is normally prepared in five copies:
 Customs copy
 Drawback copy
 Export promotion copy
 Port trust copy
 Exporter's copy

Types of Shipping Bill

1. Manual Shipping Bill
2. Computer generate EDI shipping bill

Manual Shipping Bill:

It will be prepared in quadruplicate and two additional copies in the prescribed format. It
contains exporter’s name and address, Invoice no. and date, shipping bill no., Number and
description of packages, Quantity, weight and value of goods, Name of vessel in which goods are
to be shipped, Country of destination, total amount of duty, port at which goods to be discharged,
and any other details if applicable. It will be filled by the customs agent and signed by both the
exporter and customs agent. This document used for the customs clearance of the exporting
goods. After customs clearance the shipping bill will be numbered with date and duly stamped
and signed with “Let export” permission by the customs official. After this only customs agents
will allow the goods to clear through sea or air.
Computer Generated EDI
 It also contains the same details as that of manual shipping bill prepared by customs,
which is having an on line EDI (Electronic Data Interchange) system. This will be signed by the
CHA (Customs House Agent) and customs official with “Let export” permission.
When goods are manufactured in India on which drawback duty is allowed, the shipping
bill used is called the drawback shipping bill.

12. Letter of Credit: This method of payment has become the most popular form in recent
times; it is more secured as company to other methods of payment (other than advance
payment). A letter of credit can be defined as “an undertaking by importer’s bank stating that
payment will be made to the exporter if the required documents are presented to the bank
within the variety of the L/C”.

Contents of a Letter Of Credit

A letter of credit is an important instrument in realizing the payment against exports.

So, needless to mention that the letter of credit when established by the importer must
contain all necessary details which should take care of the interest of Importer as well as
Exporter. Let us see shat a letter of credit should contain in the interest of the exporter. This
is only an illustrative list.

 Name and address of the bank establishing the letter of credit

 Letter of credit number and date
 The letter of credit is irrevocable
 Date of expiry and place of expiry
 Value of the credit
 Product details to be shipped
 Port of loading and discharge
 Mode of transport
 Final date of shipment
 Details of goods to be exported like description of the product, quantity, unit rate, terms
of shipment like CIF, FOB etc.
 Type of packing
 Documents to be submitted to the bank upon shipment
 Tolerance level for both quantity and value
 If L/C is restricted for negotiation
 Reimbursement clause
Steps in an Import Transaction with Letter of Credit

The importer includes a purchase contract for the buying of certain goods.

The importer requests this bank to open a LC in favor of his supplier.

The importer’s bank opens the LC as per the application.

The opening bank will forward the original LC to the advising bank.

The advising bank, after satisfying itself about the authenticity of the credit, forwards the same to the exporter.

The exporter scrutinizes the LC to ensure that it confirms to the terms of contract.

In case any terms are not as agreed, the importer will be asked to make the required amendments to the LC.

In case the LC is as required, the exporter proceeds to make arrangements for the goods.

The exporter will effect the shipment of goods.

After the shipment is effected, the exporter will prepare export documents, including Bills of Exchange.

The exporter’s bank (negotiation bank) verifies all the documents with the LC.

If the documents are in the conformity with the terms of LC and all other conditions are satisfied, the bank will
negotiates the bill.

The exporter receives the payment in his bank account.

The importer’s bank checks the documents and informs the importer. The importer then accepts/pays the bill
(This would depend on the terms, Delivery against Acceptance or Delivery against Payment). On acceptance/
payment, the importer gets the shipping documents covering the goods purchased by him.

The LC issuing bank reimburses the negotiating bank, the amount, if the documents are found in order.
Terms of Shipments – Inco terms

The INCOTERMS (International Commercial Terms) is a universally recognized set of definition

of international trade terms, such as FOB, CFR & CIF, developed by the International Chamber of

Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between

buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a

lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial

terms like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight,

cargo insurance and other costs and risks.

The purpose of Inco terms is to provide a set of international rules for the interpretation of the

most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of

such terms in different countries can be avoided or at least reduced to a considerable degree. The scope of

Inco terms is limited to matters relating to the rights and obligations of the parties to the contract of sale

with respect to the delivery of goods. Inco terms deal with the number of identified obligations imposed

on the parties and the distribution of risk between the parties.

More Clarification on Inco terms

EXW (At the named place)

Ex Works: Ex means from. Works means factory, mill or warehouse, which are the seller’s premises.

EXW applies to goods available only at the seller’s premises. Buyer is responsible for loading the goods

on truck or container at the seller’s premises and for the subsequent costs and risks. In practice, it is not

uncommon that the seller loads the goods on truck or container at the seller’s premises without charging

loading fee. The term EXW is commonly used between the manufacturer (seller) and export-trader
(buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may

use the term Ex Factory, which means the same as Ex Works.

FCA (At the named point of departure)

Free Carrier: The delivery of goods on truck, rail car or container at the specified point (depot) of

departure, which is usually the sellers premises, or a named railroad station or a named cargo terminal or

into the custody of the carrier, at seller’s expense. The point (depot) at origin may or may not be a

customs clearance centre. Buyer is responsible for the main carriage/freight, cargo insurance and other

costs and risks.

In the air shipment, technically speaking, goods placed in the custody of an air carrier are considered as

delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air

shipment.

FAS (At the named port of origin)

Free Alongside Ship: Goods are placed in the dock shed or at the side of the ship, on the dock or lighter,

within reach of its loading equipment so that they can be loaded aboard the ship, at seller’s expense.

Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks

In the export quotation, indicate the port of origin(loading)after the acronym FAS, for example FAS New

York and FAS Bremen. The FAS term is popular in the break-bulk shipments and with the importing

countries using their own vessels.

FOB (At the named port of origin)

Free on Board: The delivery of goods on the board the vessel at the named port of origin (Loading) at

seller’s expense. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and
risks. In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example

FOB Vancouver and FOB Shanghai.

Under the rules of the INCOTERMS 1990, the term FOB is used for ocean freight only.

However, in practice, many importers and exporters still use the term FOB in the air freight. In North

America, the term FOB has other applications. Many buyers and sellers in Canada and the USA dealing

on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and

FOB destination.

FOB Origin means the buyer is responsible for the freight and other costs and risks. FOB

Destination means the seller is responsible for the freight and other costs and risks until the goods are

delivered to the buyer’s premises which may include the import custom clearance and payment of import

customs duties and taxes at the buyer’s country, depending on the agreement between the buyer and

seller. In international trade, avoid using the shipping terms FOB Origin and FOB Destination, which are

not part of the INCOTERMS (International Commercial Terms).

CFR (At the named port of destination)

Cost and Freight: The delivery of goods to the named port of destination (discharge) at the seller’s

expenses. Buyer is responsible for the cargo insurance and other costs and risks. The term CFR was

formerly written as C&F. Many importers and exporters worldwide still use the term C&F.
CIF (At named port of destination)

Cost, Insurance and Freight: The cargo insurance and delivery of goods to the named port of

destination (discharge) at the seller’s expense. Buyer is responsible for the import customs clearance and

other costs and risks.

In the export quotation, indicate the port of destination (discharge) after the acronym CIF, for example

CIF Pusan and CIF Singapore. Under the rules of the INCOTERMS 1990, the term CIFI is used for ocean

freight only. However, in practice, many importers and exporters still use the term CIF in the air freight.

CPT (At the named place of destination)

Carriage Paid To: The delivery of goods to the named port of destination (discharge) at the seller’s

expenses. Buyer assumes the cargo insurance, import custom clearance, payment of custom duties and

taxes, and other costs and risks. In the export quotation, indicate the port of destination (discharge) after

the acronym CPT, for example CPT Los Angeles and CPT Osaka.

CIP (At the named place of destination)

Carriage and Insurance Paid To: The delivery of goods and the cargo insurance to the named place of

destination (discharge) at seller’s expense. Buyer assumes the importer customs clearance, payment of

customs duties and taxes, and other costs and risks.

DAF (At the names point at frontier)

Delivered at Frontier: The delivery of goods at the specified point at the frontier on seller’s expense.

Buyer is responsible for the import custom clearance, payment of custom duties and taxes, and other costs

and risks.
DES (At named port of destination)

Delivered Ex Ship: The delivery of goods on board the vessel at the named port of destination

(discharge) at seller’s expense. Buyer assumes the unloading free, import customs clearance, payment of

customs duties and taxes, cargo insurance, and other costs and risks.

DEQ (At the named port of destination)

Delivered Ex Quay: The delivery of goods to the Quay (the port) at the destination on the buyer’s

expense. Seller is responsible for the importer customs clearance, payment of customs duties and taxes, at

the buyers end. Buyer assumes the cargo insurance and other costs and risks.

DDU (At the named point of destination)

Delivered Duty Unpaid: The delivery of goods and the cargo insurance to the final point of destination,

which are often the project site or buyers premises at seller’s expense. Buyer assumes the import customs

clearance, payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own

risks.

DDP (At the named point of destination)

Delivered Duty Paid: The seller is responsible for most of the expenses, which include the cargo

insurance, import custom clearance, and payment of custom duties, and taxes at the buyers end, and the

delivery of goods to the final point of destination, which is often the project site or buyers premise. The

seller may opt not to insure the goods at his/her own risk.
“E”-term, “F”-term, “C”-term & “D”-term: Inco terms 2000, like its immediate predecessor, groups

the term in four categories denoted by the first letter in the three-letter abbreviation.

 Under the “E”-TERM (EXW), the seller only makes the goods available to the buyer at the

seller’s own premises. It is the only one of that category.

 Under the “F”-TERM (FCA, FAS, &FOB), the seller is called upon to deliver the goods to a

carrier appointed by the buyer.

 Under the “C”-TERM (CFR, CIF, CPT, & CIP), the seller has to contract for carriage, but

without assuming the risk of loss or damage to the goods or additional cost due to events

occurring after shipment or discharge.

 Under the “D”-TERM (DAF, DEQ, DES, DDU & DDP), the seller has to bear all costs and

risks needed to bring the goods to the place of destination.

All terms list the seller’s and buyer’s obligations. The respective obligations of both

parties have been grouped under up to 10 headings where each heading on the seller’s side

“mirrors” the equivalent position of the buyer. Examples are Delivery, Transfer of risks, and

Division of costs. This layout helps the user to compare the party’s respective obligations

under each Inco terms.

3 Realisation of Export Proceeds

Once the goods have been physically loaded on board the ship, the exporter should
arrange to obtain his payment for the exports made by submitting relevant documents.
A complete set of documents normally submitted for the purpose of negotiation is called
a negotiable set of documents, which usually consist of the following:
1. Bill of exchange
2. Bill of lading
3. Commercial invoice
4. Packing list
5. Inspection certificate
6. GSP certificate
Negotiation
A complete set of negotiable documents is presented to the negotiating bank through
whom the documentary letter of credit has been advised. Where the exporter has complied with
all the terms and conditions of the letter of credit while submitting his documents to the
negotiating bank, the documents are deemed to be clean. The letter of credit opened by the buyer
through his bank (opening bank) authorizes drawing a bill of exchange against which payment
will be made by the opening bank on behalf of the buyer, provided the terms and conditions
specified in the letter of credit are complied with.
Bill of exchange
It is the negotiable instrument through which the amount of export invoice / invoices will
be collected from the corresponding bank specified by the importer through exporter’s bank. It
contains number and date drawn on, credit no., corresponding bank address, the amount to be
collected , terms of payment, importer’s name and address with invoice no. and bill of lading or
airway bill no. the drafts drawn are of two types.
1. Sight draft
2. Usance draft
If the letter of credit stipulates payment at sight, the exporter draws a “sight draft” on the
buyer or his bank. When sight drafts are drawn by the exporter, he expects the buyer to arrange
for payment immediately on presentation of the draft. Until payment for the draft is made,
shipping documents will not be handed over to the buyer to enable him to clear the goods. (See
Annexure 10)
When the exporter has offered credit terms for payment, a “Usance draft” is usually
drawn by the negotiating bank of the exporter. It is drawn for the payment after a specified
period. The buyer on whom the draft is drawn retires the draft after 30days, 60days or 90days as
agreed between him and the exporter at the time of concluding the contract. The letter of credit
opened by the buyer will clearly specify the credit period which has been agreed upon and would
mention that the draft should be drawn for 30,60 or 90 days, as the case may be.
For a credit period beyond 180 days, the exporter has to obtain the prior permission of the
exchange control authorities in India. The bill of exchange drawn should correspond to the
conditions stipulated in the letter of credit.
Besides the negotiation of the documents, the banker has to perform other formalities. As
part of the negotiation set of documents, the exporter has submitted the duplicate copy of the
GR-1 form. After negotiation are complete, and payment is physically received by the bank, the
duplicate copy of the GR-1 form is sent to the RBI after due checks.
The exporter requires a commercial invoice attested by the bank for his use in claiming
incentives. The bank attests the extra copies of the commercial invoice supplied by the exporter
and returns them to him.
To enable the exporter to claim incentives applicable for exports, a certificate known as
Form I or “Bank Certificate” is required. The Form I or Bank certificate describes the product
exported, its value, the details of the invoice, the bill of lading against which the export was
made, the rate of conversion for the exchange for the exchange used, etc. the case of CIF
contracts, the bank certificate specifies the fob value, freight and insurance under separate
headings as evidenced in the bill of lading, insurance policy and invoice. The bank certificate
also indicates the GR-1 form number against which the export was made. The original copy of
the bank certificate is furnished to the exporter and the duplicate copy is sent to the JDGFT of
the area. A third copy may be kept for its official records.

3.3.6 Realisation of Export Incentives:

The incentives the exporter will get in today’s context and the manner in which they can
be obtained are as follows:
3.3.6.1. Duty Drawback:
This refers to a rate fixed by the government based on the customs duty and excise duty
components which go into the production of an export product. This does not refer to the
finished product excise duty, but to the excise and customs duty paid on all the raw materials and
components which go into the production.
Every year the Department calls for latest data on these through the Export Promotion
Councils, determines the drawback rate and publish it for the exporters by June of the year.
When the shipping bill is submitted to the customs for the shipping of goods, it consists
of a set of five copies. The duplicate copy is known as the ‘Drawback copy’, and this will
contain all the details like description of the product, the port of destination, the total amount of
drawback as per government notification etc. this copy is endorsement by customs and sent
directly by them to the drawback cell in the customs department situated in the port from which
goods were exported. The exporter can approach this cell for his drawback payment with any
additional details they may ask for.

3.3.6.2. Excise Rebate:

Finished goods which are subject to excise duty for home consumption are exempt from
the duty when they are exported. The scheme is also applicable where the exported goods
contain excisable goods in their manufacture.
The exporter can avail of this facility in either of the following methods, where finished
goods are excisable:

i. Export under Bond:

Under this method, the exporter has to execute a bond in favor of Central Excise
Authorities. The amount of the bond will be equal to the duty on the estimated maximum
outstanding of goods leaving the factory without paying the duty and pending acceptance of their
proof of export by excise authorities. No excise need to be paid by the exporter.

ii. Refund of Duty:

 If the duty is already paid, after export is made, the exporter should make a claim with
the Central Excise Authorities. After verification of the claim, the excise authorities will arrange
for the refund of the central excise.
Where the excisable materials have been used in the manufacture, similar to the above
arrangement, the exporter can avail of the facility of manufacturing under bond or he can claim
refund after duty is paid.

Foreign Trade Policy 2009-2014 – Special Focus Initiatives:

 Government of India shall make concerted efforts to promote exports in all sectors by
specific sector strategies that shall be notified from time to time Rs. 325 cores would be
provided under promotional schemes for textile for exports made with effect from 1st
April 2009.
 EPCG Scheme at zero duty has been introduced for certain engineering products,
electronic products, basic chemicals and pharmaceuticals, apparel and textiles, plastics,
handicrafts, chemicals and allied products and leather and leather products.
 Processed foods have now been added under Focus Product Scheme.
 Under DEPB Scheme,
a. Duty credit scrip under Chapter 3 i.e. Promotional measures and under DEPB
scheme will now is issued without waiting for realization of export proceeds. The
exporters will be required to submit proof of export proceeds realization with the time
limits prescribed by RBI. This provision is now applicable.
b. DEPB scripts were earlier used for payment of duty only on imported items that
were under free category but now this utilization is now extended for payment of duty
for import of restricted items as well.

Under EPCG Scheme,

c. In case of decline in exports of a product(s) by more than 5%, the export obligation
for all exporters of that product(s) is to be reduced proportionately and this provision is
extended for the next year.
d. Reduction in customs duty under EPCG scheme from 5% to 3%.
 Additional funds of Rs. 1200 crores have been allotted for CST/TED/Drawback refunds.
 Allowing payment of interest on delayed payments of Terminal excise duty and central
sales tax.
 An additional fund of Rs. 1400 crores is provided to clear the backlog claims of TUF.
TYPES OF CONTAINER USED FOR SHIPMENT

TYPE OF CONTAINER USED IN

SHIPMENT
HIGHCUBE REEFERS
BULKERS
FLAT RACKS DRY CONTAINER

TANKS ROOLTRALERS OPEN TOPS

 STANDARD CONTAINER
STANDARD CONTAINERS:

Standard 20'

inside inside Inside door door tare Maxi

capacity
length width height width height weight cargo

19'4" 7'8" 7'10" 7'8" 7'6" 1,172CuFt 4,916lbs 47,900lbs

5.900m 2.350m 2.393m 2.342m 2.280m 33.2CBM 2,230Kg 21,770Kg

Standard 40'

inside inside Inside door door tare Maxi

capacity
length width height width height weight cargo

FLAT RACK CONTAINER

Flat rack 20'

inside inside inside door door tare maxi

capacity
length width height width height weight cargo

18'5" 7'3" 7'4" - - - 5,578lbs 47,333lbs

5.620m 2.200m 2.233m - - - 2,530Kg 21,470Kg

Flat rack 40'

inside inside inside door door tare maxi

capacity
length width height width height weight cargo

39'7" 6'10" 6'5" - - - 12,081lbs 85,800lbs

12.080m 2.438m 2.103m - - - 5,480Kg 39,000Kg

 FLATT RACK COLLAPSIBLE CONTAINER

Flat rack Collapsible 20'

inside inside inside door door tare Maxi

capacity
length width height width height weight cargo

18'6" 7'3" 7'4" - - - 6,061lbs 61,117lbs

5.618m 2.208m 2.233m - - - 2,750Kg 17,730Kg
Flat rack Collapsible 40'

inside inside inside door door tare Maxi

capacity
length width height width height weight cargo

39'7" 6'10" 6'5" - - - 12,081lbs 85,800lbs

12.080m 2.126m 2.043m - - - 5,800Kg 39,000Kg

REEFER COINTAINER

Reefer 20'

inside inside inside door door tare maxi

capacity
length width height width height weight cargo

17'8" 7'5" 7'5" 7'5" 7'3" 1,000CuFt 7,040lbs 45,760lbs

5.425m 2.275m 2.260m 2.258m 2.216m 28.3CBM 3,200Kg 20,800Kg

Reefer 40'

inside inside inside door door tare maxi

capacity
length width height width height weight cargo

37'8" 7'5" 7'2" 7'5" 7'0" 2,040CuFt 10,780lbs 56,276lbs

11.493m 2.270m 2.197m 2.282m 2.155m 57.8CBM 4,900Kg 25,580Kg

 REEFER HIGH CUBE CONTAINER

Reefer High Cube 40'

inside Inside inside door door tare maxi

capacity
length width height width height weight cargo

37'11" 7'6" 8'2" 7'6" 8'0" 2,344CuFt 9,900lbs 57,761lbs

11.557m 2.294m 2.500m 2.294m 2.440m 66.6CBM 4,500Kg 25,980Kg

HIGH CUBE CONTAINER

HIGH CUBE 40'

inside Inside inside door door tare Maxi

capacity
length width height width height weight cargo

39'5" 7'8" 8'10" 7'8" 8'5" 2,694CuFt 8,750lbs 58,450lbs

12.036m 2.350m 2.697m 2.338m 2.338m 76.3CBM 3,970Kg 26,510Kg

PLATEFORM CONTAINER

PLATFORM 20'

inside inside inside door door tare Maxi

capacity
length width height width height weight cargo

19'11" 8'0" 7'4" - - - 6,061lbs 52,896lbs

6.058m 2.438m 2.233m - - - 2,750Kg 24,000Kg

PLATFORM 40'

inside inside inside door door tare Maxi

capacity
length width height width height weight cargo

40'0" 8'0" 6'5" - - - 12,783lbs 86,397lbs

TURN OVER OF SONA EXPORTERS
Table 3.1 Turn Over of PON SANGER EXPORTS
(In crores)

YEAR SALES (RS) VARIATION (RS) PERCENTAGE

2010 20.34 14.1624

2011 25.09 4.75 17.4697
2012 30.98 5.89 21.5708
2013 37.08 6.1 25.8181
2014 44.45 7.37 30.9497

Interpretation

The above table indicates the total export position from the year 2010-2014. The sales

turn over increases from the year 2010 -2014

Figure 3.1 Turn Over of PON SANGER EPORTS

Turn Over of SONA EXPORTERS

40
35
30
25
Crores[Rs.]

SALES (RS)
20
VARIATION (RS)
15
PERCENTAGE
10
5
0
2011 2012 2013 2014 2015
Year
 EXPORTS TO UAE

Table 3.8 Exports to UAE

(In crores)
YEAR SALES (RS) VARIATION (RS) PERCENTAGE

2010 14.03 12.8783

2011 17.31 3.28 15.8858
2012 21.38 4.06 19.6150
2013 25.59 4.21 23.4773
2014 30.67 5.09 28.1436

Interpretation

The above table indicates the export position to UAE from the year 2010-2014. From

2010 to 2014 variation is going positively.

Figure 3.8 Exports to UAE

Exports to UAE

28% 13%
16% 2010
2012
23% 20%
2013
2014
2015
 EXPORTS TO UK

Table 3.9 Exports to UK

(In crores)
YEAR SALES (RS) VARIATION (RS) PERCENTAGE

2010 2.24 12
2011 2.76 0.52 15
2012 3.41 0.65 19
2013 4.08 0.67 23
2014 5.44 1.36 30

Interpretation

The above table indicates the export position to Canada from the year 2010-2014.

Figure 3.9 Exports to UK

Exports to UK

30% 13%
15%
2010
2011
19%
23%
2012
2013
2014
 EXPORTS TO CANADA

Table 3.10 Exports to Canada

(In crores)
YEAR SALES (RS) VARIATION (RS) PERCENTAGE

2010 1.63 22
2011 2.01 0.38 16
2012 2.48 0.47 18
2013 2.97 0.49 22
2014 3.56 0.59 31

Interpretation

The above table indicates the export position to Canada from the year 2005-2009.

Figure 3.10 Exports to Canada

Exports to Canada

28% 13%
16% 2010
2011
23% 20%
2012
2013
2014
 EXPORTS TO OTHER COUNTRIES

Table 3.9 Exports to Other Countries

(In crores)
YEAR SALES (RS) VARIATION (RS) PERCENTAGE
2010 2.44 13
2011 3.01 0.57 16
2012 3.72 0.71 20
2013 4.45 0.73 23
2014 5.33 0.88 28
Interpretation

The above table indicates the export position to Canada from the year 2010-2014.

Figure 3.9 Exports to Other Countries

Exports to Other Countries

28% 13%
16% 2010
2011
23% 20%
2012
2013
2014
 FUTURE TREND ANALYSIS OF SALES

Future trend

With the available data for the past five years from 2005 – 2009, the future trend of this

concern in export has been forecasted.

Methodology:

The methodology adopted here is the least square method.

Formulae:

na + bΣ X =ΣY

aΣX + b X 2 = ΣXY

By solving the above equations we get the values of a and b.

a = ΣY / n

b = ΣXY / ΣX 2

Then substituting the values of a and b in the linear equation we get

Y = a + bx
Table 3.11 Future Trend Analysis
(In crores)

YEAR Y (RS) X X2 XY (RS)

2010 20.34 -2 4 -40.68

2011 25.09 -1 1 -25.09

2012 30.98 0 0 0

2013 37.08 1 1 37.08

2014 44.45 2 4 44.45

TOTAL 157.94 0 10 15.76

Calculation

Y = a + bx

a = ΣY / n = 157.94 / 5 = 31.58

b = ΣXY / ΣX 2 = 15.76 / 10 = 1.57

X = (x – 2012)

x = year for which the sales is estimated.

Substituting the value of a and b in the formula we get the future exports

 2015 = 31.58 + 1.57(3) =36.29 corers

 2016 = 31.58 + 1.57 (4) =37.86 corers

 2017 = 31.58 + 1.57 (5) =39.4 corers

 2018 = 31.58 + 1.57 (6) = 41 corers

 2019 = 31.58 + 1.57 (7) =42.57 corers

Interpretation

From the analysis it is found that future sales trend gradually increases year by year.
Future year’s sales when compared to present situation are good.

Figure 3.11 Future Trend Analyses

Future Sales

44

43

42

41

40
Crores [Rs.]

39

38
Series1
37

36

35

34

33
1 2 3 4 5
Sales
 FINDINGS AND INFERENCE

 The documentation paper works are simplified than the previous years.

 This has led to the emergence of a business environment ,widening both the scope and

scale of opportunities open to sellers

 Though many documents prevail in documentation, only certain documents play a vital

part in the company.

 It uses the Inco terms as FOB and C&F mostly.

 From the company’s procedure, the following has been inferred;

Figure 4.1Forward System followed in PON SANGER EXPORTS

 UAE offer tax benefits for the imports. This is not provided by the U.S.8-10% is kept as

the profit margin.

 The shipment carry days are 18days to UAE and 26-30days to U.S.

 The firm pays its bank – Canara Bank, an amount of $25 for each FOREX conversion.

 There seem to be a relative increase in the sales turnover of SONA EXPORTERS

 The product wise sales turn over and variations are fluctuating year by year.

 As an overall study, we can find that the firm has enjoyed more benefits and sought more

profits in the year 2012.

 From the future trend analysis, the export of the company increases year by year.
 SUGGESTIONS

 As only certain documents are put in use, the other documents have no power in the

company which will be supportive to reduce the export procedures.

 As many of the documents are part in the use of documentation and procedures which

may delay and tend to loss the customers.

 The company has to speed up the paper work.

 Update of available export incentives.

 The company should check the exchange rates before entering into particular markets

which will help in achieving more profits.

 The company can improve its sales by improving its quality and promotional activities.

 The company has to improve their infrastructure facilities which will increase the

exports.

 If all the processing units are brought under one roof, it will reduce the processing time of

goods and it will lead to timely delivery of goods to the customers.

 Require more knowledge on the incentives offered by the Government.

 Can opt for Market Development Assistance from the Government of India, for
Exhibition and Stalls overseas.
 CONCLUSION

The study was conducted to know the process involved in an apparel firm and to study

about the various departmental functions which coordinates to complete the export cycle. The

export procedure of the firm has been seen clearly and other related aspect has been known.

From the analysis it is found that the performance of the company is satisfactory, but the

company is facing problem regarding excess of documents which causes delay in transportation.

Therefore necessary steps should be taken to limit the number of documents so that the company

can make distribution at right for the company and it helps the company to have competitive

advantage over its competitors.

There are signs of good future for SONA EXPORTERS because of growing demand for

Indian snakes in the world market.

 BIBLIOGRAPHY

Books

1. Balagopal T.A.S, “Export Management”, Himalaya Publishing House, nineteenth edition 2007

2. Jeevanandam.C., “Foreign Exchange- practice, concepts and control”, Sultan Chand and Sons,

tenth edition 2007

3. Kothari C.R., “Research Methodology, Method & techniques”, New Age International.

Pvt. Ltd, Second Edition, 1985

4. Mahajan M.I.,” A guide on export policy, procedure and documentation”, Tata McGraw hill

publishing company ltd, Third Edition 2005

5. Dr.Varma.M.M. & Aggarwal R.K, “Foreign Trade Management”, King Book, second edition

2006

6. Puri, V. K., “Exporters’ Guidelines, A Basic Book on How to Export as per Govt. Policy &

Procedures”, 2nd Edition, JBA Publishers, 2008-09

7. Paul, Justin & Aserkar, Rajiv, “Export Import Management”, 2nd Edition, Oxford University

Press, 2009, Chapter – 2, pp. 17-29.

Reference Site

 http://www.sebi.gov.in/dp/splfinal.pdf as retrieved on April 20, 2010

 Overcoming the obstacles to export documentation1, Thomas A. Cook.

http://search.barnesandnoble.com/Export-Import-Procedures-and-Documentation/Thomas-E-

 Johnson

 Export Documentation Made Easy2, Laurel Delaney

 http://www.allbusiness.com/business-planning-structures/starting- a-

business/3878207-1.html
 Export Trade Sector Using Available Trade Finance Tools and Resources5, Koch

and John.

 http://www.allbusiness.com/trade-development/trade-development-finance/8890466-

1.html

 True cost of export documentation7, Corinne Campbell.

 http://www.dynamicbusiness.com/articles/articles-export/true-cost-of-export-

 documentation2043.html

 Guide to Inco terms 2000, Posner and Martin8.

 http://www.allbusiness.com/legal/international-law-foreign-investment-

finance/918569-1.html

 All Industry Rates of Duty Drawback, 2008-099.

 http://www.cmai.in/download/circulars/Pre_Budget_Memorandum.pdf

 Foreign Trade Policy 27th August 2009 - 31st March 2014

 http://dgftcom.nic.in/exim/2000/policy/ftp-plcontent0910.pdf
 ANNEXURE

Interview Questions

Mr. ASHFAK

Export Manager, SONA EXPORTERS, CHANGARAMKULAM

a) How an export order is processed?

b) What role the different departments play for the completion of the export order?

c) What role does merchandising department play in an Apparel export house?

d) What are the different documents prepared & used for the export?

e) How important are these documents?

f) What are the Inco-terms? How are they important?

g) What is a Letter of credit? What is its significance?

h) How does Government render its help to your firm and how do you utilize it?

i) Are you looking for a wider market?

j) Do banks you work with offer their best help?

Annexure 1 – Certificate of IEC

Annexure 2 – AEPC

Annexure 3 – Performa Invoice

Annexure 4 – PO

Annexure 5 – Commercial Invoice

Annexure 6 – Packing List

Annexure 7 – Inspection Certificate

Annexure 8 – Certificate of Origin

Annexure 9 – Bill of Lading

Annexure 10 – Bill of Exchange