ACKNOWLEDGEMENT

I like to acknowledge the following on the threshold of my achievement and successful completion of project entitled EXPORT PROCESS I sincerely acknowledge with deep sense of gratitude and encouragement received from my project Mentor, GLOBAL MARKETING whose guidance helped me to accomplish the objective of the project for guiding me throughout the project and providing with valuable time & information whenever needed by me. I would like to thank the members of my FASHION INSTITUTE for their cooperation. In addition, to the entire respondent who have spared their valuable time in answering my questions & queries. Last but not the least, would like to thank my family & friends who would have been great support throughout my work.

NIKITA GARG

EXPORT

WHAT IS EXPORT ? To ship goods or services outside a country or region especially for trade or sale. WHY EXPORT ? To earn foreign exchange. To become a global brand. To expand sales. To diversify sources of supply. To diversify sources to sale.

Exporters are of two types : Manufacture exporter The one who manufactures products. Merchant exporter The one who buys good from local market and exports them in his own name.

EXPORT PROCESS
1. SELECTION OF A PRODUCT If you want to enter export trade, the first thing you have to do is to decide about the product, which you intend to trade. You should have intimate knowledge about the product and sources of supply. If you have varied sources of supply, you will have no problem in procurement and shipment. But if you produce the product yourself at effective cost and exercise quality control, then you can become a successful exporter within shortest possible time. You can also analyse which products are exported to which country. 2. SELECTION OF A MARKET In view of scarce resources and shortage of experienced marketing personnel, the exporters should be selective and concentrate on markets, which could yield the best results. For this one has to examine : The economic position of the country. Size of the Market and whether it is expanding or shrinking. Market growth in a given product. Unit price of the product. Import regime in the importing country. Location of the market. 3. OPENING THE BUSINESS After selection of product, one may open the business, give it a name, print letterheads, install phone and fix a signboard on your business premises. 4. REGISTRATION FOR EXPORT It is mandatory to register your firm as an exporter against payment of a nominal fee. A registration number is required for exporting goods which is called IEC number ( Importer Exporter Code number ) Director General Of Foreign Trade ( DGFT ) IEC number is issued by DGFT ( Director General Of Foreign Trade ). In order to export it is essential to obtain IEC no.

 After receiving IEC no. ; registration with AEPC ( Apparel Export Promotion Council ) is compulsory for apparel and garment exporters. Incorporated in1978, AEPC is the official body of apparel exporters in India that provides invaluable assistance to Indian exporters as well as importers/international buyers who choose India as their preferred sourcing destination for garments. It assists Indian exporters dealing in garments. It surveys overseas markets to search potential markets for garments. It identifies buyers of Indian garments. It collects export enquiries from abroad and communicates the same to its members. Wherever possible, it arranges buyer-seller meet. It provides MDA ( Marketing Development Assistance ) to eligible Indian exporters of readymade garments. It holds garment-specific exhibitions in foreign markets to give an exposure to Indian products. It recommends visas to Indian business persons intending to undertake business trips abroad. It recommends to R.B.I allocation of foreign exchange to eligible Indian exporter desiring to travel abroad. It brings out publications and market survey reports on garments and allied products. It also has a formation which takes care of customers who are dissatisfied by the shipment. AEPC can also blacklist fraudlent parties on receiving a complaint from buyer.

5.

FINANCING FOR EXPORT The exporter should accept order, which he can fulfill easily. He should have the necessary finances or access to finances for effecting shipment and the capacity to wait till the sale proceeds are received. In this connection, term of payment plays an important role, as it should be timed to keep you solvent at the time of need. For export pre-shipment and post-shipment credits are available from the Govt. on concessionaire rate. The exporter can make use of it.

6.

LOCATING FOREIGN BUYERS Next step shall be to locate foreign buyers for products in which exporter is dealing. Foreign buyers can be located : Through web/internet. With the help of MDA. AEPC also assists in providing information about foreign buyers. AEPC even organizes exhibitions in foreign countries to attract foreign buyers. Indian exporters may display their products in these exhibitions. If foreign buyer selects a specific product in exhibition, he immediately contacts participant or supplier of product. ITPO ( India Trade Promotion Council ) It organizes a trade fair every year on a very large scale and invites buyers from all over he world. ITPO keeps a record of foreign buyers who have visited the fair and Indian exporters desirous of contacting foreign buyers can consult foreign buyers register in ITPOs office.

7.

QUOTING A PRICE In case of export, quoting of price means many things. For this one has to examine several things including the following : What price to charge to remain competitive abroad ? While calculating prices one has to think about all the cost including, packing, insurance, credit, agents commission, octroi duties, documentation fee, marking charges, transportation charges, export duties etc. For securing good price one has also to check up price of the same product abroad. If there is a good mark up in price in foreign market, one should not loose sight of it.

8.

OBTAINING THE EXPORT ORDER You need to approach your customers, convince them to buy from you, negotiate a deal and price that they find acceptable, and present them with a quote (usually in the form of a invoice).

9.

VERIFICATION OF THE BUYER Verification of bona fide of buyer is critically important to prevent oneself from a fraudlent buyer. This can be done through various sources : Apparel Export Promotion Council ( AEPC ) Counter part of AEPC in buyers country. Ministry Of Foreign Trade in buyers country. Chamber Of Commerce Abroad. Foreign bank in which prospective buyer is maintaining his business account .

10.

SIGNING OF A CONTRACT When prices are accepted then a contract is signed with the firm for supply of goods which becomes binding on both the buyer & seller. Contract is a document, which normally contains : Name of exporter Name of importer Item of sale Unit price Total quantity Terms of payment (There could be basically two arrangements for payment; first being through direct funds transfer without involving any credit facility. This funds transfer could be both before the shipment of goods or after the shipment of goods generally referred as Cash Against Documents (CAD). Second arrangement is through the Letter of Credit (LC). The customers bank provides a letter of credit,which promises to pay the supplier as long as the terms are met. There are two types of LC, LC sight and LC Deferred payment. The payment may be paid immediately at sight or at a later date). Mode of shipment (Sea, Air, Road) Currency in which transaction will be made. Validity period of a contract & delivery period. Shipping marks if any. Arbitration clause.

11.

TERMS OF DELIVERY When the exporter is making an offer, he quotes the price of his product. If the offer is accepted then a contract is signed between the buyer & the seller. The contract includes terms and conditions under which goods are delivered. The buyer sitting in the overseas market is normally not interested to receive charge of goods at one's factory site but he may be interested to get charge of goods on FOB basis which means free on Board at airport or seaport. It means that charges of the consignment are fully paid up to that point and the rest of the freight is paid by the buyer. Terms of delivery are not only important for quoting price but it also makes clear as to who is responsible for the goods if anything goes wrong. Also if shipment is not delivered on time, then the seller has to pay per day penalty for the delay.

12.

ARRANGING THE SHIPMENT With the export order in hand, one has to get down to producing the goods that have been promised to deliver. This will mean securing raw materials and components from the suppliers, and producing, packaging and labelling the goods for export. The exporter arranges the shipment as per the terms and conditions as stipulated in the contract.

13.

INSURANCE Insurance is necessary to recover cost in case of loss. But when the exporters are sure that the chances of loss are minimum, they do not insure consignment. In case the buyer insists on Insurance then it must be done.

14.

PACKING Packing should be sea, air and road worthy. The container should be in a position to carry contents to the destination in perfect condition. For reduction in cost, mostly economical packing materials are used. 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.

15.

PRE-SHIPMENT INSPECTION After shipping bill is passed by export department, the goods are presented in dock for examination. Goods will be examined by examiner. This inspection is necessary as : To ensure that prohibited goods are not exported. The goods are being shipped as per the quality norms applicable in the destination. country of

 Goods tally with description and invoice. Duty drawback, where applicable, is correctly claimed. 16. LOADING OF GOODS 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. 17. TRANSPORT Light and costly items are normally sent by air whereas as heavy items are shipped by sea. In each case the most economical mode is used to reduce cost. 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. 18. POST SHIPMENT DOCUMENTS Customs Invoice : Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate. Legalized Invoice : This shows the seller's genuineness before the appropriate consulate or chamber or commerce/ embassy. Certified Invoice : It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in accordance with specific contract. Shipping Order : Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date.

The process does not end here. It needs to start all over again with the next client. This is focused by export management and involves the way one organizes its export department.