EXPORT AND IMPORT

FINANCING
Definition

Import:

 The term import is derived from the conceptual

meaning as to bring in the goods and services
into the port of a country.
 The buyer of such goods and services is referred
to an "importer"
 Definition
Export:-
This term export is derived from the conceptual
meaning as to ship the goods and services out of
the port of a country.
The seller of such goods and services is referred
to as an “exporter”.
 Balance Of Trade
A trade deficit occurs when imports are large relative to
exports.
Balance of trade represents a difference in value for
import and export for a country.
 Imports are impacted principally by a
country's income and its productive resources
 Types of Import
There are two basic types of import:

Industrial and consumer goods

Intermediate goods and services

 Types of Export
Physical Export : If goods physically go out of the
country.

Deemed Export : If goods and services are supplied to

another entity.
EXIM Bank
 Exports & Import – General Provisions in Foreign
Trade Policy

 The interpretation of Policy: DGFT is the final authority. Any

exemption from policy or procedure also to be referred to
DGFT
 Freedom to export & import except to the extent of provisions
in the Foreign Trade Policy or any other law in force
 Every exporter/importer must comply with the provisions of
the Foreign Trade (Development & Regulation) Act 1992
 No agency shall withhold consignments allowed for exports.
Free movement of export goods is allowed. Authority can take
undertaking from exporter in case of any doubt
 Specific Provisions
 Free exports
 All exports in freely convertible currency
except in specific situations
 Realization of export proceeds within a
specified time
 Deemed exports
IMPORT FINANCE

Import finance is required in order to

bring goods into the country, but it is
not always easy to raise capital when
looking at different products. This can
be finished or incomplete goods, but
many lenders favour finished goods.
Types of Import Finance

 Letter of credit.
 Documentary Collection
 Cash-in-Advance (Pre-payment).
 Open Account.
 Bill of Lading.
Export Finance

In order to be competitive in markets, exporters are

often expected to offer attractive credit terms to
their overseas buyers. Extending such credits to
foreign buyers put considerable strain on the
liquidity of the exporting firms. Therefore, it is
extremely important to make adequate trade
finances available to the exporters from external
sources at competitive terms during the post-
shipment stage.
Export Finance

 Export credit can be broadly classified into

 Pre-shipment finance and
 post shipment finance.
 Pre-shipment finance refers to finance extended
to purchase, processing or packing of goods
meant for exports.
 Financial assistance extended after the shipment
of exports falls within the scope of post shipment
finance.
Types of Export finance

PRE-SHIPMENT FINANCE
 Cash Packing Credit Loan
 Advance Against Hypothecation
 Advance Against Back-To-Back L/C
 Advance Against Exports Through Export Houses
 Advance Against Duty Draw Back (DBK)
 Special Pre-Shipment Finance Schemes
POST SHIPMENT FINANCE
 Export bills negotiated under L/C
 Purchase of export bills drawn under confirmed contracts
 Advance against bills under collection
 Advance against claims of Duty Drawback (DBK)
 Advance against Deemed Exports advance against Retention
Money
 Advance against Deferred payments