presentation on export procedures

8/10/2019 Presentation on Export Procedures

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Made by: Himanshu Setia

7thSemester MBA

IMS, KUK

Undergone at Diamond Exports , Panipat


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DIAMOND EXPORTS as a leading Indian BusinessHouse engaged in Manufacture, Import & Export ofhome furnishing items.

Company has registered officeat the Commercial capital of India i.e. Mumbai & have

developed extensive contacts & goodwill with relatedbusiness communities. Their areas of activities include:

Manufacture a wide range of home furnishing items like

hand tufted carpets, handloom carpets, shaggy rugs,hand hooked rugs & braided rugs. Amongst these,

braided rugs, hand hooked rugs & shaggy rugs are theirspecialization.


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Based at Panipat, the handloom city of India, company

offer exclusively designed products that can be classic

or contemporary, western or oriental. The color

combinations range from soft pastels and earthy tones

to striking schemes. Company has skilled designers

and gifted artisans, who inherited this precious art from

their ancestors, can bring to life all types of patterns

and custom designs to fulfill your specifications.

Diamond Exportsis one of the manufacturers of theseitems as well as exporter of these items. They also

make some more items like rugs and hand tufted

carpets etc.


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Diamond Export is Government recognized ExportHouse which produces various home furnishing items in

Panipat city known as city of handloom. The industry is

engaged in the export business and fully dedicated in the

work with its all sources. The industry is part of HEMA

known as Handloom Exports Manufacturers Association

and CEO of DIAMOND EXPORT Mr. Ramesh Verma is

president of this association. This company is part ofPanipat Textile Industries Cluster Development

Foundation (PTICDF) and The Panipat Home

Furnishing Cluster Pvt. Ltd.


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Diamond Exports is the industry of Textile and Export

Import Sector.

Diamond Exports is the manufacturer of Home

furnishing items which are exportable to Europeancountries.

They believe that quality is the key to success and so

they cannot compromise with it. Company is backed

by a team of educated, experienced and qualified

professionals who are solely dedicated towards

offering products, which are flawless. In other words,

products that they offer are a combination of qualityand durability. Due to their quality products and fair

prices, they had become the choice of several

customers. Today, they are serving a large number of

clients.


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Management Team

At Panipat management team is headed by CEOMr.RameshVerma

Mr. Sunil Verma (International Marketing)

Mr.Dinesh Tyagi (Administration)

Mr. Anil Verma (Production)Mr. Chris (European Market)

Nature of Business:

Medium & Small Enterprise - Supplier, Manufacturer,

Exporter Number of Employees

50 to 60 employees, more than 400 Employees.

Turnover

US$ 0.25-1 Million (or Rs. 1-4 Crore Approx.)


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Head Office

It is in capital city of country, NEW DELHI.

Team of 20 for management, design and finance, Indira Gandhi

International airport is the nearest airport and transportation can be

arranged easily.

Production Unit

Diamond Exports include 4 production units covering a total of 7000m

in total in Panipat city.

More than 400 workers are ascertain,All modern facilities and machinery are available,

Strict quality control at all stages.

Corporate office Address:

Diamond Exports

Near Bharat Gas Godown, Babail Road, Panipat -132 103, Haryana,India

Mr. Ramesh Verma

+ (91)-(180)-2611577

+ (91)-9812034897

+ (91)-(180)-2611877


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1. Carpet

2. cushions

3. Tableware

4. curtains and blinds

5. Other Home Furnishing Items


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Big Lots (USA)

Ross Stores (USA)

Home Depot (USA)

T.J, Maxx(USA)

LIDL (Europe)

ALDI(Europe)

Penny Market( Europe)

Tommy Hilfiger (USA)


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Search for perspective buyer of items: The Exporter

may get these details through any of the following ways,1. Websites of the import firms.

2. Visit to the exporters websites by an interested foreign

buyer.

3. Participation in trade fair/visit to a trade fair by the

exporter.

4. Contact with the overseas marketing agent

5. Contact with a buying agent in the exporters country.6. Exporters own retail outlet in the foreign country.

7. Circulation of trade enquiry by the trade promotion in

the exporters country.


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The terms and condition of an export order varies from order

to order depending on the nature of product, parties involvedand so on.

Following are the standard clauses of an Export order:

1, Product and its description: It includes the size, quantity,

type, color, packing, nature and material of product which is

used to make it.

2, Product specifications regard its quality: Quality is an

important aspect as quality plays a crucial role and if quality

standards do not match the expectations of importer than it is

difficult to place an order.


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3, Price: FOB/CFR/CIF etc.: Various costs which are included

in cost of product are given codes which are:

FOB stands for free on board

CFR stands for cost and freight CIF stands for cost, insurance and freight

DES stands for delivered ex ship

DEQ stands for delivered ex quay

DAF stands for Delivered at frontier DDP stands for delivered duty paid

These affect the price of the final product and added to the price

of product.

4, Quantity: It means deciding how much or number of

products which are ordered. It states the number of pieces,

number of products and packets which would be properly

mentioned in the order.


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5, Payment terms D/A, D/P, letter of credit etc.: There are

various methods and means to do payments of the order and it

is decided at the time of order placement which method is to

be used for making payments at the time of shipment receivedby the importer.

6, Delivery schedule: Time period, partial/ complete dispatch

of shipment these all details are mentioned in the export order

and it is decided in advance on which date order is to be sentthrough shipment and receiving of shipment and payments

schedule is made and work is done according to the delivery

schedule.

7, Mode of Dispatch: Dispatch of goods and products is donethrough ships overseas or by air or both can also be used as

mode of dispatch. These are to be decided and mentioned at

the time of placing order and goods are dispatched through that

medium of transport.


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8, Inspection: Inspection is done after completion of the order of the

party and inspection is necessary for checking the quality and

quantity of the product produced .

9, Labeling, Packaging and Marking requirements: There are variousmarks and labels used in international market, Different labels and

different type of the packing is used as per the nature of product and

demand of the importer.

Types of Labels are:

Strip of clothCard Label

Adhesive Stickers

Users Manual.

Types of Packing:Plastic packs

Paper based packing

Combined plastic & cardboard packing

Miscellaneous packing (like leaves, wood etc.)


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10, Insurance: as the shipment is necessary and valuable for both importer

and exporter so both parties can have insurance by the insurer company

for the product and shipment by exporter/ importer both for the same but

at different insurable interest as per insurance contract.

11, Documents required :

Some important documents are:

Commercial invoice

Packing list

Certificate of origin/GSP (Generalized system of preference)certificate of

origin

Transport document such as: AIR bill/ bill of Lading

Inspection certificate

12, Escalation clause: There is clause of sharing of increase in cost

mentioned in the terms and conditions of an export order as if there is any

increase in the number of pieces produced than it can be shared by both

the parties and importer pays for that also at less price as per agreement.


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13, Arbitration clause:There is also a clause of dispute settlement if there is any disputeregarding the contract and if exporter or importer fails to perform

their duty as specified than they can take help of law for justiceor can approach to a third party of their choice to settle thedispute.

14, Fines/penalties:

Under the contract fine s and penalties are also mention and canbe included if there is a need to add them. As per the contract anyof the party can claim for penalty or fine if other party doesntact as per the agreement or conditions.

15, Applicability of Law: As agreement between importer andexporter is a kind of contract than it also enforceable under lawor applicable under law this agreement of the export isenforceable bylaw and it is a legal document.


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1. Enquiry:

Size detail Drawing, if available Sample, if possible Delivery schedule Mode of dispatchsea, air or both

Mode of packing Modes of payment Requirement for pre-shipment inspection Any certificate of origin required

2. Performa Generations

3. Order placements

4. Order Acceptances


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5. Documents for payment:

Advance payments

Open account.

Documentary collection: includes

D/A Document against Acceptance

D/P Documents against Payments

Documentary Credit: known as Letter of Credit

There are various types of letter of credit: Back to back letter of credit,

Revolving letter of credit.

Standby letter of credit.

Transferable letter of credit.

Negotiable letter of credit, Red or green clause letter of credit.

Bill of exchange

There are five people in Bill of Exchange those are:


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Drawer: Exporter Drawee : Importer Payee : Beneficiary Exporters bank: Collection Bank, negotiating Bank Importers Bank: Remitting Bank

6. Goods Documents

7. Documents for C & F agents

Commercial Invoice Packing List Certificates of Origin or GSP certificate of origin Transportation documents such as Air Bill/Bill of lading Inspection Certificate if required

8. Custom Clearances

9. Bills Negotiation

10. Bank to Bank documentation

11. Receipts of bank certificates


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Department Forms required Certificate Role

Reserve bank of INDIA

(RBI)

Company name , business and

size information, Bankers

Certificate

Certify the company to do export

and import

Register the company for various

export procedures

Director General of Foreign

Trade (DGFT)

Aayaat Niryaat Form -

ANF2A", PAN number, Bank

Account number

provide exporter a unique IEC

Number

IEC Number is a ten digits

code required for the purpose

of export as well as import.

(EPC) Export promotion

council

Self certified copy of the IEC

number. Membership fee

should be paid in the form of

cheque or draft

registration cum membership

certificate (RCMC)

help exporters in availing benefits

with respect to Customs and

Excise

Registration with

Commodity Boards

Commodity Board is

registered agency designated

by the Ministry of Commerce,

Provides registration certificate

for exporting goods.

Boards are responsible for

production, development and

export of tea, coffee, rubber,

spices and tobacco.

Registration with Income

Tax Authorities

Bank account number, IEC

number, registration certificate.

Exemption from both Value

Added Tax and Central Sales

Tax.

to get the benefit of tax

exemption it is important for

an exporter to get registered

with the Tax Authorities

Textile committee Nature of business, registration,samples

Issue certificate of origin and GSP

certificate of origin

Help to avail tax benefit on

various products in importers

country.

Export Credit

Guarantee Corporation

(ECGC)

Bank current account, financial

status of company

Provides a range of credit risk

insurance covers to exporters

against loss in export of goods

and services

Provides Overseas Investment

Insurance to Indian companies

investing in joint ventures

abroad in the form of equity or

loan


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Finally some recommendations for the company are as follows:-

There must be a minimum ratio of the order so that wastage couldbe avoided.

The company should provide all bills to all importers. Such aspacking list, invoice order, GSP certificate etc. these documentswill help to claim and clear the shipment easily.

Company should fulfill its social responsibility by making

environment friendly products and using natural dye.

Company must use cardboard packing material instead of plasticbags, as it is environment friendly and increase goodwill ofcompany.


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STRENGTHReasonable price as compared to competitors.

Sizeable market share of Home Furnishing Items.

Offers variety of products under its brand.

Different styles and color combination are available.An experienced team of sales and marketing executives.

WEAKNESS

No proper replacement system for the defects.

Improper and irregular supply.

Improper packaging of carpets.

Lack of schemes for importers.


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OPPORTUNITY

Rising demand for innovative Home furnishing items.

Improving supply system for established brands

Good scope for curtains and durries and other

products.

Use of natural dyes improves the goodwill.

THREATS

Ever increasing competition from multinationals and

local companies.

Increase in sale of cheap local textile products.Other Exporters of home furnishing items.


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