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Entrepreneurship planning to set up a trading company, or start importing or exporting from India, must understand the stages and stakeholders involved in the process, as well as the regulatory framework and documentation required.
In India, the imports and exports are regulated by the Foreign Trade (Development and Regulation) Act, 1992, which empowers the federal government to make provisions for development and regulation of foreign trade. The current provisions relating to exports and imports in India are available under the Foreign Trade Policy
In this blog, you'll learn all about the import export procedure and documentation and find out about some vital intricacies involved with it.
Did you know?
If you are an export and import business owner and you want to import an item from India, then you must first get the import export code number (IEC number) before doing so. It has lifetime validity.
Export/Import Documentation You Need to Know Before Getting Started
Undoubtedly more advancement in tech has brought ease to each section of business, but it has, somewhere down the line, brought more tricks to scammers also. Hence, the legalities need to be tight enough to protect the money of a common man. How would you acknowledge the authorities that you're doing a 100% legitimate import and export business? You'll certainly need strong documents. But what sort of documentation is needed in the export procedure, and how challenging import export procedure and documentation in India can be? Let's understand about it in detail.
Goods Related Documents
Certificate of Inspection: Inspection Board of India and a few other such organizations approve this vital document to ensure the quality of the products being exported.
Packing List: This document shows how many packages are there, details of what's inside the boxes, and their conditions.
Seller's Bill: A Seller's bill includes vital data about the products like the amount, blemishes on packing, number of packages, ship's name, delivery terms, destination port, etc.
Testament of Origin: This authentic certification depicts where the goods' production has taken place. Besides that, buyers can avail individual exemptions and taxes through this document.
Payment Related Documents
Letter of Credit: It's a proof issued by the purchaser's bank as a letter to respect the bills of the exporter's bank.
Bank Certificate of Payment: Whenever the importer pays the exporter, the bank issues this certificate as proof.
Bill of Exchange: We can call this document a sort of credit instrument between the exporter and importer.
Shipment Related Documents
Bill of Lading: the shipping organization issues Bill of Lading as proof to acknowledge the delivery of the products.
Mate's Receipt: captain issues this document. It has data about the date of shipment, after, bill of merchandise, data about the vessel, etc.
Transportation Bill: this document includes data like the recipient's name, exporter's name and address, name of the vessel, and so on.
Marine Insurance Policy: It's an agreement between the insurance company and exporter to avail of any loss caused by the exporter due to whatever mishap that happened during the shipment process.
Airway Bill: This document consists of the information of the products pretty much similar to the shipping bill the airline company issues.
Cart Ticket: The exporter obtains a cart ticket (also known as cart chit or gate pass) which contains some vital info such as shipping charge number, number of items, nation port, etc.
Other Vital Documents
Other than the 3 vital documents we mentioned above, here comes a few common export import documentation that you need to submit:
Importing some specific goods demands an industrial license copy. When an importer guarantees some import gain under the guidelines of the government, an industrial license can bring you some profit. You can send a copy of this Industrial Permit to customs authorities and avail the benefits related to it.
Undoubtedly, it's common sense that you can't import certain goods without a proper import license. Besides import customs leeway techniques, this document illustrates the fulfilment of rules and regulations of importing goods. This document is important in order to bring in some specific merchandise as per the government regulations. The government controls the import of certain objects from time to time. Besides that, the administration looks upon an import permit as permission to bring such materials from foreign countries into the Indian territory.
Technical Write Up
The technical write up is a sort of record for import allowance under a few explicit goods. It encourages a customs authority to figure out the perfect market estimation of such imported goods. Thus, it helps value evaluation.
Registration and Membership Certificate
Government offices offer advantages from import duty exemptions regarding a few specific merchandise. Registration and membership certificate generation with customs experts is among the prerequisites for import clearance. In such circumstances, you'll have to provide a registration and membership certificate besides vital import customs approval documents.
You, as an exporter, need to record DGFT and GATT reports besides various reports of customs clearance with customs authorities. The importer needs to record the GATT presentation as per the conditions of the common agreement on trade and tariffs. Moreover, the importer/exporter needs to file whatever additional vital documents. It should be issued by the customs department or government when you're importing restricted goods.
Export/Import Procedures and Documentation You Need to Know
We've covered the documentation part in the earlier sections and now comes the export and import procedure side of things.
3 Critical Steps to Import and Export Business
The following steps are vital for any entrepreneur to attain perfection throughout the import-export procedure. After completing all the documentation, you need to do 3 important steps as an export import business owner:
Open a company: Opening a company isn't a big process now, as you've already completed most of the job with regards to acquiring all the necessary documents. Once you've got the documents mentioned in the previous sections, you're good to open your import export company.
Open a bank account: You'll have to receive funds, pay taxes, and complete some legalities. So, opening a bank account is vital. You can't enjoy smooth transactions without an authorised bank account.
The 10- digit import export code (IEC) number is necessary for receiving/sending shipments, order money, customs clearance and helps to create a strong legal recognition. Hence, getting this number from the appropriate authorities is critical for your import export business.
Contact the Potential Buyers
You can't contact potential buyers without the right strategies. After finding serious and dependable buyers, you need to send the offer price with details like quality, price, delivery terms, validation period for the offer, etc. Don't expect your potential buyer to directly accept your offer price. Negotiation will always follow, so be ready with some strong points that justify your pricing. Also, be a bit flexible in negotiation.
Send Samples and Confirm the Order
Before placing big orders, the importer will ask for samples most of the time, and you should never deny sending the same. Contact a well-known shipping company because you won't want any damaging product issues while shipping. You'll have to fill up an export declaration form demanding all vital info from your importer. If your sample satisfies the buyer, you can certainly expect orders to come in your basket.
Inspect Report and Final Payment
The buyer needs to receive the inspection report. Otherwise, they won't accept the order or complete the payment procedure. Consider yourself safe only when you receive the final payment from the buyer.
Send All the Original Documents
You Should send the original document only when you've received the final payment. Without the original documents, your buyer won't be able to clear import customs. Always believe in making all duties, regulations, and vital terms about your product right to avoid further surprises or errors from your end.
Importance and Benefits of Exports-Imports and foreign trade course
Exports-Imports and foreign trade form a crucial component of the economic growth of any country. Recently the country's global trade has grown significantly, Along with this the demand for skilled workers in this sector is also increasing. There is a lot of employment available in Import-Export and Foreign trade management in Trading Houses, MNC Companies, Export Industry.
Career opportunity in Exports-Imports and foreign trade course
A career in the field of foreign trade offers exciting and fulfilling opportunities. Candidates who complete this Export-Import documentations and procedure Course are usually paid handsome salary packages, Apart from an Import-Export Agent, there are other jobs available for those looking to work in the Import-Export Industry.
AIAT, a foreign Trade Coaching Institute helps you to become an Export/ Import Expert. The syllabus of the Export-Import foreign Trade Course is designed in a manner so as to teach all the basic concepts of the foreign Trade sector to the students in a systematic manner.