Import export meaning


Definition of import and export and what is the difference between import and export

Import is the process of purchasing foreign manufactured goods in the buyer’s domestic market, while Export process of selling goods to a foreign country. All the transactions which are handled by a person to import and export products from one country to another is known as Importers and Exporters. All the products of import and export into business are the best way to participate in the global economy.

Import and Export products into business are the best way to participate in the global economy. Top import and export items in India bring new heights to the trade business and also help to contribute in the international trading.

Why Import and Export is necessary?

Importing and exporting terms are very necessary because it helps grow national economies and expands the global market. Every country has some certain advantages in resources and skills. For example, some countries are rich in natural resources such as fossil fuels or precious metals and minerals while other countries have shortages of many of these resources.

Imports are important for business and individual consumer’s point of view. From beneficial point of view individual consumers produced products with imported components as well as other products that are imported into the country. If you import more than you export, more money is leaving the country than is coming in through export sales. Import and Export exists because one country has a supply of some commodity that is in demand by another.

The more a country exports, more domestic economic activity is occurring. More exports of products mean more production, jobs and revenue. If a country is a net exporter, its domestic product increases, which is the total value of the finished goods and services it produces in a given period of time. Net exports increase the wealth of a country.

Both terms of import and export helps to grow national economies and expands the global market. Imports are necessary for all types of businesses and individual consumers. Individual consumers benefits from locally produced products with imported components as well as other products that are imported into the country. Imported products provide better prices and more consumers; it helps to increase their standard of living.

Every country wants net exporters rather than net importers because importing gives us access to important resources and products at a cheaper cost. If import is done more than export, more money is leaving the country than is coming in through export sales.

On the other side, if a country exports more products, the more domestic economic activity is occurring. More export means more production, more jobs and revenue. If a country is a net exporter, it’s gross domestic product increases, which is the total value of the finished goods and services in a given period of time. Thus, net exports increase the wealth of a country.

There are many variations in Import and Export and these are as follows:

Export Management Company (EMC): EMC is that which handles all the export operations for a domestic company that want to sell product overseas but doesn’t know how? The main work of EMC is hiring dealers, handling advertising, arranging shipping, and sometimes arranging shipping also. EMC’s usually specialize by product, foreign market or both.

Export trading company (ETC): While an EMC has merchandise to sell and is using its energies to seek out buyers, an ETC attacks the other side of the trading coin. It identifies what foreign buyers want to spend their money on and then hunts down domestic sources willing to export. An ETC sometimes takes title to the goods and sometimes works on a commission basis.

Import/export merchant: This international entrepreneur is a sort of free agent. He has no specific client base, and he doesn't specialize in any one industry or line of products. Instead, he purchases goods directly from a domestic or foreign manufacturer and then packs, ships and resells the goods on his own. This means, of course, that unlike the EMC, he assumes all the risks (as well as all the profits).

Barriers to Trade

Exporting product is not always an easy endeavor. There are two types of trade barriers that hinder the export of its computer tablets.

Formal Trade Barriers: This type of barriers which are created internationally for the express purposes of making it harder for an exporter to sell goods in a foreign market.

Informal Trade Barriers: These barriers are not created to hinder imports of goods but have the effect of doing so.

A common barrier is a tariff, which is a special type of tax that is imposed on goods imported into a country. Tariff makes the imported goods more expensive than its domestic equivalent.

how to start an import export business

import export procedure


Import procedure was started under foreign trade Act 1992.Under this act, import of all the goods are free except for the items which are regulated by any law or policy. There is a pre- need for issuing a license authority for the import of goods. The Customs officials will not permit for clearance of goods unless the importer gets an IEC code.

Import procedure involves into the following phases:

Issuing of Import permit: For issuing a permit for import procedure an importer intending to import agricultural commodities in respect to the commodities.

Risk Management System: Risk management system (RMS) is introduced in respect of specified goods and importers.

Bill of entry for home consumption on payment of customs duty: Importer has to submit Bill of Entry giving details of goods being imported, along with required documents. Electronic submission of documents is done in major ports.

White Bill of Entry is for home consumption. Imported goods are cleared on payment of customs duty.

Out of customs charge order: Goods can be cleared outside port after ‘Out of Customs Charge’ order is issued by customs officer. After that, port dues, demurrage and other charges are paid and goods are cleared.

Bill of Entry for warehousing: Yellow Bill of Entry is for warehousing. It is also termed as ‘into bond Bill of Entry’ as bond is executed. Duty is not paid and imported goods are transferred to warehouse where these are stored. Green Bill of Entry is for clearance from warehouse on payment of customs duty. It is for ex-bond clearance.

Out of customs charge order: Goods can be cleared outside port after ‘Out of Customs Charge’ order is issued by customs officer. After that, port dues, demurrage and other charges are paid and goods are cleared.

Demurrage if clearance from port delayed: Demurrage is payable if goods are not cleared from port/airport within three days. Goods can be disposed of if not cleared from port within 30 days.

Export procedure involves certification of exportable materials as per the requirements of importing country. Export Procedure describes the documents required for export from India. These special documents may be required depending on the type of product or destination. Some export products may require a quality control inspection certificate from Export Inspection Agency. As Some food and may require a health or sanitary certificate for export.

A successful exporter is that who completely research the markets before exporting the products. The first step is to set up a business organization depending on the export needs. There are two types of exporters - Merchant Exporters who buy goods from markets and sell them to foreign buyers and a manufacturer exporter who manufacturers the goods he exports.

These are some documents which are required for exporting products.

Registration: First step is registration in export procedure. The exporters must have to obtain PAN based Business Identification Number(BIN) from the Directorate General of Foreign Trade (DGFT) required to filing of shipping bill for clearance of export goods. PAN based BIN is received by the Customs System from the DGFT online. The exporters are also required to register authorized foreign exchange dealer code and open a current account in the designated bank for credit of any drawback incentive’s required to register authorized foreign exchange dealer code.

Registration in the case of export under export promotion schemes:

All the exporters, under the export promotion scheme need to get their licenses, registered at the Customs Station. For such registration, original documents are required.

Arrival of Goods: The goods brought for the purpose of examination and allowed entry to the Dock on the strength of the checklist and other declarations filed by the exporter in the Service Center. The Port authorities have to check the quantity of goods actually received on the reverse of the Check List.

Status of Shipping Bill: Status of shipping bill is checked by the exporter. Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. An exporter can check the query counter at the service center whether the shipping bill is submitted or cancel before the goods are brought into the Docks for export and examination.

Export General Manifest: Within 7 days from the date of sailing of the vessel all the shipping lines/agents need to furnish the Export General Manifests, Shipping Bill wise, to the Customs electronically.

Apart from the submission of EGM electronically, the shipping lines need to continue to file manual EGMs along with the exporter copy of the shipping bills as per the present practice in the export department. The manual EGMs need to be entered in the register at the Export Department and the Shipping lines may obtain acknowledgements indicating the date and time at which the EGMs were received by the Export Department. This is the general procedure for export under EDI Systems.

Export procedure involves into the following phases:

Registration of documents under Export Promotion Scheme: Advance authorisation, DEPB etc. should be registered if exports are under Export Promotion Scheme.

Shipping Bill: Export is required to submit Shipping Bill with required documents for obtaining permission to export. There are five forms :

  • Shipping Bill for export of goods under claim for duty drawback – these should be in Green colour
  • Shipping Bill for export of dutiable goods – this should be yellow.
  • Shipping bill for export of duty free goods – it should be white colour.
  • Shipping bill for export of duty free goods ex-bond – i.e. from bonded store room – it should be pink colour (e) Shipping Bill for export under DEPB scheme – Blue colour.

Third party exports: Export can be by manufacturer himself or third party (i.e. by exporter on behalf of another). Merchant exporter means a person engaged in trading activity and exporting or intending to export goods.

Registration with DGFT and EPC: Exporter has to be obtain IEC number from DGFT is advance. He should be registered with Export Promotion Council if he intends to claim export benefits.

Entry Outward: Loading in conveyance can start after ‘Entry Outward’ is given by customs officer.

Export Import Documentation


Introduction

Export term refers to the sale of goods from one country to another against payment in foreign currency in a legal way. Import term means bringing goods into India from a place outside India.

Documents for Import and Export are more complex than those used for domestic sales due to the special characteristics of international trade such as geographical distance, various customs laws, greater risks etc. All the documents for import and export goods will depend on the conditions of sale agreed between seller and buyer.

Why need documentation

There are some reasons for which documents are necessary for Import and export of goods. These are as follows:

  • Due to long distance separation between buyers and suppliers.
  • Some formal Contract such as assigning duties or responsibilities is necessary.
  • Operational constraint.
  • Claim of export assistance and incentive which are provided by the government of a country.

Documents required for Import and Export

International Purchase Order

Basically, international transactions are based on the buyer’s purchase order. It can be defined as the exchange of information between exporter and importers with respect to price, quality and quantity of products etc. After the transaction details agreed, the supplier issues an informal price or a more detailed Performa invoice. If the buyer accepts the seller’s price and other conditions, the buyer issues a purchase order. In International purchase order, the seller’s signature of the purchase order will constitute the acceptance of the transaction.

Commerce Invoice

Commerce Invoice is the main document of Import and export documentation because it contains all the information about international sale. It contains price of the product, quantity, services sold, delivery and payment conditions as well as the taxes and other expansive also. This document is prepared by the exporter and then addressed to the importer and the import custom clearance.

Packing List

It is the detailed version of commercial invoice but without price information includes invoice number, quantity and description of goods and shipping marks and numbers. Packing list is not required all transactions, it is required by some countries and some buyers.

Packing list is prepared by an exporter and addressed to the importer, the carrier and the import customs clearance.

Irrevocable Letter of credit L/C

In this document, the importer’s bank agrees to the exporter that the exporter will get paid if it can prove that it has shipped the goods by providing the corresponding documents required by the letter of credit.

Exporter likes this document because the advance assurance of payment ensures the seller that it will not waste time preparing or shipping an order to a buyer who ultimately refuse to accept or pay for the goods.

CMR Document

CMR transport document is used by drivers, operators and forwarders that gives the responsibilities and liabilities of the parties to a contract for the carriage of goods by road internationally.

Basically, the carrier completes the form but the exporter is responsible for the accuracy of the information and must sign the form when goods are collected. CMR document is addressed to the importer and the carrier.

Bill of Lading

This document is issued by the agent of a carrier to a shipper, signed by the captain, regarding receipt of the goods, the condition on which transportation is made and delivers goods at the port of destination to the lawful holder of the bill of lading.

Therefore a bill of lading is a receipt for merchandise and a contract to deliver it. This document is prepared by the shipping company through the agent and the importer.

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