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10 Must-Have Documents For Exporting Like A Pro

Unlock the essential documents required for export from India for a smooth, hassle-free journey.

Expanding into international markets is an exciting milestone for any business, but it all starts with one major step: getting your export documents in shape. Whether you’re a fresh entrant or a seasoned veteran testing the foreign trade waters, having the right documents can either make or break your business. Feeling overwhelmed about where to start? Don’t worry. We’ve got your back with an all-in-one guide to walk you through the must-have documents required for export from India. Let’s dive in and get started! 

Why Is Export Documentation Critical? 

Picture this: you've got the finest products for markets across the globe and are ready to ship them out, only to have them stuck at customs due to incomplete paperwork. That's indeed a splitting headache for many exporters, which makes getting your documents in order quite essential. 

In fact, export documents aren't just about bureaucracy; they're the backbone of international trade to ensure smooth transit beyond borders, timely payments, and regulatory compliance. 

The Must-Have Documents For Export From India 

To help you navigate the export documents maze, we’ve chalked down a list of the mandatory documents required for export from India. From an import export license to the registration of your import export company, we’ve covered it all! 

Import Export Code 

The first step to entering the export world is getting an IEC certificate or an import-export code. In its simplest sense, an Import Export Code is a 10-digit code that is issued by the Directorate General of Foreign Trade for any individual or business looking to export or import goods. 

Think of it as a global trade ID in the international market for businesses of all types and sizes. With an IEC certificate, you can avail yourself of customs clearance, remittances, cross-border trade, and other export-related formalities smoothly.

Commercial Invoice 

The next addition to your documents required for export from India is a commercial invoice. While the title may suggest, a commercial invoice goes beyond being a mere receipt. In fact, it’s a document that legally binds the terms and conditions for sale between an exporter and a buyer. 

Plus, it lists out the terms of payment, the quantity of goods, the unit price, and the total cost of goods. This way, customs officials can determine and assess the taxes and duties to avoid any shipping discrepancies. 

Packing List 

Apart from the aforementioned documents required for export from India, exporters also need a copy of their packing list. In its basic sense, the packing list lists, quite literally, out a detailed inventory of the contents of the shipments. In other words, it specifies what’s in the shipment, its weight, dimensions, and packaging. While this may not seem so important, it enables customs officials to verify the shipment against the bill of lading and commercial invoice for efficient and effective handling. 

Airway Bill/Bill of Lading 

Among the essential documents required for exporting from India, a bill of lading or airway bill stands as a cornerstone of the shipment process. These documents, in their basic sense, are the agreement proof between the shipping company and the exporter, stating the terms of transportation. Think of it as a receipt to transport the cargo. 

Certificate of Origin

Beyond these, every exporter should have a certificate of origin in their paperwork file. The main purpose of this certificate is to verify where the product was made. Think of it as the nationality of your product. This way, exporters can meet the importing country’s regulations and claim any benefits pertaining to international trade agreements. 

Shipping Bill 

Along with the certificate of origin, another important document required for export from India is the shipping bill. This piece of paper includes all the details about the exporter required to clear the cargo at customs. It indicates in-depth insights about the description of the goods, quantity, destination, port of entry, tax incentives, and the exporter’s profile. Once this is verified and approved, the shipping bill, legally, allows the goods to be shipped to their final destination. 

Export License 

While exporting goods, certain products, like military equipment, hazardous materials, and rare minerals, may require an export license before they can be shipped out. That’s why it’s essential for exporters, especially those from India, to thoroughly review their product category to check whether or not they need an export license to avoid any legal issues. 

Letter of Credit 

Along with these, a letter of credit is also an integral part of your export documentation portfolio. As the name suggests, a letter of credit is a financial instrument given by a bank that acts as a confirmation that the exporter will receive the payment for goods shipped. However, this is conditional, as it depends on whether or not they meet the terms and conditions. 

Insurance Certificate 

Exporting goods beyond borders comes with its own set of risks, such as damage, theft, loss, etc. That’s why it’s essential for all exporters to have an insurance certificate that gives them potential coverage under such circumstances. Plus, it helps you be safe rather than sorry. 

Product-Specific Certificate 

Lastly, depending on the type of product being exported, certain documents are required to comply with the rules and regulations of the importing country. 

For instance, electronics may require a CE certificate, whereas agriculture and food products often require a phytosanitary certificate. It’s important to note that the main purpose of these documents is to validate whether or not products meet the necessary quality, safety, and health standards of the destination country. 

In A Nutshell 

Exporting to any country across the globe, especially India, can open numerous doors for your business, but it all starts with getting your fundamentals right. Every single document has its own significance, and getting it right helps to ensure a smooth, hassle-free journey. By double-checking the requirements of your exporting destination, you can be well-equipped to thrive in the competitive global market.

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From Trees To Trade: Decoding The Promising Future of Indian Coconut Exports

Coconuts, a tropical staple in many Indian households, are more than just an agricultural pursuit. In fact, they’re a significant contributor to the nation’s export economy. From desiccated coconut to coconut oil, Indian coconut exports have indeed gained a strong global foothold. Curious to know everything you need about this competitive yet thriving market? Read on to unlock the biggest coconut exporters in the world, how to start a coconut export business in India and much more. 

The Global Coconut Export Landscape 

As a globally traded commodity, the coconut export market is driven by the rising popular demand for coconut-based products in several sectors. With more consumers seeking more plant-based natural products, the biggest coconut exporters in the world have indeed stood at the forefront of production and distribution. Not to mention, countries like the Philippines, Indonesia, Brazil, India, and Vietnam, to name a few, have established export networks and large-scale coconut plantations. 

In fact, even though India, while being a major coconut producer, emphasized domestic consumption, recent trends reveal how the nation is gaining ground in the international markets by targeting North American, Middle Eastern, and European markets, to name a few. 

What’s more is that India stands tall as one of the largest coconut producers globally, accounting for 31.45% of the world’s coconuts. In fact, with the nation’s fertile coastal states, like Karnataka, Tamil Nadu, Andhra Pradesh, and Kerala, at the heart of this thriving industry, the Indian coconut export business is booming. 

Not to mention, Indian coconut exports are a mix of everything from desiccated coconut and coconut oil to activated carbon made from coconut shells and coir. These coconut-based products are not only an Indian staple but also are sought after increasingly across the globe. 

India’s recent emphasis on sustainability, quality, and organic certifications of coconuts has further enhanced its appeal in the international market. In fact, Indian coconut export businesses are achieving the growing market demand for organic coconut products, including organic oil, coconut water, and other niche products, to cater to an array of consumers, including those who are health-conscious. This strategic focus steadily positions the nation as a competitive force on the international front. 

The Biggest Coconut Exporters in the World 

While India’s coconut exports have found a receptive audience across the globe, it faces severe competition from the biggest coconut exporters in the world. In fact, with the leading coconut exports coming in from the Philippines and Indonesia, accounting for approximately 20% and 18% of global coconut exports, respectively, both nations saw a significant increase in their desiccated coconut exports. 

On the contrary, India ranks 3rd in its coconut exports, accounting for 15% globally. In fact, India’s exports of coconut products were valued at $ 427.3 million in 2022–23, representing a 9.8% increase from 2021–22. 

Apart from these top 3 contenders, other nations like Vietnam, Brazil, Sri Lanka, Papua New Guinea, Mexico, Thailand, and the Dominican Republic play a significant role in contributing to the global coconut export landscape. In fact, each of these nations has tailored their foreign trade strategies to meet specific market demands, and their coconut exports are no different. 

In a Nutshell

Overall, India's coconut exports serve as a testament to the global affinity for coconut-based products. Despite facing severe competition from the biggest coconut exporters in the world, including Indonesia and the Philippines, India has indeed carved out a niche in the international market, especially with a streamlined focus on sustainability and quality. Looking ahead, the future of coconut exports in India seems promising with significant opportunities to diversify, innovate, and connect with a larger consumer base. 

Frequently Asked Questions (FAQs)

Is coconut export business profitable in India? 

Absolutely! With a significant and growing market demand, starting a coconut export business is indeed profitable, especially in India. 

How to start a coconut export business from India? 

In order to start a coconut export business in India, it’s important for you to have a proper plan. In other words, you need to have a thorough understanding of the global coconut export market. Post that, it’s important to establish a sound supplier and buyer network. Before exporting any product, it’s essential for you to get the documentation in shape, especially any compliance certificates and licenses. Once you’ve got these in proper shape, you’re all set to pack and ship your products. 

What are India’s top coconut exports? 

Standing as one of the biggest coconut exporters in the world, India primarily exports fresh coconuts, coconut oil, coconut sugar, coconut water, coconut sugar and desiccated coconut to name a few. 

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The Role of Innovation & Technology in Boosting India's Exports

Enterprises in India are in for an exhilarating journey spanning across the globe. And what is adding a peppy tadka to their export endeavors is a fab fusion of innovation and technology.

These enterprises have taken challenges up as opportunities and in a dazzling display of trade prowess, and export and import moves, we see India waltzing onto the significant international stage with the flair and confidence of a successful economy.

Innovation, the maestro of the trade symphony

The spotlight is now on innovation as it takes the centre stage in the Indian export arena. With a hawk-eye on trending market analytics and ever-changing consumer needs, enterprises are concocting potions with unique blends of products and services. The experience leaves behind a lasting impression. From the high-quality hang’em all and drape’em all handcrafted traditional tapestries of Varanasi to the cutting-edge software solutions emerging from the bustling tech hubs of Bengaluru and Hyderabad, every export reflecting on ___ platform reflects a unique touch of India's rich cultural tapestry and diversity.

What's innovation without its dance partner, technology?

The picture is now pretty clear. While Indian enterprises embrace technology; they are equally adept at twirling with it. What’s the result? A whirlwind of efficiency and productivity. Manual processes have now become a relic of the past. The emerging present-day champions are automation, artificial intelligence, and data analytics.

Information Technology (IT) and Software Services

Innovation and technology contribute significantly to the growth of any country’s economy. The world is now a witness to how companies like Tata Consultancy Services (TCS), Mahindra and Mahindra, Infosys, and Wipro IT are leading from the front as India emerges as a champion global IT hub. 

We are the Coders of Change. Every line of code speaks of our binary brilliance rewriting the narrative of India’s export progress, exporting change in far-flung corners of the globe, and ringing in a revolution in the way the world experiences technology.

Pharmaceuticals

Our records show India as a major stakeholder in the global pharma industry. The pharma exports of India grew 3.2 per cent in FY23 to $25.4 billion.

Exporting Health, Bottling Hope

What’s extraordinary about India is that from manufacturing units to international industrial shelves, our pharma products are bottling hope and exporting good health and wellbeing. India's pharmaceutical export success – of vaccines, biopharmaceuticals, and bioinformatics - is a testament to our global approach and the commitment we hold towards global well-being, one potion at a time.

Automobiles and Automotive Components

The estimated export of auto components from India during FY23 was around $43.35 billion. Companies such as Tata Motor, and Mahindra and Mahindra have developed fuel-efficient electric vehicles further boosting India’s export prospects.

With dynamic drives and amazing global vibes, you are in for both when you dive into experiencing our automobile components. When we export automobile and automobile components, we export a lifestyle – providing to the end users a fine-crafted driving experience that is also a global sensation.

The figures on The Dollar Business – an advanced AI-Powered super engine for exporters and importers showcase how India’s journey of exporting automobiles spans across continents, giving you the adrenaline rush, and bringing you the thrill of driving even in the most rugged terrains. Fasten your seatbelts, the world is your playground!

Agriculture and Food Processing

India's exports are a lot spicier than our authentic masaledaar curries. Our diversified exports leave a flavorful impact on the global market space!

The tadka of masala that we add to our exports comes with a dash of grit and determination, and resilience and innovation.

The agricultural sector is not behind in the race either. With the adoption of technology, modern processing techniques, and advanced irrigation methods in agriculture and food processing, productivity leapfrogs. The Indian food processing industry is estimated to be growing at the compound annual growth rate of 15.2%.

Textiles and Apparel

Computer-aided Design (CAD) and automation in the manufacturing of quality products in the textile and apparel industry add a competitive advantage in India’s exports and imports.

The textiles and apparels that we produce are not just threads and fabrics; our products showcase a vibrant tapestry of tradition, culture, style, and craftsmanship. India’s technology-infused sewing and pattern-making skills, stitch together success stories even on global runways.

2023 marked a whopping 108.4% increase in spun yarn exports from India.

Infinite Impact

Innovation and technology create a more responsible and sustainable trade ecosystem. Embracing innovation and technology has vast potential in creating jobs and generating employment opportunities. It drives economic growth and unlocks a country’s prospects towards building a more connected and prosperous business ecosystem.

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Decoding Trade Tech: Future of Technology on Export Import Trade Intelligence

Global trade, an arena that was once dominated by ships and caravans, is now witnessing rapid transformations with the digital highways of the 21st century. Longer supply chains and increased competition in the markets have spurred the demand for optimization. 

This digital revolution is not just re-shaping how we trade, but also spawning an era of better transparency, connectivity, and efficiency in the realm of global commerce. But the real question lies in how technology is changing the future of international trade, especially with up-to-date global trade intelligence. Curious to know how technology is taking the trade world by storm? Read on to find out! 

Exploring The Modern Trade Terrain 

With the advent of digital technology, the days where global trade was bound to paper trails & physical limitations are long gone. In fact, digital advancements like AI-powered global trade intelligence & big data analytics are not only paving the way for moving goods across borders, but also creating a faster, more transparent & efficient marketplace. Not to mention, they enable businesses to anticipate market trends, identify the right buyers and sellers, and streamline their operations with ease & accuracy. 

How Is Technology Shaping the Future of International Trade? 

Technology, especially AI in international trade, has changed the name of the game for the future of international trade by transforming global communication and connectivity. In fact, the integration of video conferencing, Internet and email has significantly reduced geographical barriers, often associated with global trade, allowing businesses to discover and connect with buyers, sellers & potential partners from the comfort of their offices or homes all with a click of a button. 

Plus, the advent of technology in the global trade realm has transformed supply chains by providing real-time export import competitive intelligence to allow businesses to make strategic & informed decisions. 

What’s more is that with every step and process automated, trading becomes easier with stacks of paperwork at border crossings long gone, and export import trade intelligence simplified. 

Is Technology A Win-Win For Global Trade? 

While implementing trade tech may have many benefits for businesses worldwide, the real question lies in whether it’s a viable fit for businesses in the long run or a temporary fixer upper.

 The answer is quite simple – yes. In today’s ever-evolving global trade arena, technology is indeed a meaningful change with abundant potential. 

In fact, trade tech not only reduces costs & increases efficiency, but also scours new avenues and opportunities for all-sized businesses to thrive & compete. 

The Way Forward

Overall, technology, especially in the global trade arena, isn’t just a mere tool. Instead, it stands as the sail of the global trade ship, with real-time export import trade intelligence to steer it on the course of success. 

With continuous improvements and innovations at play shaping our interconnected world, it is indeed the need of the hour for businesses to harness these digital winds for a prosperous tomorrow. Powered by technology, the sky is the limit for the future of international trade, all geared up for unparalleled growth. 

Frequently Asked Questions (FAQs)

How will technology affect global trade in the future? 

Technology, for the future of international trade, would provide faster, real-time export import trade intelligence across industries and countries to understand trade dynamics & global supply chains to make businesses more efficient. 

Does technology play a pivotal role in international trade? 

Yes, technology serves as an essential pillar for international trade, as it empowers them to tap into new markets beyond borders for them to thrive in. 

Does AI help in import export business? 

As one of the leading technologies in today’s digital era, AI helps import export businesses by providing real-time export import trade intelligence to streamline supply chains, find active buyers and sellers, and gauge consumption patterns of people for a specific product and industry. 

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Top Mistakes Exporters Make in International Trade

Blunders of Exporters in International Trade

International trade is leapfrogging at a mind-boggling speed. While sealing deals look easy, cross-border delivery comes with its own hassles. Exporters find themselves struggling to execute control as they end up navigating a treacherous minefield of potential mistakes. “To err is human. Missteps are inevitable. We believe our Indian exporters and importers need some fine-tuning before they dive deep into the world of trade.” opine experts at TDB – a multi-national company acting a catalyst in global trade.

We are listing down some common mistakes that exporters in the trade industry often make:

Let's take a light-hearted look at some of the top blunders our exporters make in the world of global trade.

Lost in Translation

Oftentimes we forget translation requires some amount of localisation. Have you ever tried talking a word or two in the local dialect when you are traveling and exploring a new place? Feels fun, right!? You feel like you are one among the people there. But then when you translate because you must translate, things can go awfully wrong. So is the case with exporters too. We know of exporters who in their well-intentioned attempt to translate product descriptions into a foreign language use the service of online translators. And, oh the result! The translated description hilariously morphs into something unexpectedly different. Terms such as "state-of-the-art technology" turn into "advanced potatoes" and "premium quality" becomes "supreme chicken." Translations that leave potential buyers scratching their heads as to what exactly the exporters intend.

The Time Zone Tango

It takes two to tango!

Exporters, especially those new to the game of trade, often tend to overlook the importance of adhering to time zones. Imagine a scenario where there’s a supplier scheduling a crucial international conference call at 6:00 PM only to realize too late that it's 6:00 AM for the recipient in another continent. The outcome? Sleep-deprived participants or missed opportunities, all because the dear supplier missed checking the different time-zone factor. If only the prospective customer verified the scheduled time!

Cultural Quirks and Oopsie Daisies

Every culture has its quirks just like how the Swedish enjoy Fika – a unique cultural quirk that allows people to slow down from the mundane, socialize, relax, and enjoy the simple pleasure of life.  With quirks, exporters can unwittingly step on cultural landmines you cannot ignore and just stepover. Well… sadly, one company had to learn this the hard way. They sent a pretty huge shipment of bright yellow flowers to a country where the colour symbolizes mourning. Oopsie Daisy! Now, just imagine the reaction at the place where the flowers would have added to the beauty of a product launch affair. A joyous product launch turned into a sombre affair, sans flowers.

Currency Catastrophes

Currency exchange rates can be tricky with their free-floating or fixed nature. Indian Exporters sometimes find themselves playing a game of probability or financial roulette. One exporter was under the assumption that they were striking a great deal, only to realize later they were quoting prices in a depreciating currency. And, the result? Profit margins dwindled faster than a cube of ice in the Sahara.

Documentation Dramas

An international trade deal is closed, but the hard work remains. It comes with its fair share of paperwork. This is precisely where exporters often find themselves drowning in a sea of documents. And so… there was this exporter who was just back from proposing marriage to his long-time partner. They had made a note to practice the lines to be delivered when on their knees. This note ended up on a table among a bulk of other documents. Guess what! The air felt different at the customer’s end. The unexpected romantic gesture amid customs declarations left the customer bewildered.

Talking serious business! Doesn’t it feel like these instances could rival even sitcom scripts? Language mishaps, cultural faux pas, and some amazing anecdotes; we are pretty sure you found the pointers intriguing. So, the next time, you are taking that big plunge mind the time zones, double-check your translations, and keep an eye on the market and currency fluctuations. Also, unexpected letters could make or break your day!

Summing it up…

To be a successful exporter, one needs meticulous planning, thorough research, and a dynamic approach to facing challenges head on. Exporters can maximize their export potential by steering clear of common pitfalls in the global market.

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AI for Exporters and Importers: Pioneering the Future of Trade Intelligence 

In the dynamic landscape of international trade, where markets evolve rapidly and global connections are more vital than ever, the integration of artificial intelligence (AI) is proving to be a game-changer for exporters and importers alike. This blog explores the transformative role of AI in shaping the future of trade intelligence, with a specific focus on how it enables businesses to efficiently find buyers and sellers, all while leveraging the power of import export data. 

1. Finding Buyers and Sellers: 

In the expansive world of international trade, identifying potential buyers and reliable sellers is a significant challenge. AI-driven solutions are revolutionizing this process by offering advanced algorithms that meticulously analyze vast datasets, including crucial import-export data. This data-driven approach empowers exporters to pinpoint target markets, understand buyer preferences, and streamline their outreach efforts with unparalleled precision. Likewise, importers can leverage AI to identify trustworthy sellers, ensuring that their procurement processes are grounded in data-driven decision-making. 

2. The Crucial Role of Import-Export Data: 

At the core of AI's effectiveness in trade intelligence lies the rich repository of import-export data. This data serves as the lifeblood for AI algorithms, providing deep insights into market trends, demand fluctuations, and the competitive landscape. By harnessing the power of import-export data, AI systems empower businesses to make informed decisions, enabling them to navigate the intricacies of international trade with agility and foresight. 

3. Predictive Analytics for Strategic Decision-Making: 

AI's predictive analytics capabilities offer exporters and importers a strategic edge. By analyzing historical import export data, AI can forecast future trends and identify emerging markets. This foresight allows businesses to tailor their strategies, proactively target growth opportunities, and stay ahead of market dynamics. Whether expanding into new territories or optimizing existing operations, predictive analytics driven by AI enhances decision-making processes. 

4. Automation Streamlining Trade Operations: 

AI-driven automation is reshaping traditional trade processes, bringing efficiency and accuracy to the forefront. From document processing to customs clearance, automation reduces manual workload, minimizes errors, and accelerates workflows. This not only enhances overall operational efficiency but also frees up resources for businesses to focus on strategic aspects of their trade endeavors. 

Conclusion: 

In conclusion, AI's integration into the world of international trade is ushering in a new era of efficiency, insight, and connectivity. For exporters and importers seeking to navigate the complexities of the global marketplace, leveraging AI for finding buyers and sellers while tapping into the wealth of import-export data is no longer an option but a strategic imperative. As businesses embrace these technologies, they position themselves at the forefront of a transformative wave in trade intelligence, ensuring they are not only adaptive but leaders in the evolution of global commerce. The future of international trade is undeniably entwined with the capabilities of AI, and the journey toward a smarter and more connected global trade landscape has already begun. 

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What are the most commonly used terms in Export Import Business?

Following are the terms that are used extensively along with their meanings in Export Import Business.

Ex work or EXW

Ex Work or EXW is an incoterm where the exporter or seller sells his/her goods or services to buyers at his/her own premises or any other named place. The importer or the buyer assumes all the costs and risks of goods clearance for export, loading and unloading and movement of goods from one place to another. 

Exchange Control

An Exchange Control policy is designed by the government to restrict the outflow of domestic currency and prevent a worsened balance of payments position by controlling the amount of foreign currency that can be retained or held by citizens of the country.

Exchange Permit

An Exchange Permit is a permit that is required by the importer or buyer‘s government to enable the import firm to convert its own currency into foreign currency. This is done to pay the exporter or seller in a foreign country for the goods or services sold.

Exchange Rate

An Exchange Rate is the unit price of one currency in correspondence to different currency.  A unit of one country’s currency can be exchanged for a unit of another country’s currency.

Exchange Restrictions or Exchange Regulations

Any restriction or regulatory measure imposed by an importing country. This is done in order to protect its foreign exchange reserves.

Excise Duty

Any duty fee or amount that is charged on both produced and imported goods is called excise duty. Goods or services that are subject to excise duty are alcoholic spirits like beer, wine, tobacco etc. The duty or the taxes calculated differ from product to product.

Excise Goods

All goods other than chewing tobacco which fall under the Alcoholic Liquor Duties Act 1979, Hydrocarbon Oils Duties Act 1979 or the Tobacco Act 1979 which are chargeable with duty of excise are excise goods.

Excise Tax

Excise Tax is a domestic tax calculated on the manufacture or sale or use of any commodity within the country. This fee is usually refundable if the product is exported.

Excise Warehouse

An Excise Warehouse is dedicated space/premises authorized by the HM Revenue & Customs (HMRC) for the deposit without payment of duty of goods or services liable to excise duty. It is to be noted that there are special requirements for premises for the storage of oil and other liquid items. 

Exempt persons

Buyers or importers who are not registered for VAT or any registered taxable persons who are re-importing goods or services other that in the course of their business.

Ex-Im Bank

An Export and Import Bank is the official and authorized export credit agency. Ex-Im Banks were set up to assist in financing the export of goods or services from one country to another country or other International markets. Exim Banks offers services to companies, be it small or big to convert export leads into real sales conversions that help to create an overall stronger economy. Private sector banks and lenders are not direct competition to Ex-Im Bank. In fact they support in export financing to fill the gaps in trade financing. These banks reduce the risks that a country might face in international trade. These banks provide working capital guarantees, i.e. pre-export financing, loan guarantees, export credit insurance and direct loans or buyer financing. No transaction for these banks is too large or too small. On an average, 85% of the transactions directly benefit small businesses.

Expiration Date

Expiration Date is the final date upon which the presentation of documents and drawing of agreements under a LC or Letter of Credit can be made.

Export

An Export is the actual shipment or transportation of goods or services under the Export Administration Regulations or EAR or International Traffic in Arms Regulations or ITAR. 

Export Administration Regulations (EAR)

Export Administration Regulations or EAR as it is known as are a set of regulations and rules and protocols related to the United States export control law. This is a legally bound document that elaborates on the type of products and data that fall under the category of export.

Export Broker

An Export Broker is an individual or a company that brings together exporters and importers on one platform but does not take part in actual commercial/sales transactions.

Export Cargo Shipping Instruction or ECSI

ECSI or an Export Cargo Shipping Instruction is a trade document in the shipping kit which is a part of the export documentation docket. It is present throughout the process of international trade. This document is issued by the exporters or sellers to the shipping companies or carriers mentioned the details of the goods or services and the terms and conditions for the movement of these goods or services along with cost allocation. 

Export Commission House

An Export Commission House is an agency or firm that acts as a buying or selling platform for a foreign buyer.  

Export Control Classification Number (ECCN)

An ECCN or Export Control Classification Number is a unique dedicated alphanumeric identification number used to identify a certain goods or item on the CCL or the Commerce Control List.

Export Control Exemption and/or Exclusion

Certain legally recognized contexts wherein export control regulations are not applicable to the passing on of information. For instance, fundamental research, public domain/publically available information, educational information and disclosures to Bona-fide full time employees. 

Export Control Laws and Regulations

Governments of countries formulate certain policies, rules and prohibitions to restrict and regulate the export of goods or services.

Export Credits Guarantee Department (ECGD)

Wholly owned by the Government, this agency extends export credit insurance and other services to exporters in order to promote exports.

Export Declaration

Export Declaration is an official document submitted at the port or an airport declaring the details of goods or services that are being exported outside the country. It is submitted at the port of exit.

Export Duties

Export Duties are the taxes or duties paid by the exporter on the goods or services he/she exports from his/her country.

Export House

Export house is an intermediary agency dealing with buying and selling. The agency does not manufacture the goods or service; it only handles the export materials and sometimes financing between the exporter and importer. 

Export Incentives

Export incentives come in various forms like public subsidies, tax rebates, financial and non-financial schemes or measures that promote foreign trade and increase economic activity in the country.

Export Invoice

Export Invoice is an official document required if one wants to export goods or services outside the country to another country/region. This document entails the minute details like the size, volume, price, and weight, country of origin etc. other important description of the goods or services exported.

Export License

Export Licence can be obtained from the Government of the said country. This licence is required to legally, following the laws of the land to export particular goods or services like pharmaceuticals, chemicals and ammunition. The exporter or the seller needs to apply and obtain the licence if he/she wants to export the above mentioned goods. .

Export License Exception

Export License Exception as understood is the authorization granted under very specific situations allowing for the export or re-export of good or services that would under normal situations require an export license. Export License Exceptions are mentioned in detail in (Export Administration Regulations) EAR 740.

Export Management Company

An Export Management Company is a private company offering services similar to the export department for multiple manufacturers of goods or services. These are rendered either by taking title or by transacting the trade on behalf of their clientele. Their client in turn pays them a fixed salary, retainer or commission, or retainer and commission for the rendered services.

The above terms are commonly used phrases or terms in the foreign trade industry/Import Export Business that help exporters and importers in their day to day trade activities.

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What is the meaning of Trade Remedies in Import Export Business?

What is the meaning of Trade Remedies in Import Export Business?

Trade Remedies in Import Export Business based on import export data are policies of trade that help Governments take corrective measures or steps against imports that result in material injury to the domestic industry. These Trade Remedies are used as corrective measures for competitive imbalances created by unfair or biased trade practices. These remedies can be introduced under specific circumstances for providing protection from imports beyond the protection granted by the tariff schedules negotiated as a part of GATT (The General Agreement on Tariffs and Trade).

WTO or the World Trade Organization identifies three main types of import restraints as trade remedies, they are:

Antidumping measures

Countervailing duties

Safeguard measures

The purpose of these duties is to protect the industry against a situation arising out of unfair trade practices. i.e. to offset the adverse effect of price discrimination internationally.

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What is the difference between a clean on-board Bill of Lading (BOL) in import export business and a shipped on-board Bill of Lading (BOL)?

In the foreign trade market, after the completion of all the necessary formalities and procedures of the Customs under export at the exporters or seller’s country, the goods or services are then handed over the shipping carrier for the purpose of transit to the buyer’s or the importer’s country. In case the consignment (goods or services) are transported by sea, the shipping carrier issues a receipt of goods or services to the shipper or the exporter or the seller which is called the Bill of Lading (BOL). In case the goods or services are not loaded on board the vessel, the Bill of Lading (BOL) states “Received for shipment” without the mention of “shipped on board”. In case the exporter or the seller insists or requires the Bill of Lading (BOL) to mention “shipped on-board”, it will be done only after the cargo (goods or services) are loaded on-board the vessel. A “shipped on-board” Bill of Lading (BOL) may be required by the exporter or the seller for claiming various export benefits from the Government.

What is the meaning of clean on-board Bill of Lading (BOL)? What is the purpose of this document and how can one use it?

At the onset, there are two types of documents in import export business, a clean Bill of Lading (BOL) and clean on-board Bill of Lading (BOL). A clean Bill of Lading (BOL) is when the shipping carrier of goods or services receives the shipment (cargo) in good condition meaning properly packed and sealed. In other words, any cargo that is received under a clean Bill of Lading (BOL) carries no other clause, notation, comments or remarks regarding the quality or quantity of goods or services received including the packaging. After receiving the clean Bill of Lading (BOL), the shipping carrier is responsible or any damage, handling damage, poor packaging or any defective items.  After all the goods or services which are in good condition have been loaded on board the vessel, the shipping carrier then issues a clean on-board Bill of Lading (BOL) certifying that the cargo on board has no other clause  or notation or comments/remarks regarding the quantity, quality or packaging of the goods or services. In simple terms, the shipping carrier when issuing the clean on-board Bill of Lading (BOL) certifies that the goods or services that have been loaded on board the vessel are in good condition without any damage or defect properly packed and sealed.

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Understanding the Basis of IGST (Integrated Goods & Services Tax) & SGST Rates on Imports: Insights from Import-Export Data

The IGST (Integrated Goods & Services Tax) is levied on the import of goods or services to India. This is considered as interstate supply. When an import takes place, calculating customs duty for imports, IGST (Integrated Goods & Services Tax) is also included. Prior to the introduction of GST (Goods and Services Tax), basic Customs Duty, Countervailing Duties (CVDs) and Special Additional Duty (SAD) were accounted for.  However, once the Government introduced of GST (Goods and Services Tax), Countervailing Duties (CVDs) and Special Additional Duty (SAD) were replaced by IGST (Integrated Goods & Services Tax). Hence, IGST (Integrated Goods & Services Tax) along with Basic Customs Duty are the two categories of taxes that determine the total import duty payable to the Customs Department at the time of import of goods to India post the introduction of GST (Goods & Services Tax).

 What is the difference between SGST (State Goods and Service Tax) and CENVAT (Central Value Added Tax?)

The full form of SGST means, State Goods and Service Tax, and CENVAT means, Central Value Added Tax. SGST or State Goods and Service Tax forms one of the three components of the GST (Goods and Service Tax). GST (Goods & Services Tax) comprises of CGST (Central Goods and Services Tax), SGST (State Goods and Service Tax) and IGST (Integrated Goods & Services Tax). The difference between SGST (State Goods and Service Tax) and CENVAT (Central Value Added Tax) is that SGST (State Goods and Service Tax)charged at last step while CENVAT (Central Value Added Tax) is charged at the beginning of the manufacture of goods or services. Once the GST (Goods & Services Tax) ACT comes into force, CENVAT (Central Value Added Tax) will be abolished and merged with GST (Goods & Services Tax).

What is the difference between Central Excise Tax and CENVAT (Central Value Added Tax)?

CENVAT or Central Value Added Tax is the credit of central excise duty that is paid for the procurement or duty regarding the manufacture of the final good or service which needs to be exported.  Whereas, Central Excise Tax is the tax that is levied on the manufactured goods or services in India. This tax has to be paid on the final goods or services post manufacturing.

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Acquiring a Phytosanitary Certificate for Export: Process and Export Import Data Analysis

In the foreign trade industry, a Phytosanitary Certificate is a commonly used term in import export industry. The questions usually asked are:

What are the procedures for Phytosanitary Certificate and who comes for the inspection?

The purpose of a Phytosanitary certificate in import export business is to declare that any plants or plant material that is being exported is free from any pesticide or disease. This is done to prevent the introduction and spread of any pests or insects in the importing countries. The exported goods analyzed through import export data must be processed in a way that they have no potential whatsoever to for introducing any regulated pests.

The procedures and formal features of this certificate are concluded upon according to the guidelines of the NPPO (National Plant Protection Organization) or any other equivalent authority/authorities in the country. These authorized bodies certify to meet the standards of import Phytosanitary requirements.

According to the World Trade Organization (WTO), each country has designed certain standards and parameters to meet the Phytosanitary requirements of foreign countries. These guidelines and standards form an integral part of the final Act of General Agreement of Tariff and Trade (GATT) 1994. It is necessary to protect human, animal and, plant race and the environment from any possible health hazards, these measures are integral and must be followed by exporters or sellers across the world.

The following are the measures and objectives of Sanitary and Phytosanitary (SPS) requirements in import export business:

To protect human, plant and animal life or the health within the said territory from any kind of risk arising from the entry and establishment or spread of pests, disease or disease-carrying organisms

To protect human, plant and animal life or the health within the said territory from possible risks from any contaminants, additives, toxins or disease-causing or disease-carrying organisms on foods, beverages or feed

To protect human, plant and animal life or the health within the territory from any disease transmitted by animals or plants or any of their products from the entry, establishment of spread of pests

To limit or prevent other damages within the territory from the entry, the establishment or spread of pests

The Department of Agriculture of the Indian subcontinent is responsible and is the authoritative body to issue the Phytosanitary Certificate under the export of goods or services.

Certificate under the export of goods or services.

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Export Bill Discounting: Concept and Formalities Explained with Insights from Import Export Data.

This term is commonly used in the import export industry as the finance requirements of this industry are voluminous and much more demanding as compared to a domestic sale.

Export Bill Discounting is a common practice in the foreign trade industry. The business contract drawn upon between the exporter and importer is on credit basis, the exporter still requires finance immediately upon the shipment of his/her exported goods or services. In this situation, the exporter approaches his/her banker to help finance against his/her exported goods or services. This is done by submitting documentary proof of export after which he/she can avail the required finance.

How does this procedure work?

This process involves the following steps. Once the goods or services are moved out of the warehouse or factory, the Customs House Agent (CHA) appointed by the exporter or seller finishes all the formalities and procedures of the customs on behalf of the exporter and hands over the documents to him/her.  Once the customs formalities are completed and once the Let Export Order (LEO) is obtained, the exporter hands over the goods or services to the shipping carrier to transport the goods or services to the final destination port. After the goods or services are handed over, the shipping carrier then issues a Bill of Lading (BOL) under sea shipments or Airway Bill (AWB) under air shipments.

All these documents along with the Bill of Lading (BOL), Airway Bill (AWB), packing list, commercial invoice, bill of exchange, export order copy, certificate of origin are submitted to the bank requesting a discount on export bills. Normally you can discount your export documents just as you would discount your cheques, promissory notes etc. with the said bank.

The bank then goes ahead and verifies all the submitted documents and prepares to discount bills to transfer the amount to the exporter’s or seller’s account. In case the export order is in any foreign currency, the exporter can either convert the amount to his country’s currency or open a foreign dollar account and transfer the amount accordingly. 

This support is extended to exporters by almost all banks in most countries according to the guidelines of the government at a very low-interest rate.

How does the exporter repay the amount financed by the bank under Export Bill Discounting?

After the Export Bill is discounted by the bank against the exported goods or services, the amount of discounted bills is collected from the importer or buyer as per the agreed payment terms and conditions between both the parties.  For instance, if the exporter has extended a credit line of 60 days to the importer, the bank adjusts the amount of the bill discounted in such a way to receive the amount of bill discounted from the exporter on maturity, i.e. on the 60th day. The required bank interest till the date of receipt of the amount from the overseas importer’s bank and other bank charges are debited to the exporter’s account.

What happens in case the exporter is unable to pay the discounted export bills to the bank?

If the bank does not receive the amount against the discounted export bills, the whole amount of discounted bills with interest is debited to the exporter’s or seller's account.

Do all banks discount bills against exports for all exporters without collecting their creditworthiness?

Usually, banks discount all the export bills of their account holders without collecting their creditworthiness. Nevertheless, most banks do demand collateral security from exporters to finance.

To take care of default payments against discount export bills, banks do collect insurance against exporters from credit guarantee agencies.  

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What is a Running Bond in Import and Export Business and how does it work?

A Running Bond in Import and Export Business is a financial document that is frequently used by Government and Private Authorities against security requirements. When we talk about exports and imports, a Running Bond is usually used by the Customs Department for multiple requirements. To fulfill specific legal terms and conditions, this bond is executed.  Post fulfilling the legal terms and conditions stated in the bond, the executor usually does not cancel the bond. It is then carried over to the next obligation against the same legal terms and conditions mentioned for the previous obligation.

Talking specifically about the Running Bond in import and export business, in a situation where a customer executes a Running Bond with the authorities, post fulfilling the requirements of the bond, it then carried over for a new obligation and it does not get cancelled.  

The advantage of the above procedure is that the customer or the client does not have to execute a separate Bond every time or every obligation. He/She usually carries it forward for a new obligation.

For instance, a client or a customer executes a 10 billion worth bond; he/she will be able to use the bond for multiple transactions below the said amount, i.e., 10 billion.  However, proof of obligation for each transaction done has to be submitted to reduce the bond obligation.  Hereafter, the client can execute new jobs up to the limit of 10 billion. By submitting legal documentary proof for each transaction and completing the necessary formalities, the value of each bond reduces, thus enabling him to implement new projects.

In layman’s language, if an importer executes a bond worth 10 billion to avail import duty exemption against his consignment and he/she imports goods worth only 2 billion. The value of the bond will come down to 8 billion. According to the terms and conditions of the bond, the importer can further import goods worth an import duty of up to 8 billion; after which the value of the bond will come down to zero. During this process, in case the importer submits an obligation against the bond worth 2 billion which was the value of his/her first transaction, the value of the bond comes up to 2 billion again. He/she will be able to import goods or services worth import duty of up to 2 billion. In simple words, if a bond worth 10 billion is executed by an importer against import duty exemption worth 10 billion, the importer will be able to import goods up to import duty worth of 10 billion at any time and any number of transactions if the value does not exceed 10 billion.

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Understanding Cargo Diversion in International Trade: How Import Export Data Can Help

When the cargo has reached the initially desired destination, and for reasons such as oversight, cancellation, wrong grades or wrong consignee, the exporter must move the shipment to a new location, there are certain aspects that need to be taken into consideration.

The first step is to understand the present status of the shipment through import export data and provide accurate instructions to the carrier.

If the goods need to be diverted to another country, then the legal processes and documentation must be understood and followed thoroughly. In case it is within the same country, then appropriate steps must be taken to process the transportation. The formalities and procedures for diverting goods are not constant and vary depending on the shipment, location, and carrier, but the overall process is the same.

Typically, every time a shipment is transported to the destination, the carrier informs the destination port of the details of the goods and prior to arrival, files an Import General Manifest with the local government authorities. For diverting goods to a new destination, this is also a factor to be considered. If the filing with IGM has not happened yet, then the process of redirection is relatively easy compared to the alternative.

There are four situations for diversion of export goods from one destination to another:

Before the shipment has set sail from the port:

After completing the export customs formalities, the cargo is handed over to the carrier. Prior to the vessel leaving the port the exporter can choose to change the destination of shipment. This can be done in conjecture with the shipping line through simple documentation and legal procedures. In comparison with other situations of diversion, this is the easiest one because the change is processed prior to transportation.

At the transshipment port:

Another option to divert your goods to a new destination is at the transshipment port. In this case, if the shipping carrier provides services up to your new destination, then the process is simple with minimal risk. The carrier will have to inform the destination port of the change and initiate the transport. In case the communication has not been established, then the goods can be dropped off at the transshipment point and shipped via another vessel to the desired destination. In case the same carrier does not deliver to the new location, then a new carrier must be identified to transport the goods. Once the necessary formalities and documentation are complete, the existing carrier hands over the shipment either to the new vessel of the same company or an entirely new shipper with a revised set of documents.

Before filing the Import General Manifest (IGM):

If the shipment carrier has not filed the Import General Manifest (IGM) at the destination port, then the process of diverting goods to a new location is considerably easier for the exporter. Once a new carrier is identified or the same carrier has agreed to provide the service, the shipment can be redirected with the necessary paperwork and formalities done.

After filing Import General Manifest (IGM):

If the shipment carrier has filed Import General Manifest (IGM) at destination port, then the diversion process is a little more complex with multiple processes involved. The IGM has to be first amended with the customs authorities at the destination port and the procedures and documentation as per the new destination need to be completed. One important consideration here is the dwelling time. The process needs to be carried out as quickly as possible to reduce detention cost at the port prior to transporting it to the new location. After all the necessary documentation is complete, the goods are transported to the new destination port.

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Understanding LET Export Order (LEO) for Global Trade

LEO of Let Export Order for Global Trade is the final formality in a whole list of compliance requirements for the movement of goods outside the Indian subcontinent. This practice is generally completed by the Indian Customs Department by following the practice of assessing the total value of goods and inspecting all the goods that need to be exported.

The Customs Department of any country is in charge of any movement of cargo or goods crossing the border of that country. This movement is monitored and regulated as per the law and import export data of that country thus promoting trade. Air or sea cargo can cross the border only after the legal formalities and procedures are completed, submitted, and approved by Customs.  

As mentioned earlier, one can appoint a Customs House Agent (CHA) to complete the necessary formalities smoothly. The Indian Government recommends the exporter to directly deal with the export formalities and procedures with the Customs Department. Nevertheless, to save and focus on the business than government procedures and formalities, most of the exporters do associate with Customs House Agents to get the work done fast.  

Post preparation of the commercial invoice and packing list, the exporter then delivers it along with a declaration form namely, Statutory Declaration Form (SDF) to the Customs House Agent. In today’s day and age, everything is online and shipping documents can be filed online as well. To save time and make the process simpler for exporters, Customs House Agents generally have the said software downloaded. Post receiving all the documents, namely, the invoice, the packing list, and the Statutory Declaration Form (SDF), the CHA (Customs House Agent) will go ahead and file the shipping bill online. The shipping bill is generated online serial wise, and it is a centralized process making it convenient and available to all the custom offices in the country.

After the shipping bill is generated by Customs, the shipment is moved to the airport or seaport or Container Freight Station (CFS). This is where the Customs Facility will be present to inspect the cargo and complete the final shipment procedures. A slot to unload the cargo is usually discussed with the carriers as different carriers have different handling locations under the Customs Bonded area. Once the slot is allotted, the cargo is unloaded. The Customs House Agent along with the exporter approaches the Customs Inspector for registration of the goods online for the purpose of inspection. The Customs Inspector also physically inspects the goods and crosschecks and verifies all the legal documentation filed by the exporter. After completing the physical inspection of the cargo, the Customs Inspector then prepares an inspection report and submits it online. This is done to get an online approval from his higher ups/senior officials of the Customs Department. The Senior Officials then assess the total value of the goods and tally it with what the exporter declares in his commercial invoice. Exporters must ensure that the value of the goods is neither too low nor too high and it should be at par with the market price.

In the documents submitted, why should an exporter declare the value of his goods?

The exporter must declare the total value of his goods as some importing countries press taxes and other local duties against certain categories of products that are being imported into their country. In case the product falls under such category and the exporter has under invoiced his commercial invoice to save tax and duty, the exporter might be penalized.

Exporters are eligible for various export benefits from the Government on a product value basis; there is a chance of manipulation of documents by over invoicing the commercial invoice submitted.

Coming back to “Let Export Order”, after the physical assessment and inspection of goods is completed; the report of this process is uploaded online in the centralized system. The Customs Department then allows the movement of goods or services outside the country by submitting a document named, “Let Export”. This document is widely called “Let Export Order”. Post this procedure, print outs of the shipping bill for the said shipment is generated and the Customs officials present at the location signs it and approves it.  

The hard copies of the documents contain the exchange control copy and shipping bills for carriers who move the shipment via sea or air. As a part of Customs Clearance procedures, the carrier of the shipment files with the Customs Department on the details of goods exported; and this legal document is called the Export General Manifest (EGM). Based on the Export General Manifest (EGM), the Customs Department then issues another document called the Export Promotion copy (EPC) of the shipping bill declaring the goods exported. This document is proof of export of goods which then can be submitted by exporters to avail benefits or incentives, or even financial assistance provided by the Government. The Customs Department also signs all other legal central excise documents.

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Understanding Third Party payments, annual returns and IGST in export and import business.

In an attempt to liberalize payment procedures for export and import business and also considering international trade practices, the RBI has sent out a notification regarding Third-Party transactions. Third Party transactions are those that involve an intermediary or a third party who is not directly or indirectly connected to the exporter or importer and he/she manages the transaction between the exporter and importer.

Regarding Third-Party payments in export and import business, RBI has sent out a notification that mentions that “firm irrevocable purchase order or tripartite agreement” should be in place. However, it is not necessary if in all documentary evidence the name of the Third-Party or any circumstances leading to the third-party payments is mentioned in the Irrevocable Order or the invoice is submitted. The following conditions are to be followed:

If the AD Bank is satisfied with the bona-fides of the said transaction and other export documents like the commercial invoice/FIRC

The AD Bank would consider the FATF statements while handling such a transaction

Annual Returns in Export and Import Business

When is one required to file Annual Return of GST online?

Any registered taxable person excluding an input service distributor or a deductor under section 37 or an NRI (Non-Resident Indian) taxable person, will need to furnish an annual return for every financial year online in a particular form and manner prescribed on or before the 3rd first day of December following the end of the said financial year.

What is IGST and how is it calculated?

IGST means Integrated Goods and Services Tax and it is the tax that is collected on any inter-state movement of goods between the seller and consumer.  

Under imports, IGST is calculated on the total transaction value of imported goods including duties and other taxes charged under the law other than the GST Laws.

IGST is applicable on every import transaction and is collected before delivery of the imported goods. However, IGST is usually paid monthly along with returns of IGST against any domestic movement of goods or services.

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Let us now understand what the term UTGST means in Import and Export Business?

Union Territory Goods and Services Tax is the full form of UTGST in Import and Export Business.

This law entails that there is a separate GST levied on goods and services in States and Union Territories. As we know that there was a new clause inserted by the Constitution of India in 2016, namely Clause 26B on State in Article 366. According to the said clause, any State with reference to Article 246A, 268, 269, 269A, and 279A which includes a Union Territory with a Legislature can levy SGST. However, State (SGST) is not applicable in a Union Territory without an independent Legislature.

Since some Union Territories have their independent legislatures and can be considered as independent States, the GST Council has brought about Union Territory – GST (UTGST) which is applicable on all goods and services in that Union Territory which will be on par with State –GST (SGST).  

In accordance to the above Act, UTGST is applicable to only those Union Territories which do not have an independent Legislature and below is the following list of Union Territories in India:

·Chandigarh

·Lakshadweep

·Daman and Diu

·Dadra and Nagar Haveli

·Andaman and Nicobar Islands

To address this concern, the GST Council has come up with Union Territory GST Law (UTGST) which is at par with the State GST (SGST). For instance, State GST (SGST) is applicable in the following Union Territories, New Delhi, and Puducherry. In this case, both the Union Territories come with their independent legislatures and are considered as “States” as per the GST Council.

According to Article 246 (4) of the Indian Constitution, the Parliament has the exclusive authority to make laws regarding any matter that includes any part of the Indian subcontinent, which is not incorporated in the State, including matters set forth in the State list. Subsequently, once the GST Council submits an approval, according to the law of the land, the Central Government forwards the UTGST Law in Parliament. Once the Parliament approves it, there can be the following combination of taxes applicable for any transaction:

Intra-State or for the supply of goods/services within a State: CGST + SGST

Intra-UT or for the supply of goods/services with Union Territories: CSGT + UTGST

Inter State/Inter UT or for the supply of goods/services across States or/and Union Territories: IGST

Utilization order of Input Tax Credit of Union Territory – GST would be the same of State- GST. In other words, Input Tax Credit of either State GST or Union Territory GST would set-off against State or Union Territory respectively. If there are any Output Tax Liabilities, they can be set-off against Integrated GST.