Procedure of Export Goods from India to Other Countries

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Importing and Exporting are means of Foreign Trade. Foreign trade is carried out in goods and services – which covers imports, exports, and the balance of foreign trade – is presented separately for Export goods and services. In this article, we will discuss the Processing an Export Order in detail – 

About Import Export Code

Primarily, IEC stands for Importer Exporter Code. This is a code needed or important for those who are either exporting or importing any item, good, or service from country to country.

  • IEC code is mandatory for the one who is either importing in India or exporting outside India. 
  • To get IEC code online, a copy of the PAN card, proof of address of the business, the constitution of the business, and a letter for the banker are required.
  • IEC can be issued by the entity throughout its existence and does not require any renewal or filing.

Now we discuss the Processing of Export Goods from India 

Processing an Export Goods from India

An exporter should consider the following steps while processing the export order:

Export Procedure can be classified into the following stages:-

Step 1:- Registration Procedure.

Step 2:- Pre-Shipment Procedure.

Step 3:- Shipment Procedure.

Step 4:- Customs House Agents

Step 5:- Documentation

Step 6:- Submission Documents to Bank

Step 1 – Confirmation of Export Order

On receipt of an export order, Order requirement should be noted carefully in respect of 

  • Product ordered, 
  • Product Specification, 
  • Payment Terms, 
  • Packaging Material, 
  • Delivery date 

The exporter can enter into a formal agreement with the overseas buyer to avoid the future risk of consignment rejection.

Step 2 – Finance

Step- 3 Labeling, Packaging, Packing and Marking

Step-4 Shipment Insurance for Export Goods

If you are exporting goods worth lakhs of rupees then you must take Marine insurance policy to avoid risks of loss or damage to the export goods during transit.

Normally, in CIF agreement the exporters do the insurance policy whereas for C&F and FOB agreement importers obtain an insurance policy.

Step-5 Plan the Dispatch Date

It is most important that the export order should reach the buyer port on a scheduled date. For this, you have to connect with CHA after receipt of the order and confirm the days in how many days the consignment shall reach the destination port. Accordingly, you have to plan and make consignment ready for dispatch.

  • The exporter has to communicate the shipping company well in advance for booking the required space in the vessel for shipment.
  •  Managing Internal Transport from factory/warehouse to the port of shipment.

Step-6 Obtain BIN for Export Goods

Before Exporting, exporters must obtain a PAN based Business Identification Number (BIN) and AD Code from the Customs Authority. This must be obtained before filing the shipping bill for the clearance of export goods.

Exporters must also open a current bank account in the designated bank for crediting any drawback/subsidy amount and the same bank account should be registered on the custom system.

Step 7 – Hire Customs House Agents

Exporters may hire Customs House Agents licensed by the Commissioner of Customs for fast and smooth processing. CHA are experts and facilitate work connected with the clearance of cargo from Customs.

Step 8 – Pre-shipment Documentation:-

  • In the case of Non-EDI, the shipping bills or bills of export are required to be applied in the prescribed format issued by Custom Authority. An exporter needs to apply different forms of shipping bill/ bill of export for export of duty-free goods, the export of dutiable goods and export under drawback, etc.
  • Under EDI System, declarations in the prescribed format are required to be filed through the Service Centers of Customs. A checklist is generated on which data shall be for verifying by the exporter/CHA. After successful verification, the data is submitted to the Custom System by the Service Center operator. The system shall generate a Shipping Bill Number, which is affixed on the printed checklist and returned to the exporter/CHA. 
  • In most of the cases, a Shipping Bill is processed by the system on the basis of declarations made by the exporters without any human intervention. Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the ICES/E system.

Step 9 –  Documentation of Export Goods

FTP 2015-2020 outlines the following mandatory documents for import and export.

  •         Bill of Lading/ Airway bill
  •         Commercial invoice cum packing invoice
  •         shipping bill/ invoice of export/ invoice of the entry (for imports)

Note – Other records like a certificate of origin, inspection certificate, etc may be required as per the case.

Step 10 – Submission of documents to Bank

After shipment, it is essential to present the documents to the Bank within 21 days for onward dispatch to the foreign Bank for arranging payment. 

Documents should be brought under the following documents

  •      Bill of Exchange
  •      Letter of Credit (if the shipment is under L/C)
  •      Invoice
  •      Packing List
  •      Airway Bill/Bill of Lading
  •      Declaration under Foreign Exchange
  •      Certificate of Origin/GSP      
  •      Inspection Certificate, wherever required

  Step 11Realization of Export Proceeds

Export Invoice, agreement, and other documents must be denominated either in Indian rupees or foreign currency in which country goods are exporting.

However, export proceeds must be realized in freely convertible currency (most likely US$)  except for export to Iran.

Export proceeds should be realized within 9 months from the date of export.

How to Start Export Business in India

If you require any other guidance concerning import export licensing or registration, please feel free to contact our business advisors at 8881-069-069.

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