Project Report On Bsl Final

EXPORT PROCEDURES IN SHIPPING LOGISTICS &DOCUMENTATION IN BHUSHAN STEEL LIMITED

SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF MASTER’S IN BUSINESS ADMINISTRATION

SUBMITTED BY: SANDEEP KUMAR MBA (2008-2010)

Industry Guide

Faculty Guide

Mr. SUSHIL SHARMA

Mrs. MALTI

(Sr. MANAGER EXPORT)

(HOD OF DIAS, ROHINI)

Company Certificate

TO WHOM IT MAY CONCERN This is to certify that MR.SANDEEP KUMAR a student of DELHI INSTITUTE OF ADVANCED STUDIES completed summer training on “Export Procedures in

Shipping Logistics & Documentation in Bhushan Steel Limited” at Ghaziabad from 5th June 2009 to 31st July 2009. SANDEEP KUMAR has successfully completed the project under the guidance of Mr. Sushil Sharma (Sr. Manager Exports). He is a sincere and hard-working student with pleasant manners. We wish all success in her/him future endeavours.

Signature

Mr. SUSHIL SHARMA Sr. MANAGER EXPORTS BHUSHAN STEELS LIMITED

ACKNOWLEDGEMENT

This project is stepping stone towards the beginning of my professional carrier and its satisfactory has endowed me with broader horizons of knowledge. This project is a fruitful culmination of my concerned affords during my summer training at Bhushan Steels Ltd. Shaibabad. I would like to express my thanks to Mr. Sushil Sharma ( Export ) for given me an opportunity to a part of this esteemed organisation. I would like to express my deep sense of gratitude to the entire international trade department. Specially Mr. Rahul Singh, Mr.Nand kishore and Mr Vineet for their inspiring guidance, continuous engorgement and valuable suggestion. At last but not the least, I would like to thank my all faculties and personnel of Bhushan Steels Ltd, for there corporation and help.

SANDEEP KUMAR MBA DELHI INSTITUTE OF ADVANCED STUDIES ROHINI

OBJECTIVE PRIMARY OBJECTIVE To describe all the documents used in international trade. And clearly show the gravity of each document. To analyze the Govt. Export-Import Policy with regard to the documents requirement. And also point out the key part of these articles. To find out the reasons of discrepancies in documents with special reference to BHUSHAN STEEL LIMITED To analyze the key strategies of the company to reduce the discrepancies, and try to explore the other strategies too, which are also useful for reducing discrepancies. To analyse the procedure of shipping logistics.

SECONDARY OBJECTIVE To analyze the factors which directly influence the various Logistics and International Marketing procedures involved at Bhushan steels thereby selecting the appropriate mode of transportation which effectively helps in reducing the cost of transportation of goods through road and sea. To analyze the latest trends and consumption pattern of various markets for increasing the volume of sales in International market. To find out the effect of the imposition of the custom duty on various steel products in BHUSHAN STEEL LTD.

EXECUTIVE SUMMARY Documentation is the engine of exports in global trade. Documentation facilitates the movement of freight, transfer of title, processing of payment, and customs clearance. Without documentation, the shipment is at a standstill. Even with the continuing advances in technology playing a greater role in international business, documentation is still required by all parties involved in global trade. Why is this so? The answer is surprisingly simple. On an average, customs authorities worldwide physically inspect only 4 to 8 percent of the cargo that moves through their borders. There are some exceptions, such as Saudi Arabia, but as a general rule, the local customs authorities do not physically inspect most import shipments. If this statistic is correct, then how do customs manage their affairs in all the gateways of the world? How do customs authorities control the merchandise crossing the border and entering into commerce? They do this through the documentation provided by the importer and the importer’s customhouse broker. The other documentation created —such as the commercial invoice, packing list, certificate of origin, health and sanitary certificate, bill of lading, certificate of conformance, and certificate of analysis — are all for the account of the importer to meet the customs clearance requirements in their country, thereby making export documentation into import documents. Customs clearance and required import documentation are governed by local laws andvary from country to country. What Korean customs may need to clear a pharmaceutical from the United States is very different from what customs in Brazil, Nigeria or Germany may require To the U.S. exporter this means it is crucial to have more than one set of criteria for your export documentation needs. The exporter must implement a standard operating procedure (SOP). This SOP must be flexible, particularly for those exporters that ship to numerous destinations. This flexibility allows the exporter to meet and identify the specific documentation requirements for each country to which it is exporting

Here are the factors that can vary significantly depending on the country to which you are shipping: · Number of copies · Notarization · Legalization/consularization · Language · Originals vs. copies · Format of documentation · Valuation · Commodity descriptions · Product labeling · Other government agency requirements · Black ink/blue ink Standard operating procedures are somewhat arduous to create. However, once the standard is created, it will only require updating. Through the utilization of a database (and there are many available to choose from) a company can electronically store the documentation requirements for each country. Once a shipment is packed and ready for export to a specific country, the document requirements can be retrieved from the database with all of the nuances in place that are unique for the particular destination. Import shipments accompanied by incomplete documentation are held in storage areas until such time that proper documents are presented to authorities. These delays can be costly in terms of storage fees. The very nature of these time delays can expose the shipment to other factors such as bad weather, theft, damage, and/or loss. Additionally, incomplete documentation moves the importer into a reactive position with the local customs authorities. Overseas, as in the United States, the importer is responsible for all declarations made to customs. No importer wants to have customs reject their shipment due to incomplete documentation. Repeated offenses may cause customs to put a “black mark” against the importer. Your buyers’ measure of you as a long term supplier will be dictated by the quality of your documentation capabilities. Your overseas customers will favorably receive complete and accurate documentation. Their customs clearance headaches will have been eased, their shipment delivered timely and safely.

Company Profile

Company Profile Bhushan Steel Ltd. Bhushan Steel Type Private Founded IN 1987 Headquarte India rs Brij Bhushan Singhal (Chairman) Key people Neeraj Singhal (Managing Director) Industry Steel Cold rolled, galvanised, Bhushan Galume, colour Products coated tiles, drawn tubes, strips, wire rods, alloy billets, sponge iron

Website

http://www.bhushangroup.org/

Bhushan Steel Limited (BSL) is India's 3rd largest Secondary Steel Producer after SAIL and TISCO. It is ISO 9002, QS 9000 certified and is a company of over Rs 4000 crores. The Company currently has capacity to produce almost one million MT/Annum of Cold Rolled Steel at Sahibabad and Khopoli Works. The Company is a 'single-point source' for a wide variety of products such as CRCA, Galvanized and Colour coated sheets, Galume Sheets, High tensile steel trapping (HTSS), Hardened and tempered steel and precision tubes. The Company has the scale, diversity and product quality to meet its customers' requirements. Bhushan Steel is the producer of widest width CR Sheets in India. It is a major supplier of automotive grade steel sheets for inner and outer panels of leading 4-wheeler and 2-wheeler manufacturers.

Bhushan Steel has led the way in forging a new future for the Indian steel industry. It enjoys an industrial and market position as a low-cost and high value added steel producer. Amongst the various reasons behind BSL's unprecedented growth and rapid integration on the steel value chain, perhaps, the most important would be its unwavering focus on acquiring the latest technology and know-how. The most important reason behind this focus has been BSL's commitment to provide its customers with the best quality products. The result, to say the least, has been awe-inspiring growth.

Research & Development The company has a full fledged Research & Development Center and has many firsts to its credit including development of High Tensile Steel for passenger car skin panel applications, development of panel grade material for Visi Coolers & Chest Coolers of Coca-Cola & Pepsi, ultra thin CR sheet for picture tube and battery applications etc. The company has also provided an important substitute for EDD grade extra width CRSS for the Indian Automobile and white good industry. Plants location, products from group companies and their usage

MILESTONES 1988-89

New Rolling mill 60,000 TPA, Total Installed capacity 1,20,000 TPA

1991-93

Continuous galvanizing line 1,00,000 TPA Shift from full hard to drawn & deep drawn grade

1993-94

Skin pass mill, Cut to length, CR Slitter. Auxiliary equipment of GP Line

1994-97

Hitachi CR Mill (1700mm) 3,50,000 TPA GP/GC Line 40,000 TPA Power Plant 12 MW

19982001

Continuous Galvanizing Line 85,000 TPA Replacement of CR Mill-50,000 TPA Power Plant 12 MW Kathabar & Annealing bases.

2003-06

Khopoli (Mumbai) project commissioned 4,25,000 MTPA Colour Coated, HTSS, H&T Drawn Tubes installed apart from CR & GP

Introduction of Galume -!st time in the country Power Plant 24MW 2006-07

Commissioning of Phase I of Orissa Plant (up to May 07 ) Sponge Iron 6,80,000 TPA Billets 3,00,000 TPA Power Plant 110 MW

PLANTS 1. KHOPOLI PLANT The Khopoli plant, commissioned in 2004 has been playing a remarkable role not only in the growth of exports, but in the production of a much wider variety of value added steel like Colour Coated Sheets, High Tensile Steel Strappings, Hardened and Tempered Strips and Precision Tubes. In addition to these, the Khopoli plant has recently launched the Galume value added steel (Aluminium & Zinc Coated Sheet) for the first time in the country.

Operating with the most advanced technology, expressed through a large fleet of latest equipment, machinery and systems, the Khopoli plant has given a tremendous boost of 425000 MT per annum to BSL's total production capacity Including 240000 MT of galvanised steel, which are further forward integrated into Colour Coated Sheet, Galume and other value added products

2. SAHIBABAD PLANT Giving a tremendous volume-thrust to the production capacity of BSL is its plant at Sahibabad, with a production of 475,000 MT per annum comprising products such as Automotive Grade C R Sheet and Galvanised Sheets. As a strategic move to optimise the usage of resources and services, as well as to streamline the functioning of all systems and process within the organisation, BSL has recently implemented SAP (the global leader in Enterprise Resource Planning Systems). After all, with sales touching Rs. 3070 crores and installed capacity in the one million tonnes per annum range, BSL is now India's 3rd largest Secondary Steel Producer after SAIL and TISCO. BSL has the distinction of being the only producer In India of the widest width CR Sheet, besides being a preferred supplier of automotive grade steel sheets for inner and outer panels to all leading 4-wheeler and 2-wheeler manufacturers in the country.

Policies

BHUSHAN STEEL LTD, SAHIBABAD Integrated Quality, Environment, Occupational Health & Safety Management System Policy

Bhushan Steel Ltd. commits to produce cold rolled and galvanized steel sheets of world class quality in a safe, healthy and clean environment by involving employees with continual improvements in system implementation, technological advancement, operational integration, prevention of pollution & hazards maintaining

Legal compliance and satisfying needs & expectations of Customers.

MARKETING SYSTEM OF BHUSHAN STEEL LTD

MARKETING SYSTEM

MARKETING

EXPORT

OEM

TRADE

ORIGINAL EQUIPMENT MANUFACTURER

ABROAD SALE

OPEN MARKET

DIRECT TO MANUFACTURER 1. DIRECT EXPORT

SALE TO DEALERS

2. THROUGH AGENT ETC.

AS MARUTI UDYOG, FIAT, LG, FORD, YAMAHA, HONDA, HM, ETC

AUTOMOBILE INDUSTRY FOUR WHEELERS THREE / TWO WHEELERS CLUTCH - CHAIN MANUFACTURERS

HOME APPLIANCES REFRIGERATORS AIR CONDITIONERS WASHING MACHINE COLOUR PICTURE TUBE

BEARINGS MANUFACTURE

ELCETRICAL MOTOR/COMPRESSOR MANUFACTURING SECTOR

Our Pride of Association Our products continue to be a favorite with all quality conscious users of Automobiles & White Goods/ Domestic appliances & General Engineering Industries. We take great pride in maintaing the highest standards of quality which our customers expect and it is no wonder that eminent corporate like Maruti Udyog, Honda Siel Telco Indica, Hindustan. Mo General Motor Hyundai Motors, Ford Motors, Mahindra & Mahindra, Eicher Tractors, Ashok Leyland, LG Electronics, Whirlpool, Videocon, Daikin Shriram, National Matsushita, Samsung Electronics

Godrej, Voltas, IFB, Fedders Lloyd, Carrier Refrigeration, Electrolux Group, Hitachi Airconditioners, KF Bearing, Cromptom Gr Philips India, BHEL Aistom Limited, L&T, BPL, GE Motors, Jhonson Lift, Kone Elevator, Lucas TVS, NRB Bearing, Harsha Engineers Limited, Bundy India Limited, Tecumseh, LML,

Scooters India Ltd., Bajaj Auto, Honda Motorcycle, Yamaha Motors, Bajaj Tempo continue their unbounded trust on us and in regularly sourcing our products.

Bhushan today has become a synonym to variety of value added steel products. It had shown its presence in various fields and has acquired the status of “The Leader” in the area of operations. Steel has been associated with Bhushan ever since the group has been founded about 30 years back with a commitment – steel solid commitment. Bhushan group has a long – standing reputation for producing high quality products and for being responsive to customers. Bhushan Group has achieved its leading market position in all of it’s field of operations covering steel billets/ingots, rolled products, rounds, wire rods, narrow strips, Mild Steel and Galvanized pipes, wide width cooled rolled coils and sheets. The success story, which once humbly began with the manufacturing of door hinges in 1973, has today grown to a vast conglomerate of industrial enterprises having total turnover of over Rs. 4200 Crores. The philosophy behind the corporate excellence is driven by the positive impact it makes on the common man’s life through customer satisfaction and by delivering customized and reliable products at competitive rates. Amongst the various reasons behind BSL's unprecedented growth and rapid integration on the steel value chain, perhaps, the most important would be its unwavering focus on acquiring the latest technology and know-how. The most important reason behind this focus has been BSL's commitment to provide its customers with the best quality products. The result, to say the least, has been awe-inspiring growth. The Khopoli plant, commissioned in 2004 has been playing a remarkable role not only in the growth of exports, but in the production of a much wider variety of value added steel like Colour Coated Sheets, High Tensile Steel Strappings, Hardened and Tempered Strips and Precision Tubes. In addition to these, the Khopoli plant has recently launched the Galume value added steel (Aluminium & Zinc Coated Sheet) for the first time in the country. Operating with the most advanced technology, expressed through a large fleet of latest equipment, machinery and systems, the Khopoli plant has given a tremendous boost of 425000 MT per annum to BSL's

total production capacity Including 240000 MT of galvanised steel, which are further forward integrated into Colour Coated Sheet, Galume and other value added products. Giving a tremendous volume-thrust to the production capacity of BSL is its plant at Sahibabad, with a production of 475,000 MT per annum comprising products such as Automotive Grade C R Sheet and Galvanised Sheets. As a strategic move to optimise the usage of resources and services, as well as to streamline the functioning of all systems and process within the organisation, BSL has recently implemented SAP (the global leader in Enterprise Resource Planning Systems). After all, with sales touching Rs. 3070 crores and installed capacity in the one million tonnes per annum range, BSL is now India's 3rd largest Secondary Steel Producer after SAIL and TISCO. BSL has the distinction of being the only producer In India of the widest width CR Sheet, besides being a preferred supplier of automotive grade steel sheets for inner and outer panels to all leading 4-wheeler and 2-wheeler manufacturers in the country. The most brilliant milestone in BSL's journey of excellence is the setting up of a state-of-the-art Hot Rolling Steel & Power Plant in Orissa. This Integrated Steel and Power Plant will, no doubt, put BSL firmly on the fast track of progress. Bhushan Steel Limited, is an ISO 9002,QS 9000 certified and a company of Rs. 2868 crores ($650 million approx.). As one of the prime movers of the Technological Revolution in the Indian Cold Rolled Steel Industry, BSL has emerged as the country’s largest and the only CR steel plant with an independent line for manufacturing Cold Rolled coils and sheets up to a width of 1700 mm, as well as Galvanised Steel Coils & Sheets up to width of 1350mm.The Company currently has capacity to produce ALMOST ONE MILLION MT/Annum of Cold Rolled Steel at Sahibabad and Khopoli Works .

EXCELLENT MECHANICAL PROPERTIES Practically , No Variation In Mechanical Properties Due To 100 % Hydrogen Annealing Furnace The Raw Material Selection Is Done By Computerized Program For Different Applications Close Tolerances On Thickness, Width And Length - X- Ray Thickness Gauge To Measure Thickness To A Fraction Of A Micron. - Radiometrie Thickness Checking Across The Width • State-of-the-art R&D center, replete with advanced quality control equipment and conforming to the most stringent international standards. • Attainment of Export House status in the very first year of its foray into exports and consequently being honoured with Trading House status (Export-Sales for 2005-2006 was Rs. 1006 crores). • As the single largest supplier to almost all automobile and white goods manufacturers of the nation, BSL has quite decisively established its leadership infheinduslry. • Introduced Galume for thefirst-time in India. • In addition to "the recent commissioning of its colour coated sheet line, BSL has also developed special grades of import substituteCRsteel, which include; • HSLA (High Strength Low Alloy) steel, remarkable for its greater strength wrth lesser weight, ideal for critical carpanels • IF Steel, crucial forcritical applications like Car Body Outer Panels and white goods Ultra Thin Picture Tube shield, which has value addition of over 300% • High Tensile material forwheel rims

PERFORMANCE AT A GLANCE

PERFORMANCE AT A GLANCE

200 year Gross Sales

2001

2

2003 2004

200 5

2006 2007

2008

1058

1139

1263

1745

2868

3070

4202

4673

Exports

70

115

300

389

1051

1006

1527

1228

PBDIT

177

183

202

277

410

408

659

750

46

46

61

96

153

154

313

423

Cash Accruals

105

108

133

203

317

312

580

707

Net Worth

481

528

573

664

805

960

1338

1822

Gross Block

940

989

1302

1529

2044

3091

4586

2927

14

14

15

22

38

38

75

100

Net Profit

EPS (Rs.)

% SALES FOR 2007

OEM EXPORT

TRADE

Specification

EXPORT TRADE OEM

News & Updates Bhushan Steel Ltd will setup a two million tonnes per annum(mtpa) capacity integrated steel plant with a captive power plant in Burdwan district of West Bengal. A 0.5 mtpa capacity cold rolled and galvanizing plant for automobile grade steel will also be set up. An agreement to this effect was jointly signed by Bhushan Steel, the government of West Bengal and the West Bengal Industrial Development Corporation Ltd. The total investment in the projects on the anvil has been pegged at Rs. 8,800 Crore. The projects will provide gainful engagement - direct and indirect - to around 3,000 people. While the proposed steel and power plant will come up in Burdwan Distt., the cold rolled and galvanizing plant will be set up in North 24 Parganas Distt. The setting up of the steel plant will require 2,500 acres of land which will be identified jointly by the state government and Bhushan Steel. An additional 90 Acres of land will be required for cold rolled and galvanizing plant. After the signing ceremony, Mr. Buddhadeb Bhattacharjee, Chief Minister of West Bengal, and senior company officials, briefed news persons at Writers Buildings on the project.

TOR STEEL Applications - The product finds its uses in various types of Construction activities like Buildings, Roads, and Bridges etc where it is used for Concrete

Reinforcements. Other names for Tor Steel are twisted steel bar, CWD bar, CTD Bar, deformed steel bar etc. Our TOR Steel bars confirm to IS: 1786 in dimensional tolerances but in actual exceeds the specification. TOR STEEL Bars are manufactured at our Chandigarh plant

STEEL BILLETS

Steel Billets are semi finished length of Steel which can be worked in a rolling mill or for forging operations. These are also known as bloom, slab, and sheet bar. Billets are available as round bar, flat bar, wire rod etc. Billets are produced at our Chandigarh and Orissa Plants GI PIPES

The product finds its uses in a number of applications- domestic, agriculture and Industrial. Galvanized Pipes are available in the sizes ranging from 10mm NB to 100 mm NB, Strip thickness 1.80 mm 5.40 mm We manufacture GI Pipes at our Derabassi (Punjab) plant. GALVANIZED CORRUGATED SHEETS

Corrugated sheets are extensively used for Industrial sheds, housing, temporary structures etc. Corrugated Galvanized Sheets are manufactured at Our Kolkata plant.

ALLOY STEEL ROUNDS

Alloy Steel rounds are used for manufacturing seamless tubes. These are also used for general Engineering purposes. We produce Alloy Steel rounds at our Chandigarh plant.

CR COILS

Cold Rolled Coils are used in the manufacture of Automobiles, White Goods, Electrical Panels, Furniture, Transformers, Oil barrels and drums and general Engineering products. CR Coils are produced at our Chandigarh and Kolkata plants.

NARROW CR COILS

Narrow CR Coils are used in the manufacture of Automobiles, Precision Tubes, Cable Tapes, White Goods, Electrical Panels, Furniture, Transformers, Oil barrels and drums and general engineering products. Narrow CR Coils are produced at our Chandigarh and Kolkata plants.

CR SHEETS

Cold Rolled Sheets are used in the manufacture of Automobiles, White Goods, Electrical Panels, Furniture, Transformers, Oil barrels and drums and general engineering products. CR Sheets are produced at our Chandigarh and Kolkata plants.

GP COILS / SHEETS

Applications: Galvanized Coils and Sheets are used to make Boxes, Containers, Ducting, Cooler Body, etc. GP Coils are manufactured at our Kolkata Plant.

PRECISION TUBES (ERW and CEW)

These Tubes are widely used for Power and Industrial boilers, Transformers, Super heaters, Automobiles and Bicycles, Railway Electrification, Furniture and General Engineering Applications etc Precision Tubes are made at our Kolkata plant.

CABLE TAPES

Cable tapes are used as Armour in Telephone and other Cables.Cable tapes are available in strip width of 19mm to 65mm, thickness of 0.30 to 0.80mm, inner diameter 450-800 mm, Coil weight 50-200 Kg. We manufacture cable tapes at our Kolkata and Derrabasi works.

BLACK PIPE

Black pipe is used for transportation of air, gas, fabrication of structure, automobiles, cycles and general furniture industries. Varnished pipes are used for general engineering industries. Black pipe is manufactured at our Kolkata plant, and Plot No.03, Chandigarh plant.

POWER

100 MW Power Plant is operational at our Orissa Plant. The excess power generated is being sold through state power grid.

SPONGE IRON Applications: Sponge iron is a basic raw material for making primary steel products. WIRE RODS

We are manufacturers of IS-2062 and Electrode Quality in our Plant located at 3, Industrial Area Phase-I, Chandigarh.

Sahibabad Plant

Bhushan Steel Ltd. has recently successfully implemented SAP system at its Sahibabad works along with its sales outlets with the help of Siemens Information Systems ltd. (SISL) in first phase

List of Finished Products of Sahibabad Plant

1. Cold Rolled Coil

2. Cold rolled sheet

3. Galvanised Plane Coil 4. Galvanised Plane Sheet 6. Galvanised Corrugated Sheet

TOR STEEL Applications - The product finds its uses in various types of Construction activities like Buildings, Roads, and Bridges etc where it is used for Concrete Reinforcements. Other names for Tor Steel are twisted steel bar, CWD bar, CTD Bar, deformed steel bar etc. TOR Steel bars confirm to IS:1786 in dimensional tolerances but in actual exceeds the specifications.

STEEL BILLETS Steel Billets are semi-finished length of Steel which can be worked in a rolling mill or for forging operations. These are also known as bloom, slab, sheet bar. Billets are available as round bar, flat bar, wire rod etc. Billets are produced at Chandigarh and Orissa Plants.

GI PIPES The product finds its uses in a number of applications- domestic, agriculture and Industrial. Galvanized Pipes are available in the sizes ranging from 10mm NB to 100 mm NB, Strip thickness 1.80 mm 5.40 mm Manufactures GI Pipes at Dera bassi (Punjab) plant

ALLOY STEEL ROUNDS Alloy Steel rounds are used for manufacturing seamless tubes. These are also used for general Engineering purposes. Produces Alloy Steel rounds at Chandigarh plant.

CR COILS Cold Rolled Coils are used in the manufacture of Automobiles, White Goods, Electrical Panels, Furniture, Transformers, Oil barrels and drums and general Engineering products. CR Coils are produced at Chandigarh and Kolkata plants.

NARROW CR COILS Narrow CR Coils are used in the manufacture of Automobiles, Precision Tubes, Cable Tapes, White Goods, Electrical Panels, Furniture, Transformers, Oil barrels and drums and general engineering products.

CR SHEETS Cold Rolled Sheets are used in the manufacture of Automobiles, White Goods, Electrical Panels, Furniture, Transformers, Oil barrels and drums and general engineering products. CR Sheets are produced at Chandigarh and Kolkata plants.

CABLE TAPES Cable tapes are used as Armour in Telephone and other Cables. Cable tapes are available in strip width of 19mm to 65mm, thickness of 0.30 to 0.80mm, inner diameter 450-800 mm, Coil weight 50-200 Kg. Manufactures cable tapes at Kolkata and Derrabasi works.

SWOT Analysis

Strengths 1. 2. 3. 4. 5.

Low cost of production Excellent infrastructure Broad Range- to cater wide industrial and customers needs. Developed Brand Image Excellent Market Network Spread all over the country.

Weakness 1. Plant Location 2. Single Location Plant

Opportunities 1. Expected increase in Demand of PIJCF in the Telecom Sector. 2. Opening of New Plants at other Locations where raw material is already produced.

Threats: 1. 2. 3. 4.

Worldwide slump on steel market. Competition posed by other companies and competitors. Dumping of steel by CIS countries. Economic slowdown in India.

INTRODUCTION TO INTERNATIONAL TRADE

No country can possibly produce its requirements within its own geographical boundaries. Thus, it has to look at international trade as the option to obtain those goods which it cannot produce, or produce as cheaply as other countries. Technologies are changing and newer, innovation products are being launched continuously the world over. For the consumer, international trade is a means to satisfy their requirements and a means to ensure that he gets supplies from very competitive sources. Foreign trade increases employment both directly and indirectly. International trade has thus, increased the economics interdependence of nations. All countries have not been endowed by nature with the same productive facilities. There are differences in climatic conditions and geological deposits as also in the supply of labour and capital. Due to these differences, each country finds it advantages to specialize in the production of same specific commodities. Such specialization would not be economically practicable but for the possibilities of exchange of surplus production with other countries through international trade. Infact, in the absence of international trade, it would be difficult to utilized the surplus production properly. International trade will take place when the buyers find foreign markets cheaper to buy in and sellers find them more profitable to dispose off their products than the domestic market. Thus a more effective use of world resources in made possible through international trade. India’s foreign trade (development and regulation) act 1992 defines export as taking any goods out of India by land, sea or air. The Indian customs act 1962 defines export goods as any goods which are to be taken from India to a place of outside India. These two definitions in reality, deal only with physical exports. However in real term exports will also encompass the following: 1. Project exports 2. Services exports 3. Software exports 4. Re-export 5. Deemed exports 6. Counter trade 7. Offshore trading

The liberalization of the economy in 1991 has opened up new avenues for entrepreneurship and today; exports are regarded as a thrust area. There are a number of reasons as to why an organization or even a proprietorship firm should consider export as an opportunity to enter into

1. Larger market - for those people with a wider vision, who consider not just India but the world as their market, export offer tremendous opportunities. 2. Excess production capacity produce goods for the export market. 3. Insufficient exports.

domestic

demand

available which

which

forces

can

be

manufactures

used to

to look for

4. To spread business risk in several markets so that setback in some markets can be offset by good results in other markets. 5. Support and incentives offered by the government. 6. Statutory obligations investment, import the capital goods scheme etc.

of manufacture through the foreign capital goods through export promotion

7. Access to better technology. 8. Social obligation to add to the country’s foreign exchange reserves. 9. Boost self-image.

INTRODUCTION

Investing in various types of documents used in international trade is an interesting activity that attracts people whose willingness to enter in the global business activity as well other also such as from all walks of life irrespective of their occupation, economic status, and education background. The exporter and importer, both must be sailing in the difficulties of the documents, which are very important in terms of negotiations, dispatch, and receive the goods. Import the specific quantity of the goods is more difficult to export because each and every govt. wanted to make its balance of payment in positive manner, that’s why the govt. of any country restricts the import, as much as possible. International market has always been a fascinating market among traders. Some loose and some make heavy money. After witnessing recent boom in Indian in international market, it has become the most favoured the trader to grow and developed them on this span. On the one hand exporter takes higher returns as camper to low prices in the domestic markets, on the other hand importer enjoy the fruit of the good raw material in low cost. But the international trade is very risky on the sight of trust to other parties. For taking care of that the parties takes some protective step to pay some amount or quality assurance. All these are making its own documents, those documents are very useful for making payments and the trust to other party because in-betweens other parties must be include. However, the intrinsic value of an international trade depends upon a multiple factors (such as demands and supply), the earnings of the companies, and growth rate and risk exposure of the company. These factors rely on other factors like economic environment in which they function, the industry they belong to, and finally company’s own performance. Trade documentation and related procedures are an important component of the trade facilitation system. They help identify the import and export items in terms of description; value and ownership for both trade as well as control purposes. They allow for the tracking of cargo so that the importers and exporters know where their shipments are and when they will arrive at the final destination. Trade documents are also important evidence of goods clearance and are used for financing and the payment for the goods especially if payment is made under Letter of Credit (LC) terms. While trade documents are an integral and necessary part of international trade, efforts should be made to simplify them, so that they do not become an obstacle to international trade. Trade documentation should therefore be reviewed regularly and improved so that it will facilitate trade and at the same time to prevent any abuses to the trading system.

Documents fulfil the following functions: Proof of contract Documents such as transport documents (bill of lading), insurance documents, etc. Evidence the existence of contracts of sale and conditions stipulated there. Title to the goods. Certain transport documents represent title to the goods, that is, they give the right to collect the goods from the carrier (just as a bank draft gives you the right to collect funds against the drawer).

Information Certain documents provide information on the price for the goods (invoice), the contents of package units (packing list), etc.

Customs The customs of the country of destination require documents that evidence the origin of the goods, etc. in order to establish whether the goods are importable to the country and in order to charge appropriate taxes and duties.

Proof of compliance

Certain documents serve as proof that the conditions stipulated in the contract of sale are complied with, such as date of shipment (transport documents), the origin of the goods (certificate of origin), etc. Any exporter before exporting goods should obtain Exporters Code Number from the Reserve Bank of India known as RBI code number. In addition, an exporter is required to obtain an Importerexporter code (IEC) number from the Office of the Director General of Foreign Trade or his regional Offices. These two numbers have to be furnished in the export documents. From April’2001 the IEC will be replaced with the PAN number issued by the Income Tax authorities. This will be the uniform identification number for transaction with any Government agencies like Customs, Central Excise etc. The exporter should also procure an export order/consent from the foreign buyers. The exporter intending to export any goods should file a document called Shipping Bill with the Customs Department. All the columns in the Shipping Bill should be filled in properly, which includes the name and address of the exporter., name and address of the foreign

buyers. Quantity and description of the goods., FOB value, etc. enclosed to the Shipping Bill are:

The documents to be

a) Invoice b) Purchase order/contract c) G.R. form in duplicate d) Export license, if the goods are falling in the negative list of the Export and Import Policy. e) Exporter’s declaration regarding correctness goods, etc; (Section 50 of the Customs Act, 1962).

of

the

value,

The Shipping bill so filed with the Customs is assigned with a serial number with date by the noting clerk and then the Shipping Bill is scrutinized by the Appraiser/Superintendent and after assessment it is countersigned by the Assistant/Deputy Commissioner. The original copy of the Shipping Bill is detached by the noting clerk when no export duty is payable. If any export; duty is payable original copy of shipping bill is detached by cash department after collecting duty and making suitable endorsement on all the copies of shipping bill. The other copies are then returned to the Exporter/CHA. Thereafter the Exporter/CHA presents the duplicate and triplicate copies of shipping bill with other documents and the goods to the Appraiser/Superintendent in charge of examination. The Appraiser/Superintendent examines a percentage of the consignment with reference to the documents and gives an order called ‘LET EXPORT’ order on duplicate and triplicate copies of Shipping Bill. The goods thereafter remain in the Customs area till they are loaded into the conveyance (Ship/Aircraft/Container) under Custom supervision. Export Promotion copy of the Shipping bill and duplicate copy of G.R. form are returned to the Exporter/CHA. The Preventive Officer/Inspector supervises the loading of export goods into the conveyance and makes an endorsement to that effect on the Shipping Bill and G.R. Form. Original G. R. form is detached by the Preventive Officer/Inspector for onward transmission to the Reserve Bank of India (R.B.I.) Triplicate,

Quadruplicate,

Export documentation

EXPORT DOCUMENTATION STEPS INVOLVED ARE: The main parties involved in the processing are the exporter, the foreign buyer, the negotiating bank, the shipping company, the insurance company, the Reserve bank of India, the chief controller of exports and imports, the collector of customs & clearing and forwarding agents. Steps that’s need to be followed to process an export order:

Steps -1 Scrutinize the order with reference to the terms and conditions of the contract. The export order must specify the mode of payment whether LIC, DIA, DIP or Advance Payment. The most important document required by an importer are: (a) Bill of Exchange (b) Commercial Invoice (c) BIL (d) Insurance Policy (e) Packing list (f) Certificate of origin These should be given to the negotiating bank.

Steps-2 For a manufacturer, after the export order has been confirmed, a delivery note should be sent to the works manager. This note should contain all relevant details pertaining to the requirement.

Steps-3 After goods have been manufactured the followed is to be done: (a) Clearance from the central excise authorities by obtaining gate pass (GP-1) from if

goods are to be removed under claim for rebate of duty. (GP-2) FORM, if good are to be removed under a bond i.e. as per terms and conditions of the collector of customs or AR-4 A form if the exporter wishes to avail the services of central excise officer for the purpose of physical verification at the factory & thereafter sealing of packages. (b) The concerned export inspection agency has to be approached for conducting quality control and pre-shipment inspection. (c) A receipt has to be obtaining, if the goods are dispatched by road to the port of shipment.

Steps-4 Once the goods have been dispatched to the port, the works manager is supposed to send a dispatch advice to the firms export department. Then insurance cover is solicited. At this formalities regarding global price regulation, canalization, certificate of origin ECGC cover needed to be completed. Thereafter the export department sends the following documents to its clearing and forwarding agent: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)

Commercial Invoice Original Export Order Original L/C GR Form AR-4A Form Excise gate pass GP-1 Packing List and Weight List Certificate of Inspection Declaration Form Export Licence Purchase Memo Transport receipt

Step-5 After the agent has taken control of the consignment he prepares a web. Three kinds of shipping bills are to be prepared depending on the type of goods exported. These are free, dutiable and drawback shipping bills. Once the shipping bills are cleared by the customs, the agents forwards a copy of shipping bill.

Step-6 The agent then forwards the relevant documents to the exporter.

Step-7 After receiving the above documents from the agent, the exporter flees the claim with the Maritime Collector of Central Excise duty. In the meantime a shipment advice should be sent to the importer. Documents are then presented to the negotiating bank for negotiation. Thereafter the documents are transmitted to the banker of the importer would take the custody of the consignment once the goods reach the destination and other formalities at the end.

EXPORT DOCUMENTATION Export documentation plays a very crucial role in the execution of an export contract. In fact the process of export documentation begins when the order is placed by the foreign buyer with the exporter. The formalities as regards various documents relate to: (1) On the basis of requirement during and after shipment, Export documents can be classified into Pre-shipment and Post-shipment.

PRE-SHIPMENT DOCUMENTATS

Documents required up to the stage of custom clearance are known as pre-shipment export documents. -

Custom Invoice

-

Covering Packing List

-

Detail Packing List

-

ARE1 (etc)

These all documents forward to Custom Clearing Agent for Custom Clearance at port and release the Bill of Lading after Loading the Cargo at Ship (Vessel).

POST-SHIPMENT DOCUMENTS

The documents required in relation to the negotiation of documents for realization of export proceeds are referred to as Post-shipment documents. Documents Provided by Pre-shipment: -

Original Bill of Lading(3-Original /3-Non Negotiable)

-

Original Shipping Bill (Exchange Control Copy, SDF & Exporter Copy)

(2) On the basis of functions to be performed pre-shipment export documents can be classified as following:

Export documents

Commercial documents

Principal

Regulatory documents

Auxiliary

-The commercial Invoice

-Proforma invoice

-Packing list

-Intimation Instructions

-Bill of Lading

-Shipping Instructions

-Certificate of inspection

-Applications for certificate of origin

-Certificate of origin

-Mate receipt

-Bill of exchange

-Letter to bank for collection

-Shipment Advice -Insurance certificate

(A) COMMERCIAL DOCUMENTS Commercial documents are the documents used by the exporters and the importers in discharge of their respective legal and other incidental responsibilities under the export contract. These documents are in use because of the custom of trade in international trade.

KINDS OF COMMERCIAL DOCUMENTS ----There are two kinds of commercial documents are given below: (a) Principal (b) Auxiliary

(a)

Principal Commercial Document

These documents are those documents which are required by the exporter for the purpose of; • •

Effecting physical transfer of the goods and title there to from exporter to importer and Realization of export proceeds

The Various Principal commercial documents are as follows: • • • • • •

Commercial invoice (or the form prescribed by the importing country) Packing list Certificate of insurance policy Bill of lading Combined Transport document / Airway bill Certificate of origin Bill of exchange Shipment Advice

(b) Auxiliary Commercial documents These are also required in connection with procurement of the principal commercial documents are as follows: • • • • • •

Performa invoice Shipping Instruction Insurance Declaration Intimation for inspection shipping order Mate’s Receipt Letter of bank for negotiation

(B) REGULATORY DOCUMENT These are the documents which are required for copying with the rules and regulations governing export trade transaction such as foreign exchange regulations, customs formalities, export inspection etc. The various regulatory documents are as follows: • • • • • • •

Exchange control declaration form(G R Form) Freight payment certificate Insurance premium payment certificate Gate pass A R-4 Form Shipping bill/export Application/Dock Challan Receipt for payment of port charges

•

Vehicle Ticket

NOTE: In India there are thus 25 documents that are associated with the Pre-Shipment stage of transaction. Of these 16 are Commercial Documents and 9 are Regulatory documents. Out of the above 16 documents 14 have been standardized for the reason that they have different date element. Out of the 9 regulatory documents4 have been standardized. Out of these 4 documents the receipts for payment for dock charges have been completely eliminated. Beside this there is no further need of gate pass 1&2 of Excise any more.

INVOICE:

This is the basic document in the export transaction. Invoice may be of the following type:

PERFORMA INVOICE: This invoice indicates the details of the good to be exported. It is an offer to sell made by and other to the importer. Once the importer accepts the offer, the Performa invoice becomes an export order. It is prepared after negotiations with the, buyer have been concluded.

COMMERCIAL INVOICE: This is one of the most important documents in the export trade. It is the Exporters bill, which the importer has to pay. There is no standard format, and each exporter may design his own commercial invoice.

Commercial invoice needs to contain the following details: • • • • • • • •

Name and address of the Exporter Name and address of the Importer Quality of goods. Quantity of the goods. Other description of the goods. Value of goods, less discount, if any. Net amount payable by the importer. Other terms and conditions of sale.

The commercial invoice also should contain the following: • • • • • • • •

Name of the ship. Port of shipment. Port of destination. Importer’s Exporter’s code number of the Exporter. Letter of credit number. Bill of lading number. Shipping Bill number. And other details, if required.

Importance of commercial invoice to Exporter:

• • • •

The commercial invoice enables the exporter to collect payment from the importer The Exporter needs to submit copies of commercial invoice to customer for custom clearance, to export inspection agency, to claim incentive such as DBK, excise refund, and so on. It acts as documentary evidence in case of disputes between the exporter and the importer. The commercial invoice helps the clearing agent to prepare shipping bill.

Importance of commercial invoice to Importer:

• • • •

It helps the importer to make payment to the exporter. It helps to pay exact customs duty at port of destination. Certain countries demand customers invoice to give preferential tariff duties on imported goods. The importer can get such preferential import duties. It may help him to obtain loan against the imported goods. The Importer can get such preferential import duties. It may help to obtain loan against the imported goods.

Commercial Invoice is a document showing the value of goods exported. It may take form of: • • •

Custom Invoice Legalized Invoice Consular Invoice

Customs Invoice:

When the Commercial Invoice is prepared on the format prescribed by the customs authorities of Importer’s country, it is called customs invoice. This is the requirement in U.S.A, Canada

and Australia. An exporter can obtain copies of this invoice form any shop selling government publications and forms.

Legalized Invoice: It is the same as consular invoice. This term is used in countries like Turkey, Liberia, Latin American Countries etc, Commercial Invoice gives the description of the goods, priced charged, the terms of shipment and the marks and the number on tile packages containing tile merchandise. The date, name and address of both buyer and seller, name of Shipping Vessel and the port of debarkation. There is no standard form of commercial invoice. Some countries prescribe their own form. In such cases, the exporter has necessarily to use the form prescribed by the importing country.

Consular Invoice: It is a commercial invoice duly verified by the embassy consulate of the importer’s country stationed in the Exporter’s country. Certain countries like Australia, New Zealand, Canada, Arabian countries, Mexico and Middle East Countries etc. require the invoice to be certified by their Embassy/Consulate in the Exporter’s country. The consulate normally charges certain fees to certify the invoice. It is prepared in three copies 1. One copy is sent to the custom authorities of the importing country. 2. Second copy is retained by the Consulate’s office for the records. 3. Third copy is handed over to the exporter. The exporter sends this copy to the Importer along with other shipping document. The consular invoice contains the details as that of the commercial invoice such as: • Name and address of the exporter. • Name and address of the importer. • Quality and Quantity of tile goods. • Value of the goods. • Country of origin of goods, and so on. Importance of Consular Invoice to the exporter •

It helps the Exporter to clear import restrictions, if any when the invoice is attested by the consulate, the Exporter is sure that there are no import restrictions in the importer’s country. • It ensures prompt clearance from the customs at the port of shipment. Importance of Consular Invoice to the Importer: •

It helps to obtain easy clearance from the customs at tile port of estimation. The customs normally do not check the goods, if it accompanies by consular invoice.

•

It helps him to obtain preferential tariffs in his country.

CERITFICATE OF ORIGIN This certificate is issued by authorized agencies certifying the origin of goods. It states the country in which the goods have been manufactured and produced. Certain countries, such as Middle East Countries, Common wealth countries and countries of European community and others require this certificate of origin. There are three types of Certificate of Origin: Type A- Which is required in general by all countries for clearance of goods? Chamber of councils, Export Promotion Councils, issues it. Type B- Which is required under generalized system of preferences GSP? It is require by European Community countries such as Germany, France, England, Italy, New Zealand and others. DGFT, Export inspections agency, and other authorizes issue it. Type C- Which is required by commonwealth Nations to provide concessions under commonwealth Preferences (CWP).The office of the high commissioner of the country concerned issues it. Importance of certificate of origin to Exporter? • •

It acts as a proof that the goods are Indian origin. It helps to clear the goods from the custom at the port of shipment.

Importance of Certificate of Origin to Importer: • •

It helps to avail of concession duties under GSP and CWP references. It helps to clear the goods from the custom at port of destination.

SHIPPING BILL This is the most important basic document required by the customs authorities, for allowing Exports. It contains all the details of the goods shipped. The C&F agent of the exporter prepares the Shipping Bill in five copies: • •

Customs Copy, Drawback Copy,

• Export Promotion Copy, • Port Trust Copy, • Exporter’s Copy. • The Shipping Bill contains the details such as: • • • • • • •

Name and address of the Exporter. Name and address of the Importer. Quality and Quantity of goods. Value of goods. Port of shipment. Port of destination. Other required details.

There are five types of Shipping Bills: 1. 2. 3. 4.

Free Shipping Bill-Where there is no export duty. Dutiable Shipping Bill-Where there is export duty. Drawback Shipping Bill-Where the Exporter is entitled for DBK. Shipment Ex-bond Shipping Bill-Where the imported goods are kept in bonded warehouses for re-export. 5. Coastal Shipping Bill-It is domestic Shipping Bill, which is used I when the goods are moved from one port to another in India.

Importance of Shipping Bill: • • • • •

It helps to obtain clearance from the customs. It helps the Exporter to claim for duty drawback from customs. It helps customs to appraise the exact value of the goods. It helps the goods on the ship. It helps to obtain excise refund from excise authorities.

MATE`S RECIEPT The mate of the ship issues it, when the goods are loaded on the ship. It is an acknowledgement that the goods have been received on board the ship. The mate of the ship indicates the condition and the number of packages received on board the ship. It contains information such as: • • •

Name and address of the exporter. Name and address of the importer. Description of Packages.

• • •

Value of goods. Port of destination. Condition of packages at the time of loading.

Procedure to obtain the Mate’s receipt: • • • •

The Exporter’s agent loads the goods on the ship. The mate the ship prepares the mate’s receipt giving details regarding the number of packages and the condition of packages at the time of loading. The mate sends the receipt to the port trust authorities. The Exporter’s agent has to pay the port dues and collect mate’s receipt. The mate’s receipt is then handed over to CPO. The CPO records the shipment of goods on the shipping bill and document. The mate’s receipt is then sent to the shipping company. The shipping company then exchanges the mate’s receipt for sets of bill of lading. It is to be noted that mate’s receipt is an acknowledgement and not a document of title of goods. The Bill of lading is a document of title to goods.

IMPORTANCE OF MATE`S RECIEPT: • • • •

It acts as a proof for the goods that has to be lodged on the board of the ship. It helps the exporter to obtain attestation from CPO regarding shipment of goods on the regarding shipment of goods on the required documents. It helps to make payment of port trust dues. The mate’s receipt is needed to obtain Bill of Lading from the shipping company.

BILL OF LADING The Bill of Lading serves as a contract between the shipper (Exporter) and the shipping company. The shipping company agrees to transport the goods from one port of shipment to the port of destination. It is a document title to goods. The importer can take the possession of goods on the basis of Bill of Lading. The Bill of lading contains the following details: • • • • • •

Name and address of the exporter and the importer. Port of shipment and destination. The name of the ship, voyage number and date of shipment. The details of goods. The amount of freight – and weather paid or not. Other required details.

Bill of Lading is made in two sets: 1. Non-negotiable set of Bill of lading containing 10 to 12 copies. The non negotiable copies of bill of lading do not have title to goods. They are used for record purpose. 2. Negotiable set of Bill of Lading containing 2 to 3 copies. The negotiable copies of Bill of Lading have title to goods. Anyone negotiable copy can give title to goods.

There are different types of bill of lading: • • • • •

Clean Bill of lading- Where there are no advance remarks from the Shipping Company. Caused Bill of Lading-Where there are adverse remarks from the shopping company “ONE CASE DAMAGED”. Freight Paid Bill of Lading- Where the Exporter pays the freight. Freight Collect Bill of Lading- Where the bill is issued to the order of a certain person. To Order Bill of Lading- Where the bill is issued to the order of a certain person.

Importance of Bills of Lading to the exporter: • • • • •

It helps him to obtain incentives such as DBK, excise refunded. It acts as a proof that the goods have been shipped. It helps to pay freight under CIP contract. It helps to send shipment advice to Importer. The Exporter can hold the shopping company responsible for any damages to the goods in transit.

Importance of Bill of Lading to the Importer: • •

It helps him to collect the goods from the port of destination. It helps him to pay freight under FOB contracts.

Importance of Bill of Lading to the shipping company: • •

It helps the shipping company to collect the freight. It safeguards shipping company against wrong claims either by Exporter or Importer regarding damage at the time of loading will be indicated on tile bill of lading.

NOTE: It is to be noted in the case of air transport, instead of Bill of LADING, airway bill is used. The details of airway bill are more or less the same as that of tile Bill of Lading.

BILL OF EXCHANGE Meaning of Bill of Exchange: According to section 5 of Negotiable Instruments Act, 1881, a bill of exchange is “an instrument in writing – containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or the order of a person or the bearer of the instrument’. A bill of exchange contains an order from the creditor to the debtor to pay a specified amount to a person mentioned therein. The maker of a bill is called the “drawee”. The person who is entitled to receive payment is called “payee”. When it is drawn on a foreign it is termed as a foreign draft or bill of exchange. It is prepared either in an international currency or Indian rupees depending upon terms of contract. According, the bill is known by the name of the currency in which it is drawn. Example, a bill drawn in US dollars is known as “Dollar bill” and when prepared in rupees, being termed as “Rupees Bill”. When the goods are shipped by sea, the bills are drawn in sets and two sets of documents including drafts are mailed to the foreign correspondent through an authorised dealer for presentation to the drawee (importer). Each one bears a reference to the other. Bill of exchange is of two types: 1. Draft at Sight. 2. Usance Bill. When the drawer i.e. exporter expects the drawee i.e. importer to make payment immediately after the draft is presented to him, it is called a “sight draft”. Unless and until this draft is retired, tile negotiating bank does not handover the shipping documents and the buyer can’t take delivery of goods. There the exporter has agreed to give credit to the foreign buyer, he draws a “Usance Bill” i.e. draft is drawn is for payment at the date later than the date of presentation. A draft may be drawn according to the period of credit such as 30 days sight, 60 days sight and so on, implying

thereby, that the drawee i.e. importer is to retire the draft 30 days or 60 days or as the case may be ,after it is presented to the drawee who will retire it by writing upon it accepted with his signature and date. Thereafter the documents are handed over to him for enabling him to take delivery of goods. As there is no aligned document for draft, the same can be prepared by the exporter in the usual format.

Clean Bill and Documentary Bill: When the drawer of a bill encloses with it a document of title to goods or any other equivalent document, it is called a “documentary bill”. In an export transaction the exporter delivers to the banker documents like full set of BIL, A WP,PPR etc together with documents like drafts , invoices, packing list etc for presentment to the drawee. Depending upon the tenor of the bill i.e. D/P or D/A the documents delivered to the drawee against payment or acceptance. If on such document is attached with the bill, it is clean bill, Impersonal cheques, drafts and travelling cheques are some of the examples of clean bills.

OTHER DOCUMENTS Black List Certificate: This is to certify that ship/aircraft carrying the good has not touched a particular country on his journey or that his goods are not of particular country. This certificate is usually called for where countries have stood political relation with another.

Weight Note: This document is used to confirm that the packets etc are of a particular weight and not more than the stipulated weight as per contract. It may at times give the gross weight and net weight of the whole consignment.

Packing List: It is a list showing details of goods contained in each parcel/shipment. It shows item-by-item the contents of the containers or parcels shipped to enable the buyer/receiver of the shipment to check the shipment. Packing List has to be prepared in the aligned form as per guidelines.

Manufactures/Suppliers Quantity: This is a certificate to the effect that the goods, which have been manufactured/Supplied, are as per the requirement of the contract of sale.

Certificate of Inspection: Inspection of thee goods have been inspected before shipment is needed under some contracts or by some countries. This certificate is generally required to be issued by one of the authorized independent inspection surveyors in the export country.

Language Certificate: Indian exporters should apply for this certificate simultaneously or separately with the GSP certificate and application for pre-shipment inspection. The language certificate is issued in in quadruplicate three copies are given to the exporters. He should transmit one copy to his overseas importer, along with documents for realization of export proceeds.

Manufacture’s certificate: In addition to the certificate of origin, some countries require a manufacture’s certificate to the effect that goods ships have actually been manufactured and are available.

Certificate of measurement: Freight can be charged either on the basis of weight or measurement. When it is charged on weight basis the weight declared by exporter is accepted. However certificate of measurement from the Indian chamber of Commerce or any other approved organization may be obtained by the exporter and given to the shipping company for calculating of necessary freight. The certificate contains the name of the vessel, the port of destination, description of goods, quantity, breadth, length, depth etc of the packages.

Trans Shipment Bill: This document is used for goods imported into a customs port/airport intended for transhipment.

Trans Shipment permit: The Transhipment permit is the permission for transhipment of goods from the vessel on which the same are booked originally to another for export.

Shipping Order: Shipping order is issued by the shipping line intimating the exporter, about the reservation of space of shipment of cargo through a particular vessel from a specified port and on a specified date.

Shut out Advance: It is a statement of packages shut out by a ship and is prepared by the shad concerned and sends to the exporter showing the particulars of packages, for disposal arrangement.

Short Shipment Form: Short Shipment form is an application to the custom authorities at post advising the short shipment of goods and for claiming.

Stamp Duty: There is no longer any Stamp duty on either the sight drafts or Usance draft on or trade by or in favour of a commercial bank or co-operative and such bills of exchange are raised out of benefited commercial or trade transactions.

LIST OF DOCUMENTS TO BE SUBMITTED BY THE EXPORTER TO VARIOUS AUTHORITIES

•

TO THE CUSTOM AUTHORITIES 1. 2. 3. 4. 5. 6. 7. 8. 9.

•

Shipping bill Commercial Invoice G.R. Form (Original and Duplicate) Shipper’s Declaration Form Copy of Export Contract/LC/Export Order Inspection Certificate A.R. Form Export Licence (whenever necessary) Weight age Certificate (wherever necessary)

TO THE PORT AUTHORITIES 1. Port trust copy of the Shipping Bill 2. Shipping order

•

TO THE BANK 1. 2. 3. 4. 5. 6.

L/C (Where required) Commercial Invoice Bill of Lading Insurance certificate Bill of exchange G.R. Form (Duplicate Copy)

7. Bank Certificate (3 copies) 8. Export Inspection certificate (where required) 9. Certificate of origin 10. Shipment Advice

• TO LICENCING AUTHORITY 1. Application for exporter/importer code number in duplicate. # For advance licence A. B. C. D.

Application in prescribed form. Copy of export order. Statement of export. Bank receipt/Draft for application Fee

2. Special Import Licence To the R.B.I (for remittance of foreign exchange for payment of claims). A. Application form B. Copy of Invoice C. Sales contract D. Bill of lading E. Inspection report # To the export import bank 1. L/C 2. Balance Sheet of Exporter # To The Bank (for Packing Credit): 1. Proforma Invoice 2. Copy of dispatch Invoice 3. L/C # Document required by the importing country: 1. 2. 3. 4. 5. 6.

Consular Invoice (mainly required by Latin America) Combined Certificate of Origin Customs Invoice (for U.S.A & Canada) Health Certificate Certificate of origin G.S.P certificate of origin

Shipping logistics

DISTRIBUTION LOGISTICS FOR EXPORTS IN BSL Once the goods are packed and their pre-shipment inspection has been completed, the exporter should draw up a logistics plan for the distribution of the goods to the importer to ensure their timely delivery. This involves planning for transportation of the goods. The decision as regards the mode of transport to be used is thus, the essence of distribution logistics. The logistics plan should be drawn up considering the factors such as one, the alternative modes of transport and two, the mode which is optimal from the point of view of the transportation cost. It may sometimes so happen that there is no direct shipping link between the exporting and the importing country. In such a case transport of the goods would involve transhipment of goods from an intermediate port in other country. The mode of transport as to whether the shipment would be sent by air or by sea or road is a matter of negotiation between the exporter and the importer and is specified in the export contract. The exporter has to plan the transport logistics to insure timely dispatch of the goods. In this significant area Clearing and forwarding agent are a link between the owners of the goods and owners of means of the transport. They are experts and knowledgeable in laws and regulations governing shipment of goods through the customs authorities

ROLE OF CLEARING AND FORWARDING AGENT The clearing or the forwarding agents are the specialized people to provide various services to an exporter to ensure the smooth and timely shipment of the goods

CLASSIFICATION OF THE SERVICES PROVIDED BY THE C&F AGENTS

The services provided could be classified into essential and optional services

1. ESSENTIAL SERVICES

These services comprise: • • • • • •

• • • • • • •

Ware housing before transportation Local transportation Container arrangement Reservation of shipping space Selection of the mode of transport Packing, Marking and Labelling Completing customs and ports facilities Goods insurance Advising exporters on trade laws Educating exporters on trade laws Educating exporters in respect of developments in transport and changing options available them to explore new market Coordination with other agencies Procuring document

2. OPTIONAL SERVICES This service comprises: • • • •

Warehousing facilities abroad Bringing back goods Locating stranded goods Assessment of damage

FORMS OF SHIPPING The forms of shipping represent the organization of shipping organization of shipping services. There are three basic forms of shipping as explained below: • • •

Liner Shipping Tramp Shipping Conference Shipping

BHUSHAN STEELS basically deals with all forms of shipping. TRAMP SHIPPING basically involves those ships which are usually used for the transportation of homogenous cargo which is moved in bulk quantities .Such ships operate on single on single or consecutive voyages. Such ships work on inducement basis and ply indiscriminately between the ports of the world depending upon the laws of the demand and supply in the market. The rates in the tramp market are determined purely by the free inter play of the forces of the demand and supply. the

shipping lines operating as tramps can operate on any route for which the freight cargo is available .Thus, such shipping lines are not committed to any discipline in terms service schedule and the freight rates. However Conference and Linear shipping are used in rare cases or in the case of discrepancies.

LINER SHIPPING Involves the carriage of merchandise by regular shipping lines. These shipping lines provide the service by calling regularly at specified ports irrespective of quantity of cargo available. Such ships usually carry general cargo i.e., an accumulation of small loads belonging to many shippers. Each shipper pays the freight in accordance with the tariff based on volume, weight or the value of the cargo. The liner shipping companies provide commitment of regular service on specified sea routes at specified freight rates.

CONFERENCE SHIPPING involves an association of two or more liner shipping companies operating in a well-defined trade, plying on a fixed route or routes within certain geographical limits. The groups of liner in the conference operate on the basis of common freight rates and tariffs as well as conditions of carriage.

TYPES OF SHIPS There are primarily four types of ships and readily used for the shipment of various products from BHUSHAN STEELS: • • •

Single deck vessels Twin deck vessels Shelter deck vessels

RESERVATION OF SHIPPING SPACE If it is proposed to send the shipment by sea then the first step is to apply for the reservation of the shipping space. it is always advisable to book the shipping space in advance since there is shortage of shipping lines for the transport of cargo. An exporter can approach the shipping company or its agent directly through freight broker. Generally, reservation commences six to eight weeks before the arrival of the ship. It ca be done through formal agreement. When the shipping space is booked, the shipping line issues a document called the shipping order.

SAILING PROGRAMME OF THE SHIPS

The details of the sailing programmes of the ships are regularly published in the newspapers like EXIM News Letter, Shipping Times, and The daily shipping express. The exporters can obtain information from freight brokers and freight forwarding agents.

PROMINENT SHIPPING LINES •

MSC

•

MAERSK

•

CMA

•

APL

•

IAL

PROMINENT PORT •

JNPT

•

GTIL

•

MUHDRA

•

KANDLA

•

MSKT

DETERMINATION OF FRIEGHT RATES

The freight rates charged by various shipping lines are fixed taking into consideration a complex set of factors namely: • • • •

•

Nature and volume of cargo Relationship of weight to the measurement Competition from other carries/conferences Possibility of damage, pilferage, lighterage Operational cost

• •

Port charges and dues Possibility of securing return cargo

In practice, the various shipping lines follow a very practical approach and fix the rates taking into consideration the following two aspects • •

What rate the conference must establish to attract the rate? Can the conference lines afford to carry the cargo at this rate?

CONTAINERISATION Containerisation is the technique of stowing freight in reusable containers of uniform size & shape for transportation.

The use of containers has revolutionized the carriage of goods through shipment. The containers are carried by train or road to the sea ports where they are loaded on the ships for the onward transportation to the destination. The exporters do not need to carry the cargo to the seaports any longer rather they can approach the container freight station or the inland container depot(ICD) to book the cargo there for the transportation to the destination. The custom clearance of the cargo is provided at ICDs and in the process, the exporters are able to save lot of time. The packing of the cargo in a container can be done either in the container depot or in the factory of the exporter. The type of container used in BHUSHAN STEELS is General Purpose containers which are closed and are suitable for the carriage of all types general cargo both solids and liquid. Access for loading and unloading is through full width doors. The dimensions of general purpose container are as follows: Based on the length of the container, the container is generally known as 20ft container or 40ft container,20ft containers are specifically used in BHUSHAN STEELS although some times in rare cases 40ft containers are used at some discrepancy.

STUFFING OF CARGO IN THE CONTAINER Stuffing of cargo into the container is concerned with the packing of the cargo. The exporter or the shipper should formulate a proper storage plan prior to packing a container.

= load bearing / weight distribution area

container floor steel roll full longitudinal support to provide guidance when pushing in the dunnage cradle weight distributing dunnage in cradle form please note that the softer this dunnage is the more it will succomb to the weight of the steel rolls solid steel bars could be considered with protective hard plastic angle profiles or may be once in correct position additional support dunnage can be placed on top of the longitudinal supports full longitudinal steel plate to facilitate easy gliding chock blocks after pushing from rear to front location it can be fixed in position with additional dunnage to prevent longitudinal movement

Methods of Payment

METHODS OF PAYMENT Payment mode in BHUSHAN STEELS in reference to international trade basically comprises three modes of payment. These payment methods are also known as payment terms. 1. Advance Payment 2. Cash against payment or Documentary collection: (a) Documents against payment (b) Documents against acceptance 3. Letter of credit

ADVANCE PAYMENT Under this method, the exporter receives payment from the overseas importer in advance in the form of demand draft or cheque denominated in foreign currency or by way of direct telegraphic transfer against the supply of goods to be made later on. In case of huge payments in advance, the importer demands that an advance payment guarantee be provided through bank. It is the safest mode of payment from the point of view of the exporter. The exporter may ask for advance payment only when he is a strong trading position and able to dictate terms in case when the particular product is not available elsewhere. However, the importer would be willing to make advance payment if he can rely on the integrity of the exporter. When an exporter receives advance payment then he must have an evidence of advance payment in the form of Certificate of Foreign Inward Remittance (CFIR).This certificate is issued by the exporter’s bank i.e. the authorized dealer in foreign exchange, where the advance payment was deposited. This certificate is issued when the money is credited to the account of the exporter.

DOCUMENTARY COLLECTION OR CASH AGAINST PAYMENT The documentary collection involves collection of a given sum of money by a bank due from the importer against delivery of certain documents at the instruction of the exporter. The parties involved in the documentary collection are as follows: 1. The exporter i.e., he presents documents to his bank along with bill of exchange for collection of payment/acceptance. 2. The Collecting Bank i.e., the bank which forwards the document for collection or obtaining acceptance of the draft from the importer as per instructions of the exporter. 3. The Remitting Bank i.e., the bank which presents documents to thee importer for the collection of the payment/acceptance of the draft as per instruction of the collecting bank. 4. The importer i.e., the party entitled to receive documents against payment/acceptance. Documentary collection may take either of the two forms detailed below: 1. Documents against payment(D/P) 2. Documents against acceptance(D/A)

PROCEDURE FOR THE COLLECTION OF PAYMENTS UNDER D/P The following procedure is followed for the collection of payment under D/P i.e., Document against Payment.

1. The exporter sends the shipment and obtains shipping documents from the clearing and forwarding agent. 2. He prepares a sight draft on the importer for the value of goods. 3. The exporter submits the sight draft along with other shipping documents to his bank. The exporter’s bank acknowledges that all the document s noted by the exporter are presented. 4. The exporter bank sends the shipping documents and the draft along with a collection letter to correspondent bank known as remitting bank which is usually located in the importer’s country 5. The remitting bank notifies to the importer upon receipt of the draft and the documents and requires him to make the payment against the draft so the documents are released to him. 6. All the documents including those establishing the importer’s title to the goods are released to him upon his payment of the amount of the sight draft. 7. The remitting bank sends the remittance to the exporter’s bank which in turn, credits the account of the exporter.

Exporter (forwards documents to)

Informs Exporter’s Bank (forward Credit the document to) account of

Sends

Importer’s Bank

remittance

Makes Payments

Importer

Hands over Ddocuments

Collection of Payment under D/P

PROCEDURE FOR COLLECTION OF PAYMENT UNDER D/A The payment under D/A i.e. documents against acceptance is completed in two stages viz., (a) Acceptance, and (b) Collection In the first stage, the sequence of steps is the same as outlined above for D/P Mode of payment with the only difference being that importer conveys his acceptance on the Usance Draft instead of making payment, and the documents are released to him. The remitting bank sends the acceptance to the collecting bank and the same is given to the exporter. The exporter waits for the expiry of the Usance period and then submits the acceptance to his bank for the collection of payment. After the expiry of the Usance period, the exporter submits the acceptance to the bank for the collection of payment. The collecting bank credits the account of the exporter upon realization.

The procedure for the acceptance and collection in case of D/A mode of payment is explained in the figure Exporter

Sends

(forwards documents to) acceptance

Exporter’s Bank (forward document to)

Informs Sends Importer’s Bank

Accepts Usance Draft

Importer

Hands over documents

acceptance

Acceptance of Usance Draft under D/A

Exporter (forwards documents to)

Credit the

Exporter’s Bank (forwards acceptance to)

account

Remittance

sent

Importer’s Bank

Asks for payment Importer Makes Payment

Collection of Payment against Acceptance

LETTER OF CREDIT

According to article 3 of uniform customs and practices relating to the documentary credits, Documentary letter of credit has been defined as any “arrangement whereby a bank acting at the request and in the accordance with the instructions of a customer (the importer) undertakes to make payment to or to the order of a third party (the exporter) against stipulated documents and compliance with stipulated documents and compliance with stipulated terms and conditions”.

DOCUMENTARY CREDIT & CONFIRMATION CYCLE

PARTIES TO A LETTER OF CREDIT

(1) (2) (3) (4) (5)

Applicant/Importer Applicant`s/Importer`s Bank Exporter Intermediary/Confirming Bank Paying/ negotiating bank

RESPONSIBILITIES OF THE PARTIES TO THE LETTER OF CREDIT

(1) Applicant - The applicant should given precise details for opening the letter of credit

.The applicant should indemnify banks against the rules and regulations imposed by the foreign countries. (2) Issuing Bank - The issuing bank gives a conditional undertaking and reimburses the

negotiating bank against submission of the prescribed documents. It should verify the documents presented under the credit within seven banking days following the day of receipt of the documents and if it observed any discrepancy in the documents it will refuse reimbursement. (3) Advising Bank - The bank advising the Letter of Credit acts without any engagement

on its part but will take reasonable care to check the authenticity of the credit. If incomplete or unclear instructions are received, it will give the preliminary information to the Beneficiary without any responsibility on its part (4) Confirming Bank - When the confirmation to accredit is added by a confirming bank

at the specific request of the opening bank it constitutes a definite, equitable undertaking on the part of the confirming bank in addition to the opening bank, provided the stipulated documents are presented in accordance with the terms and conditions of the credit with the due date (5) Negotiating Bank - The nomination of bank by the opening bank for negotiation of the

documents under a credit does not constitutes any undertaking on the nominated bank unless the credit is confirmed by it. Negotiating Bank may be the bank of the beneficiary of the credit. Issuing Bank will reimburse the nominated bank if it had negotiated the documents as per the letter of credit. (6) Reimbursing Bank- Reimbursing bank will reimburse the claim made by the

negotiating bank under a credit. It need not insist for submission of any certificate of compliance from the negotiating bank along with their claim. The Issuing Bank will have prior arrangement or provide sufficient funds with the reimbursing bank for honouring the reimbursement claim as and when it is made.

Sample Procedure for Administration of Irrevocable Documentary Letters of Credit:Step 1 The Sales and Credit Departments agree that a irrevocable letter of credit is necessary prior to communicating financial terms to the customer. Sales and Credit must also agree whether to require an irrevocable confirmed or unconfirmed letter of credit.

Step 2 The Credit Department will communicate the letter of credit terms to the customer, forward a letter of credit checklist to the customer and try to select the issuing bank. Selecting the issuing bank is not always possible. The Credit Department will also request that the customer forward a copy of the letter of credit on receipt. The customer generally receives its copy before our advising bank. Getting an early copy allows all parties at (your company) to begin the review process. Step 3 The customer arranges with its bank for the issuance of the letter of credit. Step 4

The issuing bank sends copies of the letter of credit to the customer and to seller’s advising bank. Both, the customer and seller’s advising bank will send a copy to the Credit Department. Step 5 Once the Credit Department receives a copy of the letter of credit, it will send copies to Customer Service Representatives, Sales, and Traffic within one business day of receipt. Traffic personnel will forward the letter of credit to the forwarder. In addition, the Credit Department will log the letter of credit in the Letter of Credit Database. Step 6 Credit, Sales, and Traffic will review the letter of credit looking for necessary amendments within one day of receipt. Reviewing parties will forward all amendments to the Credit Department via Fax or E-mail. A Fax or E-mail is still necessary should Sales or Traffic require no amendments.

Step 7 If amendments are necessary, the Credit Department will forward all required changes to the customer. Should the necessary amendments lie outside Credit's realm of expertise, it will seek the needed assistance from other areas within the Company. If the customer agrees, it will forward requests to its issuing bank, which in turn will forward an amended letter of credit to seller’s advising bank. Seller’s advising bank will fax a copy of the amended letter of credit to Credit, who in turn will send it to Sales and Traffic. Credit, Sales, and Traffic will review the amended letter of credit to ensure no additional changes are necessary. When making amendments and reviewing an amended letter of credit, it is important to keep the letter of credit's expiration date in mind. Credit should approximate the number of days taken up by the amendment process and amend the expiration date by the same number of days. Step 8

If no changes are necessary, all the affected parties approve the amended letter of credit by notifying the Credit Department of the approval via Fax or E-mail within one day of receiving the amended letter of credit. If changes are necessary, go back to Step 6. Once the Credit Department receives the approval notifications from all parties, it will immediately advise all parties affected that the letter of credit has been approved. Step 9 Sales send a copy of the amended letter of credit to the plant with instructions to ship the product to the customer. Sales will do this on the same day it receives the notification from the Credit Department confirming that the amended letter of credit is acceptable. Step 10

The Freight forwarder and Traffic Department ship the material and send all the documentation required in the letter of credit along with a draft for payment to seller’s advising bank via overnight express courier. Step 11

Our advising bank reviews all documentation to ensure that it complies with the letter of credit's requirements. If there are any correctable discrepancies, the advising bank will correct them. It is important to note that your advising bank may charge you for each discrepancy found and corrected. If there are non-correctable discrepancies, our advising bank will try to get the customer to waive them. However, getting the customer to waive non-correctable discrepancies is no guarantee that the issuing bank will agree to the changes. This is especially true if the financial condition of the customer deteriorates. The advising bank's review process should take three days or less. Step 12

Seller’s advising bank forwards all the documents to the location specified in the letter of credit, which is usually the address of the issuing bank. Step 13 The issuing bank honors the letter of credit and forwards the funds to seller’s advising bank. Should the issuing bank not honor the letter of credit, it must tell seller’s advising bank why. Step 14

Seller’s advising bank will credit his account minus applicable fees. All advising fees are absorbed by the division making the sale. The advising bank will contact the Credit Department stating whether or not payment has been received.

Should the issuing bank refuse to honor the letter of credit, seller company are still responsible for associated fees. The issue of who will pay for the associated fees should be resolved prior to accepting the letter of credit. The Buyer and the Seller should all be in accord. Although the seller typically pays for advising fees, all fees are negotiable

Importer approaches

Importer’s Bank sends L/C

Advising Bank (In exporter

Authenticates L/C

Beneficiary Exporter

Procedure for the Issue of Letter of Credit

CONTENTS OF LETTER OF CREDIT A Letter of Credit generally contains the following information: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Complete and correct name and address of the beneficiary i.e. exporter. Complete and correct name and address of the applicant i.e. importer. Type of the letter of Credit/Documentary Credit Amount of credit How the credit shall be available e.g., by sight payment, deferred payment, acceptance or negotiation Name of the nominated bank, that is, the bank with which the credit is available or whether it is available with any bank The name of the drawee of the draft and the tenor of the draft. List of the documents required to be submitted by the beneficiary. Port of discharge and the place of final destination.

10. Terms of delivery i.e., FOB, CFR, CIF etc. 11. Status of transhipment i.e, whether allowed or not. 12. Status of partial shipment i.e, whether allowed or not. 13. The last date of sending shipment. 14. Time period for the presentation of the document for negotiation by the beneficiary after the dispatch of the shipment. 15. The date and place of expiry of the letter of credit. 16. Transfer of the letter of credit allowed or not. 17. Mode of advice of the letter of credit i.e. by mail or teletransmission. Documents Released

Importer

to

Informs Account (Exporter) of exporter Submits Credited

Beneficiary (exporter) Bank forwards them to

Remittance

Issuing Bank (L/C opening Bank)

For advi ce

Beneficiary

Discrepant Documents

Sent

sent Scrutiny of Documents

NonDiscrepant

Re mitt anc e Sen t

Documents

Procedure for Settlement of Payment under L/C

Findings & Recommendations

FINDINGS AND SUGGESTIONS The data provided in this report is totally based on primary and secondary research i.e. through organization, websites, magazines and other organization etc. FINDINGS Bhushan steel limited doing fairly well business wise in regards to handling of the documents related to international trade. The complete department plays an important role and gels together firmly in case of encounter with any discrepancies. Day by day many ways is invented to produce the documents and it reduced the discrepancies and mistakes. Company is taking relevant steps towards generating international trade documents. Under international trade documents each and every field is important but more stress is laid on “LETTER OF CREDIT”, because every field is affected from the same. Therefore letter of

credit is the important term which includes all the other documents. Company’s steps started with making of Performa invoice and ends with BRC’s. All the departments must use some step to prevent the crises. Company used following term to prevent any losses.

Creating the Performa invoice with high examination of market. Company gives the quotation with the examination of the market. The company main business in Middle East therefore any activity in Middle East forces to adopt different Strategies and force to make different quotation in a different time period. Many mores company also watchful in the international marketing price. Which reflect the company customers thinking? BSL focuses on the Contract in very careful manner. BSL makes its own contract format and try to convince the buyer to accept it. BSL take some defensive steps to make sure the payments in export. They very well know how the problem arises in terms of payment in international trade. They uses Letter of credit when the buyer is little bit faithful (because they know letter of credit is not much safer term as it looks),used CAD basis when the buyer is new and used advance payments if the buyer is not much reliable.

Check the Letter of credit: They careful examine the letter of credit when it’s come. And if they found and problem in L/C then they preferred to take the Amendment on it. Its is useful when the buyer want to make some complication in documents such as put another unit in L/C and contract other unit. Which make difficulties of the exporter and make some gain to buyer (advance payment discount etc). Therefore they take some precaution and take some amendment in L/C if necessary. And after the amendment they again examine the L/C.

Simple format for documentation: Company used some simple format towards creating the documents and this format is also universal acceptable. This gives more and more effectiveness in documentation department.

Coordination between the all departments: BSL in one of the very big company and the international trade make more complicate when, there are no coordination, but in BSL the coordination is very good. They all together used the benefit of license such as DUTY DRAWBACK, DEPB or DFRC.

Checking documents before going to negotiation: -

They check all the documents before negotiate them. Which make lowest error of margin Activeness of remittance department: They all are very active and specially remittance department which make easier and faster end of export and able to take the benefits. These all are the KEY STRATEGIES of the Bhushan steel limited to handle the documents in the proper manner.

BSL`S INTERNATIONAL MARKETING department always checks the documents related to the consignment.International division keeps full check on the various factors which affect the International Marketing. These factors may include all such factors i.e. Exchange Rate fluctuations, Economic Environment of the nations, Political Environment of the nations where the exports has to be done. The various competitions and the prices of the product are noticed by the International Marketing department. LOGISTICS plays a crucial role in the transportation of goods to the international market, Logistics department keeps full check on the various shipping related maters as almost whole transportation in the International Market is performed through ships. LOGISTICS department identifies the rates of various shipping lines and appoint the shipment job to the appropriate shipping line keeping in view the suitable freight rates. The Transportation of the goods to the Custom bounded area as well as to the port in accordance with the incoterms specified in the contract, Infact the logistics department keeps the full check and implement the various procedures of the export involving preshipment as well as the post-shipment. The Logistics department keeps full check on the following:

• • • • • •

Nature and volume of cargo Relationship of weight to the measurement Competition from other carries/conferences Possibility of damage, pilferage, lighterage Operational cost Port charges and dues

SUGGESTIONS Bhushan steel and strips limited may be used some other strategies such as: - Standardization of documentation department

Documentation department must be standardized. They must use some of the latest term of documentation such as latest software etc. These make it more placate in international trade documents - Letter of credit must be clear and standardized They use same technique which they used in the making of CONTRACT, such as they must be make some format and try to convince the buyer to accept it. Under it they must clarify the terms and condition of the L/C and the way of getting L/C. that’s make some problem but to prevent some losses we need to take some that kind of step. Because many time we see the buyer asking some of those clause in letter of credit which is not possible to fulfilled. And the discrepancy may be arise therefore we need to standardized the company policy towards letter of credit. - Limited documents must be given Documents asking in the letter of credit make difficultly to give them and also take some of the important time. Therefore we need to standardize the letter of credit under it we give one of the lists which show we are able to give only these documents (list of the documents showing). And then we sign the contract. -Proper uses of SAP: BSL must have SAP software to making documents which make it less mistake. BSL having big market in the INTERNATIONAL and that’s make more work load to the Employee and take some error in making the documents which is resolve by using SAP software. In the current they also used the software but that is used only in Sahibabad plant not in Khopoli plant. So it must be used in both plants. All these are the other strategies which must be used in the BSSL.

 OTHER SUGGESTIONS

 During the research, one of the interested things is coming out, that’s the documents discrepant because of the mis-coordination between the demanded goods and produce goods. Therefore, documentation department do not do any thing to stop the problem.  Try to more and more communicate with all departments to resolve the problem of misunderstanding

 Must be given least documents but all are standardized.  Always make the documents with the reference of UCP 500.  In the near future, Bhushan steel limited will do much better than before. BSL also try to become a market leader and will create a win-win situation through these strategies in the field of documentation, International Marketing  Bhushan Steel needs to maintain its position in its area of operations covering steel billets/ingots, rolled products, rounds, wire rods, narrow strips, Mild Steel and galvanized pipes, wide width cooled rolled coils and sheets.  With the ongoing slump in the steel market and competition posed by competitors like Jindal, etc and changing technological requirement like the onslaught of Optical Fibers the company needs to consolidate on its steel products and think of developing new products and offer existing products at better prices and quality.  At the same time due to increase in crude oil price at international level and slump in American economy equilibrium is shifted. New technology and trained workforce need large investment. Due to above mentioned reason’s there is decrease in new orders for BSL, a serious matter.  Bhushan Steel Ltd.‘s management is trying to find out a way out of these circumstances . Oil prices and economic ups & down are bound to occur, so company should be prepare for such conditions.  Brazil, Indonesia, Argentina and last but not least India itself are growing rapidly. Infrastructure and other industrial development is on fast track. BSL can search new opportunity there.  For a successful company professional working environment and dedicated team is must. Export documentation section has it own standard that should be improved and maintained. BSL has a very efficient export deptt. .

Bibliography

BIBLIOGRAPHY DATA OF THE REPORT IS TAKEN FROM THE FOLLOWING WEBSITES:  WWW.EXIMBANK.COM  WWW.BHUSHANSTEEL.COM  WWW.GOOGLE.CO.IN  WWW.TRADEPORT.ORG

AND THE BOOKS USED ARE:  EXPORT MANAGEMNET BY P.K.KHURANA  EXPORT DO IT YOURSELF BY M.I. MAHAJAN

AND MORE IMPORTANTLY IS –ANNUAL REPORT OF THE BHUSHAN STEEL LIMITED 2006-07.