Types Of Exporters 2019 March (2)

EXECUTIVE SUMMARY India is one of the world’s largest producers as well as consumer of food products, with the sector playing an important role in contributing to the development of the economy. Food and food products are the largest consumption category in India, with a market size of USD 181 billion. Domestically, the spending on food and food products amounts to nearly 21% of the gross domestic product of the country and constitutes the largest portion of the Indian consumer spending more than a 31% share of wallet. Going forward, the Indian domestic food market is expected to grow by nearly 40% of the current market size by 2018, to touch USD 258 billion by 2018. Food processing industry in India is increasingly seen as a potential source for driving the rural economy as it brings about synergy between the consumer, industry and agriculture. A well developed food processing industry is expected to increase farm gate prices, reduce wastages, ensure value addition, promote crop diversification, generate employment opportunities as well as export earnings. In order to facilitate and exploit the growth potential of the sector, the government on its part has initiated extensive reforms. Some of the key measures undertaken by the Government include: amendment of the Agriculture Produce Marketing Committee Act, rationalization of food laws, implementation of the National Horticulture mission etc. The government has also outlined a plan to address the low scale of processing activity in the country by setting up the mega food parks, with integrated facilities for procurement, processing, storage and transport. To promote private sector activity and invite foreign investments in the sector the Government allows 100% FDI in the food processing & cold chain infrastructure. The recent budget has announced several policy measures, especially for the cold chain infrastructure, to encourage private sector activity across the entire value chain. However, despite of continual efforts and initiatives of the Government to provide the required stimulus to the sector, processing activity is still at a nascent stage in India with low penetration. At the same time, though India is a key producer of food products, having an adequate production base for inputs, productivity levels are very low in the country. While India remains a top producer of food, production yield levels are among the lowest amongst the BRIC countries. Also, the Indian export market, at USD 13.7 billion, has a share of only 1.4% of the world food trade.

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RESEARCH METHODOLOGY Objective: 1. To study the concept and procedure of Export. 2. To study the documents required in Export transaction. 3. To study Inco-Terms.

Types of Data: While deciding about the method of data collection to be used for the study, the researcher should keep in mind two types of data: 1. Primary 2. Secondary The primary data are those which are collected afresh and for the first time, and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process.

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INTRODUCTION EXPORTERS: Exporters can be basically classified into two groups:

1. Manufacturer Exporter: As the exporter has the facility to manufacture the products he intends to export and hence he exports the products manufactured by him. 2. Merchant Exporters: An exporter who does not have the facility to manufacture an item. But, he procures the same from other manufacturers or from the market and exports the same. An exporter can be both, a manufacturer exporter as well as a merchant exporter, he can export product manufactured by him or he can export items bought from the market. Once it is decided to export, it is mandatory on your part to follow certain procedures, rules and regulations as prescribed by various authorities such as DGFT, RBI and customs. These procedures, rules and regulations are laid down in the Policy, Exchange Control Manual and Custom Act, etc. Accordingly Export documents are required to be prepared keeping in view of the requirement of the foreign buyers and our regulatory authorities. In India ships transport more than 90% of the cargo. It therefore interesting to study the export processed by ships documentation related to it.

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Processing of an export order: Exporter operation starts with the receipt of enquiry by the exporter from importer. In the enquiry, exporter submits his offer giving complete details of product technical, specific price, delivery payments terms, etc. After the process, negotiations importer sends a purchase order follow by Letter of Credit (if applicable). The exporter manufactures or purchases the goods according to the specifications given in purchase order. As soon as the goods are ready, the exporter invites the representative of Export Inspection Agency (EIA) for the pre shipment inspection and contains the certificate of inspection is issued. After that, the exporter prepares following documents: 1. Invoice 2. Packing List 3. ARE-I from excise department 4. Marine Insurance Policy 5. Copy of Purchase Order Above those documentation sends to CHA by exporter. Based on these documents Custom House Agent (CHA) completes the Octroi Formalities, obtain port permit and prepare shipping bill which is a customs document. Custom department checks the export cargo on the basis of information provided on the shipping bill. If satisfy then cargo allow to loaded on the board of ship. The shipping line gives mate receipt to CHA after the payments if ocean freight and port due obtains the bill of lading from shipping line. Bill of lading is a proof of dispatch of cargo and also a negotiable document. After that CHA sends various documents back to exporter which is: 1. Customs attested invoice 2. Copy of Shipping Bill 3. Full set of non-board bill of lading 4. Copies of purchase order 5. Copies of ARE 1 Form 6. SDF Form After that, the exporter submits above documents to bank for negotiation which include: 1. Commercial Invoice 2. Packing List 3. SDF Form

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THEORETICAL BACKGROUND Set Up & Need For An Export Organization: The proper selection of organization depends upon: 1. Ability to raise finance. 2. Capacity to bear the risk. 3. Desire to exercise control over the business. 4. Nature of regulatory framework applicable to anyone.

Structure of an Export Organization: Marketing manager for generating sales Commercial manager for looking activities of the execution of the orders Staff personnel for carrying out the day-to-day activities, namely: 1. Preparation of pre - shipment documents. 2. Co-coordinating with clearing agents on the progress of the shipment to be made. 3. Co-ordinations with the ware house\C. excise department regarding packing and clearance of the goods for export. 4. Preparation of post shipment documents for banks. 5. Follow-up with the bank on dispatch of documents, receipt of payment, an ailment of bank loans etc. To look into the requirement of licenses, claiming of export benefits filing of documents with the Government Authorities in Discharge of Export Obligations, if any, filing of returns to the various Government Agencies which are mandatory, prepare and keep an information bank of various transaction of the company, their domestic as well as international competitors. An office boy for doing leg work A clearing and forwarding agent to handle the documents and goods in the customs premises\in the port of lading. Depending upon the size of the business the numbers of personnel under each category may increase. For example if a company is transacting substantial volume of business in more than one product. Then it is necessary to have marketing manager for each product so that the person can concentrate on a particular trade to enhance the business.

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How One Begins To Do Exports: Before entering into the venture of exports, one must look for the product to be exported and the market where he intends to export. In case of a manufacturer, obviously he would like to export the product he manufactures as is or with possible modification as may be required by the market. However, in case of a merchant exporter or a trader, one has to identity the product to export. If the exporter is already in the trade in the domestic market and is familiar with the product it would be an advantage to export the said product of which he has reasonable knowledge. Before selecting a product, one must simultaneously made a study and find out the prospective market. For finding out the market for the selected product, the following methods will help: 1. Get statistical information as to imports of the product by various countries and their growth prospects in the respective countries 2. Approach the chamber of commerce for their guidance to find out the market. 3. Approach the Export Promotion Council dealing in the product of selection to get more information. Once you are ready with the product you wish to export and have found the market for the same, you are ready to proceed further. Following sequences can be followed: Anyone, who wishes to export, must first of all get an Importer Exporter Code Number (IE Code).This can be obtained by making a formal application to the office of the Regional Directorate General of Foreign Trade (DGFT). Get yourself registered with the related Export Promotion Council and become a member. Also arrange to obtain Registration-Cum-Membership Certificate (RCMC) from the council. Under the Foreign Trade Policy, it is mandatory that an exporter gets him registered with the Export Promotion Council to avail of various export facilities. Being a member, you will have access to all the information relating to the product that could be made available by the council. Many foreign buyers send their enquiries for the imports to the Export Promotion Council. 6

Hence you will have few customers interested in your product. 1. Understand the local government regulations in relations to the export of the product. 2. Get information of the government’s regulations of the importing country as to restrictions on the quantity, product specification, packing regulations, customs regulations, requirement of specific documents/information etc. 3. Availability of Vessels/Airlines, the transport charges, frequency of operation etc., 4. To look for a Custom House Agent (CHA) (clearing agents) for handling the documents/cargo in the customs. 5. If the product is covered under any quota regulation, find out the agency/council who is handling the quota distribution for the product and the availability of quota for exports.

Registration for Obtaining Importer Exporter Code (IEC) Number: The Customs Authorities will now allow the exporter to export or import goods into or from India unless he holds a valid IEC number. Before applying for IEC number it is necessary to open a bank account in the name of the company with any commercial bank authorized to deal in foreign exchange. The duly signed application form should be supported by the following documents. 1. Bank receipt (in duplicate) / Demand Draft for payment of the fees of Rs. 1000/2. Certificate from the banker of the applicant firm as per Annexure 1 to the form given. 3. One copy of PAN number issued by Income Tax Authorities duty attested by the applicant. 4. One copy of Passport Size photographs of the applicant duly attested by the banker to the applicant. 5. Declaration by the applicant that the proprietor / directors as the case may be of the applicant company, are not associated as proprietor / directors in any other firm, which has been caution, listed by the RBI. Where the applicant declares that they are associated as proprietor / directors in any other firm, which has been caution, listed by the RBI, they will be allotted IEC No. but with an additional condition that they can export only with RBI’s prior approval and they should approach RBI for the purpose. 7

6. Each importer/exporter shall be required to file importer/exporter profile once with the licensing authority shall enter the information furnished in Appendix 2 in their database so as to dispense with changes in the information given in Appendix-2, importer/exporter shall intimate the same to the licensing authority.

Finding a Customer: Once you have selected the market, the next step is to find a prospective customer. This you can get, 1. From the directory of importers of the country. 2. By writing to the Embassy of India in that country for assistance. 3. By means of participation in a Fair / Exhibition abroad either directly or through the export promotion council. 4. By participating in international fair if organized locally. 5. From the personal contacts in that country.

Negotiating Contract: Once the prospective customer is found, the business deal has to be concluded. The following aspects may be considered before entering into a final contract with the customer: 1. Credit worthiness of the customer. 2. Availability of the steamer / airlines and the frequency. 3. The freight charges. 4. The full product specification. 5. The quantity, price. 6. Terms of payment. 7. Type of packing and markings on the packages. 8. Mode of shipment & shipment schedule. 9. Quantity to be shipped. 10. Documentation requirement for the customer. 11.

Compliance of the local governmental rules and regulations. Before

entering into contract one should take note of the above factors.

Processing an Export Order: You should not be happy on receiving an export order.

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You should first acknowledge the export order, and then processed to examine carefully in respect of Items: 1. Pre-shipment inspection 2. Special packaging 3. Shipment and delivery date 4. Documentation requirement 5. Specification 6. Payment condition 7. Labelling and marketing 8. Requirements 9. Marine insurance, etc. If you are satisfied on these aspects, a formal confirmation should be sent to the buyer, otherwise clarification should be sought from the buyer before confirming the order. After confirmation of the export order immediate steps should be taken for procurement/manufacture of the export goods. In the meanwhile, you should proceed to enter into a formal export contract with the overseas buyer.

Financial Risks Involved In Foreign Trade: As an exporter while selling goods abroad, you encounter various types of risks. The major risks which you have to undergo are as follows: 1. Credit Risk 2. Currency Risk 3. Carriage Risk 4. Country Risk You can protect yourself against the above risks by initiating appropriate steps. Credit Risk: You can cover your credit risk against the foreign buyer by insisting upon opening a letter of credit in your favor. Alternatively one can avail of the facility offered by various credit risk agencies. A specific insurance cover can also be obtained from ECGC (Exports Credit & Guarantee Corporation) to cover your country risk besides covering credit risk. Currency Risk:

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As regards covering the currency risk, due to the exchange rate fluctuations, you can request your banker to book a forward contract. Carriage Risk: The carriage risk can be covered by taking an appropriate general insurance policy. Country Risk: ECGC provides cover to protect the exporter from country risks.

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PACKAGING INFORMATION FOR FOOD PRODUCTS Three types of packaging are used for food. Transport or export packaging is the outermost layer, which protects the product during transit. Outer packaging is an intermediate layer, for example a box containing several bags, tins or pouches of product, which is sometimes used to display goods in a retail environment. Sales packaging is the immediate layer of packaging around the goods. Packaging materials

There are a number of requirements that cover packaging for foods and other materials. As well as dealing with packaging in direct contact with food, the rules cover packaging capable of affecting food through the migration of its constituents into the food. Key rules include:  Aluminium is considered safe for food contact, although it may not be suitable

for highly acidic foods such as tomatoes and soft fruits.  Plastics are subject to an overall migration limit of 10 milligrams per square

decimetre of plastic surface area or per kilogram of food. There are also many specific migration limits that apply to individual substances contained in the regulations, whether they are plastics monomers or plastics additives that are used to achieve a particular technical effect. There are also rules about the use of declarations of legal compliance that apply to packaging moving up and down the supply chain.  Other specific rules apply to regenerated cellulose film, ceramics, plasticisers in seals for food containers, certain epoxy derivatives used in coatings, adhesives and plastics when used in contact with food.  New rules apply to contamination from chemicals, including mycotoxin (mould-related) contamination (in, for example, cereals and dried fruit) and radiological contamination from the use of pesticides and animal medicines, as well as nitrates from green, leafy vegetables. The overriding rule is that any packaging materials must not allow their constituents to migrate into the food in amounts that could harm human health or affect the nature or quality of the food. For those that manufacture or convert packaging materials into particular food packaging, there are also rules about documenting good manufacturing practice. Packaging that meets the requirements for food contact is labelled 'for food contact' and may also bear a specific symbol resembling a wine glass and a fork. New types of packaging material that actively maintain or improve the condition of food, as opposed to simply containing it, are now available. Other materials, known as 'intelligent packaging', monitor the condition of the food. These active packaging materials must comply with regulations on food additives. The 'intelligent' packaging technologies should not be used to disguise problems such as spoilage. Information should be given on the package to help consumers use them safely.

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Products of Animal Origin (POAO) are subject to extra packaging rules. You must ensure that your products have an identification mark applied before they go into transit. Depending on the product, you can apply the mark to:  the wrapping  the packaging  a label affixed to the product, the wrapping or the packaging

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IMPORTANCE OF FUMIGATION IN INTERNATIONAL TRADE In most of the cases where in wood materials are used for packing of export goods, the buyer insists supplier to fumigate cargo and asked to produce fumigation certificate along with other export documents. Fumigation is a legal requirement by the buyer in most of the countries. So fumigation certificate is issued by the fumigator by obtaining approval for fumigation from the licensing authority. Most of the countries will not allow to import goods without fumigation certificate, wherever applicable on such goods. Fumigation is a method of killing pests, termites or any other harmful living organisms to prevent transfer of exotic organisms. Fumigation is executed, by suffocating or poisoning pest, within an area of specified space by using fumigants. Normally, fumigation is done for wood material used for packing of goods to be exported. In some cases, empty container before stuffing of cargo is fumigated. Most of the cases, fumigation is done after completion of stuffing of cargo and closing the door of container. The result of such fumigation is more effective, as the gases used for fumigation circulates all spaces in the container without spreading gas outside, as the container is closed. However, this method of fumigation is not allowed for the cargo for certain food products for direct consumption and other specified goods.

5 Fumigation Advantages 1. 2. 3. 4. 5.

Controls pests at all life stages Efficient and time-saving Fumigants can reach where most other insecticides cannot Offers zero insect tolerance in products or living environments Reduced residue problems in commodities & structures

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PORTS IN INDIA

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Mode of Transportation 1. Ocean Transport 2. Rail Transport 3. Road Transport

1. Ocean Transport: More than 95% of international trade is conducted by sea routes since ancient times, sea routes are being used for transportation of cargo from one country to another and is also used for transporting the cargo from one port within the country to another. For example, In India the cargo can be transported from Chennai port to Visakhapatnam port using the shipping route. Sea routes are used for carrying bulk commodities like such as coaling and thermal coal mines, fertilizers, crude oil acids, cotton bales and all agricultural product, etc. The modern ships have the capacity to carry 7000 containers. One of the biggest cargos owned by Maersk-sea land is 1,138 feet long from end to end and 140 feet wide at mid ship. Such ships are called post-panama ship.

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Export Documents Commercial Invoice: Commercial invoice is an important and basic export document. It is also known as a 'Document of Contents' as it contains all the information required for the preparation of other documents. It is actually a seller's bill of merchandise. It is prepared by the exporter after the execution of export order giving details about the goods shipped. It is essential that the invoice is prepared in the name of the buyer or the consignee mentioned in the letter of credit. It is a prima facie evidence of the contract of sale or purchase and therefore, must be prepared strictly in accordance with the contract of sale. Inspection Certificate: The certificate is issued by the inspection authority such as the export inspection agency. This certificate states that the goods have been inspected before shipment, and that they confirm to accepted quality standards. Marine Insurance Policy: Goods in transit are subject to risks of loss of goods arising due to fire on the ship, perils of sea, thefts etc. Marine insurance protects losses incidental to voyages and in land transportation. Marine Insurance Policy is one of the most important document used as collateral security because it protects the interest of all those who have insurable interest at the time of loss. Types of Policy: 1. SPECIFIC POLICY: This policy is taken to cover different risks for a single shipment. 2. FLOATING POLICY: This policy is taken to cover all shipments for same months. There is no time limit, but there is a limit on the value of goods and once this value is crossed by several shipments, then it has to be renewed. 3. OPEN POLICY: This policy remains in force until cancelled by either party, i.e. insurance company or the exporter. 4. OPEN COVER POLICY: This policy is generally issued for 12 months period, for all shipments to one or all destinations. INSURANCE PREMIUM POLICY: Differs upon from product to product and a number of other such factors, such as, distance of voyage, type and condition of packing etc. Premium for air consignments are lower as compared to consignments by sea. 16

Consular Invoice: Consular invoice is the most important document, which needs to be submitted for certification to the Embassy of the importing country concerned. The main purpose of the consular invoice is to enable the authorities of the importing country to collect accurate information about the volume, value, quality, grade, source, etc., of the goods imported for the purpose of assessing import duties and also for statistical purposes. In order to obtain consular invoice, the exporter is required to submit three copies of invoice to the Consulate of the importing country concerned. The Consulate of the importing country certifies them in return for fees. One copy of the invoice is given to the exporter while the other two are dispatched to the customs office of the importer's country for the calculation of the import duty. The exporter negotiates a copy of the consular invoice to the importer along with other shipping documents. Certificate of Origin: The importers in several countries require a certificate of origin without which clearance to import is refused. The certificate of origin states that the goods exported are originally manufactured in the country whose name is mentioned in the certificate. Certificate of origin is required when: 1. The goods produced in a particular country are subject to’ preferential tariff rates in the foreign market at the time importation. 2. The goods produced in a particular country are banned for import in the foreign market. Bill Of Lading: The bill of lading is a document issued by the shipping company or its agent acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods in the like order and condition as received, to the consignee or his order, provided the freight and other charges as specified in the bill have been duly paid. It is also a document of title to the goods and as such, is freely transferable by endorsement and delivery. Bill Of Lading Serves For 3 Main Purposes: 1. As a document of title to the goods 2. As a receipt from the shipping company 3. As a contract for the transportation of goods

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Airway Bill: An airway bill, also called an air consignment note, is a receipt issued by an airline for the carriage of goods. Airway Bill or Air Consignment Note is not treated as a document of title and is not issued in negotiable form. It is a contract between the airlines or his agent to carry goods to the destination. It is the document of instructions for the airline handling staff. It acts as a customs declaration form. Since, it contains details about freight it also represents freight bill. Shipment Advice to Importer: After the shipment of goods, the exporter intimates the importer about the shipment of goods giving him details about the date of shipment, the name of the vessel, the destination, etc. He should also send one copy of non-negotiable bill of lading to the importer. Packing List: The exporter prepares the packing list to facilitate the buyer to check the shipment. It contains the detailed description of the goods packed in each case, their gross and net weight, etc. The difference between a packing note and a packing list is that the packing note contains the particulars of the contents of an individual pack, while the packing list is a consolidated statement of the contents of a number of cases or packs. Bill Of Exchange: The instrument is used in receiving payment from the importer. The importer may prefer bill of exchange to LC as it does not involve blocking of funds. A bill of exchange is drawn by the exporter on the importer, to make payment on demand at sight or after a certain period of time. 1. Bill of Exchange is a means to collect payment. 2. Bill of Exchange is a means to demand payment. 3. Bill of Exchange is a means to extent the credit. 4. Bill of Exchange is a means to promise the payment. 5. Bill of Exchange is an official acknowledgement of receipt of payment. Shipping Bill: Shipping bill is the main customs document, required by the customs authorities for granting permission for the shipment of goods. The cargo is 18

moved inside the dock area only after the shipping bill is duly stamped, i.e. certified by the customs. Shipping bill is normally prepared in five copies: 1. Customs copy. 2. Drawback copy. 3. Export promotion copy. 4. Port trust copy. 5. Exporter’s copy. A.R.E. 1 Forms (Central Excise): This form ARE-1 is prescribed under Central Excise rules for export of goods. In case goods meant for export are cleared directly from the premises of a manufacturer, the exporter can avail the facility of exemption from payment of terminal excise duty. The goods may be cleared for export either under claim for rebate of duty paid or under bond without payment of duty. In both the events the goods are to be cleared under form A.R.E-1 which will show the details of the goods being exported, the relevant duty involved and if the duty is paid or goods being cleared under bond, details of goods being sealed either by the exporter or Central Excise officials etc Exchange Control Declaration Form: This form ARE-1 is prescribed under Central Excise rules for export of goods. In case goods meant for export are cleared directly from the premises of a manufacturer, the exporter can avail the facility of exemption from payment of terminal excise duty. The goods may be cleared for export either under claim for rebate of duty paid or under bond without payment of duty. In both the events the goods are to be cleared under form A.R.E-1 which will show the details of the goods being exported, the relevant duty involved and if the duty is paid or goods being cleared under bond, details of goods being sealed either by the exporter or Central Excise officials etc. Export Application: This is the application to be made to the customs officials before shipment of goods. The prescribed form of the application is the Shipping Bill/Bill of Export. Different types are required for shipment like ex-bond, duty free

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goods, and dutiable goods and for export under different export promotion schemes such as claims for duty drawback etc. Vehicle Ticket/Car Ticket/Gate Pass: Before the goods are being taken inside the port for loading, necessary permission has to be obtained for moving the vehicle into the customs area. This document will contain the detail of the export cargo, name and address of the shippers, lorry number, marks and number of the packages, driver’s license details etc.

Other Documents: 1.

Black List Certificate: It certifies that the ship/aircraft carrying the cargo

has not touched the particular country on its journey or that the goods are not from the particular country. 2.

Language Certificate:Importers in the European Community require a

language certificate along with the GSP certificate in respect of handloom cotton fabrics classifiable under NAMEX code 55.09. Generally four copies of language certificate are prepared by the concerned authority who issues GSP certificate. Three copies are handed over to the exporter. A copy is sent along with the other documents for realization of export proceeds. 3.

Freight Payment Certificate:In most of the cases, the B/L or AWB will

mention the transportation and other related charges. However if the exporter does not want these details to be disclosed to the buyer, the shipping company may issue a separate certificate for payment of the freight charges instead of declaring on the main transport documents. This document showing the freight payment is called the freight certificate. 4.

Insurance Premium Certificate: This is the certificate issued by the

Insurance Company as acknowledgement of the amount of premium paid for the insurance cover.

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Method of Receiving Payments against Export Method of Payments: 1. Payment in advance 2. Documentary Bills 3. Letter of Credit Payments In Advance: This method does not involve any risk of bad debts, provided entire amount has been received in advance. At times, a certain per cent is paid in advance, say 50% and the rest on delivery. This method of payment is desirable when: 1. The financial position of the buyer is weak or credit worthiness of the buyer is not known. 2. The economic/ political conditions in the buyer’s country are unstable. 3. The seller is not willing to assume credit risk. Documentary Bills: Under this method, the exporter agrees to submit the documents to his bank along with the bill of exchange. The minimum documents required: 1. Full set of bill of lading 2. Commercial Invoice 3. Marine Insurance policy and other document, if required. Letter Of Credit: A letter of credit can be defined as “An undertaking by importer’s bank stating that payment will be made to the exporter if the required documents are presented to the bank within the variety of the L/C”. Contents: A letter of credit is an important instrument in realizing the payment against exports. So, needless to mention that the letter of credit when established by the importer must contain all necessary details which should take care of the interest of Importer as well as Exporter.

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INCO-TERM: “International Commercial TERMS” “INCO-TERMS define the mutual obligations of seller and buyer arising from the movement of goods under an international contract from the standpoint of risks, costs and documents”. Initially created in 1936 by the International Chamber of Commerce (ICC) and have been periodically revised. (Inco terms 2010 is the 8th revision) The seven rules defined by Inco terms 2010 for any mode(s) of transportation are: 1. EXW – Ex Works (named place of delivery): The seller makes the goods available at its premises. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller doesn't load the goods on collecting vehicles and doesn't clear them for export. If the seller does load the good, he does so at buyer's risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale. 2. FCA – Free Carrier (named place of delivery): The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place. The seller pays for carriage to the named point of delivery, and risk passes when the goods are handed over to the first carrier. 3. CPT - Carriage Paid To (named place of destination): The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier. 4. CIP – Carriage and Insurance Paid to (named place of destination): The containerized transport / multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. 22

5. DAT – Delivered at Terminal (named terminal at port or place of destination): Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal. 6. DAP – Delivered at Place (named place of destination): Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer. 7. DDP – Delivered Duty Paid (named place of destination): Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. This term places the maximum obligations on the seller and minimum obligations on the buyer. Rules for Sea and Inland Waterway Transport: The four rules defined by Inco terms 2010 for international trade where transportation is entirely conducted by water are: 1. FAS – free alongside Ship (named port of shipment): The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers (see Inco terms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo. 2. FOB – Free on Board (named port of shipment): The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel (this rule is new!). The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in containers (sees Inco terms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. This term has been greatly misused over the

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last three decades ever since Inco terms 1980 explained that FCA should be used for container shipments. 3. CFR – Cost and Freight (named port of destination): Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel (this rule is new!). Maritime transport only and Insurance for the goods is NOT included. This term is formerly known as CNF (C&F).

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EXPORT CHART OF FOOD PRODUCTS IN INDIA

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LEARNING OUTCOME 1. The process is developed in such a way that it performs its work without interruption. 2. The flow chart provides the detailed information about export process. 3. Government plays important role for promotion of export. 4. Export Oriented Unit (EOU) enjoys government subsidy benefits and generates more revenue. 5. The company has to face delay while receiving the payments from clients due lack of proper follow up of documents.

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CONCLUSION 1- Development of food industry necessitates effective networking and constructive partnerships between industry and Government, agriculture industry and research organizations. The Ministry of Food Processing Industries should set up a small Committee with 10-12 members representing these interests to coordinate policies and activities. 2 - Foods should be healthy and nutritious. Hence: (a)

Limits should be set for trans-fats and encouragement given to the use of

omega 3 fatty acids (b)Fruits and vegetables contain important nutrients which have proved to reduce the incidence of many non-communicable diseases like cancer, cvd, diabetes, cataract,

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BIBLIOGRAPHY Books: [1]. EXPORT WHAT.WHERE.HOW, 43rd (Nov. 09) edition, Anupam Publication, Based on new foreign trade policy by Paras Ram. [2]. Research Methodology, Methods and Techniques, Second Revised Edition by C. R. Kothari.

Websites: [1]. www.dgft.gov.in [2]. www.idexport.com [3]. www.wikipedia.com [4]. www.infodrive.com [5]. www.tradeindia.com

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ANNEXURE 1. Commercial Invoice

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2. Consular Invoice

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3. Packing List

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4. Bill of Lading

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5. Bill of Exchange

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6. Export Declaration

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7. Export Application

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8. Shipping Document

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