Export Managment
*Special branch of mgt.science
*Follows all principles and philosopies of mgt.science
*In general Export management means what export
manager does
Meaning of export management
*Activities directly or indirectly associated with
exports
*Activities before shipment & after shipment
*Systematic & scientific approach-to manage
marketing activites
*All mgt.process to achieve desired objectives
*Finding opportunities for marketing in overseas
market
Scope of export management
*Export formation & procedure
*Export pricing
*Export services
*Export production & quality control
*International marketing research
*Advertising & publicity
*Export financing
Functions of export management
*Planning, organising,team-building,execution control
*Conduct market research
*Product development
*Fix prices with proper care
*Utmost caution
*Advertising/publicity abroad
*Effective communication with buyers abroad
*Receiving export orders through packaging,
transportation, documentation etc
*Strict with rules& regulations
*Look after opening of new branches/offices abroad
*Face challenges of international competition
*Export incentives
Role of exports in economic devt
*Higher forex earning
*Meeting BOP crisis
*Debt servicing
*Solve unemployment problem
*Optimum utilisation of resources
*Financing research & development
*Better international relations
*Remove disparity of countries
*World peace
Planning for exports
*Planning can be done by two ways. 1) Desk
Research and 2) Market Study.
*Desk research- studying market from ones own
office by published data and from various
sources
*Sources of published data are as follows:
Road Transport
*Transporters are private transport companies and
truck drivers. They are classified according to the
distance of their itinerary. In the case of very
heavy tonnage, an authorisation is required. It
uses 3 types of vehicles:
*One-piece vehicle (trucks)
Articulated vehicles (tractor + semi-trailer)
Articulated road trains (truck + semi-trailer)
The contract takes shape after signing off the
letter of vehicle called CMR. The signature of the
transporter imposes a certain responsibility in the
case of loss or damages. In the case of objections
raised by the transporter, those objections must
be counter-signed by the shipper/sender.
Railway Transport
*The transport document used in railway traffic is the
letter of vehicle CIM. There are two forms : one
for normal traffic and another for fast traffic. The
original is addressed to the addressee, and the
sender will receive a folio attached to the bundle.
The document will be filled in partly by the
sender but mostly by the railway company.
Indian Laws
*There are some important legislations in India
pertaining to exports.
*Exim Policy- Export –Import policy – prepared in India
periodically by Ministry of commerce,
Government of India.
*It is the policy relating to exports and imports and
contains various policy decisions and procedural
environment.
Objectives of Exim Policy
*To strengthen the base for export production and
create sound and favorable situation for exports.
*To facilitate technological up gradation and
modernization of domestic production.
*To reduce imports through import substitution.
*To offer necessary institutional support to export
initiatives by establishing suitable institutions to
provide finance
*To offer export incentives, concessions, facilities in
export promotion activities.
New Exim Policy 2009-14
*It can otherwise be called as New foreign Trade
Policy.
*Highlights of New Foreign Trade Policy 2009 – 2014
are as follows
*A)Higher Support for Market and Product
Diversification-Incentive schemes under Chapter
3 have been expanded by way of addition of new
products and markets
*The incentive available under Focus Product
Scheme(FPS) has been raised from 1.25% to 2%.
*International agencies- Worldbank, WTO, UNIDO-
have available economic & social data
*Chamber of commerce of respective countries-
information required to develop trade
Contd…
*Embassies of foreign countries in India- good source
to give commercial import policies of countries
*Foreign banks in India
*Public sector agencies like STC, MMTC- posses
wealth of information.
*After collecting all data, exporter can tentatively
come to a conclusion.
Market study
*Exporter has to visit the country concerned &
conduct field survey to get detailed information.
*Market profile- Exporters get clear picture about
market demand for product
*Product profile- details about product preferred, any
modifications, demand for present and future can
be obtained.
*Competition – ascertain nature of competition,
strength and weakness.
*Distribution- dealing through agents/dealers/retailers
etc
International Marketing Intelligence
*IMI includes collection, processing, analysis &
interpretation of all types of information
*Decision related information- It may include
prospects of foreign market, competition,
characteristics of foreign market etc
*Product related information- consumers taste &
preferences about product ,their shape, colour,
size, packaging etc
*Price related information- prevailing price ranges,
price trends, pricing practices, govt.policies, price
elasticity of demand etc
Contd….
*Market selection related information- demand
trends, govt policy regulations, competitive
situations etc
*Promotion related information- media availability,
effectiveness, competitive behaviour etc
*Distribution related information- Information on
channel alternatives, power & influence of
channel members etc
*Competition related information- Information about
major competitors, extent of competition,
relative strengths, weakness strategies
Sources of information
Organisations within India
*Sources of informations pertaining to foreign
markets
* ITPO- India Trade Promotion Organisation
*STC- State Trading Corporation
*CII- Confederation of Indian Industry
*Export Inspection Councils
*Indian Institute of Foreign Trade
*Management Schools/ Dept of Universities etc
Organisations outside India
*International Trade Centre, Geneva
*Office of Indian Embassies
Contd…
* A large number of products from various sectors
have been included for benefits under FPS. These
include, Engineering products (agricultural
machinery, parts of trailers, sewing machines,
hand tools, garden tools, musical instruments,
clocks and watches, railway locomotives etc.)
Technological upgradation
* To aid technological upgradation of our export
sector, EPCG Scheme at Zero Duty has been
introduced.
*This Scheme will be available for engineering &
electronic products, basic chemicals &
pharmaceuticals, apparels & textiles, plastics,
handicrafts, chemicals & allied products and
leather & leather products Holder Incentive
Scheme in that particular year). The scheme
shall be in operation till 31.3.2011.
Green Products
*Support for Green products and products from North
East
*Focus Product Scheme benefit extended for export
of ‘green products’; and for exports of some
products originating from the North East.
Marine Sector
* Fisheries have been included in the sectors subject
to the condition that Fishing Trawlers, boats,
ships and other similar items shall not be allowed
to be imported under this provision
Agriculture & Leather
To reduce transaction and handling costs, a single
window system to facilitate export of perishable
agricultural produce has been introduced. The system
will involve creation of multi-functional nodal
agencies to be accredited by APEDA.
Leather Sector
Leather sector shall be allowed re-export of unsold
imported raw hides and skins and semi finished
leather from public bonded ware houses, subject to
payment of 50% of the applicable export duty.
Export Finance
*The areas where finance would be essential after
obtaining an export order will be:
*Procurement of raw materials and components
* Availability of funds until the export benefits are
realized.
*Refinance facilities for long term credits
Methods of export finance
*The schemes of export financing in India are liberal
and no export contract would be frustrated for
lack of finance.
*World Trade Organisation *Commercial Banks require basic procedural
*Publications-lot of information from journals, formalities to be dully filled in by both buyer and
research publication exporter to provide them the financial facilities.
*Internet- a readily available and updated source of Terms of Payment
information. *Payment by documentary credit
MIS & MR *Advance payment
*MIS includes several diff.tasks and one which may *Cash against documents (CAD)
be marketing research on individual foreign *Documents on acceptance (DA)
market *Consignment basis
*MR –conducted through in-house research or Payment by Documentary Credit
external agencies like advertising agency, *Export orders normally stipulate that the buyer
management institute etc. should open a letter of credit in favour of the
*MR is very essential in an changing environment, exporter
fast technological development, changing *Out of all the terms of payment the most secure
consumer attitudes, taste & requirements etc. methods of payment and most widely followed in
Scope of marketing research international marketing is letter of credit
*Product research payment
*Pricing research *It is an authority for payment for the exporter
*Distribution research provided he does not violate any of its clauses.
*Promotion research Letter of Credit
*Consumer research *A Letter of credit is an authority issued by buyer
Export marketing research through his banker to the exporter through his
*Systematic art of gathering, recording, analysing & bank stating that the payment will be made
interpreting data on export marketing problems. *Payments method through a documentary L/C has
*Exporter can seek many answers through research number of advantages:
like *When L/C is established, the exporter may be sure
*1) How can the exporter make best appeal to this that the payment would not pose a problem
market * L/C in India is an important document for
*2) How successful is the exporters export marketing commercial bank which advances pre-shipment
program finance.
*3) What are the weak areas in export marketing Contd….
programmes. *L/C offers advantages to both buyer and seller. As
seller is concerned, a L/C ensures him the
Benefits of export marketing research payment for the goods he sells, provided he
*Helps to explain the status of the company follows the instructions.
*Helps to examine export market for a new product *Buyer has to have botheration of arranging for the
*Helps to pool the resources from agencies like STC, L/C, but it may enable him to avail certain
IIFT, EPCS etc. discounts and a lower price from the seller and
*Helps in carrying out real exporting buyer is assured that the shipment will be made
*Helps in collecting information & interpreting it by the date specified in the letter of credit.
intelligently.
Elements of export marketing Parties in Letter of credit
*Per capita income *The opener- is the buyer (the importer). It is opened
*Foreign trade at the request of the buyer.
*Government *The issuer-also called as issuing bank i.e. (bank in
*Standard of living the importing country issues letter of credit at
*Population the request of the importer.
*Climate *The Beneficiary- he is the seller or exporter.
*Location Kinds of Letter of credit
*Transportation *Clean letter of credit- it is a draft without any
*Resources & production. documents attached to it.
Market Selection *Documentary letter of credit- the draft must be
*The company has to decide the market it should accompanied by the documents specified in the
enter into letter of credit.
*Decide whether to enter few or many countries *Revocable letter of credit- it may be revoked at any
*Exporter must consider geographical factors, income time without the consent of beneficiary. Since it
and population, political climate and other does not protect the beneficiary, exporters, do
factors. not prefer on the basis of this type
*To enter export market, company must follow a Contd….
systematic process *Irrevocable credit- it may not be revoked without the
Determine parameters consent of all the parties concerned.
*Political stability in export markets *Confirmed letter of credit- if L/C is confirmed by
*Economic stability bank in exporters country, it becomes confirmed
*Government policy
*The strength and stability of currency
*Infrastructural facilities
Preliminary screening of markets
*Exporter has to undertake initial screening of the
markets
*Objective of screening- to identify best potential
markets and eliminate certain markets from
further probing.
*In screening, exporter may consider size of market,
policies, pricing etc.
Detailed investigation
*Collect information on nature of the customers,
mature and degree of competition, present and
potential demand for the product, trade policies
and so on.
*Information may be collected from primary sources
as well as from secondary sources.
Short listing of markets
*Detailed investigation helps exporters to shortlist
the countries
*Objective may be to arrive a list of few countries
which influences selection decision.
Evaluation and selection of markets
*Company should eliminate countries which do not
meet company’s minimum requirements.
*Eliminate countries which are subjected to inflation,
govt.instability and so on.
*Finally, an exporter may select only those countries
which provide good rate of return on its
investment.
Mode of entry of an export firm
*The company may decide the mode of entry through
*1) Direct exporting
*2) Indirect exporting
*3) Licensing
*4) Joint Ventures
Licensing
*Another alternative to enter into foreign markets.
*Licensor enters into agreement with a license in the
foreign market
*They have the right to use manufacturing process,
trademark, patent, trade secret etc.
*Licensor is guaranteed amounts in the form of fees
or royalities.
Advantages of Licensing
*Serves as an easy entry in foreign markets.
*Products are not subjected to trade barriers as they
are sold in a foreign market itself
*Licensor can get world wide recognition –e.g. coco-
cola
*This method is more suitable when direct or indirect
exporting is no longer profitable.
Disadvantages of Licensing
*Licensor has less control over the licensee
*Royalties or fees paid may be less
*Licensee may terminate the licensing agreement
and may continue operation.
*Only those firms possessing high technology,
L/C. The issuing bank sends L/C through its
branch bank located in the exporters country
with the request to add its confirmation.
*Red clause credit- is an authority to the negotiating
bank to make advances to the beneficiary for the
purpose of purchasing the relevant goods.
RBI in export finance
*RBI, the central bank of our country does not directly
provide export finance to the exporters but
encourages commercial banks and other financial
institutions to provide liberal export finance.
*It has developed various schemes to encourage
commercial banks to provide export finance
Schemes of RBI
*Export Bills Credit Scheme- RBI used to grant
advances to scheduled banks against export bills
maturing within 180 days.
*Pre-shipment Credit Scheme- It provides refinance
facilities to scheduled banks which provide pre-
shipment loans to exporters
*Export Credit Interest Subsidy Scheme- RBI provides
interest subsidy of minimum 1.5% p.a to banks
that provide export finance to exporters with
interest charge prescribed by RBI.
Exim Bank
*The Export Import Bank of India came into existence
on Jan 1, 1982 and started functioning from
march 1, 1982 with its headquarters in Bombay.
*Exim Bank of India has been both a catalyst and a
key player in the promotion of trade and
investment
*Exim Bank is managed by a Board of Directors,
which has representatives from the Government,
Reserve Bank of India, Export Credit Guarantee
Corporation of India, a financial institution, public
sector banks, and the business community.
Objectives
*The primary objective of the Export-Import Bank of
India is to provide financial assistance to
importers and exporters and function as the top
financial institution.
*Some of the services of the bank include: overseas
investment finance, film finance, export credit,
finance for export oriented units and agricultural
& SME finance. In the period of 2005- 2006 the
total amount of loan given out by the bank
amounted to 150,389 million, while this figure
shot up to Rs. 220,760 million in the flowing year.
Contd….
*Exim Bank, according to the official, is increasing its
thrust on supporting the outward investment
efforts of Indian companies by providing loans,
equity finance, guarantees and advisory services.
*In 2009-10, the bank sanctioned funded and non-
funded assistance aggregating Rs 1,054 crore to
18 corporates for part-financing their overseas
investments in six countries.
ECGC
*In order to provide export credit and insurance
support to Indian exporters, the GOI set up the
 distinctive brand names and trade marks may be
able to enter into licensing agreements.
Joint Ventures Abroad
*When Company needs to enter in a foreign market it
may enter in a joint venture abroad.
*It takes place when a foreign company together with
local firm carry out some business operations.
*Joint ventures abroad can be of different forms-
industry, consultancy, trading, marketing etc.
*In general joint venture involves sharing of
ownership and control.
Legal systems
* Legal Systems exists in different countries which
may be classified into three categories
*1) Common Law
*2) Civil or Code Law
*3) Theocratic Law
Common Law
*Derived from English law
*Found in England, U.S, Canada & many other
countries.
*The basis for common law is tradition, past
practices, past ruling, Legal precedents set by
courts etc.
Code or Civil Law
*Derived from Roman Law and found in Germany,
Japan, France and many countries.
*Under code law, the legal system is divided into
three separate codes.
*A) Commercial
*B) Civil
*C) Criminal
*Code law plays an important role in conducting
business transactions.
Differences
Common Law
*Based on court’s interpretation of events
*Contract tend to be detailed
Civil Law
*Based on how the law is applied to the facts
*Contract tend to be shortest and less specific.
Theocratic Law
*It is based on religious precepts
*Example- Islamic Law which is found only in Muslim
Countries who derive all rules from principles
established in Quran, the sacred text.
Categories of Laws
*There are broadly three sets of laws and regulations
relevant to international business
*1) International laws, treaties, conventions etc
*2) Laws of foreign countries
*3) Laws of home country ( India) related to foreign
trade.
International laws
*International business is governed by several laws,
treaties, agreements, conventions etc.
*For e.g.. Private law is taken into consideration.
Private law (Civil law) is that part of a legal
system that involves relationships between
Export Risks Insurance Corporation (ERIC) in July
1957 and was transformed into Export Credit
Guarantee Corporation Limited ( ECGC) in 1964.
*Functions of ECGC-Helps in obtaining financial
assistance from commercial banks and other
financial institutions
*Helps in developing and diversifying exports
*Provides risk coverage against political and
commercial risks.
Policies of ECGC
*Standard policies- issued to exporters to protect
them against payment involved in exports
*Specific policies-protect Indian firms against
payment risk involved in terms of payment ,
construction works and turnkey project etc.
*Special schemes- such as Transfer Guarantee meant
to protect banks which add confirmation to letter
of credit opened by foreign banks.
Export Pricing
*Price plays an important role in export marketing
and it is a strategic marketing tool to achieve
certain objectives. Some of the factors affecting
pricing policy decisions are:
*Variable & fixed costs
*Competition
*Product differentiation
*Exchange rate
*Image
Pricing approaches
*Cost base pricing( cost plus pricing)- the price
includes a certain percentage of fixed, variable,
marketing costs
*Market oriented pricing- very flexible policy which
allows the prices to change in accordance with
changes in market conditions.
*Following competitors- many firms follow the
dominant competitors in fixing the price
*Negotiated prices- deciding the price by negotiating
between buyer and seller
*Customer determined price- buyers specifies the
price and it will be acceptable based on cost,
condition of business etc.
Break even price
*It is the price for a given level of output at which
there is neither any loss nor any profit.
*If the exporter sells below this price he makes a loss
and if he sells above this price he makes a profit.
*It helps to understand the minimum sales required
to avoid any loss
*BEP is the point of sales at which there is neither
any loss nor any profit.
Dumping
*It refers to selling in the foreign market at a price
below the home market price.
*If the foreign price is above the home market price,
it is reverse dumping.
*Sporadic dumping- sell out the excess stock that
may arise occasionally.
*Intermittent dumping- periodic sale abroad at prices
below the home market price
*Dumping is generally condemned in most of the
nations as in some countries there may be even
 individuals.
*This includes the law of contracts and the law of
obligations. It is distinguished from public law,
which deals with law involving the state,
including regulatory statutes, penal law and
other law of public order.
Contd…
* A private law, is a law enacted to be applied to a
specific individual or corporation.
* Areas of private law:
*Civil law
Contract law or law of obligations
*Law of torts
*Property law
*Family law
*Labor law
*Commercial law
Law of Torts
*Tort law- French equivalent of the English word
‘wrong’-which means twisted or crooked or
wrong.
* Everyone is expected to behave in a straightforward
manner and when one deviates from this straight
path into crooked ways he has committed a tort.
* Hence tort is a conduct which is twisted or crooked
and not straight.
* Example- Defamation, trespass etc
Diff. bet. torts and criminal
*Tort is an infringement, whereas crime is a breach of
public rights and duties which affect the whole
community.
*In tort the wrong doer has to compensate the injured
party whereas in crime, he is punished by the
state in the interest of the society.
*In tort the action is brought about by the injured
party whereas in crime the proceedings are
conducted in the name of the state.
*In tort damages are paid for compensating the
injured and in crime it is paid out of the fine
which is paid as a part of punishment.
Contd…
*For example, if you are playing soccer in the street
and you accidentally kick the ball through
someone's living room window, this may be a
negligence tort
Property Law
*Property law is the area of law that governs the
various form of ownership in real property and in
personal property.
* In the civil law system, there is a division between
movable and immovable property. Movable
property roughly corresponds to personal
property, while immovable property corresponds
to real estate or real property, and the associated
rights and obligations thereon.
Examples
*Personal property (Movable) –moved from one
location to another e.g.. Wildlife, Livestock's-
chickens
*Real property (immovable)- Land, Buildings etc.
a long period dumping.
Transfer pricing
It is the rate or price that are utilized when selling
goods or services between company divisions
and departments, or between a parent company
and a subsidiary
When used properly, it can help to manage profit
and loss ratios within the company and is
considered to be a relatively simple method of
moving goods and services among the overall
corporate family.
It is a great way to move goods from one company
division or department to another without
generating a lot of postings on the Accounts
Receivable and Accounts Payable books
Contd…
*This process eliminates the necessity for invoices,
tariffs, internal bills of lading, and other
documents that would normally apply to a new
purchase using an outside vendor.
* There are instances that this type of transaction can
be abused. This is especially true when transfers
to international locations are conducted. Today,
many countries have regulations to help prevent
the use of transfer pricing as a means of
evading taxes or similar unethical and illegal
activities.
Inco terms & Price quotations
*Inco terms are set up to provide a set of
international rules for trade terms in foreign
trade.
*The main purpose of it is to avoid uncertainties of
different interpretation of terms in different
countries.
*There are various types of prices that are often
quoted in the international trade
*Loco price- goods are available at the godown of the
seller and in the course of shipment all the
expenses will have to be borne by the importer.
Contd….
*(FOR)- Free on Rail price- responsibility of sending
goods to railway station and loading is borne by
seller.
*(FOB)- Free on Board- responsibility of sending goods
to the sea port and also loading it is borne by the
seller.
*(FAS) –Free Along Ship- includes upto the despatch
of the goods to the sea port which includes cost
of goods, packing, marking etc.
Indian Exports
*The history of Indian exports is very old. During
ancient times India exported spices to the other
parts of the world. India was also famous for its
textiles which were a chief item for export in the
16th century.
*Though India has some product diversification in its
export basket, it has not expanded significantly
in the two big markets-Africa and Latin America.
India’s business with South Asian countries is
Family Law
*Family law -an area of the law that deals with family
related issues and domestic relations including
the nature of marriage, civil unions, and domestic
partnerships;
*Issues arising during marriage, including spousal
abuse, legitimacy, adoption, surrogacy, child
abuse, and child abduction
*The termination of the relationship and ancillary
matters including divorce, annulment, property
settlements, alimony, and parental responsibility
orders
Settlement of Disputes
*Disputes of certain nature are settled by WTO or in
accordance WTO principles
*There are two avenues for the settlement of
disputes.
*1) Judicial Dispute Settlement
* 2) Extra-judicial Dispute Settlement.
Judicial dispute settlement
*Dispute is settled through litigation (i.e.) by judicial
court.
*Litigation takes very long time ,it is highly expensive
*It strains the relationship between the parties
involved
*Therefore despite these drawbacks, extra-judicial
dispute settlement may be preferred.
Extra Judicial Dispute Settlement
*A conciliation clause or an arbitration clause
may be incorporated
*Conciliation- amicable settlement of disputes
*Arbitration- intend to adopt an adversary of
private judges of their choice and not
judges appointed by state.
*For international businessman, arbitration
offers distinct advantages since it is quicker
and cheaper
*The Indian Council of Arbitration entrusts
arbitration as a means of settling
commercial disputes and popularizes
arbitration.
Laws of Foreign Countries
*Firms doing business abroad has to consider various
laws and regulations related to foreign countries
*Laws related to product, packaging and labelling ,
price , promotion etc are among the important
regulations which exporter should consider.
Regulations related to Products
*Countries should establish standards for their
products pertaining to quality, safety, health
consideration etc
*ISO 9000 accredition is necessary for certain
products for selling in the market.
*In many countries it is mandatory to produce certain
disclosures about the products like the
ingredients, potency etc.
*Consumers can avail compensation if they prove
that the product was at fault.
Packaging and Labelling
*Many countries adopt their own regulations in
also negligible. This region has not been
integrated with the global economy, though
political and economic initiatives have been
taken in the recent past in this direction.
Major Export items
*In the past ten years, Indian exports have grown at a
rate of nearly 22%. Some commodities have
enjoyed faster export growth than others.
*Some of India's main export items are cotton,
textiles, jute goods, tea, coffee, cocoa products,
rice, wheat, pickles, mango pulp, juices, jams,
preserved vegetables etc.
*India exports its goods to some of the leading
countries of the world such as UK, Belgium, USA,
China, Russia etc.
Problems in export trade
*There are few problems which need to be solved
before India makes a mark for itself in the export
sector.
*The Indian goods have to be of superior quality. The
packaging and branding should be such that
countries are interested to export from India.
*At the same time India must look for potential
market to sell their goods. The government
should frame policies which gives boost to the
exports.
Export promotion in India
*Incentive programs designed to attract more firms
into exporting by offering help in product and
market identification and development, pre-
shipment and post-shipment financing, training,
payment guaranty schemes, trade fairs, trade
visits, foreign representation, etc. The need for
export incentives and assistance are:
*Makes the export business attractive
*Helps in diversification and expansion of exports
*Helps new and budding exporters to develop
*Helps in production of quality products
*Helps in earning foreign exchange.
Incentives
*Export incentives are widely employed strategy of
export promotion. The main aim of these
incentives is to increase the profitability of
business
*Important export incentives in India include rebate
of duties, income tax concessions, freight subsidy
etc.
*Many countries have established Export Processing
Zones (EPZ) and 100% Export oriented units
(EOU) in a bid to increase their export earnings.
Contd…
*These schemes aim to attract foreign capital and
technology to increase exports and to contribute
to economic development in general.
*Foreign investment up to 100% is normally allowed
in the EPZ and EOUs and there is no restrictions
on the import of technology, raw materials and
intermediaries
 packaging and labelling
*Regulations regarding packaging materials, method
of packaging, standards etc.
*Labelling in local languages is compulsory in some
countries e.g.. In Canada , use of both French
and English is Compulsory.
Regulation of Promotion
*Promotional activities are usually subjected to
various types of controls which may vary from
country to country.
*In some countries products like alcoholic drinks,
tobacco products etc are not allowed to be
advertised in any media.
*In India, Door Darshan does not entertain ad’s of
cigarettes, cigars , pan masalas, baby food etc.
*Many countries add statutory warning for certain
products like cigarettes, baby products
Transport contract
*It is a strategic element which gives the exporting
companies choose their mode of transport
according to cost, time involved and safety and
security. The other criteria such as nature of the
product, quality and importing country will
determine the choice of the principal mode of
transport.
*The advantage of air transport lies in its speed and
security. On the other hand, its cost is higher but
the speed allows frequent deliveries.
*The Air Transport contract is signed between the
transporter (air company) and the loader who
can be a forwarding agent. The contract is given
concrete shape by Air Transport letter (AIR WAY
BILL).
*EPZ are outside the (DTA) Domestic Tariff Area (i.e.)
the tax laws applicable to other parts of the
country are not applicable to EPZs.
Export Processing Zones(FTZ)
*As a part of export promotion drive, the GOI has
established free trade zones in different parts of
the country.
*The basic idea behind setting up of FTZ is to provide
duty free environment for export promotion at
low costs so that the exporting units will operate
successfully.
*A free trade is an area or industrial belt near
sea/airport where a manufacturing unit can
import goods duty free which should be used
only for exports.
Contd…
*These zones emerges as an effective instruments to
boost exports .
*It has to provide favorable environment for export
production.
*At present, there are seven EPZ operating in India.
The seventh EPZ at Vishakhapatnam is under
implementation stage.
Quality control & preshipment inspection
*Goods should be exported only after ensuring about
its quality. If the quality of the goods is not
satisfactory, it will affect the image of the nation
*The exporter should take every care to ensure the
quality of exports. The GOI has passed an act in
this regard. The Export (Quality control and
inspection) Act, 1963,empowers that all the
commodities should be brought under the
compulsory Quality control and pre-shipment
scheme and if the goods are not up to the mark it
cannot be exported.
Export order Execution
*Once the terms and conditions are acceptable to
both buyer and seller, the buyer may place an
order with the exporter.
*For confirmation of the order, the pro-forma invoice
is sent in triplicate to the buyer and he is asked
to return two copies duly signed by him.
*The exporter should again send one copy to the
importer with the exporters signature to confirm
the acceptance.
Contd…
*The confirmation of the order usually takes in the
form of contract but there is no hard and fast
rules for the terms
*The contract should contain detail of goods, their
quality, quantity, price, period of delivery, terms
of payment, licenses, insurance etc.
Product Preparation
*The process of product preparation for exporting is
the ability to see the product through the eyes of
a foreign consumer. If one can do that, the rest is
just common sense.
*Many times exporters mistakenly believe that only
modifications make their products superficial
ones. In reality, exporting may necessitate
fundamental changes in a product before it is
ready to be sold abroad.
*For example, foreign electrical standards are much
 different than electrical standards in the Home
country. If that pattern is not followed, the
product will be unusable or (worse yet) even
dangerous

Packaging
*Packaging refers to the process of design,
evaluation, and production of packages. It can be
described as a coordinated system of preparing
goods for transport, warehousing, logistics, sale,
and end use. Packaging contains, protects,
preserves, transports, informs, and sells.
*Purpose of Packaging-Physical protection, Security
Convenience and Portion control. For consumer
packaging, symbols exist for product
certifications, trademarks, proof of purchase, etc.
Some requirements and symbols exist to
communicate aspects of consumer use and
safety.

Customs Formalities
*Goods may be shipped out of India only after
customs clearance has been obtained.
*The clearing and forwarding agent on behalf of the
exporter should present various documents to
the customs authorities.
*Shipping bill
*Invoice
*GR form
*Quality control inspection certificate
*Letter of credit
Contd…
*Export license
*Any other documents
*A facility is available for customs checking of the
goods at the factory. Applications for obtaining
should be made to the Assistant collector of
customs.
*The custom appraiser visits the factory to check the
consignment and after checking it, he will seal
the packages and it can be loaded on the ship.