Import Export Business Procedure
Firstly, we should know about all the information regarding the world market and the demanding goods. Different countries have different rules and regulations for importing and exporting goods. In India, following are the necessary information for this business :-
IEC (Importer Exporter Code), is the first government formality you need to fulfill before starting business. It is a 10 digit code with permanent validity issued by DGFT(Directorate General of Foreign Trade). It can be easily applied through online. For more information, click here: what is import and export code and directorate general of foreign trade. You can also contact us for IEC, we provide affordable charges for making IEC.
CHA(Custom Housing Agent), In India, you must involve CHA for all exports and imports. CHA is required to clear goods for import and export with specific authorization which must be produced whenever required by Deputy or Assistant Commissioner. CHA is a certified person for filling all paperwork required by custom.
For Import, after having IEC, second thing is to find the oversea source for your desired product. If you are dealing with an oversea supplier for the first time then it will recommended that you must ask samples or give a personal visit. Also, there is an another thing which is ITC(Indian Trade Classification) which classifies goods into 3 categories :
- Restricted
- Canalized
- Prohibited
Goods that are not mentioned in the above, can be freely imported anywhere; if the importer has a valid IEC. Portlogy can help you sourcing and verification of supplier overseas.
For Export, first you should have very good knowledge of the product you are going to export. Then you need to find a foreign agent or a buyer in foreign country. This may be a real challenge. Websites like Indiamart (http://www.indiamart.com) and Alibaba (www.alibaba.com) can help in this regard. Other option is to take part in International Exhibitions to display your product. You should have well prepared with your product samples. Like import policy, in export policy, ITC classifies goods into 3 categories :
- Restricted
- Prohibited
- State Trading Enterprise
Goods that are not mentioned in the above, can be freely exported anywhere, if the exporter has a valid IEC.
Payment mode, there are basically 4 modes of payment to overseas seller in International trade of imports and exports :
- Advance Payment
- Letter of Credit
- D.A.P or D.P (Documents Against Payments)
- D.A. (Documents Against Acceptance)
but it will be a good idea to involve a bank for safer transactions. This method of payment is called letter of credit (LC, What is a letter of credit?) . Again paying with LC is a simple task. Also get knowledge about how to ship like which carrier to use (postal service, UPS, FEDEX, etc).
Shipping mode source, shipping mode source can be air or sea. If your cargo is small, like less than 1 cubic metres, it can not be send via Sea, then Air is the only way. For perishable (Meat, fruits etc) items, Air is the only way. Durable large quantity goods are to be sent Via Sea. If your shipment is less than size of container, it is send alongside other cargo as LCL (less than container Load). If it can full whole container it is called FCL(Full Container Load).
Free on Board, which means the seller fulfills its obligation to deliver when the goods have passed over the ship’s rail at the named port of shipment. The buyer has to bear all costs and risks of loss of or damage to the goods from that point. It can also be used for inland waterway transport or sea.
Cost and Freight, means the seller must pay the costs and freight necessary to bring the goods to the named port of destination.
All these procedure can be taken carefully by import export agent. These agents manages, CHA, transport, payment, LC, licenses etc.