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Copyright © 2008, NewAge International (P) Ltd., Publishers
Published by NewAge International (P) Ltd., Publishers
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publisher. All inquiries should be emailed to rights@newagepublishers.com
ISBN (10) : 81-224-2326-4
ISBN (13) : 978-81-224-2326-6
Price : £ 9.99
PUBLISHING FOR ONE WORLD
NEWAGE INTERNATIONAL(P) LIMITED, PUBLISHERS
4835/24,Ansari Road, Daryaganj, New Delhi - 110002
Visitusatwww.newagepublishers.com

Dedicated
To
Lord Venkateswara

PREFACE
In view of the increasing thrust of exports in the field of International Marketing,
a number of Indian Universities have introduced the subject “Export-Import Procedures,
Documentation and Logistics” at Post-graduation level, in particular M.B.A., while
certain inputs of the subject are also taught even at graduation level in some of the
institutes.
This subject has gained importance looking to the job potential, as doors of
employment have been opened on this new front with the increasing pace of exports
and emphasis on globalisation.
To me, to write this book, an inspiring force has been students of my Institute.
Since introduction of U.G.C. syllabus at M.B.A., they have always complained that they
are not able to find a comprehensive book to meet their academic requirements, in a
systematic and meaningful manner. Their persistent demand, semester after semester
has heightened.
Their request has turned into a fruitful compliance with my stay for four months
in United States to support my daughters and enjoy vacation. I have promised my
students, before departure, that I would be back at the Institute with a book to place
in their hands to meet their longstanding desire.
This book provides a single place — Just like a single window concept — where
MBA students, following UGC syllabus, adopted by many Universities, can find all the
topics, dealt in a systematic manner. The topics are covered in the same order of UGC
syllabus for students’ convenient reading. Other students who have this subject at
graduation/post graduation level, hopefully, find this book irresistible, considering its
relevance and usefulness, as many Business Schools/Institutions, largely, have the
same topics, chosen by UGC, in their course content. Recent path - breaking
developments in Simplification of Documents, made by the Government in August,
2005, have also been added in this book.
Computerized Customs Clearance both for exports and imports has come into
operation from September 2004. This is in vogue at over 19 ports in India. I have
focused to deal with this new area, as highlighted, in detail, along with manual clearance
still existing at those ports, where computerized processing has not, yet, been initiated.
I shall feel delighted if this book fills in the students’ quench, which they have
been craving. My aim has been to answer three questions mainly in each topic — “Who,
Why and What for”. Experience has given me the feeling that many books do not
answer these questions, adequately, leaving basics unclear. My effort has been to address
these issues with clarity.
I record my appreciation to my ever-smiling Director Prof. P.K. Chopra, who
knows the art of being a tense freeman, even in the midst of tensions.

During my stay in U.S., I have been able to secure the necessary environment
with the support of my two professionally employed daughters—Radhi and Dheera—and
my two little American Citizens, grandsons—Theer and Tarkh. I owe this book to my
wife Sandhya—for her unflinching love and care towards me. But for the computer
support provided by my two sons-in-law — Kalyan and Kish — this book could not have
been completed. In fact, Kish, despite his busy and heavy schedule, has designed the
colourful front page to give completeness to the book.
My special thanks are due to my dear friend Mr. R. Satyanarayana who has taken
pains for careful proof reading.
I have gone through the autobiography of Mahatma Gandhiji “My Experiments
with Truth” during my early student days. I have been greatly influenced with the
simple language of the book with total focus on communication. Needless to add, I have
made sincere efforts to give tinge of that style of writing to my readers. I feel happy
if my students can understand what I have wanted to convey without the barrier of
language.
PROF. C. RAMA GOPAL
(viii)

CONTENTS
Preface (vii)
1. Export-Import Trade : Introduction to Regulatory Framework 1
2. Export Preliminaries 5
3. Documentation Framework—Aligned Documentation System 11
4. International Business Contracts 32
5. Terms of Payment 48
6. Instruments of Payment & Methods of Financing Exports 59
7. Uniform Customs & Practice for Documentary Credits 71
8. Business Risk Coverage 75
9. Cargo Insurance 83
10. Foreign Exchange Regulations & Formalities 93
11. Quality Control and Preshipment Inspection 96
12. Role of Clearing and ForwardingAgents 103
13. Excise Clearance of Cargo 108
14. Shipment of Export Cargo 118
15. Customs Clearance of Export Cargo 122
16. Customs Clearance of Import Cargo 135
17. Negotiation of Documents with Banks 144
18. Procedures and Documentation forAvailing Export Incentives 153
19. Processing of an Export Order 163
20. World Shipping 175
21. Indian Shipping 186
22. Containerisation 195
23. Machinery for Consultation 206
24. Air Transport 212
25. International Set-up 220
Index 225

1
EXPORT-IMPORT TRADE :
INTRODUCTION TO REGULATORY FRAMEWORK
v Introduction
v Trade Policy
v Foreign Trade
v Simplification in Documentation (Developments in August,
2005)
• DGFT related documentation at a single place
• Reduction of Documents to five for Customs purposes
v Review Questions
INTRODUCTION
Creation of appropriate institutional framework and supportive environment facilitates
the growth of external trade. In a developing country like India, the real barometer of
sustained economic development is the growth index of exports. Sustained growth in exports
can only be accelerated by conducive framework. The primary objective and emphasis of the
framework is towards accelerated development with the required regulation to support the
framework structure. The role of regulation is to protect the interests of consumers, obtain
conditions of competition and foster the institutional framework. The present regulatory
framework in India is highly supportive. The attitude of the government, a very important
aspect for faster pace, is poised in that direction to make the framework achieve the sustained
growth, removing the bottlenecks, hindering the path of progress and development.
1

2 Export-Import Procedures, Documentation and Logistics
TRADE POLICY
Trade policy is one of the many economic instruments for achieving economic growth.
The basic twin objectives of the trade policy have been to promote exports and restrict
imports to the level of foreign exchange available in the country. The inherent problems of
the country have been non-availability/acute shortage of crucial inputs like industrial raw
materials, supporting relevant technology and required capital goods. The problems can be
removed by imports. But, continuous imports are neither possible nor desirable. The gap
between exports and imports is financed through borrowing and foreign aid. However,
imports must be financed by exports, in the long run. The basic objective of the trade policy
revolves round the instruments and techniques of export promotion and import management.
FOREIGN TRADE
Foreign trade is recognized as the most significant determinants of economic development
of a country, all over the world. For providing, regulating and creating necessary environment
for its orderly growth, several Acts have been put in place. The foreign trade of a country
consists of inward and outward movement of goods and services, which results into outflow
and inflow of foreign exchange. The foreign trade of India is governed by the Foreign Trade
(Development & Regulation) Act, 1992 and the rules and orders issued there under. Payments
for import and export transactions are governed by Foreign Exchange Management Act,
1999. Customs Act, 1962 governs the physical movement of goods and services through
various modes of transportation. To make India a quality producer and exporter of goods
and services, apart from projecting such image, an important Act—Exports (Quality control
& inspection) Act, 1963 has been in vogue.
Developmental pace of foreign trade is dependent on the Export-Import Policy adopted
by the country too. Even the Exim Policy 2002-2007 lays its stress to simplify procedures,
sharply, to further reduce transaction costs.
Today’s international trade is not only highly competitive but also dynamic. Necessary
responsive framework to make exports compete globally, is essential. In order to harness
these gains from trade, the transaction costs, in turn dependent on the framework support,
involved need to be low for trading within the country and for international trade.
International trade is a vital part of development strategy and it can be an effective instrument
of economic growth, employment generation and poverty alleviation. Market conditions
change, almost daily, requiring quick response and more importantly, anticipation of the
future requirements is the need of the hour. To gear with the changing requirements, it is
essential that the framework has to remain in pace and change in anticipation, accordingly,
and then only international trade can pick up the speed envisaged.

Export-Import Trade : Introduction to Regulatory Framework 3
SIMPLIFICATION IN DOCUMENTATION (Developments in August, 2005)
DGFT Related Documentation at a Single Place
Importers and exporters have to fill multiple application forms at various stages of
their business activity to meet procedural requirements of different Departments/Ministries
under different Acts. The objective of Government has been to simplify procedures and
reduce documentation requirements so as to reduce the transaction costs of the exporters
and thereby increase their competitiveness in international markets. With this in mind, a
Committee to look into procedural simplification and reduction of transaction costs has been
set up under the Chairmanship of Director General of Foreign Trade.
As a first step towards this exercise, the DGFT has devised a single common application
form called ‘Aayaat Niryaat Form’. This 50-page set of forms, as against the 120-page set
currently in existence, provides availability of information on DGFT related Documentation
at a single place. It has a web interface for on-line filing by exporters and retrieval of
documents by the licensing authorities. This is a major leap towards paperless trading, in
the series of initiatives in the direction of moving towards reduced paper transactions
through procedural simplifications. A single common application form called “Aayaat Niryat
Form” is being introduced, reducing the documentation requirements by more than 60%.
REDUCTION OF DOCUMENTS TO FIVE FOR CUSTOMS PURPOSES
Government has decided to do away with a number of declarations that exporters,
presently, have to file under various promotion schemes, including duty drawback and duty
entitlement pass book.
The decision has been taken by the finance ministry in line with the recommendations
of the sub-committee headed by the Chief Commissioner of Customs, Delhi. The panel has
been formed to study the problems faced by traders under the present exports documentation
procedure, following complaints from industry about cumbersome requirements that have
often resulted in unnecessary delay and additional transaction costs.
The sub-committee has comprised representatives from the Customs department, the
Directorate General of Foreign Trade, the Reserve Bank of India, Fieo and the Delhi Exporters
Association. After a scrutiny of requirements under the electronic data interface (EDI)
system, the sub-committee has concluded that there are just five documents required for
customs purposes. These include commercial invoice, packing list, self-declaration form,
ARE-1 (application for removal of excisable goods for export) and the declarations pertaining
to various export promotion schemes.
While the identified documents can not be dispensed with, the sub-committee has
stated that a number of documents being filed by exporters for various export promotion
schemes have outlived their utility and do not serve any useful purpose. It has recommended

that such declarations should be done away with. The revenue department, after going
through the sub-committee’s recommendations, has also decided not to ask for any declaration
on the duty drawback scheme and the duty-free replenishment certificate scheme. The
department has agreed to issue a suitable draft notice and standing order for guiding
industry and staff, in this context.
REVIEW QUESTIONS
1. Write the importance of Regulatory Framework in the context of exports trade?
2. Write a note on recent emerging developments in ‘Simplification of Documentation’ in
International Trade?

5
EXPORT PRELIMINARIES
v INTRODUCTION
v ESTABLISHING A BUSINESS FIRM
_ SELECTION OF NAME OF FIRM
_ APPROVAL TO NAME OF FIRM
_ REGISTRATION OF ORGANISATION
_ OPENING OF BANK ACCOUNT
_ OBTAINING PERMANENT ACCOUNT NUMBER
_ REGISTRATION WITH SALES TAX AUTHORITIES
v IMPORTER-EXPORTER CODE NUMBER
_ REGISTRATION CUM MEMBERSHIP CERTIFICATE
_ REGISTRATION WITH ECGC
_ REGISTRATION UNDER CENTRAL EXCISE LAW
_ REGISTRATION WITH OTHER AUTHORITIES
_ EXPORT LICENSING
v CHECK YOUR UNDERSTANDING
v REVIEW QUESTIONS
INTRODUCTION
In order to enter into export business, certain preliminary steps have to be taken by
every business organisation. The setting up of an export firm is completed in two stages.
They are:
2

(a) Establishing a business firm and
(b) Obtaining the Importer-Exporter Code number for the business firm and completing
other registrations.
ESTABLISHING A BUSINESS FIRM
There are various formalities and registrations to be made with different authorities
before an exporter can enter into export business and accept an export order.
1. Selection of Name of Firm
An entrepreneur can choose any name for the firm he wants to start. It is desirable that
the name of the firms indicates that the business relates to export / import. Various words
like global, international and overseas in the name of the firm convey the meaning that the
firm is engaged in export / import.
2. Approval to Name of Firm
There is no need to obtain prior approval of Regional Licensing Authority of DGFT for
the proposed name of business firm. However, if the firm is planning to export ready made
garments to any country, approval from Apparel Export Promotion Council (AEPC) is required.
The entrepreneur has to apply to AEPC in the prescribed application form for the clearance
of the name. While applying, one can suggest two or three names, in the order of preference.
Once the name is approved, registration of firm in that name with AEPC is to be made
within a period of three months. After the registration is done, the firm would become a
registered exporter and be able to get the quota allocation for export of ready made garments
to export quota countries. Export of ready made garments to countries like USA, Canada
and countries of European Union requires quota approval from AEPC.
3. Registration of Organisation
The form of organisation can be sole proprietorship, partnership firm under Indian
Partnership Act, 1932 or joint stock company registered under the Companies Act, 1956. If
it is a joint stock company, it can be either a private limited company or public limited
company. If the form of business is partnership or joint stock company, registration under
the appropriate act is required. A sole trader requires permission from local authorities, as
required. No separate registration is needed for a sole proprietorship.
4. Opening of Bank Account
The firm or company has to open a bank account with a branch of a commercial bank,
authorised by Reserve Bank of India to deal in foreign exchange. Only a select few branches
of commercial banks are authorised by RBI to deal in foreign exchange. The firm may
require pre and post shipment finance for its business. In deciding the bank and branch, the
firm has to keep its credit requirements and cooperative attitude of the bank to assist as
it would be a new entrant in the field of international business. Timely credit is an important

Export Preliminaries 7
ingredient for the success or failure of business, in particular, in international business
which is highly competitive.
5. Obtaining Permanent Account Number
Export income is subject to a number of exemptions and deductions under the Income
Tax Act. For claiming those exemptions and deductions, it is necessary for every exporter
to obtain Permanent Account Number from the income tax authority. This PAN is required
to be quoted while applying for Export Import Code number.
6. Registration with Sales Tax Authorities
Exporter need not pay sales tax while making purchases, meant for export. For availing
the benefit, firm has to register with sales tax authorities and secure sales tax number.
Exporter/purchaser has to give Form -H to the seller/manufacturer. For this purpose, exporter
has to make an application along with copy of letter of credit or export order to the Sales
Tax Office that has jurisdiction to his office for issuance of Form-H. Exporter prepares
Form-H, in triplicate, and issues two copies to the seller and retains one copy for his record.
7. Importer-Exporter Code number
No export or import transaction can be made without obtaining an importer-exporter
code number. IEC number is a pre-condition for exports from and imports into India. IEC
number entitles to import or export any item of non-prohibited goods. This code number is
made compulsory, now.
The Registered/Head office of the applicant shall make an application for grant of IEC
number to the Regional office of DGFT (known as Regional Licensing Authority), having
territorial jurisdiction over the firm, along with the following documents:
(A) Profile of the exporter/importer
(B) Demand draft from a bank for Rs.1,000 as fees
(C) Certificate from the banker of the applicant
(D) Two copies of passport size photographs of the applicant, duly attested by bank.
(E) If there is any non-resident investment in the applicant firm and such investment
is with full repatriation benefit, full particulars of such investment are to be disclosed
and approval of RBI for such investment is to be enclosed.
(F) Declaration on applicant’s letterhead that there is no association of the applicant’s
firm with caution listed firms.
The Licensing authority shall allot the IEC number in a prescribed format. There is no
expiry date for IEC number. It shall be valid till it is revoked. This number is to be,
invariably, quoted in all documents, prescribed by rules, in particular, in Bill of Entry in
case of imports and in Shipping Bill, in case of exports.
Prior to 1-1-1997, it was necessary for every exporter to obtain CNX number from RBI.
Now, it is no longer required as IEC number has replaced CNX number.

8. Registration cum Membership Certificate
It is obligatory for every exporter to register with appropriate Export Promotion Council
(EPC) and obtain Registration cum Membership Certificate. Any person applying for import
or export licence or any other benefit under the current Exim Policy is required to obtain
Registration cum Membership Certificate (RCMC). The benefits provided in the current
Exim Policy are available only to those having valid RCMC.
A registered exporter receives ocean of literature and necessary guidance regarding
export market information from the Council. Any exporter may obtain RCMC from any
Export Promotion Council relating to his main line of business.There are different Export
Promotion Councils such as Engineering Export Promotion Council, Chemical Export
Promotion Council, Apparel Export Promotion Council and Textile Export Promotion Council
etc. However, if the export product is not covered by any EPC, the concerned Regional
Licensing Authority of DGFT can issue RCMC to the exporter. With the receipt of certificate,
the exporter will be known as “Registered Exporter”. The benefits provided in the current
Exim policy are available only to the registered exporters having valid RCMC.
9. Registration with ECGC
The exporter should also register with Export Credit and Guarantee Corporation of
India (ECGC) in order to secure export payments against political and commercial risks. It
also helps to get financial assistance from commercial banks and other financial organisations.
10. Registration under Central Excise Law
Central excise levy is applicable if the following conditions are satisfied:
(a) The duty is on the goods
(b) The goods must be excisable
(c) The goods must be manufactured or produced and
(d) The goods must be manufactured produced in India.
When Registration is to be Made: Every manufacturer/producer of goods has to
submit the prescribed application form to the jurisdictional Range officer of the Central
Excise for registration if the total value of the goods cleared for home consumption, known
as Domestic turnover, exceeds the exemption limit. The exemption limit is Rs. 100 lakhs in
case of SSI unit and Rs. 50 lakhs in case of non-SSI units. However, the unit is exempt from
registration, if the products manufactured by it are not excisable. Manufacture of salt does
not attract excise duty. The incidence of duty is attracted when the goods are cleared from
the factory/warehouse of the manufacturer.
Allotment of Registration Number: Once the unit is registered with Central Excise
Authority, they allot Excise Control Code (ECC) Number. The ECC number is 15 digit code
number with the first 10 digits being the same as Permanent Account Number.
Applicability of Excise Duty to Exporter: In respect of applicability of excise duty
on exports concerned, goods enjoy exemption from duty on the final product, meant for

Export Preliminaries 9
export. Where exemption is not availed, refund of excise duty paid is made, after actual
export. Secondly, refund of excise duty is made on inputs used in the manufacture of goods,
meant for export. The exporter has to submit the prescribed form ARE-1, in sixtuplicate, to
the competent central excise authority for the central excise clearance of the goods. The
procedure for clearance of central excise would be discussed, in detail, in the chapter dealing
with “Excise clearance of cargo”.
11. Registration with other Authorities
It is desirable for the exporters to become members of local Chamber of Commerce,
Productivity Council or any other trade promotion organisation recognised by the Ministry
of Commerce or Industry. Local membership helps the exporters in different ways, including
in obtaining Certificate of Origin, which is vital for exports to certain countries.
12. Registration for Business Identification Number
The exporters have to obtain PAN based Business Identification Number (BIN) from
the Directorate General of Foreign Trade prior to filing for customs clearance of export
goods. Purpose of BIN is to bring a common identification number to all persons dealing
with various regulatory agencies, such as the Central Excise and Customs Department,
Income Tax Department, Offices of Director General of Foreign Trade etc. All assesses
would be considerably benefited if they have to obtain just one identification number for use
by the various Government agencies.
13. Export Licensing
Many items of goods are free for exports without obtaining any licence, if they do not
fall in the Negative List.
The Negative list consists of goods the import or export of which is prohibited, restricted
through licensing or otherwise canalized.
Part–I : Prohibited Items: These items can not be exported or imported. These items
include wild life, exotic birds, wood and wood products in the form of logs,
timber, pulp and charcoal.
Part–II : Restricted Items: These are the items, export or import of which is restricted
through licence. They can be imported or exported only in accordance with
the regulations governing in this behalf.
Part–III : Canalized Items: Goods, which are canalized, can be imported or exported
through the canalizing agency, specified in the Negative List. The Director
General of Foreign Trade may issue a licence to any other person to import
or export those items, which are included in the Negative List.
It is evident from the above, all goods may be exported barring items in the Negative
List. Items in the Negative list can be prohibited items, imported or exported by licence or
through the designated canalizing agency or others under special conditions. So, it is necessary
for the exporter to check the nature of the item before he enters into the contract or even

makes efforts to secure the export order. Needless to add, the item of export agreed upon
should not fall in the banned list.
CHECK YOUR UNDERSTANDING
State whether the following statements are TRUE or FALSE.
1. Exporter/purchaser has to give Form-H to the seller/manufacturer so that sales tax is not
charged on goods purchased, meant for export.
2. Export of ready made garments to countries like USA, Canada and countries of European
Union does not require quota approval from AEPC.
3. It is not necessary for exporter to obtain CNX number from RBI as IEC number has
replaced CNX number.
4. The benefits provided in the current Exim policy are available only to the registered exporters
having valid Registration cum Membership Certificate (RCMC).
5. Exporter should register with Export Credit Guarantee Corporation of India to secure
overseas payments, protecting from commercial and political risks.
6. The incidence of excise duty is attracted when the goods are cleared from the factory/
warehouse of the manufacturer.
7. In respect of goods, which are not included in negative list, exporter can export the cargo
without obtaining any licence.
Answers
1. True 2. False 3. True 4. True. 5. True. 6. True. 7. True
REVIEW QUESTIONS
1. Describe the different preliminary steps to be taken in respect of establishemt of a business
firm and registrations required to be made before entering into export business?
2. Describe the formalities and registrations with the different authorities before an exporter
can accept export contract?
3. Write Short Notes on the following:
(a) Registration cum Membership Number
(b) Import Export Code Number
(c) Excise Control Code Number
(d) Sales tax formalities for exports
(e) Negative List

11
DOCUMENTATION FRAMEWORK—
ALIGNED DOCUMENTATION SYSTEM
v ALIGNED DOCUMENTATION SYSTEM (ADS)
• OBJECTIVE
• ADVANTAGES OF ALIGNED DOCUMENTATION SYSTEM
• SITUATION TODAY
v COMMERCIAL DOCUMENTS
• PRINCIPAL EXPORT DOCUMENTS
• AUXILIARY EXPORT DOCUMENTS
v REGULATORY DOCUMENTS
v CLASSIFICATION OF COMMERCIAL AND REGULATORY
DOCUMENTS
• DOCUMENTS RELATED TO GOODS
• DOCUMENTS RELATED TO SHIPMENT
· DOCUMENTS RELATED TO PAYMENT
• DOCUMENTS RELATING TO INSPECTION
• DOCUMENTS RELATED TO EXCISABLE GOODS
• DOCUMENTS RELATED TO FOREIGN EXCHANGE
REGULATIONS
v REVIEW QUESTIONS
HISTORY
International trade developed, over the centuries, in an unstructured and adhoc manner
as countries exchanged goods and products they excelled in for those, which they lacked.
3

Documents accompanying these transactions also followed a similarly haphazard path.
Numerous documents were required in a variety of formats for each export shipment. An
order number might appear on the right or the left side of a form; addresses could be shown
as lines or blocks.
The situation has started to improve in the mid-1960s with the document alignment
work initiated by Sweden, standards developed by the Trade Facilitation Working Party of
the UN/ECE (WP.4) and the 1965 publication of the United Kingdom Board of Trade’s
Simpler Export Documents.
ALIGNED DOCUMENTATION SYSTEM (ADS)
The standardisation of the pre-shipment export documents is done on the basis of the
system, popularly known as Aligned Documentation System (ADS).
Objective
The primary objective has been to ensure benefits to everyone in the international
trade chain from easier documentation. To enter information on an easy basis and access
the information with greater convenience, Aligned Documentation System (ADS) is adopted.
Documents related to exports are printed on uniform length and standard A-4 size of paper.
Initially, information is entered in Master Document 1 and Master Document 2. From these
documents, Common information, required to be incorporated in all the relative documents,
is entered in the slots at the same locations. An exporter can develop 14 out of 16 Commercial
Documents with the help of Master Document 1. Shipping order and Bill of Exchange are
the only two Commercial Documents that can not be developed as these have not been
standardised. In a similar manner, with the help of Master Document 2, three of the
Regulatory Documents-GR form, Shipping Bill/ Bill of Export and Port trust copy of Shipping
Bill can be developed.
Main advantage of this system is to enter the data quickly and read them with greater
ease and speed. Document alignment is a major trade facilitation activity. Aligned
Documentation System is based on the U.N. layout key. Deriving national document subsets
from the UN Layout Key rules simplifies trade documentation on an international scale,
bringing considerable benefits to traders.
Advantages of Aligned Documentation System
1. Dispenses Conventional Documentation preparation: Once information is
entered into Master Documents, it becomes possible to prepare many Commerical
and Regulatory Documents with the help of masking reproduction technique. The
documents are aligned to one another. All documents are printed in the same size
of paper. Common items of information are given the same relative slots in each
of the documents included in the system. The common items of information occupy
the same relative position on each form. For example, shipper top left, references
top right, signatory details bottom right and so on.

Documentation Framework—Aligned Documentation System 13
2. Easier to Complete and Access: This makes forms both easier to complete and
easier to process. Since common positions are used for data items, it is possible to
use a ‘Master Document.’ This master document can be used to produce a range of
documents using a photocopier and overlays (to provide the form outlines and hide
unwanted data).
3. Benefit to All Parties: All parties in the international trade chain benefit from
easier document processing. Using documents that comply with UN alignment
standards speed up form preparation, cut costs and reduce errors. Exporters may
actually get paid quicker than otherwise!
4. Better Image: Aligned documents simplify document checking and training new
staff. They even enhance an organization’s professional image.
Paper Size and Specifications
Paper: A4
Size: Length 297 mm
Width 210 mm
Margins: Top 10 mm
Left 20 mm
Right 6 mm
Bottom 7 mm
Situation Today
By the mid-1980s, the use of aligned documents has been widespread in a number of
countries. Its true potential has begun to materialize as master/photocopier systems started
yeilding to computerized export documentation systems. Success stories include banking
and transport (apart from rail).
For the purpose of Documents Aligned System, documents have been classified into two
categories as under:
1. Commercial Documents
2. Regulatory Documents
COMMERCIAL DOCUMENTS
Objectives
The objectives of Commercial documents are:
1. To effect physical transfer of goods from the exporter’s place to the importer’s
place.
2. To transfer property and title of goods from the exporter to the importer and

3. Realization of export proceeds from the exporter to the importer.
Out of the 16 commercial documents in the Export Documentation Framework, as
many as 14 documents have been standardized and aligned one to another. Commercial
documents may be classified as Principal Export Documents and Auxiliary Documents.
Principal Export Documents: These are the eight documents, which are required to
be sent by the exporter to the importer.
These are known as Principal Export Documents. They are:
(i) Commercial invoice
(ii) Packing list
(iii) Certification of inspection/quality control (where required)
(iv) Bill of lading/Combined Transportation Documentation
(v) Shipping Advice
(vi) Certificate of origin
(vii) Insurance Certificate/Policy (In case of CIF export sales contract)
(viii) Bill of Exchange.
Auxiliary Export Documents: The remaining eight documents, other than principal
export documents, are known as auxiliary export documents. They are:
(i) Proforma invoice
(ii) Intimation for Inspection
(iii) Shipping Instructions
(iv) Insurance Declaration
(v) Shipping Orders
(vi) Mate’s Receipt
(vii) Application for Certificate of Origin and
(viii) Letter to the Bank for Collection/Negotiation of Documents.
REGULATORY DOCUMENTS
Regulatory pre-shipment export documents are those which have been prescribed by
different government departments and bodies in the context of export trade. These documents
are meant to comply with the various rules and regulations under relevant laws governing
export trade such as export inspection, foreign exchange regulations, export trade control
and customs etc.
There are 9 regulatory documents associated with the pre-shipment stage of an export
transaction. Out of them, only 4 have been standardized. The regulatory documents are as
follows:

(1) Gate Pass-I/Gate Pass II: The Central Excise Authorities prescribe them.
(2) ARE-1: These are Central Excise forms. Earlier, AR4 and AR5 Forms have been
used. In their place, ARE 1 form , now, is used.
(3) Shipping Bill/Bill of Export: They are standardized and prescribed by the Central
Excise Authorities.
• For export of goods.
• For export of duty free goods.
• For export of dutiable goods.
• For export of goods under claim for duty drawback.
(4) Export Application/Dock Challan: Standardized and prescribed by the Port Trust
Authorities.
(5) Receipt for Payment of Port Charges: Standardized.
(6) Vehicle Ticket.
(7) Exchange Control Declaration Forms: GR/PP forms are standardized and prescribed
by RBI.
(8) Freight Payment Certificate.
(9) Insurance Premium Payment Certificate.
Classification of Commercial and Regulatory Documents
The different commercial and regulatory documents may be classified into documents
related to goods, documents related to shipment, documents related to payment, documents
related to inspection, documents related to excisable goods and documents related to foreign
exchange regulations.
DOCUMENTS RELATED TO GOODS
(i) Proforma Invoice
Proforma invoice is the starting point of an export contract. As and when the exporter
receives the trade inquiry from the importer, exporter submits the Proforma invoice to the
importer.
The Proforma invoice contains details such as name and address of the exporter, name
and address of the intending importer, nature of goods, mode of transportation, unit price
in terms of internationally accepted quotation, name of the country of origin of goods, name
of the country of final destination, period required for executing contract after receipt of
confirmed order and finally signature of the exporter.
Importance and Significance of Proforma Invoice are Two Fold
(A) It forms basis of all trade transactions and further negotiation or contract is made
on this basis.
(B) It helps the importer to obtain the import licence, where required, and obtain
foreign exchange for completion of the contract.

(ii) Commercial Invoice
A commercial invoice is the seller’s bill for merchandise or goods sold by him. Invoice
contains all the particulars and details in respect of name and address of seller (exporter),
name and address of buyer (importer), date, exporter’s reference number, importer’s reference
number, description of goods, price per unit at particular location, quantity, total value,
packing specifications, terms of sale (FOB, CIF etc), identification marks of the package,
total number of packages, name and number of the vessel or flight, bill of lading number,
place and country of destination, country of origin of goods, reference to letter of credit, if
opened, terms of payment, and finally signature of the exporter etc.
From the details, it is clear that invoice is an important and basic export document. It
is also known as ‘DOCUMENT OF CONTENTS’ as it contains all the important information
necessary for the preparation of other export documents.
For many countries, there are no prescribed special invoice forms. Exporters can use
their normal invoices used for indigenous trade for exports made outside the country too and
show the particulars required by the importer in terms of the contract. However, there are
special invoicing procedures in respect of exports to certain countries like Canada, U.S.A.
and Australia. Some countries like Uganda, Mexico, Sudan and Tanzania require special
customs invoices.
Information about the special invoice forms required can be gathered from the respective
Export Promotion Councils apart from the procedures of trade to be followed in respect of
the importer’s country. Any recognized Chamber of Commerce too can provide the information
in this respect.
Significance of Commercial Invoice
(A) It is prima facie evidence of the contract of sale and purchase of goods. On the basis
of the invoice, all the other documents, in the context of export, are prepared as it
is the basic document.
(B) Invoice constitutes the main document for various export formalities such as pre-
shipment inspection, quality, excise and customs procedures.
(C) It is useful for accounting purposes, both by the exporter and importer.
(D) This document is required in collection/negotiation of documents through the bank.
(E) For claiming incentives, this document is essential.
(iii) Consular Invoice
Some of the importing countries insist that the invoice is to be signed by the importing
county’s consular located in the exporter’s country. Such invoices are known as consular
invoice. The exporter has to pay a certain fee to obtain the certificate/invoice. Such charges/
fees vary from country to country. The main purpose to obtain consular invoice is to secure
authentication of information contained in the invoice. Once the invoice is signed by the
consular of the country, the importer gets comfort and confidence in respect of accuracy of
information in respect of quality, source of goods, volume and grade.

Normally, on arrival of the goods, it is necessary to convince the customs authorities
of the importing country that the goods stated in the invoice and the actually imported
goods are one and the same. If the customs authorities get suspicious or not convinced, they
open the packages of the imported goods. If this happens, considerable delay takes place.
The importer is put to hardship by delayed receipt of goods. To avoid all these problems,
importer insists on the exporter to obtain the consular invoice from the consulate stationed
in the exporter’s country. The consulate invoice is, generally, prepared in three copies. One
copy is retained by the consulate office, the second copy is sent to the customs of the
importing country and the third copy is given to the exporter to forward the same along with
other documents through the banker for collection/negotiation.
This information also facilitates in assessing import duties and also would be useful for
statistical purposes.
Significance of Consular Invoice can be Summarized
Importance to the Exporter
1. Once the invoice is signed by the consulate of the importing country, the exporter
is reasonably assured that there are no import restrictions in the importer’s country
for the goods and that there would be no problem in realization of export proceeds
or foreign exchange.
2. It enables prompt clearance from the customs of exporter’s country for shipping the
goods.
Importance to the Importer
1. In the importer’s country, the customs do not normally open the packages. It helps
the importer to get speedy delivery of goods.
2. Lot of unnecessary hardship which importer faces once the packages are opened is
avoided.
Importance to the Customs
1. The customs of the exporting country can easily clear the goods.
2. The customs of the importing country need not open the packages for checking and
can easily calculate the import duties.
(iv) Legalized Invoice
Certain Latin American countries like Mexico require this. It is just like consular
invoice, which requires certification from consulate or authorized mission, stationed in the
exporter’s country.
(v) Customs Invoice
When the commercial invoice is prepared on the format prescribed by the customs
authorities of the importing country, it is called “Customs Invoice”. This is the requirement
of U.S.A., Canada and Australia.

(vi) Packing Note and Packing List
There is a difference between packing note and packing list. Packing note refers to the
particulars of contents of an individual pack while packing list is a consolidated statement
of the contents of the total number of cases or packs.
A packing note contains the following details:
(a) Date of packing,
(b) Number of packing note,
(c) Number of case to which it relates to,
(d) Contents of case in terms of quantity and weight,
(e) Marking numbers,
(f) Name of exporter,
(g) Name of importer,
(h) Importer’s order number,
(i) Number and date of bill of lading and
(j) Name of vessel/flight.
Packing note is kept in each concerned case/pack. Packing note and packing list are
sent to the importer along with other documents. If any case contains any shortfall, importer
can communicate to the exporter in which case there is shortage of goods for making good.
No particular form has been prescribed for both packing note/list. Normally, ten copies
are prepared. Two copies are sent, in advance, to the buyer, one copy along with the
documents, one to the shipping agent and the remaining are retained by the exporter.
Precaution is to be exercised that the details of the quantity in the packing note/list
should conform to the quantity as stated in the Invoice and Bill of Lading/Airway Bill.
(vii) Certificate of Origin
As the very name indicates, certificate of origin is a certificate that specifies the name
of the country where goods are produced. This is absolutely necessary where the importing
country has banned the entry of goods of certain countries to ensure that the goods from
those countries are not allowed to enter in. At the time of arrival of the goods in the
importer’s country, this certificate is necessary for the customs to permit preferential tariff.
Certain countries offer preferential tariff to goods produced and imported from India. In
such a case, this is a must to the importer to claim preferential tariff and importer insists
on this document from the exporter. This enables the importer’s country to regulate the
concessional tariff only to select countries and deny to the rest of the countries.
A certificate of origin can be obtained from Chamber of Commerce, Export Promotion
Council and various trade associations which have been authorized by Government of India
to issue. The agency from which certificate of origin is obtained should conform to the terms
of letter of credit.

Significance of Certificate of Origin
(A) Certificate of origin is required for availing concession under Commonwealth
Preferences (CWP) as well as Generalized System of Preferences (GSP).
(B) It facilitates the importer to adhere to the rules and regulations of his country.
(C) Customs in the importer’s country allow the concessional tariff only on production
of this certificate.
(D) When goods from some countries are banned, importing country requires this
certificate to ensure that goods from banned countries are not entering into the
country.
(E) Exporting country may insist on this certificate to ensure that the goods imported
are not reshipped again.
DOCUMENTS RELATED TO SHIPMENT
(i) Shipping Bill
The shipping bill is the main document on the basis of which the customs permission
is given. Under manual processing of export documents, the exporter is required to file the
appropriate type of shipping bill to seek the order for customs clearance of the export
shipment. Under computerized processing, the exporter does not prepare the shipping bill;
instead it is computer generated. The customs order is called “LET EXPORT Order”. After
the shipping bill is stamped by the customs, then only the goods are allowed to be carted
to the docks.
The shipping bill contains the following particulars:
(A) Nature of goods exported,
(B) Name of vessel, master or agents,
(C) Flag,
(D) Country of destination, the port at which the goods are to be discharged,
(E) Exporter’s address,
(F) Importer’s address,
(G) Details of the packages, such as numbers and marks,
(H) Quantity details of each case, total number of cases and aggregate weight,
(I) F.O.B. prices and real value as defined in the Sea Customs Act and
(J) Whether the merchandise is Indian or foreign origin which is re-exported.
The shipping bill is prepared in five copies:
1. Customs copy
2. Drawback copy

3. Export Promotion copy
4. Port Trust copy and
5. Exporters copy
Importance of Shipping Bill
(A) It is an important document required by the customs authorities for clearance of
goods. The customs authorities endorses the duplicate copy of the shipping bill with
“Let Export Order” and “Let Ship Order”.
(B) After the clearance of customs, exporter can load the goods on ship.
(C) Shipping bill endorsed by the customs authorities facilitates the exporter to claim
incentives such as excise duty refund and duty drawback.
Types of Shipping Bills
(1) Free Shipping Bill: It is used in case of goods which neither attract any export
duty nor entitled for duty drawback. It is printed on simple white paper.
(2) Dutiable Shipping Bill: It is used in case of goods, which attract export duty. It
may or may not be entitled to duty drawback. It is printed on yellow paper.
(3) Drawback Shipping Bill: It is used in case when refund of duties is allowed on
the goods exported. Generally, it is printed on green paper, but when the drawback
claim is paid to a bank, then it is printed on yellow paper.
(4) Shipping bill for Shipment Ex-Bond: It is used in case of imported goods for re-
export and which are kept in bond. It is printed on yellow paper.
(5) Coastal Shipping Bill: It is used in case of shipment that is moved from one port
to another port, by sea, within India. It is not an export document.
When goods are sent by sea, it is called Shipping Bill and it is Airway bill when goods
are sent by Air.
(ii) Mate’s Receipt
A mate’s receipt is issued by the mate (assistant to the captain of the ship) after the
cargo is loaded into the ship. It is an acknowledgment that the goods have been received on
board the ship.
Contents of Mate’s Receipt
Mate’ receipt contains the details about
1. Name of the vessel,
2. Date of shipment,
3. Berth,
4. Marks,
5. Numbers,

6. Description and condition of goods at the time they are shipped, port of loading,
7. Name and address of the shipper,
8. Name and address of the importer(consignee) and
9. Other required details.
Types of Mate’s Receipts
Mate’s receipt can be clean or qualified.
(A) Clean Mate’s Receipt: Mate of the ship issues a clean mate’s receipt if the condition,
quality of the goods and their packing are proper and free from defects.
(B) Qualified Mate’s Receipt: If the mate’s receipt contains any adverse remarks as
to the quality or condition of the goods/packing, it is known as ‘Qualified Mate’s
Receipt’. If the goods are not packed properly and the mate’s receipt contains any
adverse remarks about the packing such as “Poor Packing’, the shipping company
does not assume any responsibility in respect of the goods during transit. It is
necessary for the exporter to secure the mate’s receipt without any adverse remarks.
On the basis of the mate’s receipt, the Bill of Lading is prepared by the shipping
agent. If there are adverse remarks in the mate’s receipt, the same will be
incorporated in the Bill of Lading, which may turn to become a claused Bill of
Lading, and this may not be acceptable for negotiation.
Mate’s receipt is first handed to the Port Trust Authorities who hands over to the
exporter soon after he clears their dues. This procedure is adopted to facilitate for collection
of port dues from the exporter.
Significance of Mate’s Receipt
(1) Mate’s receipt is an acknowledgment of goods. It is not a document of title.
(2) It is issued to enable the exporter or his agent to secure bill of lading from the
shipping company.
(3) Bill of Lading, which is the title to the goods, is prepared on the basis of Mate’s
receipt so it should be obtained without any adverse remarks.
(4) Port Trust Authorities are enabled to collect their dues as it is routed through
them.
(iii) Cart Ticket
A cart ticket is also known as cart chit. This is prepared by the exporter, which contains
the details of the vehicle number, description of goods, quantity, name of the shipper,
shipping bill number and port of destination. The driver of the vehicle carries the cart ticket.
At the time of entry into Port, the cart ticket is verified by the Port Authorities to satisfy
that the vehicle is carrying only those goods, which are mentioned in the cart ticket. After
being satisfied, the gatekeeper/warden/inspector issues the gate pass to the driver and
allows entry of the vehicle into the premises of the port.

(iv) Certificate of Measurement
Freight is charged either on the basis of weight or measurement. When weight is the
basis of measurement, the shipping company for the purpose of calculation of freight may
accept the weight declared by the exporter. However, when measurement is the basis for
calculation of freight, the shipping company may insist on a certificate issued by Chamber
of Commerce or other approved organization in respect of goods. The certificate of
measurement contains the details in respect of description of goods, quantity, length, breadth
and depth of the packages, name of the vessel and port of destination of the cargo etc.,
(v) Bill of Lading
Bill of Lading is a document issued by the shipping company or his agent acknowledging
the receipt of cargo on board. This is an undertaking to deliver the goods in the same order
and condition as received to the consignee or his agent on receipt of freight, the shipping
company is entitled to. It is a very important document to the exporter as it constitutes
document of title to the goods.
Each shipping company has its own bill of lading. The exporter prepares the bill of
lading in the form obtained from the shipping company or agents of shipping company.
The goods can be consigned to order of the exporter, which means the exporter can
authorize someone else to receive the goods on his behalf. In such a case, the exporter would
discharge the bill of lading on its reverse. When the bill of lading is negotiated through the
bank, it would be endorsed in favour of the bank that would endorse further to the importer,
on receipt of payment.
Bill of Lading is made in signed set of 2 originals, any one of which can give title to
the goods. The shipping company also issues non-negotiable copies (unsigned) which are not
documents of title to goods but serves the purpose of record only.
The reverse side of Bill of Lading contains the terms and conditions of the contract of
carriage. The clauses on most of the bills of lading are common. A Bill of lading should be
clean to facilitate the exporter to obtain the proceeds of export without difficulty.
Main Purposes
It serves three main purposes.
(A) As a document of title to the goods
(B) As a receipt from the shipping company and
(C) As a contract of affreightment (transportation) of goods.
Types of Bill of Lading
(1) Received for Shipment B/L: A shipping company issues it when goods have been
given to the custody of the shipping company, but they have not been placed on board.
(2) On Board Shipped B/L: The shipping company certifies that the cargo has been
received on board the ship.

(3) Clean B/L: It indicates a clean receipt. In other words, it implies that there has
been no defect in the apparent order or condition of goods at the time of receipt or
shipment of goods by the shipping company.
(4) Claused or Dirty B/L: It shows that the B/L is qualified which expressly declares
a defective condition of goods. The clause may state “bale number 5 hook-damaged”
or “package number 10 broken”. By superimposing this type of clause, the shipping
company is limiting its responsibility at the time of delivery of goods, at the
destination. It is very important to note that bank accepts only a clean B/L at the
time of negotiation.
(5)) Transshipment or Through B/L: When the journey covers several modes of
transport from the place of starting to the place of destination, this type of B/L is
taken. It indicates that transshipment would be en route. For example, part of the
journey is by ship and the rest of journey may be by road, rail and air.
(6) Stale B/L: According to international commercial practice, B/L along with other
documents must be presented to the bank not later than twenty one days of the
date of shipment as given in the B/L. In some cases, the importer may indicate the
number of days within which the documents are to be presented from the date of
shipment. Exporter has to comply with the stipulation indicated. Otherwise, the
B/L becomes stale and is not accepted by the bank for payment. A stale bill is one
which is tendered to the presenting bank so late a date that it is impossible for the
bank to dispatch to the consignee’s place, in time, before the goods arrive at the
destination port. In other words, bank finds it impossible to see the documents
reach before the ship reaches the destination.
(7) To Order B/L: In this case, the B/L is issued to the order of a specified person.
(8) Charter Party B/L: It covers shipment on a chartered ship.
(9) Freight paid B/L: When the shipper pays the freight, then this type of B/L is
issued with the words “Freight paid”.
(10) Freight Collect B/L: When the freight on the B/L is not paid and to be collected
at the point of destination, it is marked “Freight Collect” and this B/L is known as
“Freight Collect B/L”.
Generally, the importer insists on the “clean on-board shipped” bill of lading with the
prohibition of transshipment of goods as goods can suffer damage during transshipment. If
transshipment is allowed, even period of journey may take longer.
B/L is a non-negotiable document: A bill of lading is not a negotiable document
while it is a transferable document. Transferability enables the exporter to claim payment
from the bank even before the goods reach the destination. Similarly, it enables the importer
to sell the goods even before they reach the destination.
Parties mentioned in B/L: There are three main columns in B/L. These are shipper
(consignor), consignee or order of and notifying party. Notifying party is party to whom

notice is to be sent on the arrival of goods at the place of destination. When the B/L is made
to the order of, the person, in whose name it is made to the order of, has the right to endorse
further. To illustrate:
Consignor: Cherry & Co, Bhopal
Consignee or to the order of: Dimpy & Co, Newjersey, U.S.A.
Notifying Bank: Bank of America, Newjersey
In this case, Dimpy & co has the total right for the cargo as the consignee. So, Cherry
& Co can not transfer title to the goods to the third party. If payment of the goods is not
received, consignor loses title to the goods and so B/L is not to be made in this way.
However, where advance payment has been received or goods are shipped under irrevocable
letter of credit, bill of lading can be made in the name of the consignee. In the normal
circumstances, exporter takes the bill of lading to his order and endorses to the bank at the
time of negotiation and in this way his interests are fully protected.
Who can lodge claim: B/L is the only evidence to file claim against the shipping
company in the event of non-delivery, defective delivery or short delivery. If the importer
makes payment, he can lodge the claim, as he will be in possession of negotiable copy of
B/L. Otherwise, exporter can lodge the claim and receive the value of goods.
Contents of B/L
1. Name and address of the shipper.
2 Name and address of the vessel.
3. Name of port of loading.
4. Date of loading of goods.
5. Name of port of discharge and place of delivery.
6. Quantity, quality, marks and other description.
7. Number of packages.
8. Freight paid or payable.
9. Number of originals issued.
10. Name of the shipping company.
11 Voyage number and date.
12. Signature of the issuing authority.
SIGNIFICANCE OF BILL OF LADING
Importance to the Exporter
1. It is an acknowledgment from the shipping company that the goods have been
received for the purpose of shipment.

2. After receipt of B/L, it helps him to send the shipping advice to the importer.
3. If any damage occurs to the cargo during transit, he can hold the shipping company
responsible, if he has received clean bill of lading.
4. A copy of bill of lading is required to be attached to the application form to claim
the incentives
5. It is a contract of carriage between the exporter (shipper) and the shipping company.
Importance to the Importer
1. It is a document of title to the goods, which enables him to transfer the tittle by
endorsement and delivery.
2. The exporter can send a non-negotiable copy of B/L as advance intimation of
shipment to the importer.
3 It enables him to pay the freight amount as the B/L contains freight details.
Importance to the Shipping Company
1. It helps the shipping company to collect the freight amount from the exporter (CIF
contract) or importer (FOB contract).
2. Shipping company can protect itself from the wrongful claims of exporter/importer
by incorporating condition of goods/packaging, at the time of receipt. In case the
shipping company, inadvertantly, omits to mention the advesrse conditon, at the
time of receipt, advantage can be claimed by exporter/importer, by submitting
wrongful claim.
(vi) Airway Bill
Airway Bill is also called Air consignment Note. It is a receipt issued by an airline for
the carriage of goods. As each shipping company has its own Bill of Lading, so each airline
has its own airway bill.
Airway Bill or Air consignment note is not treated as a document of title to goods and
is not issued in negotiable form. Delivery of the goods is made to the consignee without the
production of airway bill.
Importance of Airway Bill
1. It is a contract of carriage of goods between the consignor and airlines or his agent.
2. It acts as a customs declaration form.
3. It contains details of freight and so works as a freight bill.
(vii) Bill of Entry
Bill of Entry is a declaration form made by the importer or his clearing agent in the
prescribed form under Bill of Entry Regulations, 1971 on the strength of which clearance
of imported goods can be made.

When goods are imported into a country, customs duty has to be paid by the importer.
For this purpose, importer prepares the Bill of Entry declaring the value of goods, quantity
and description. This is prepared in triplicate. Customs authorities may ask the importer to
produce the invoice of the exporter, broker’s note and insurance policy to satisfy about the
correctness of value of goods declared.
For the purpose of giving information, goods are classified into three categories.
(1) Free Goods: These goods are not subjected to any customs duty.
(2) Goods for Home Consumption: These goods are imported for self-consumption.
(3) Bonded Goods: Where goods are subject to customs duty, till duty is paid, goods
are kept in Bond.
Contents of Bill of Entry
1. Name and address of importer.
2. Name and address of exporter.
3. Import licence number.
4. Name of port where goods are to be cleared.
5. Desription of goods.
6. Value of goods.
7. Rate and value of import duty payable.
DOCUMENTS RELATED TO PAYMENT
(i ) Letter of Credit
A letter of credit is a document-containing guarantee of a bank to make payment to the
exporter, under certain conditions and up to a certain amount, provided the conditions
contained in the letter of credit are complied with. For a detailed presentation, reader may
refer to the chapter on Export Financing.
(ii ) Bill of Exchange
The Negotiable Instruments Act, 1881 defines a Bill of Exchange as “ an instrument in
writing containing an unconditional undertaking, signed by the maker, directing a certain
person to pay a certain sum of money only to, or to the order of, a certain person or to the
bearer of the instrument”.
There are five important parties to a Bill of Exchange:
The Drawer: The drawer is the person who has issued the bill. In an export transaction,
exporter draws the bill as money is owed to him.

The Drawee: The drawee is the person on whom the bill is drawn. Exporter draws the
bill on the importer who is the drawee. Drawee is the debtor who owes money to the
exporter (creditor).
The Payee: The payee is the person to whom the money is payable. The bill can be
drawn by the exporter payable to the drawer (himself) or his banker.
The Endorser: The endorser is the person who has placed his signature on the back
of the bill signifying that he has obtained the title for the bill on his own account or on
account of the original payee.
The Endorsee: The endorsee is the person to whom the bill is endorsed. The endorsee
can obtain the payment from the drawer.
Types of Bills of Exchange
(a) Sight Bill of Exchange: In this Bill of Exchange, also known as demand Bill of
Exchange, the drawee has to make the payment, on presentation.
(b) Usance Bill of Exchange: In case of Usance or Time Bill of Exchange, payment
is to be made on the maturity date, after a certain period, known as tenor. When
the calculation of period is made with reference to the sight of bill, the bill is known
as ‘after sight usance bill’. Sometimes, the maturity date is calculated with reference
to the date of bill of exchange, it is known as ‘after date usance bill’.
(c) Clean Bill of Exchange: A clean Bill of Exchange is one when the relative shipping
documents do not accompany with it. In this case, the relative shipping documents
i.e. Bill of Lading is sent directly to the importer to enable him to take delivery of
the cargo.
(d) Documentary Bill of Exchange: A documentary Bill of Exchange is one where
the relative shipping documents such as Bill of Lading, marine insurance policy,
invoice and other documents are sent along with the Bill of Exchange. This is the
common form in export trade.
The documents are given to the bank either for collection or negotiation. In case
the importer gets the documents on acceptance, it is called Documents against
Acceptance. If the importer gets the documents only on payment, it is called
Documents against Payment.
After shipment of goods, the exporter draws the bill on the importer or, more
frequently, on bank acting for the importer, as agreed between the exporter and
importer. The exporter usually draws the bill to his own order or that of his bank.
Later, he endorses the bill in favour of his bank. Exporter may request his bank
to collect or purchase the bill. In case of purchase of bill, exporter receives the
export proceeds immediately. In any case, the exporter’s bank sends the documents
to its branch or correspondent’s bank in importer’s place. The bank at that end
sends the intimation of receipt of documents to the importer either for acceptance

or payment, dependant on the nature of bill drawn. In case of Documents against
acceptance, importer accepts the bill and then only gets title to goods. In case of
Documents against payment, importer has to make the payment for securing delivery
of documents.
(iii) Trust Receipt: In case of D/P bill, the importer has to make the payment to take
delivery of goods. If the importer is unable to make the payment, on arrival of the
shipment, and take possession of goods, he executes a Trust Receipt to take delivery
of goods. Importer will have the right to sell the goods and would be acting as agent
of the bank. Importer will be depositing the sale proceeds with the bank, as and
when sales are made. Till the importer makes the final settlement, bank retains
ownership for the merchandise and the role of the importer is not that of owner but
that of agent to the bank. This arrangement facilitates the importer to take delivery
of goods when sufficient funds are not available with him. This facility provides the
flexibility to the importer while the interests of bank are protected, at all times.
(iv) Bank Certificate of Payment: It is a certificate issued by the negotiating bank
to the exporter that the bill covering the shipment has been negotiated through it
and export proceeds have been received from the importer. The certificate indicates
the details of the merchandise exported. Exporter submits this certificate of payment
for establishing that the export transaction has been completed totally by him. This
certificate is required to comply with the requirements for the discharge of export
obligation.
DOCUMENTS RELATING TO INSPECTION
Certificate of Inspection
It is a certificate issued by the Export Inspection Agency certifying that the consignment
has been inspected under the Export (Quality Control and Inspection) Act, 1963 and found
that the requirements relating to quality control and inspection have been complied with,
as applicable, and the goods are export worthy.
DOCUMENTS RELATED TO EXCISABLE GOODS
(1) GP Forms
GP stands for Gate Pass. A GP form, gate pass, is issued for the removal of excisable
goods from the factory or warehouse. Form GP1 is issued for the removal of excisable goods
on payment of duty. GP2 is issued for the removal of excisable goods without payment of
duty.

(2) Form C
It is not to be confused with C form. Form C is used for applying for rebate of duty on
excisable goods (other than vegetable, non-essential oils and tea) exported by sea. It is to
be submitted, in triplicate, to the Collector of Central Excise.
(3) Forms AR4/AR4A
These forms are meant for removal of excisable goods for export by sea/post. Now, in
their place, ARE-1 form is used.
DOCUMENTS RELATED TO FOREIGN EXCHANGE REGULATIONS-LEGAL
REGULATED DOCUMENTS
Foreign Exchange Regulations require that all exports other than exports to Nepal and
Bhutan shall be declared on the following forms:
1. GR Form
GR is an exchange control document required by Reserve Bank of India. It is required
to be filled, in duplicate, for all exports in physical form other than by post. An exporter has
to realize the export proceeds within a period of 180 days from the date of shipment, in
India. To ensure control on realization, RBI has introduced this procedure.
GR form, in duplicate, is to be submitted by the exporter to the customs along with the
Shipping Bill. Customs will give their running serial number on both the copies. After
admitting the customs shipping bill, customs will certify the value of goods declared by the
exporter in the space earmarked and also record their assessment of value. Customs retains
the original copy and return the duplicate to the exporter. Customs sends the original GR
form to RBI, which will be an indication of the goods, which are to be exported. Exporter
has to submit the duplicate of GR form to the authorized dealer, named in GR form, along
with other shipping documents within a period of 21 days of shipment for the purpose of
negotiation. After the negotiation of bill, the authorized dealer will report the transaction
of negotiation to RBI. On receipt of the original, RBI is apprised of the developments in
respect of the export transaction.
Once the export proceeds are received from the importer, the authorized dealer has to
forward the duplicate copy of GR form together with the copy of invoice to RBI. RBI recognizes
that the export transaction has been concluded and export proceeds have been fully realized.
At certain customs offices, shipping bills are processed electronically. So, at those offices,
GR form has been replaced by SDF (Statutory Declaration Form).
2. PP Form
It is required to be filled in for all export transactions, in duplicate, for all countries to
be made by post parcel, except when made on “value payable” or “cash on delivery basis”.

3. VP/COD Form
It is required to be filled for all export transactions to all countries by post where the
export proceeds are realized on “value payable” or “cash on delivery basis”.
3. SOFTEX Form
It is required to be prepared, in triplicate, for export of computer software in non-
physical form.
All the above documents serve the purpose of monitoring the realization of export
proceeds in the stipulated manner.
CHECK YOUR UNDERSTANDING
(i) State whether the following statements are TRUE or FALSE.
A. Export documentation is the simplest part of overseas marketing.
B. It is the duty of the exporter to submit the Bill of Lading within 21 days from the date of
shipment or any other period stipulated in the export contract.
C. GR form is required to be filled in duplicate for all the exports in physical form other than
by post.
D. When goods are exported by sea, the document used for this purpose is called Shipping Bill
E. Drawback Shipping Bill is used for export of goods entitled to duty drawback.
F. Softex Form is required to be prepared for export of computer software.
G. For an importer, sight bill is more convenient than the usance bill.
H. Importer has to obtain the Bank Certificate of Payment after completion of import.
I. Certificate of Measurement can normally be obtained from Chamber of Commerce.
(ii) Fill in blanks:
A. Under the Foreign Exchange Regulations, exporters from India have to declare exports on
............. Form for all exports in physical form other than by post
B. The application for getting the Export Inspection Certificate is the .............
C. Shipping Bill is prescribed by ............. authority.
D. Main documents for claiming rebate in central excise duty are .............
Answers
(i) (A) False (B) True (C) True (D) True (E) True (F) True (G) False (H) False (I) True
(ii) (A) GR Form (B) Intimation for inspection (C) Customs (D) ARE 1 Forms

REVIEW QUESTIONS
1. Describe Aligned Documentation System? What are its objectives and advantages in the
context of international trade?
2. What are the main Commercial and Regulatory Documents when goods are sent by sea
under a C.I.F. contract?
3. What is a Bill of Lading and describe the purposes it serves?
4. Write different types of Bill of Lading and explain its differences from Air Consignment
Note?
5. Describe different regulatory documents, which serve the purpose of monitoring the
realization of export proceeds?
6. Write short notes on the following:
(A) Bill of Entry
(B) Cart Ticket
(C) Trust Receipt
(D) Certificate of Origin
(E) Difference between sight bill and usance bill.

32
INTERNATIONAL BUSINESS CONTRACTS
v INTRODUCTION
v DISTINCTION BETWEEN DOMESTIC SALES CONTRACT AND
EXPORT SALES CONTRACT
• CONFLICT OF LAWS
v CONSTRUCTED CONTRACT
v INCOTERMS 2000
v TYPES OF CONTRACTS
v MAJOR LAWS HAVING BEARING ON EXPORT CONTRACTS
v ELEMENTS IN EXPORT CONTRACTS
v LEGAL DIMENSIONS
• RELATING TO EXPORT-IMPORT CONTRACTS
• RELATING TO RELATIONSHIPS BETWEEN EXPORTER AND
AGENTS/DISTRIBUTORS
• RELATING TO PRODUCTS
• RELATING TO LETTERS OF CREDIT
v AGENCY VS DISTRIBUTION AGREEMENT
v DISPUTES SETTLEMENT
v BASIC ADVANTAGES OF ARBITRATION
v HOW TO RESOLVE AND SETTLE DISPUTES?
v REVIEW QUESTIONS
4

INTRODUCTION
Contract is a legal term. In simple terms, contract is an agreement that can be enforced
in law. When goods are sold, both seller as well as buyer can enforce the agreement. The
term ‘Contract’ has been defined under Section 2(h) of the Indian Contract Act.
How an indigenous contract is different when it is compared to International Business
Contract? What is the special significance to deal with in a separate chapter? Let us discuss.
Distinction between Domestic Sales Contract and Export Sales Contract
Both are sale contracts. However, the major point of distinction between a domestic sale
contract and international export contract lies in identifying the proper law governing the
export contract.
Conflict of Laws
When both buyer and seller are situated in India, both of them are very clearly aware
that both of them are bound by Indian Contract Act, 1872 and are subject to jurisdiction of
Indian courts. This is not the case when the exporter and importer are located in different
countries. Laws and Regulations of both the countries are different and goods are crossing
one national frontier to another. So, the question raises which country’s law is applicable.
The distinctive feature of international business is ‘Conflict of Laws’, as both the parties
have to deal with different legal systems. It is necessary for both exporter and importer to
put down the terms of the agreement, in writing, and specify the applicability of the law of
the land to their contract to avoid misunderstanding and disputes. The law could be either
exporter or importer’s country. In the absence of specific mention of the law, the courts
decide about the applicability of the law to the contract. Normally, the law applicable to the
contract is where the contract is to be carried out (i.e. the place where delivery of goods
takes place). Delivery of goods takes place when goods are placed on the carrier. Normally,
goods are placed on the carrier in exporter’s country. So, exporter country’s law becomes
applicable to the contract. This is the position unless otherwise the contract states. When
goods are exported from India, Indian law is applicable as the goods are, normally, placed
in the carrier in the exporter’s country. To make the matters abundantly clear, it is all the
more better to specify about the applicability of law clearly in the contract. In export
business, the parties involved in the contract agree mutually about the applicability of
particular country’s law.
Oral Vs written and constructed contracts: Oral contracts are legally binding, if
the contract is for sale of goods in India. However, in Indian context, an export contract has
to be in writing as documentary evidence is essential to secure special export facilities and
incentives. In the absence of a written contract, even constructed contract is sufficient.
Constructed Contract: A constructed contract is one, which does not have written
formal contract but inferred and established from the documents exchanged. The important
requirement is evidence of agreement. This can be inferred from telex or fax messages,

electronic data interchange with authenticity of messages, exchange of letters, purchase
order or letters of credits. If information is available to establish that there has been agreement
between the exporter and importer, based on any one or all of these documents, it is
adequate. Both written and constructed contracts are, equally, binding on both exporter and
importer.
Form of Contract: There are no universally acceptable norms to the form of contract.
There is no need of a formal contract, duly signed by both exporter and importer. The
contract is not needed to be stamped even.
As a matter of rule, majority of long term supplies contracts and project exports between
exporter and importer are based on detailed documentation and in writing. However, at
times, contracts related to supply of garments, jewellery and handicrafts are not based on
written contracts. It does not mean that there is no contract at all. Contracts in such cases
are established on the basis of telephonic contacts, confirmed subsequently by correspondence.
INCOTERMS 2000
Meaning of Incoterms
There are a number of common sale or trade terms used in international trade to
express the sale price and corresponding rights and obligations of the seller and buyer.
These terms are defined by the International Chamber of Commerce, which are known as
‘Incoterms.
Purpose of Incoterms
The purpose of Incoterms is to provide common interpretation for the different trade
terms used in international trade.
In international business, parties are from diverse nations. Different meanings exist for
different terms, due to different trade practices followed in those countries. Specific terms
are to be interpreted by all parties in a similar manner; otherwise disputes are bound to
arise. This can create misunderstandings and disputes. They may lead to litigation resulting
in wastage of time, money and strained relationship, disrupting the longstanding mutally
beneficial business contacts. In order to remedy the problem, International Chamber of
Commerce has developed Incoterms. The uncertainties of different interpretation have been
greatly avoided or atleast reduced by these Incoterms. These terms have been revised
several times with the changes in international commercial practices, from time to time. The
current version of Incoterms has been issued in 1990. They define the rights and
responsibilities of importers and exporters in international trade.
Types of Contracts
Type of contract depends on the basis of price quotation. Mainly, there are three types
of contracts, which are often used in international market.

International Business Contracts 35
Ex Works Contract: The seller fulfills his obligation by delivering the goods at his
factory/shop/warehouse. The buyer bears all the costs and risks in taking the goods from
that place to the desired destination. This term represents the minimum obligation on the
part of the seller. In this type of contract, the obligations of the seller are the lowest and
contract price is always the lowest.
Free on Board (FOB): The seller fulfills his obligation when he delivers the goods on
the ship rails at the named port of shipment. The buyer has to bear all costs and risks from
that point of time. Cartage up to the port, inland insurance, port dues and loading charges
into the ship are to be borne by the seller. The seller has to take care of all these expenses.
The term can only be used for sea or inland water transport.
Duties of the Exporter
(A) Supply the contracted goods in conformity with the contract of sale and deliver the
goods on board the vessel named by the buyer at the named port of shipment;
(B) Bear all costs and risks of the goods until such time as they shall have effectively
passed the ship’s rail. In other words, once goods are placed on ship’s rail, title to
the property passes to the buyer and so risks too;
(C) Provide at his own expense the customary clean shipping documents as proof of
delivery of goods;
(D) Provide export licence and pay export duty, if any; and
(E) Pay loading costs.
Duties of the Importer
(A) Reserve the necessary shipping space and give due notice of the same to the exporter;
(B) Bear all costs and risks of the goods from the time when they shall have effectively
passed the ship’s rail;
(C) Pay freight;
(D) Pay unloading costs and
(E) Pay the price as provided in the contract to the exporter.
Cost Insurance Freight (CIF): In addition to the responsibilities associated with
FOB contract, exporter has to arrange shipping space, bear the ship freight and marine
insurance charges from his contract price.
Duties of the Exporter
(A) Supply the goods in conformity with the contract of sale, arrange at his own expense,
for shipping space by the usual route and pay freight charges for the carriage of
goods;
(B) Obtain at his own risk and expense all documentation regarding government
authorization necessary for the export of goods;

(C) Load the goods at his own expense on board the vessel at the port of shipment;
(D) Procure at his own cost in a transferable form a policy of marine insurance for a
value equivalent to C.I.F. plus 10%;
(E) Bear all risks until the goods shall have effectively crossed the ship’s rail and
furnish to the buyer a clean negotiable bill of lading;
(F) Provide export licence;
(G) Pay export duty if any and
(H) Insure the goods.
Duties of the Importer
(A) Accept the documents when tendered by the exporter, if they are in conformity
with the contract of sale and pay the price;
(B) Receive the goods at the port of destination and bear all costs except freight and
marine insurance, incurred in respect of carriage of the goods;
(C) Pay unloading costs and
(D) Bear all risks of the goods from the time they shall have effectively passed the
ship’s rail at the port of shipment.
PASSING OF TITLE OF GOODS TO THE IMPORTER
In ex works contract Seller’s plant
In FOB contract Port of Export
In CIF contract Port of Import
If the price quotation is on FOB basis, it is a FOB contract. Similarly, if the price
quotation is on CIF basis, then it is a CIF contract. The rights and responsibilities of
importer and exporter in both the contracts are different. The International Chamber of
Commerce has described the rights and responsibilities in ‘INCO’ Terms.
Major Laws having bearing on Export Contracts
Export contracts are private contracts and Government does not interfere with them so
long as the provisions of the contract do not go against the provisions of various laws, which
have been enacted for the export-import business contracts in India. The provisions of the
export contracts should not flout the existing laws of the land. The following are the major
laws:
(A) Foreign Trade Development & Regulation Act, 1992: Under this Act, Director
General of Foreign Trade brings out the export-import policy and lays down the
procedures, from time to time. While entering into a contract, exporter has to draft
the provisions of the contract in pursuance of the provisions of the Act. To illustrate,

where there is a price regulation and a floor price is fixed in respect of a product,
exporter should not enter into a contract with a foreign buyer for supplying that
product below the price fixed. If a product is banned for export, contract should not
cover export of that commodity. If Government releases certain goods on quota
basis, it is necessary for the exporter to provide a clause in the export contract that
the supply will be dependent on the release of quota from government. If the
contingent clause is incorporated and quota is not released to that exporter and in
consequence there is breach of contract in his performance, exporter would not be
liable for default in performance.
(B) Foreign Exchange Management Act, 1999: As per the provisions of the Act,
export proceeds are to be brought into India within a period of 180 days from the
date of shipment. Exporter is not to enter a contract providing a period of credit
of more than 180 days to the importer unless the exports are made on deferred
payment basis or goods are sent on consignment basis. Further, an exporter is not
permitted to pay commission more than 12.5% to his agent, abroad for the sales
made by him and so provision for payment of commission is not to be made at a
higher rate in the contract, unless prior permission of RBI has been obtained.
(C) Pre Shipment Inspection and Quality Control Act, 1963: In the larger interests
of the international trade and in order to protect the image of the exporter as well
as nation, certain products have been brought under the Act. Once a notification
is made under the Act, certificate about pre-shipment inspection & quality control
has to be obtained by the exporter. Quality norms have to be complied with while
entering into the contract with the importer. Contract can stipulate higher quality
norms but does not allow to mention a lower norm than the one mentioned in the
Act. Even if the importer does not insist on the certificate, it is obligatory on the
part of exporter to obtain the certificate from the approved agency before shipment
of goods.
(D) Customs Act, 1962: No goods can be sent out of the country without the customs
clearance. All consignment of goods can be checked by the customs to ensure that
the goods stated in the invoice only are leaving the country and that there has been
no over/under invoicing in this process. The authority to check the cargo involved
is vested with the customs, under this Act.
(F) International Commercial Practices: Indian laws, basically, govern the export-
import contracts. In addition to these laws, there are International Commercial
Practices, which also have a significant bearing on these contracts. The International
Chamber of Commerce, Paris has prepared two documents, in the context of
international business. The documents are Uniform Customs and
Practices for Documentary Credits (UCP) 1993 and Incoterms, 1990. Banks use
UCP in the negotiation of export-import documents. Virtually, it is a bible to bankers
for negotiation of documents.

ELEMENTS IN EXPORT CONTRACTS
Meaning and Significance
The term “Elements” is a bit confusing that refers to the general conditions in contracts.
Export contracts invariably refer to the subject matter of the contract. In addition to the
subject matter, it is advisable for both the paties to incorporate several general conditions
in the contract, in particular, rights of the parties in case of failure of performance or other
contractual obligations. The goods may be lost, stolen or damaged during transit. Who would
bear the risk in such a situation? If the contract specifies the position clearly, lot of litigation
and approaching the court can be avoided. Physical movement of goods involves cost. Who
has to bear the costs and up to what point? These issues are resolved by incorporating the
elements (general conditions) in export contracts.
Most exporters have developed standard general contracts. It simplifies the day to day
operations and also reduces the possibility of missing certain items. The complexity of the
conditions depends on what is exported. If the items exported are common items such as
handicrafts, garments or normally used consumption items, standard general conditions
contract is sufficient. However, if the goods exported are complex item such as petrochemicals,
the export contract has to be drafted with a great deal of care, which may turn to be
voluminous running into hundreds of pages.
For a majority of products being exported from India, the following elements have to
be incorporated in the export contracts:
1. Names of the Parties
2. Description of the Products
3. Quality
4. Price per unit
5. Total value
6. Currency
7. Tax and Charges
8. Packing
9. Marking and Labelling
10. Mode of Transport
11. Delivery: Place and schedule
12. Insurance
13. Inspection
14. Documentation
15. Mode of Payment

16. Credit period, if any
17. Warranties
18. Passing of risk
19. Passing of property
20. Availability/non-availability of export-import licence
21. Force Majeure (Factors beyond the control of the parties that makes the performance
of the contractual obligations impossible e.g. Wars, floods, fire, civil war. Once this
specific clause is incorporated, parties are relieved of their mutual obligations, on
the happening of the event. Contract comes to an end and no party is liable for
damages)
22. Settlement of Disputes
23. Proper Law of the Contract
24. Jurisdiction.
The Ministry of Commerce, Government of India, has set up Indian Council of Arbitration.
It has developed a model set of Contracts for the benefit of exporters. These model contracts
are suitable, in case of most small and medium enterprises.
LEGAL DIMENSIONS
There are several legal dimensions in implementation of export contracts which form
part of corporate export marketing plan. These legal dimensions or issues can be broadly
classified into four categories:
(i) Those Relating to export-import contracts
(ii) Those Relating to Relationships between exporter and agents/distributors
(iii) Those Relating to Products
(iv) Those Relating to Letters of Credit
(i) Relating to Export-Import Contracts
They relate to the general conditions of export contracts and different types of contracts.
Both the areas have been, already, dealt above.
(ii) Relationships between Exporter and Agents/Distributors
To promote overseas market, most of the exporters enter into Export Agency agreement.
Export Agency agreement is a legal document, which establishes and defines the relationship
between the principal (exporter) and agent. The conditions mutually agreed upon between
both the parties are incorporated in the agency agreement. While drafting the export agency
agreement, care is to be exercised in respect of certain points. They are summarized
as under:

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Fétis, Monsieur, 124.
Fields, James T., quoted, 84, 314;
Ole Bull spends New Year’s Eve with, 276.
Finck, the musical critic, 109.
Finland, tour in, 100, 243.
Fiorentino, P. A., criticism on Ole Bull, 190.
Florence, concerts in, 61, 261.
Frederic, King of Denmark, 105.
Frederic VI. of Norway, 31, 146.
Frimann, the brothers, 35.
Fuller, Margaret, quoted, 167.
Galizin, Princess, 99.
Geijer, Gustaf, 137.
German violinists, Ole Bull upon, 294.
Gerster, the singer, 282.
Gertner, the painter, 147.
Godesberg, Ole Bull breaks a rib at, 244.
Goldschmidt, Mr., quoted, 5, 20, 53, 201.

Gould, T. R., quoted, 158.
Grieg, the composer, 296;
address at funeral, 323.
Grisi, Madame, 83, 88.
Gude, the painter, 200, 206, 211.
Guild, Mr. Curtis, address by, 272.
H. H., quoted, 240.
Habeneck, the musical director, 74, 75, 294.
Hale, Rev. E. E., address by, 272, 275.
Hamburg, Ole Bull at, 94, 132, 134, 143, 213, 237, 243.
Hanover, concerts in, 107.
Havana, visit to, 162.
Heidelberg, concerts at, 112, 124.
Hellmesberger, Mr. J., 282.
Helmholtz, the physicist, 260.
Hiller, the composer, 116.
Hjelm, Winter, quoted, 206.
Holberg, the poet, 1, 20, 35.

Holland House, Ole Bull at, 91.
Holstein, Prince of, 251.
Horsford, Professor, 276, 306.
Hulder, the, 17, 53.
Isabella II. of Spain, 194.
Janson, Kristofer, 201.
Joachim, the violinist, 239;
quoted, 321.
Jules Janin’s criticism, 71, 135.
Karl Johan, King, 31, 33, 132, 146, 149.
Kiel, concerts in, 95.
Königsberg, concerts in, 96, 98, 249.
Lablache, the singer, 83, 86.
Lacour and his violin varnish, 49.
Lamartine, 196.
Lapinsky, the violinist, 110.

Laporte, director of Opera at London, 80.
Lausanne, Ole Bull at, 50.
Leipsic, concerts at, 124.
Letters: to Mdlle. Villeminot, 77, 81, 82, 90;
on death of Malibran, 89;
to his wife from Lübeck, 95;
from Berlin, 96;
on his father’s death, 99;
in 1839, 112;
about Liszt, 120;
from Liszt, 123, 283;
from Prague, 129;
from St. Petersburg, 131;
on the Upsala affair, 136;
from Stockholm, 139;
from New Orleans, 161;
from New York, 179;
from Vuillaume, 197;
from Hans Gude, 211;
from Wergeland, 212;
to his brother from Georgia, 223;
from C. A. Seward, 229;
from E. W. Stoughton, 230;
from Mrs. H. B. Stowe, 233;
from A. O. Winje, 236;
from Fanny Elssler, 237;
to his son from Vienna, 238;
from Pesth, 239;
from Hamburg, 243;
from Christiania, 247;
from Königsberg, 249;
from Wiesbaden, 249;
to his son in Paris, 251;

from St. Petersburg, 252;
from J. Ericsson, 259;
from Helmholtz, 260;
to Liszt, 283.
Lexington, Ky., visit to, 213.
Lie, Jonas, quoted, 2, 199, 210, 248.
Linz, concerts at, 111.
Liszt, the pianist, 119, 122, 124, 239, 264, 282.
Longfellow: his “Skeleton in Armor,” 274;
Christmas with, 276;
references to Ole Bull, in “Tales of a Wayside Inn,” 287;
his 73d birthday, 299.
Lovenhjelm, Swedish minister at Paris, 46.
Löwenskjold, 132.
Lübeck, concerts at, 95.
Lund, concerts at, 133.
Lundholm, the violinist, 20, 22, 140.
Luneburg, concerts at, 148.
Lyons, concerts at, 79, 192.
Lysekloster, 14, 284, 308.
Lysö, Ole Bull’s residence, 261, 285, 299, 306, 309.

Madison, Wis., Ole Bull at, 256.
Madrid, concerts at, 194.
Malibran, Madame: at the Paris Opera, in 1831, 41;
at Milan, 56, 59;
at Lucca, 63;
anecdotes of, 60, 295;
at London, 84;
her death, 89.
Mammoth Cave, visit to, 175.
Marchesi, Madame Mathilde, 282.
Marseilles, concerts at, 192, 196.
Martha, the housekeeper, 287, 311.
May 17th, Independence Day in Norway, 37.
Mayence, concerts at, 116.
Mecklenburg–Schwerin, the Duchess of, 96.
Mendelssohn, 109, 124, 281.
Merlin, Madame, 113.
Metternich, 80.
Meyerbeer, 75.
Milan, Ole Bull at, 50.

Milwaukee, Ole Bull at, 253.
Mobile, visit to, 158.
Möllar–gutten, the peasant violinist, 201.
Moltke, Baron, 113.
Monrad, the poet, 35.
Montebello, Duke of, 49.
Montfort, Prince of, 114.
Moore, Dr., of Liverpool, 306, 314.
Moore, Thomas, 91.
Morandi, the secretary, 119.
Morges, visit to, 50.
Mori, the first violin at London Opera, 80, 83.
Moscheles, 82.
Mozart, Ole Bull’s rendering of and reverence for, 110, 111, 145,
294.
Mozart, Madame, 111, 114.
Munch, the poet, 133.
Münden, the concert at, 39.
Munich, concerts at, 114.

Musæus, Ole Bull’s tutor, 25.
Naples, Ole Bull at, 64.
Naples, Queen Dowager of, 63.
Nassau, Duke of, 250.
Neumünster, concerts at, 94.
New Orleans, Ole Bull at, 157, 161, 174.
New York, concerts at, 151, 169, 170, 176, 178, 180, 216, 305.
Nilsson, Christine, 282.
Norwegian dances, 201;
history, 30;
literature, 35;
National Theatre, 198;
popular music, 5, 203.
Öhlenschläger, the Danish poet, quoted, 144.
Ole Bull: his birthplace, 1;
his parents, 2;
“Uncle Jens,” 3, 7, 11;
in the Latin School, 3;
early ideas of music, 4;
first violin, 8;
first musical triumph, 11;
plays Fiorillo’s “Studies,” 14;
at Lysekloster, 15;

at Valestrand, 17;
first studies in violin construction, 18;
death of baby sister, 19;
plays in orchestra when nine years old, 20;
taught by Lundholm, 20;
first acquaintance with Paganini’s music, 21;
his tutor Musæus, 25;
examined for the University, 27;
influence on Norwegian art, 36, 318;
on May 17th, 1829, 37;
visits Spohr, 38;
at Göttingen, 38;
at Münden, 39;
returns to Norway, 40;
goes to Paris in 1831, 41;
robbed of everything, 42;
acquaintance with Vidocq, 43;
at Frascati’s, 44;
tempted to suicide, 46;
meets Mdlle. Villeminot, 47;
attacked with brain fever, 45;
hears Paganini, 48;
plays at the Duke of Riario’s, 49;
gives concert under patronage of Duke of Montebello, 49;
tour in Switzerland and Italy, 50;
concert and studies at Milan, 50;
writes his “Concerto in A major,” 52;
visits Venice and Trieste, 55;
wins his first laurels at Bologna, 55;
invited to Florence, 61;
writes his “Quartetto a Violino Solo,” and “Preghiera d’una Madre,”
61;
begins his “Polacca Guerriera,” 62;
at Pierro a Silve, 62;
writes “Grammar of Violin,” 62;
visits Baths of Lucca, 63;

goes to Naples, 64;
to Rome in 1835, 65;
completes the “Polacca,” 66;
to Paris, and plays at the Grand Opera, 71;
criticised by Jules Janin, 71;
severe illness in 1836, 79;
goes to London, 80;
his troubles with Mori and Costa, 80;
plays for Duke of Devonshire, 83;
married in 1836, 76, 88;
concert tour with Bochsa, 88;
on death of Malibran, 89;
bursts a blood–vessel, 90;
at Chatsworth, 90;
becomes acquainted with Paganini at Paris, 92;
concerts at Brussels and Courtray, 93;
at Hamburg in 1838, 94;
at Berlin, 96, 97;
at Königsberg and Riga, 98;
at St. Petersburg, 98, 99;
at Moscow, 99;
hears of his father’s death, 99;
tour in Finland, 100;
at Stockholm, 100;
at Christiania in 1838, 100;
at Bergen, 104;
writes “The Mountains of Norway,” 104;
third Continental tour, 105;
at Copenhagen, 105;
at Hamburg, 107;
visits Spohr again at Cassel, 107;
goes to Berlin, 108;
criticised by Finck, 109;
in Breslau and Vienna, 110;
his rendering of Mozart, 110;
visits Hungary, 111;

at Salzburg, the home of Mozart, 111;
returns to Paris, 111;
revisits Germany, 112;
to Paris again in 1839, 112, 119;
death of his child and his grandmother, 113;
his business habits, 117;
goes to London in 1840, 119;
his troubles with Morandi, 119;
with Liszt in London, 119, 120, 122;
goes to Belgium, the Rhine, and Heidelberg, 124;
in Berlin at the coronation of King William, 124;
in Dresden and Prague, 129;
writes his “Concerto in E minor,” 129;
his “Grüss aus des Ferne,” 130;
tour in Russia, 131;
sick at St. Petersburg, 131;
visits Norway, 132;
tour in Holland, 134;
and in Sweden, 135;
his letter on the Upsala affair, 136;
concert and “Sexa” at Upsala, 137;
troubles at Stockholm, 139;
celebrates Karl Johan’s birthday, 140;
meets his old teacher Lundholm, 140;
at Copenhagen, 141;
publishes three compositions, 143;
birth of a daughter, 144;
visits Throndhjem and climbs the Dovrefjeld, 146;
plays for peasants at Sogn, 147;
sails for America in 1843, 148;
concerts in New York and elsewhere, 151, 152;
makes Southern tour, 157;
on the Mississippi, 159;
visits Cuba, and writes two compositions there, 161;
returns to the United States, 164;
arrested by Schubert, 164;

visits Alice Cary, 165;
tour in New England, New York, and Canada, 168;
writes the “Niagara,” 168;
plays it in New York, 169;
writes “Solitude of Prairies” and “David’s Psalm,” 169;
tour in Mississippi Valley, 175;
in the Mammoth Cave, 175;
at St. Louis, 176;
returns to New York and Boston in October, 1845, 176;
writes his “Memory of Washington,” 176;
plays for the blind in New York, 178;
rejoins his family in Europe, 188;
concerts in Paris in 1846, 189;
gives banquet at Bordeaux, 191;
in Toulouse, Lyons, and Marseilles, 191;
tour in Algiers in 1847, 193;
tour in Spain, 194;
composes “La Verbena de San Juan,” 194;
returns to Paris, 196;
to Norway again, 198;
works to found a National Theatre, 198;
plays at festival in aid of the Theatre, 206;
composes his “Saeterbesög,” 206;
troubles with the police in Bergen, 207;
visits Prussia, 213;
sails again for America in January, 1852, 213;
invited to give concert in Washington, 214;
buys land for Norwegian colony, 221;
tour to the West and South, 222;
goes to California via Panama, 224;
finds that the title to his Pennsylvania lands is fraudulent, 225;
prostrated with fever in Illinois, 227;
his lawsuits with the swindlers, 228;
visits Mrs. Child, 230;
returns to Norway in 1857, 235;
at the German baths, 237;

in Vienna and Pesth, 238;
spends a summer at Carlsbad, 239;
returns to Norway, and buys Valestrand, 239;
tour in Finland in 1860, 243;
in England, Scotland, and Ireland in 1861–62, 243;
death of his wife, 243;
breaks a rib at Godesberg, 244;
plans a Norse Music Academy, 245;
death of his son Thorvald, 248;
concerts in Germany, Poland, and Russia, in 1863–67, 248;
his interest in political events, 252;
composes “The Nightingale,” 252;
to America again in November, 1867, 253;
in steamboat collision on the Ohio, 254;
at the Peace Jubilee in Boston in 1869, 254;
to Norway in April, 1870, 255;
his second marriage, 257;
return to the United States, 257;
his improvements of the piano, 257;
spends summer of 1872 in Norway, 261;
builds house at Lysö, 261;
winter in the South of France, 261;
concerts in Florence, 261;
visits the North of Norway, 264;
celebrates his birthday in 1876 on the Pyramid of Cheops, 266;
returns to the United States, 270;
concerts in Boston, 271;
in New York, 276, 279;
to Norway in 1877, 280;
spends winter on the Continent, 280;
the next summer in Norway, 284;
his life at Lysö, 285;
return to the United States in the fall of 1878, 291;
writes the “Violin Notes,” 292;
summer of 1879 in Norway, 296;
return to the United States and residence at Cambridge, 299;

celebration of his 70th birthday, 299, 301;
concerts in spring of 1880, 305;
sails for Europe in June, 305;
his arrival at Lysö, 311;
his death, 314;
the funeral services, 315;
address of Björnstjerne Björnson, 317;
of Edward Grieg, 323;
of Mr. Bendixen, 324;
the last tribute of the peasants, 324.
Oscar, King, 297.
Paganini: his “Caprices,” 21;
in Paris in 1831, 48;
criticised by Jules Janin, 72;
meets Ole Bull, 92;
his playing, 157, 294;
Ole Bull compared with, 72, 192, 195.
Panama, Ole Bull sick at, 224.
Paris, Ole Bull at, 41, 71, 88, 92, 111, 119, 189, 196.
Patti, Adelina, 222.
Paulsen, Ole Bull’s first teacher, 10, 20, 102.
Pesth, concerts at, 111, 238.
Philadelphia, Ole Bull at, 152, 178, 216, 225.
Pianoforte, Ole Bull’s improvements in, 257.
Ploug, Carl, 248.

Poniatowsky, Prince, 61, 63, 261.
Prague, concerts at, 129.
Pratté, his attacks on Ole Bull, 139
Presburg, concerts at, 111.
Raab, concerts at, 111.
Rein, the poet, 35.
Rhaczek, owner of Cellini violin, 125.
Riario, Duke of, 49.
Riga, concerts at, 98.
Rome, Ole Bull at, 65, 264.
Ronzi di Begnis, Madame, 61.
Rossini, at Paris in 1836, 80.
Rostock, concerts at, 96.
Rubini sings at Ole Bull’s concerts in London, 1836, 83, 86;
and the Duke of Devonshire, 84;
at Amsterdam, 134.
St. Louis, concerts at, 176.
St. Petersburg, visits to, 98, 131.

Salzburg, Ole Bull at, 111.
Sand, George, her reference to Ole Bull, 50.
Sbolczis, Professor, 261.
Schlesinger, the publisher, 119.
Schleswig, concerts in, 95.
Schubert, the music publisher, 143, 148, 164, 213.
Schumann, Vieuxtemps on, 281.
Schwanthaler, the sculptor, 114.
Schwerin, concerts in, 95, 96.
Seward, C. A., letter from, 229.
Seward, W. H., 26.
Sibbern, Minister, 216.
Sind, the banker, 92.
Sogn, Ole Bull plays for the peasants at, 147.
Sontag, Madame, 131.
Soot, Engebret, 103.
Spohr, 38, 107.
Stewardson, Mr., 225.

Stockholm, Ole Bull at, 100, 243, 266.
Storm, Edvard, the poet, 2, 35.
Stoughton, E. W., 228, 229.
Stowe, Mrs. H. B., letter from, 231.
Strakosch, Amalia Patti, 222.
Strakosch, Maurice, 76, 222, 276.
Stuttgart, concerts at, 115.
Tamburini sings with Ole Bull in London, 83, 86.
Thalberg, at Paris, 80;
at London, 83, 84;
note from, 233.
Thorwaldsen, the sculptor, 65, 106, 275.
Thrane, Waldemar, 14, 199.
Throndhjem, Ole Bull at, 146.
Thursby, Miss Emma, 277, 279, 305.
Ticknor, George, 168.
Tidemand, the painter, 200, 206.
Tordenskjöld, the naval officer, 35.

Toulouse, concerts at, 192.
Trieste, concerts at, 55.
“Uncle Jens,” 3, 7, 11.
Upsala, Ole Bull at, 135.
Valestrand, 16, 132, 239, 250.
Venice, Ole Bull at, 55.
Vermeulen, Monsieur, 94.
Vidocq and Ole Bull, 43.
Vienna, Ole Bull at, 110, 111, 126, 238, 281.
Vieuxtemps, the violinist, 151, 158, 161, 233, 280.
Vihe, the poet, 35.
Villeminot, Madame, 47, 76, 77.
Villeminot, Mdlle., the first wife of Ole Bull, 47, 76.
Violins, Ole Bull’s, 8, 12, 64, 94, 111, 116, 124, 196, 244, 249, 250,
253, 288, 293.
Vuillaume, the instrument maker, 116, 162, 197.
Wallum, Pastor, at Ole Bull’s funeral, 317.

Warsaw, concerts at, 131.
Wedel–Jarlsberg, Count, 101;
the Countess, 132.
Weilburg, Ole Bull at, 250.
Welhaven, the poet, 1, 36, 104, 149,319.
Wergeland, the poet, 36, 139, 140, 149, 321;
quoted, 71, 90, 102, 135, 147, 148, 212, 319.
Wessel, the poet, 35.
Whittier, J. G., the poet, letter from, 300.
Wiesbaden, Ole Bull at, 249, 284.
Wiesener, Dr., 314.
Willis, N. P., quoted, 169.
Wilna, concerts at, 131.
Winding, Mr., 3.
Winje, A. O., the Norse poet, 200, 236.
Wise, Henry A., 239.
Wurtemberg, King of, 112.
Youssuf, General, 193.

Zampieri, Marquis, 56, 57.
Zatlitz, the poet, 35.
Ziedler, the student, 39.

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