import procedures in India from foreign countries
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The document outlines the import procedures in India, detailing the steps involved in importing goods from foreign countries, including trade enquiry, obtaining an import license, and arranging for finance. It emphasizes the importance of various documents required at different stages, such as the proforma invoice, letter of credit, and customs clearance. The process necessitates compliance with regulations set by the Reserve Bank of India and the Directorate General Foreign Trade.
import procedures in India from foreign countries
- 2. TOPIC OF THE ASSIGNMENT:IMPORT PROCEDURES UNDERTAKEN IN INDIA TO TRADE TO OTHER COUNTRIES
- 3. MEANING OF IMPORT TRADE: It refers to the purchase of goods from a foreign country. Import procedure differs from country to country depending upon the country’s import and custom policies and other statutory requirements.
- 4. PROCEDURES FOR IMPORTING GOODS IN A COUNTRY: Following are the various steps involved in a typical import transaction for bringing goods into INDIAN territory: Trade enquiry Procurement of import license Obtaining foreign exchange Placing order/incent Obtaining letter of credit Arranging for finance Receipt of shipment advice Retirement of import documents Arrival of goods Customs clearance and release of goods
- 5. TRADE ENQUIRY The first thing that the importing firm has to do is to gather information about the countries and firms which export the given product. After receiving the trade enquiry, the exporter prepares a quotation and sends it to the importer. The quotation is known as the proforma invoice. It is a document that contains details as to the quality, grade, design, size, weight and price of the export product, and the terms of conditions on which their export will take place
- 6. MAJOR DOCUMENTS NEEDED IN CONNECTION WITH EXPORT TRANSACTION Documents related to goods Export invoice Packing list Certificate of origin Certificate of inspection Documents related to shipment Mate’s receipt Shipping bill Bill of lading Airway bill Cart ticket Documents related to payment Letter of credit Bill of exchange Bank certificate of payment
- 7. PROCUREMENT OF IMPORT LICENSE An Import license is essential to import goods from a foreign country. A license is issued under import policy announced every year by the government. In INDIA, it is obligatory for importer and also exporter, to get registered with the Directorate General Foreign Trade (DGFT) or Regional Import Export Licensing Authority, and obtain an Import Export Code (IEC) number.
- 8. OBTAINING FOREIGN EXCHANGE After getting import license, foreign exchange is obtained from RBI. An application in a prescribed form is submitted giving details of exchange required. In INDIA, all the foreign exchange transactions are regulated by the Exchange Control Department of the reserve bank of INDIA (RBI) The application is made in a prescribed form along with the import license as per the provision of Exchange control Act. After proper scrutiny of the application, the bank sanctions the necessary foreign exchange for the import transaction.
- 9. PLACING AN ORDER OR INDENT After obtaining the import licence, the importer places an import order or indent with the exporter for supply of the specified products. The import order contains information about the price, quantity size, grade and quality of goods ordered the instructions relating to packing, Shipping Ports of shipment and destination Delivery schedule Insurance Mode of payment
- 10. OBTAINING LETTER OF CREDIT If the payment terms agreed between the importer and the overseas supplier is a letter of credit, then the importer should obtain a letter of credit from its bank and forward it to the overseas supplier. Letter of credit:It is a guarantee issued by the importer’s bank that will honor payment up to a certain amount exporter bills to the bank of the exporter. It is the most appropriate and secured method of payment adopted to settle international transactions.
- 11. ARRANGEMENT OF FINANCE The importer should make the arrangements in advance to pay to the exporter on the arrival of goods at the port. Advanced planning for financing imports is necessary so as to avoid huge penalties on the imported goods lying uncleared at the port for wants of payment.
- 12. RECEIPT OF SHIPMENT ADVICE After loading the goods on the vessel, the overseas supplier dispatches the shipment advice to the importer. What a shipment advice contains? about the shipment of the goods. details such as invoice number, bill of lading/airways bill number and date, name of the vessel with the date, the port of export, description of goods and quality Date of sailing the vessel
- 13. RETIREMENT OF IMPORT DOCUMENTS Having shipped the goods, the overseas supplier prepares a set of necessary documents as per the terms of contract and letter of credit and hands it over to his/her banker for their onward transmission and negotiation to the importer in the manner as specified in the letter of credit The set of documents contains Bills of exchange Commercial invoice Bill of lading/airways bill Packing list Certificate of origin Marine insurance policy etc.
- 14. The bill of exchange accompanying the documents listed above is known as the documentary bills of exchange. Documentary bill of exchange are of 2 types: documents against payment (sight draft) Documents against acceptance (usance draft)
- 15. ARRIVAL OF GOODS Goods are shipped by the overseas supplier as per the contract. The person in charge of the carrier (ship or airway) informs the officer in charge at the dock or the airport about the arrival of goods in the importing country. He provides the documents called import general manifest. It is a document that contains the details of the imported goods. It is the document on the basis of which unloading of cargo takes place.
- 16. CUSTOMS CLEARANCE AND RELEASE OF GOODS All the goods imported into India have to pass through customs clearance after they cross the Indian borders Custom clearance is a tedious process and calls for completing a number of formalities. It is advised that importers appoint C&F agents who are well versed with such formalities and play an important role in getting the goods customs cleared.