Export Import

Process- Flow of
product (good)
and financial
transactions 
By
Harikrishnan. M
200292601147
Contents
• Import Export Procedure - Meaning
• The procedure defined - From quoting of
goods to reaching the buyer(importer)
• Methods of Payment involved in EXIM
Trade

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Import Export
Procedure - Meaning
• The import export procedure is a
systematic business procedure that is to
be followed for gaining creditworthiness
in the international market.
• Without proper export and import
procedure, the movement or transport of
goods from one country to another (and
vice versa) is not possible.

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The Procedure
Step #1: Importer requests quotes and orders
goods
• Agreeing on shipping incoterms
• Engaging a freight forwarder
• Obtaining a Letter of Credit
• Issuing of Commercial Invoice
Step #2: Freight forwarder arranges export
• Documents that need to be prepared by the
supplier
• Documents that need to be prepared by the
buyer
Step #3: Booking of freight
Step #4: Goods to travel to international
depot/port
• The Bill of Lading
Step #5: Goods processed through export
customs clearance and placed in transit
Step #6: Goods arrive in buyer’s country for
import clearance
Step #7: Goods are transported from the port to
the buyer
Step #1: Importer requests quotes and orders goods
• The first step in the shipping process is when an importer (also known as
the consignee) orders goods from a supplier (also known as the consignor).
• In a usual import, buyers will generally ask suppliers for a quote when looking at goods
to purchase. The quote can often be accompanied by, or be in the form of,
a proforma invoice.
• A proforma invoice is effectively an invoice that is used to provide an estimate and can
be subject to change.
• This differs from a commercial invoice which is a final and official invoice used for
customs clearance declarations.
• Once the quote has been approved, the consignee will often create a purchase order.
A purchase order is simply a contract outlining the details of the order and the cost of
the goods.
• Depending on the business, a comprehensive purchase order will also contain a
projected shipping date, origin and destination addresses as well as the freight
dimensions.
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Agreeing on shipping incoterms
• When a buyer issues a purchase order to a supplier, the contract should be
governed by one of the many incoterms. Prior to reading on, you should
familiarize yourself with Incoterms
• Incoterms are essentially the terms that allocate the costs and the risks
between the buyer and seller when shipping. Essentially, they determine
who is responsible for what whilst the goods are moving from Point A to
Point B.
• It is critical to select the set of Incoterms that are most appropriate for the
transaction. Failure to allocate the correct incoterm could cost a buyer
much more money than originally anticipated.
• For the purpose of this process overview, we assume our importer has
purchased the goods on EXW terms and will be responsible for all stages of
the shipping journey.

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INCOTERMS
2020 -RISK
BEARING
CHART
Engaging a freight forwarder
Once the purchase has been agreed and the incoterms selected (in this
case EXW), the importer can then arrange for a freight forwarder to
manage the transportation of the goods from Point A to Point B.

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Obtaining a Letter of Credit
• When an order is made, a common way to pay the supplier is to obtain
a letter of credit.
• Many buyers use this because it’s one of the most secure payment
methods in international shipping.
• It’s essentially a binding legal agreement issued by a financial institution
(such as a bank) guaranteeing payment for the goods.
• A buyer will typically apply for a letter of credit with a bank, outlining
everything in their order.
• When the bank finalises the letter, they will submit it to the supplier’s
bank, who will then check it off to ensure the supplier agrees with the
terms and conditions before the manufacturing of the goods commences.

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Issuing of Commercial Invoice
• Following this, the supplier will provide the importer with an order
confirmation and a commercial invoice This invoice is a key
document, detailing the price and quantity of the sold goods. It will
also contain the incoterm used.

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Step #2: Freight forwarder arranges export

Documents that • Certificate of Documents that need to be

need to be Inspection prepared by the buyer:
prepared by the • Shipping Order • Bill of Entry
supplier:
• Cart ticket • Commercial Invoice
• Shipping Bill
• Shipment Form • Bill of Lading
• Custom’s Invoice
• Import License
• Certified Invoice
• Insurance Certificate
• Packing List
• Purchase Order
• Certificate of
Origin

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Step #3: Booking of freight
• Once the required documentation is in order, the supplier must make
a booking for the export shipment.
• It is critical for freight to be booked early to avoid disappointment,
especially if the goods are going to be transported in peak shipping
season.

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Step #4: Goods to travel to international depot/port
• Once the goods are packed and ready, they will be transported to a depot
or port for export.
• Depending on the shipping incoterms, this will either be arranged by the
supplier or by the consignee through their freight forwarder and then
export clearance can then commence.
• Bill of Lading:
• When a carrier arrives to pick up the goods, a bill of lading is issued. A bill of lading
confirms that the goods were received by the carrier in an acceptable condition.
• This is an extremely valuable document, as it acts as proof of legal title over goods.
• The supplier will then need to provide the bill of lading to the consignee (i.e. the
buyer). The buyer will be required to present the bill of lading in order to secure
the release of the shipment and claim ownership over the goods. Again, this can all
be coordinated through a freight forwarding company.

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Step #5: Goods processed through export customs clearance and placed in transit

• Prior to departure, the goods will be processed through export

customs clearance. This is where all documentation is reviewed and
checked by government agencies.
• If the export is cleared, those goods will then be placed in
international transit.
• There are several modes of transport a buyer can select to transport
their freight when shipping by sea, including:
Full Container Load
Less Container Load
Reefer
Break Bulk (Out of Gauge)
Flat Racks

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Step #6: Goods arrive in buyer’s country for import clearance

• Once a buyer’s goods arrive in the country of destination, the goods

undergo an import clearance.
• Imported goods may be subject to certain taxes, tariffs and/or
charges.
• Depending on the commodity the goods may also be subject to
quarantine inspection on arrival.

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Step #7: Goods are transported from the port to the buyer (importer)

• Once the goods pass through customs and are good to go, they will
then be delivered to the buyer or agreed delivery point. Once, again,
the incoterms on the shipment will determine who arranges this.
• The receiver should discuss with the transport company or forwarder
beforehand how they would like to receive the cargo for ease of
delivery.

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Connecting
Chart of EXIM
Process
Methods of
Payment in
EXIM Trade
Open Account
Flow Chart
Consignment Flow Chart

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Documentary Credits Flow
Chart
Cash in
Advance Flow
Chart
L/C Process
Flow Chart
Thank You
References:
• https://www.impexperts.com/blog/import-export-procedure/

• https://www.impexperts.com/blog/import-procedures-in-india/

• https://www.dripcapital.com/resources/blog/payment-options-credit-risks#8

• https://ebooks.lpude.in/management/mba/term_3/DMGT546_INTERNATIONAL_TRADE

_PROCEDURE_AND_DOCUMENTATION.pdf