Trade, import and export for MSMEs: Even as exports from India continue to scale year-on-year, the country’s imports have also registered growth. In the financial year 2022-23, imports including merchandise and services grew to $892 billion from $760 billion in FY22 despite the government’s focus on reducing reliance on imports through Make in India and Atmanirbhar Bharat initiatives.
Sea and air are among the common channels of trade even though air cargo costs more than sea cargo. Importers can get their goods shipped by ocean liners as full container load (FCL) or less than container load (LCL). As the name suggests, a shipment or cargo that requires the entire space of a container is known as FCL while cargo occupying a portion of a shared container is referred to as LCL.
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For a first-time importer looking to procure finished goods or semi-finished goods as raw materials, buying from the right buyer in a foreign country amid existing trade regulations could be a task. Here’s how step-by-step a new importer can look at importing goods from outside India:
- Finalise the right exporter based on your requirements and need in the local market through various trade associations or trade directories and contact the exporter via a trade enquiry
- Negotiate price, payment terms, delivery timelines, insurance, quality, etc., with the exporter who will then send the proforma invoice
- A proforma invoice is basically an estimated invoice with a description of goods to be exported and more
- Check whether the product you want to import requires an import license as certain goods under the Export-Import (EXIM) policy don’t require a license. In case the product requires a license, here’s how you can get it as it would be required on a number of import documents.
- Apply to the Reserve Bank of India’s Exchange Control Department (ECD) to get the requisite foreign exchange to settle payment in the exporter’s local currency
- Send the import or purchase order to the exporter after the import license and foreign exchange is received.
- The order should contain information about the goods’ cost, quality of the goods and details around packing, shipping, ports from where the order will be departed and arrived, the timeline for delivery, insurance, payment mode, and more.
- Get a letter of credit from your bank in favour of the exporter and forward it to the exporter. Also, appoint clearing and forwarding (C&F) agents beforehand who will help you clear the goods from customs at the port
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- The exporter sends the shipment advice to you after loading the goods onto the ship. Shipment advice includes information about the invoice, bill of lading, name of the ship and date of shipping
- The exporter’s bank sends the documents such as the bill of exchange, invoice, bill of lading, packing list, certificate of origin, insurance policy, and more to your bank.
- The documents include the bill of exchange, a copy of the bill of lading, the certificate of origin, commercial invoice, consular invoice, packing list, and other relevant documents
- Pay your bank and collect the documents
- After the goods arrive at the port and are moved to the customs area for required clearances, the shipping company gives the delivery order — an order given by the carrier to the importer to take delivery of goods
- The order is collected by the C&F agent from the shipping company
- The agent pays port trust dues and gets the port trust receipts which are to be submitted to the customs house along with a copy of the bill of entry.
- A bill of entry is a document filed by the agent on or before the arrival of goods stating information on the goods entering the country
- Pay customs duty and clear the goods and also pay fees to your C&F agent
- Confirm the receipt of goods and pay the exporter
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