The general procedures for export trade involve the following stages:
Procedures for export trade
- Receipt of an inquiry: The first stage in the export trade is the receipt of an inquiry by the exporter forms an importer or his agent. An inquiry is a written request by a prospective importer regarding the quantity, quality, design, price, mode of payment, etc., of goods, which he intends to purchase.
- Sending quotation: In reply to the inquiry, the exporter sends a quotation (or Proforma invoice) in which all necessary details are given as required by the importer. The type for price quotation depends upon the inquiry of the importer.
- Receipt of an indent (or order): In case the importer is satisfied about the quotation from the exporter, he will send an order (or indent) for the supply of goods. The exporter should carefully check indents begin received from the importer, so that all necessary details of the goods, its packing, bank guarantee, payment, etc., are clearly mentioned.
- Receipt of export license: Goods cannot be exporter without an export license. It can be obtained from the chief Controller of Exports & Importer by applying on a prescribed form. If the exporter satisfies all conditions for the issue of a license, it is given to him normally for a period of three months from the date of application.
- Conducting an inquiry about credit: The exporter would like to know the credit worthiness of the importer before dispatching the goods. The exporter likes to ensure that there is no risk of non-payment. A bank reference may be considered to be sufficient in this regard.
- Fulfillment of foreign exchange requirements: Under the Foreign Exchange Regulation Act (FERA), the exporter has to make a declaration that he will surrender the entire foreign exchange earned on account of exports to the Bangladesh Bank within 180 days of shipment. For this purpose he has to fill in four G.R. forms.
- Fixation of exchange rate: The rate at which the currency of one country is exchanged for the currency of another country is called the exchange rate. The exchange rate keeps on fluctuating. Generally, the importer fixed the exchange rate by booking it in advance at the time of placing an order.
- Preparation for export: The following things are essential for preparing export:
- Packing, marking and forwarding of goods to be exported.
- Pre-shipment inspection of goods and excise clearance.
- Appointments of forwarding agent.
- Booking of shipping space, etc.
9. Completing customs formalities: The exporter has to observe certain customs formalities before dispatching the goods. He has to prepare and shipping bill in triplicate and application to export in duplicate. The shipping bill is a document showing the details with regard to:
- The name of exporter,
- Description of goods,
- The name of the ship to carry the goods,
- The name of importer, and
- The port of destination.
10. Obtaining freight note and bill of lading: The shipping company prepares a freight note mentioning the amount of freight payable. On payment of freight charges, the exporter obtains a document called Bill of Lading.
The freight is paid by the exporter and it is mentioned in the bill of lading. When the importer agrees to pay the freight, the bill of lading is marked Freight Forward.
11. Insurance of goods: Goods exporter are exposed to several risks, called the perils of the sea. Therefore, exportable goods should be insured against these risks. The insurance policy is forwarded to the importer along with other documents.
12. Preparation of necessary documents: After receiving the Advice Note from the forwarding agent, the exporter prepares the following documents:
- Export invoice;
- Consular invoice;
- Certificate of origin;
- Foreign bill of exchange.
13. Securing payment from importers: The payment of the order depends on the mutual agreement between the exporter and the importer. The customary modes of payments are bank draft, bill of exchange, Documents against Acceptance Bill (D/A Bill), Documents against payment Bill (D/P Bill).
14. Claiming incentives from the Government: An exporter is entitled to claim certain benefits, which have been offered by Government as incentives to promote exports. These benefits include:
- Drawback of import duty and excise duty,
- Cash compensation support,
- Import replenishment.
Related Content of Import-Export:
- What is the Definition of Import?
- General Procedure of Import Trade
- Documents used in Import Trade
- What is the Definition of Export?
- Stages of Export Involvement
- Documents used in Export Trade
- Standard Terms of Sale