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HOW TO EXPORT
�Golden Rule.
�Sell Experience.
�Selling in Export.
�On-time Deliveries.
�Communication
�Testing Products
�Approach
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GOLDEN RULE.
One must fully research its markets.
Overseas design and product requirements must
be carefully considered.
Always sell as close to the market as possible.
The fewer intermediaries one has the better.
They must be produced with due regard to the
needs of export markets
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SELLING IN EXPORT
�In today's competitive world, everyone has to be sold.
�The customer always has a choice of suppliers.
�Selling is an honorable profession, and you have to be
an expert salesman.
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ON-TIME DELIVERIES.
�Late deliveries are not always an exporters fault.
�Dock strikes, go-slows, etc. occur almost everywhere
in the world.
�If one enters into export for the first time, he must
ensure of fast and efficient delivery of the promised
consignment.
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COMMUNICATION
�Communication internal and external must
be comprehensive and immediate.
�
Good communication is vital in export.
�When you are in doubt, pick up the phone or email for
immediate clarification.
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TESTING PRODUCT
�The risk of failure in export markets can be minimized
by intelligent use of research.
�Before committing to a large-scale operation overseas,
try out on a small scale. Use the a sample test, and any
mistakes can then be corrected without much harm
having been done.
� While the test campaign may appear to cost more
initially, remember that some of the cost will be repaid
by sales, so that test marketing often turns out to be
cheaper.
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A PPROACH
If possible some indication of the attitudes towards the
product should be established, like any sales operation.
Even if the product is successful, to obtain reactions
from the customer.
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A RRANGING FINANCE
Financial assistance to the exporters are generally
provided by Commercial Banks, before shipment as well as
after shipment of the said goods.
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The assistance provided before shipment of goods
is known as per-shipment finance and that
provided after the shipment of goods is known aspost-shipment finance.
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1. Pre-shipment finance is given for working
capital for purchase of raw-material,
processing, packing, transportation, ware-
housing etc. of the goods meant for export.
2. Post-shipment finance is provided forbridging the gap between the shipment of
goods and realization of export proceeds.
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�The later is done by the Banks bypurchasing or negotiating the exportdocuments or by extending advance
against export bills accepted on collectionbasis.
�While doing so, the Banks adjust the pre-shipment advance, if any, already granted
to the exporter.
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PRE-SHIPMENT FINANCE
An application for pre-shipment advance should be
made by you to your banker along with the following
documents:
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Confirmed export order/contract etc. in original. Where it is
not available, an undertaking to the effect that the same
will be produced to the bank within a reasonable time for
verification and endorsement should be given.
An undertaking that the advance will be utilized for thespecific purpose of procuring/manufacturing/shipping etc.,
of the goods meant for export only, as stated in the relative
confirmed export order or the L/C.
If you are a sub-supplier and want to supply the goods to
the Export/Trading/Star Trading House or MerchantExporter.
Copies of Income Tax/Wealth Tax assessment Order for the
last 2-3 years in the case of sole proprietary and
partnership firm.
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Copy of Exporter's Code Number (CNX).
Copy of a valid RCMC held by you and/or the
Export/TradingCertificate.
Appropriate policy/guarantee of the ECGC.
Any other document required by the Bank. For
encouraging exports, R.B.I. has instructed the banks to
grant preshipment advance at a concessional rate of
interest.
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SPECIAL SCHEMES ARE ALSO AVAILABLE IN
RESPECT OF PRE-SHIPMENT FINANCE
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POST SHIPMENT FINANCE
Post-shipment finance is the finance provided
against shipping documents.
It is also provided against duty drawback claims.
It is provided in the following forms.
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PURCHASE OF EXPORT DOCUMENTS
DRAWN UNDER EXPORT ORDER
Purchase or discount facilities in respect of export bills drawnunder confirmed export order are generally granted to thecustomers who are enjoying Bill Purchase/Discounting limitsfrom the Bank.
The bank financing against export bills is open to the risk of non-payment.
Banks, in order to enhance security, generally opt for ECGC policies and guarantees which are issued in favor of theexporter/banks to protect their interest on percentage basis incase of non-payment or delayed payment which is not on
account of mischief, mistake or negligence on the part of exporter.
At the time of purchasing the bill bank has to ascertain thatthis drawee limit is not exceeded so as to make the bankineligible for claim in case of non-payment
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A DVANCES AGAINST EXPORT BILLS
SENT ON COLLECTION
It may sometimes be possible to avail advance
against export bills sent on collection.
Advance against such bills is granted by way of a
'separate loan' usually termed as 'post-shipmentloan'.
A margin of 10 to 25% is, however, stipulated in
such cases
This type of facility is, however, not very popular
and most of the advances against export bills are
made by the bank by way of
negotiation/purchase/discount.
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A DVANCE AGAINST UNDRAWN BALANCE
In certain lines of export it is the trade practice
that bills are not to be drawn for the full invoice
value of the goods.
Banks do finance against the undrawn balance if undrawn balance is in conformity with the
normal level of balance left undrawn in the
particular line of export subject to a maximum of
10% of the value of export.
Against the specific prior approval from ReserveBank of India the percentage of undrawn balance
can be enhanced by the exporter
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A DVANCE AGAINST RETENTION MONEY
Banks also grant advances against retention
money, which is payable within one year from the
date of shipment, at a concessional rate of
interest up to 90 days.
If such advances extend beyond one year, they
are treated as deferred payment advances which
are also eligible for concessional rate of interest.
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A DVANCES AGAINST CLAIMS OF DUTY
DRAWBACK
Duty Drawback is permitted against exports of
different categories of goods under the 'Customs
and Central Excise Duty Drawback Rules, 1995.
The claims of duty drawback are settled by
Custom House at the rates determined and
notified by the Directorate.
A copy of the shipping bill presented by the
exporter at the time of making shipment of goods
serves the purpose of claim of duty drawback as
well.