From Inquiry to Export: A Step-by-Step Guide to International Trade

Exporting goods can seem like a complex endeavor, but breaking it down into manageable steps reveals a clear and systematic process. Whether you're a seasoned business or just starting to explore international markets, understanding each stage is key to a successful export journey.

Let's walk through the typical export process, from the initial inquiry to the final payment:

1. The Spark: Initial Inquiry & Quotation

It all begins with an inquiry from an importer, keen to understand your product's details – from quantity and packing to quality and overall specifications. This isn't just a casual chat; it's the foundation of a potential deal.

Following this, the exporter prepares and provides a detailed quotation. This document is crucial as it outlines payment terms, delivery terms, complete product details, and all other relevant terms and conditions.

2. Sealing the Deal: Purchase Order & Commercial Invoice

Once the buyer reviews the quotation and is satisfied, they issue a purchase order. This is the formal acceptance of your offer. Without an accepted purchase order, no contract exists, and the export process cannot proceed.

Upon acceptance of the purchase order, the exporter generates a commercial invoice and a packing list. The commercial invoice is a vital document used by customs authorities to ascertain the shipping items and their value.

3. Packing It Up: Preparing Your Goods

The packing list specifies the quantity, weight, and carton details of the goods being shipped. This is essential for inventory and customs clearance.

Packing itself can be done in two ways:

• Factory stuffing: Goods are packed into containers directly at the factory or godown (warehouse) location.

• Port stuffing: Goods are transported to the port and then packed into containers there.

4. The Paper Trail: Documentation and Customs

With packing complete, the exporter submits the invoice and packing list to a CHA (Customs House Agent) or Freight Forwarder. The CHA plays a crucial role by generating the shipping bill on behalf of the exporter.

Before goods are shipped, the exporter must prepare all necessary documents. Depending on the product, this could include:

• IEC (Importer-Exporter Code)

• APEDA RCMC Certificate (for agricultural and processed food products)

• Phytosanitary Certificate (for plant products)

• FSSAI Certificate (for food products)

• And other product-specific certifications.

Once all pre-shipment documents are submitted and the goods are ready, the customs process is completed.

5. On the Move: Loading and Receipts

Next, the goods are loaded. If it's air cargo, goods are loaded into the aircraft, and the airline generates a Mate's Receipt. This receipt serves as prima facie evidence that the goods have been loaded onto the vessel or aircraft.

The Mate's Receipt is then given to the Port Trust Authority (or airport authority), which in turn provides the receipt to the exporter or their agent. This same receipt is finally given to the shipping company to generate the Bill of Lading (for sea shipments) or the Airway Bill / Air Consignment Note (for air shipments).

6. The Crucial Document: Bill of Lading

The Bill of Lading (or Airway Bill) is a critical document. It serves as:

• A contract of carriage between the shipper and the carrier.

• A receipt for the goods.

• A document of title (for negotiable bills of lading).

Bills of Lading can be classified as freight paid (where freight charges are paid by the exporter) or freight collect (where freight charges are collected from the buyer upon arrival).

7. Financial Closure: Bank Involvement & Payment

Once the Bill of Lading (or Airway Bill) is received, the exporter needs to prepare three sets of documents: one for the bank, one for the buyer, and one for the exporter's own records. These documents are then sent to the bank.

Upon receiving the bank receipt and post-shipping documents, the bank generates a Bank Covering Letter.

When the buyer's bank receives these documents, they are given to the buyer, allowing them to release the goods. If everything is in order and payment is due, the payment is made through the buyer's bank to the exporter's bank.

Finally, once the exporter's bank receives the payment, it generates an EBRC (Electronic Bank Realization Certificate), signifying the successful completion of the financial transaction.

In Conclusion

The export process, while detailed, is a well-structured series of steps designed to ensure smooth movement of goods and secure payments. Understanding each stage empowers businesses to navigate international trade effectively and expand their reach globally.