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2. Major Initiatives:-
1. Focus Markets Scheme – 26 new markets
added in Latin America and Asia – Oceania region,
at present 83 countries in Africa, Central America,
C I S and Eastern Europe. Incentive in the form of
Duty Free Scripts has been raised from 2.5% to 3%.
2. EPCG scheme at Zero Duty introduced
3. DEPB scheme extended till 31-12-2010.
4. Market Linked Focus Product Scheme introduced
for Export of identified products to 13 identified
markets and incentive raised from 1.25% to 2%.

3. Major Initiatives:-
5. EOU’s allowed to sell DTA upto 90%
6. 2% Interest Subvention upto 31-10-2010.
7. Rs. 5000 Crores refinance facility to EXIM Bank.
8. Special refinance facility to Banks.
9. Made in India Show at least in Six Countries.
10.Premier Trading House – Rs. 7500 Crores (Cr.10,000)
11.Grant of 1% Status Holders Incentive Scripts for
Import of Capital Goods

4. 180000 168704
162983.9
160000
140000
126262.67
120000
103090.54
100000
80000
60000 51545 Exports in ($ Million)
40000 35432 Growth (in %)
20000
23.41% 22.48% 29.08% 3.40% 22.30%
0
-31.20%
-20000

5. Targets:-
1. Annual Growth of 15%, with an annual Export
target of $ 200 bn by March, 2011
2. 2011-2014 Export growth 25% Per Annum, Double
Exports of Goods and Services by 2014
3. Double India’s share in Global Trade by 2020

6. 1. Business Structure
2. Raising Capital
3. Choosing Partners
4. Realty Issues
5. Sector Approvals
6. Tax Compliance
7. Forex Laws
8. Protecting IPR
9. Labour Laws
10. Product Liability

7. Buyer
Study

8. Execution of an Export Order
Successful execution of an
Export Order at least in the
context of SME’s in our
Country it is mostly a verbal
or a very sketchy, often even
an e-mail order.

9. It neither contains full
details normally
desirable for an
Exporter, nor the basis
on which this order is
received.

10. I am referring to an export
Order conforming to the
elements of an Export
contract. If not it may lead
to Trade Disputes in future,
which often result in
non-payment delay in
payment by the buyer.

11. So friends in the
changed scenario, i.e.
when we have very little
knowledge about the
character and credit
worthiness of buyer,

12. It is imperative to have
at least an confirmed
order which should be
based on properly
negotiated terms and
conditions under which

13. We will Export. The
least we can do is to
know about
1. Product - Full
Details, Specification,
Size, Number
i.e. Quantity

14. 2. Pre-Shipment
Inspection
3. INCO-Terms like FCA,
FAS, CPT, CIP, FOB, CIF, DDP
4. Taxes, Charges etc.
5. Period of Delivery
- Mode of Transport

15. 6. Currency – Rate of
exchange – Fluctuations –
Mode of Payment
7. Discount,
Commissions, Packing,
Licences Requirments

16. EXW - EX WORKS (named place)*
FCA - FREE CARRIER (named place)
FAS - FREE ALONGSIDE SHIP (named
port of shipment)*
FOB - FREE ON BOARD (named port of
shipment)
CFR - COST AND FREIGHT (named
port of destination)

17. CIF - COST, INSURANCE AND
FREIGHT (named port of destination)*
CPT - CARRIAGE PAID TO (named place of
destination)
CIP - CARRIAGE AND INSURANCE PAID
TO (named place of destination)*
DAF - DELIVERED AT FRONTIER (named
place)*

18. DES - DELIVERED EX SHIP (named port
of destination)
DEQ - DELIVERED EX QUAY (named port
of destination)*
DDU - DELIVERED DUTY UNPAID
(named place of destination)*
DDP - DELIVERED DUTY PAID (named
place of destination)*

19. ICC recommends that
"Incoterms 2000" be referred to
specifically whenever the terms are
used, together with a location. For
example, the term "Delivered at
Frontier" (DAF) should always be
accompanied by a reference to an
exact place and the frontier to which
delivery is to be made.

20. Here are three examples of
correct use of Incoterms:
FCA Kuala Lumpur Incoterms 2000
FOB Liverpool Incoterms 2000
DDU Frankfurt Schmidt GmbH Warehouse 4
Incoterms 2000

21. 1. Advance Payments
2. Documents against Payments
3. Documents against Acceptance
(a) Provision of Credit without
Acceptance
4. Letter of Credit

22. A documentary credit is a signed
instrument embodying an
undertaking by the banker of a buyer
to pay his seller a certain sum of
money on presentation of documents
evidencing shipment of specified
goods and subject to compliance with
the stipulated terms and conditions.

23. Buyer Seller
Issuance
Issuing Bank Advising Bank

24. Buyer Seller
Utilization
Issuing Bank Advising Bank

25. Bill of Exchange
1. Date 2. Signature
3. Endorsement
4. Letter of Credit Number
5. Term-Sight or Usance Dates
6. Amount and Currency
7. Words and Figures tally
8. Drawn on correct Party

26. Invoice
1. Invoice heading in your company’s name,
expressed and spelled as in Letter of Credit.
2. Made out in name of buyer, expressed and
spelled exactly as in the Letter of Credit.
3. Description of goods – including import licence
or proforma details price and terms of delivery –
worded and spelled exactly as set out in the
Letter of Credit.
4. Value not more then the Letter of Credit and the
Bills of Exchange
5. Authenticated as required under the credit.

27. Transport Document
1. Type of transport Documents
2. Consignor – can be different from beneficiary
3. Consignee’s name and spelling
4. Places and Ports
5. Clauses
6. On-Deck shipment

28. Insurance Documents
1. Type e.g. a Certificate
2. Correct amount e.g. CIF or CIP plus per cent
3. Same currency as the Letter of Credit unless otherwise
stipulated in the Letter of Credit
4. Risks covered
5. Date – not later then date of issue of the transport
document.
6. Endorsed if necessary
7. The insurance document must indicate the risks are
covered at least between the place of taking in charge
or shipment and the place of discharge or final
destination as stated in credit.

29. Once the discrepant documents are
tendered to the negotiating bank. The
element of delay is introduced in the
transaction and if the discrepancies are
beyond correction, the security afforded
by the documentary credit is lost and the
seller is solely at the mercy of the buyer.

30. The buyer has the following options
available to him
 The buyer take up the documents despite
discrepancies
 The buyer may use discrepant document as a
means to delay the payments
 One of the virtues of LC is “insurance against
renegotiation”
 The buyer might like to wriggle out or
transaction

31. Following penalties on the exporter-
beneficiary of LC
 Interest loss on account of delays at various
stages
 Cost of indemnity
 Demurrage and warehousing charges at
destination

32. Cost of
Funds

33. Cost of discount
either offered or
foregone

34.  Discount % / (100-discount%) X 365
/ (final date – discount period)
 For example if terms are 3/10 net 30
(i.e. 3% discount if paid within 10
days, otherwise full amount paid
within 30 days)
 3/97 X 365/20 = 0.309 X 18.25 = 56%

35. Working
Capital
Management

36. Management
of
Receivables

37. Inventory
Management

38. ECGC
The corporation has classified
almost 220 countries into its seven-
fold classification for country risk
assessment purposes and for
determining its premium rates
under the short, medium and long
term insurance covers issued by it.

39.  A1 Insignificant
 A2 Low
 B1 Moderately Low
 B2 Moderate
 C1 Moderately High
 C2 High
 D Very High

40.  Apply for the credit limit on the buyer well in time
 At the time of making shipment check that the ECGC Policy is in
force
 Send your monthly declarations of shipment regularly along with
premium amount
 Make sure that the outstanding bills against the buyerpolicy at
any time do not exceed the maximum liability
 Obtain special endorsement for covering export under LC
 Your overseas buyer should have no knowledge of your insurance
policy
 Inform defaults at the earliest to the ECGC
 Do not pay premium after default by the buyer
 Do not make compromise with your buyer without the prior
approval of the ECGC
 Do not extend tenure of the bills without approval of ECGC
 For calling back the goods take prior approval of the ECGC

41. Covering the Foreign Exchange
risk is termed as hedging the
risk. If the company dose not
want to hedge, it means it is
taking a view that the future
movements of exchange rate will
move in its favour.

42. Banks offer forward exchange contracts both
for sale and purchase transactions to
customers with a maturity date for a fixed
amount at a determined rate of exchange at
the outset. Normally contracts are entered in
India for a period where the maturity period
of the hedge dose not exceed the maturity of
the underlying transaction. The customer has
the option to choose the currency of hedge
and tenor.

43. An Exporter may need finance for execution of an
Export Order from the date of receipt of an Export-
Order till the date of realization of the Export
proceeds at any stage. Financial assistance
extended to the Exporter from the date of receipt
of Export Order till the date of shipment is known
as pre-shipment credit. This finance is extended to
an exporter for the purpose of procuring raw
materials processing, packing transporting,
warehousing of goods meant for exports. Credit
facility extended to an Exporter from the date of
shipment of goods till the realization of the Export
proceeds is known as post-shipment credit.

44. Export
Financing
by Banks
Pre- Post-
Shipment Shipment
Import
Packing Export Bill
Letters of
Credit Finance
Credit