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1
Raj Nagre
April, 2012 - August 2012
Foreign Trade Development centre, South Extension Part –I New Delhi
S u b m i t t e d b y : R a j N a g r e , S e s s i o n – M o r n i n g 9 . 3 0 a m – 1 1 . 3 0 a m B a t c h : A p r i l , 2 0 1 2 T o A u g u s t , 2 0 1 2
2
3
P a r t i c u l a r s P a g e N o .
1. Foreword
0 5
2. Acknowledgement
0 6
3. Objective of the study
0 7
4. Company profile (in brief)
0 8
5. Brief report on present status of industry: Problems & Prospects
0 9
6. Locating Buyer
1 2
7. Export order
1 4
8. Product in details
1 6
9. Activity profile
1 9
10. Explanation of activity ( How I did it)
2 0
11. Correspondence, where required
2 1
12. Documentation for execution of the order
2 2
13. Dispatch of goods
2 3
14. Collection/Settlement of payment
2 4
15. Summery
2 6
4
This project is the part of Foreign trade development management course i.e. Diploma in Import-Export
management. During the span of four months vocational academic course every student are compulsory to
perform several test and presentation for their learning. This provides them experience to stand in practical
life. Each lecture pertaining with purpose of proper completion of foreign trade.
Theoretical, lecture starts with basic of foreign trade and history of export-import into India. How gradually, it
strapped into India and other countries. Why International trade is indispensible for country’s growth and
development. Reason, because post independence our demands were hefty and coffers were empty. Hence
it was started with export policy, where as only export policy announced by government of India and
promoted to export oriented activities. But to produce as per the international requirement, technology and
quality standard are must. Then Import also initiated and government announced Exim Policy (Export Import
Policy)
This project is test for our understanding about practical approach of foreign Trade (Export Import
Trade).During this project I interacted with several process heads of foreign trade viz. Manufacturers, Freight
forwarders, Clearing House Agent, Export Import Mangers, Banker, Renowned financial institution, Logistic
managers, Marketing experts etc. They all are expert in their field.
I may mention that the views and process expressed in this project are best of my understanding and are not
to be attributed to any organization or institution.
I welcome suggestion for improving future process of the trade and export import business.
R a j N a g r e
New Delhi
September 2, 2012
5
2 . A c k n o w l e d g e m e n t
I would like to express my deep sense of gratitude to FTDC and its Member faculty for keeping this Project
report in our syllabus. Because working on this project gave me a great confidenc
e
and practical knowledge.
I would like to thanks my all faculty members, which gave us many tips regarding to execute any export
order.
M y s p e c i a l t h a n k s t o :
My Mother, Leela Nagre and My Sister, Gayathri. Her motivation and encouragement has enabled me to
complete this course.
And I am also thankful to my Dear Friend Ashish Sethia and Jai Joshi. Who enlightened me a lot about this
course.
Once again I am thankful to all people who supported me to complete this Project report, without their
corporation I won’t be able to complete this project.
Raj Nagre
6
3 . O b j e c t i v e o f t h e s t u d y
This project gives us much aspect to learn the intricacy about export import business and behavior of foreign
market as well as standard practices in overseas trade. Until we step into the on field work of export import.
One’s can’t have knowledge of step by step process therefore this project study and Training of FTDC, South
Ex. New Delhi give us knowledge about what is export Import, International marketing, How to start a export
firm, How to select a product, How to locate a Buyer, Payment methods for business, Its documentation
process as per ADS system, Rules and regulation for Export Import from exporting country and Importing
country’s trend. Which are regulated by Reserve Bank of India, Ministry of finance & commerce, Director
General of foreign trade in India, Authorized dealers Bank, Custom Authorities, Export Promotion Councils &
etc. Those all are accumulated for controlling export import trade.
Main objectives are as under given below:-
My objective of doing this Project report is to execute the given export order on foreign market. This
first involves to scrutiny of the export order and find the discrepancies in the export order, is it
executable or not in the given time by the buyer.
Another objective is to learn the basic function of the Export Trade. How one person can export with
the help of different government organization? To learn how to enter this competitive export market.
Thus this Project report is very important for me because I learnt many essential and practical things
during making this Project report. I am sure that this experience will be helpful to enter the export trade.
7
4 . C o m p a n y p r o f i l e ( i n b r i e f )
Company Name : RAGA INTERNATIONALS
Prakash Nagar Bahadurgarh, Haryana-124507
Type of Exporter : Manufacturer Exporter
Type of Company : Private Limited (set up in 1998-99)
IE Code : 9355868151
Banker : SBI Bahadurgarh (Haryana)
AD Code : 632-8753216
EPC : Engineering Goods
Product : ERW MS Black Pipe & G.I. Pipe
Production capacity: 100000MT per annum
Export : 15000MT per annum
RAGA INTERNATIONALS have a high technology plant. It is most growing company in international
business. This is dealing in engineering goods as a manufacturer exporter.
8
5 . B r i e f r e p o r t o n p r e s e n t s t a t u s o f i n d u s t r y : P r o b l e m s & P r o s p e c t s
India has traditionally been one of the major producers of steel in the world. Till the 1990s the steel industry
of India was regulated and controlled by government policies.
After the economic reforms of the early 1990s, the Indian steel industry has evolved significantly to conform
to global standard. I ndia has set a vision to be an economically developed nation by 2020.
By 2011 steel production of India has grown more than 66 MT.
The Major sector where consumption of steel is expected to grow in the coming year are:
• Construction
• Housing
• Ground Transportation
• Hi Tech engineering industries such as power generation, petrochemicals, fertilizers.
P r o b l e m s a n d T h r e a t s t o s t e e l i n d u s t r y :
There are certain challenges before the steel industry of India in the recent times. India has been one of the
major producers of steel in the world and has also been attracting a lot of foreign direct investment.
A few issues would need to be attended to if India wants to be counted as one of the major and most
economical producers of steel.
The 3 areas that need to be improved upon in the view of the exports are:
1. The infrastructure,
2. A bility to draw the top names in steel, and
3. wealth creation issues.
The condition of the infrastructural facilities of the steel industry in India is not at all conducive to a
sustainable growth and development of the steel industry of the India.
A n d s o m e m i s c e l l a n e o u s p r o b l e m s :
I. The Indian steel industry has also not been able to draw the best professionals in the steel industry
and that has been a major drawback of the industry.
II. The experts are also of the opinion that not enough policies or measures have been adopted to
amend the situation in case of the infrastructural facilities available in the steel sector.
1. One of the major reasons for such problems is the consistently increasing population of India.
9
Even though India is capable of producing steel at a good rate and also increase the volume of production
there is not enough land available to support such activities.
The design institutions in India have not been successful at recruiting the best of engineers and metallurgists
in India. This has affected the technological aspect of the Indian steel industry.
The experts are of the opinion that this issue has to be countered in order to reduce the dependence on the
overseas technological assistance.
T h e s t e p s t a k e n b y T a t a S t e e l a r e i n s t r u c t i v e i n s u c h a c o n t e x t
. The
company has been increasing public awareness about the steel industry through books and educational
sessions at the Indian Institute of Technology at Kharagpur.
In million tonnes
Year Import Export Nett
2002-03 1.77 5.28 3.51
2003-04 1.83 5.89 4.06
2004-05 2.60 4.97 2.36
2005-06 4.81 5.19 0.38
2006-07 5.30 5.91 0.61
Source: Joint Plat committee, Annual Report 2007-08.
10
N o t e : R O W : R e s t o f t h e W o r l d S o u r c e : S t e e l S t a t i s t i c a l Y e a r b o o k 2 0 0 7 , I I S I C o m m i t t e e o n E c o n o m i c
S t u d i e s - B r u s s e l s , 2 0 0 7
S N O C o m p a n y m m t S h a r e %
1 ArcelorMittal 116.40 8.66
2 Nippon Steel 35.70 2.66
3 JFE 34.00 2.53
4 POSCO 31.10 2.31
5 Baosteel 28.60 2.13
6 T
a t a S t e e l 2 6 . 5 0 1 . 9 7
7 Anshan Benxi 23.60 1.75
8 Jiangsu Shagang 22.90 1.70
9 Tangshan 22.80 1.70
10 US Steel 21.50 1.60
11 Wuhan 20.20 1.50
12 Nucor 20.00 1.49
13 Gerdau Group 18.60 1.38
14 Riva 17.90 1.33
15 Severstal 17.30 1.29
T
o p 1 5
P
r o d u c e r s 4 5 7 . 1 0 3 4 . 0 0
O t h e r s 8 8 7 . 2 0 6 6 . 0 0
1 3 4 4 . 3 0 1 0 0 . 0 0
11
• L
o c a t i n g B u y e r
After completion of the preliminary task of export, we move for locating the buyer into overseas market that
is possible through several ways. Unless we choose the proper method for locating the buyer, It may not be
giving result.
I would like to use 3 methods for locating the buyer:
1. Buying Agents
2. Trade Fairs
3. Internet
1 . B u y i n g A g e n t s :
Buying agents are very use full where languages are problem in export market and
they can be proven major role player.
a .
Middle East and Gulf country have lots of requirement for Steel and buying agents play very
important role.
b .
Buying agents take commission 3% to 5% that is very less and easily affordable buy exporter.
c .
They provide support for exporter to timely payments and healthy relation between buyer &
seller.
d .
They provide otherwise service also like legalization from importer country, warehousing
facility, participation in trade fare in country.
e. Buying agents can be located through internet and embassy/High commission of importing
country or local chamber commerce.
2 . T r a d e F a i r s : T r a
de fairs offers very best opportunity to exporter to meet their potential buyer
information about international markets.
a .
There are some important points to remember before attending the Trade fairs.
b .
Our Objective should be clear about the product & its reliability.
c .
Planning for trade fair budget in advance.
d .
Presentation and location of your exhibition should on most visited place.
e .
Trade fair should be repeatedly not only once.
f .
Provide attractive broachers for product.
g . T h e r e s h o u l d b e f o l l o w i n g i n f o r m a t i o n a b o u t t h e p r o d u c t .
Space stands available.
h. Application deadline & cost
i .
Insurance & security arrangement.
j .
Deadline for arrival of goods.
12
k .
Duties and taxes
Different types of Trade fairs:-
i. General Fairs
ii. Specialized Trade fairs
iii. Permanent/Yearly Trade fairs
iv. Solo exhibition.
3. I
n t e r n e t :
Internet is also suitable way to find out the buyer and Cost is only with some websites,
almost it is free of cost. Exporter can launch its website also and can be resister to many export
directories.
13
• E
x p o r t o r d e r
R A G A
I
N T
E
R N A T
I
O N A
L
S
Prakash Nagar, Rohtak Road,
Bahadurgarh-124507 (Haryana)
Ref: JH/06/00147 10 April, 2012
F A T
I
M A
E
N T
E
R P R
I
S
E
S
P o s t B o x N o : 2 4 5 7 3
J
e b e l A l i , F r e e Z o n e
U
A
E
Kind Attn: Mr. Husein Abbas (Purchasing Manager)
Dear Sir,
Ref. to your visit at Indian Trade Fair (New Delhi) and are pleased to submit our quote as follows:
E
R W M . S . B l a c k p i p e s b e v e l e n d s i n t h e l e n g t h o f 6 . 0 0 m t r . + / - 0 . 0 5 m t r . C o n f o r m i n g t o B S : 1 3 8 7 / 8 5 .
Size
THICKNESS
(IN MM)
Class
RATE PER PICE
(USD)
4” 5.4 BK H 16.83
5” 5.4 BK H 19.72
6” 5.4 BK H 22.60
8” 5.4 BK H 25.00
10” 5.4 BK H 29.20
12” 6.0 BK H 38.48
14” 6.0 BK H 70.69
16” 6.0 BK H 88.43
T h e a b o v e r a t e s a r e o n F O B ( M u m b a i ) P o r t b a s i s
.
T e r m s a n d C o n d i t i o n s : -
D
e l i v e r y :
Shipment within 45 to 60 days after receipt of L/C.
P a y m e n t :
100% Irrevocable L/C at Sight.
S h i p m e n t :
By 20 ft. container.
I
n s p e c t i o n &
L
e g a l i z a t i o n C h a r g e s :
To Buyer’s Account.
W i t h b e s t r e g a r d s
,
F o r R a g a
I
n t e r n a t i o n a l s
Manager (International Trade)
14
F A T
I
M A
E
N T
E
R P R
I
C
E
S
JEBEL ALI, FREE ZONE
UAE
15 April, 2012
SELLER: BUYER:
R A G A
I
N T
E
R N A T
I
O N A
L
S F A T
I
M A
E
N T
E
R P R
I
C
E
S
PRAKASH NAGAR, ROHTAK ROAD POST BOX NO: 245738
BAHADURGARH-124507 JEBEL ALI, FREE ZONE
HARYANA, INDIA UAE (Dubai)
P
U
R C H A S
E
O R
D
E
R :
921-00835
IT IS HEREBY CONFIRMED THAT THE BUYER HAS AGREED TO BUY AND THE SELLER HAS AGREED TO SELL THE
MATERIAL AS SPECIFIED BELOW SUBJECT TO THE TERM AND CONDITION AS SETOUT HERE UNDER, WHICH
FORM AN INTIGRATED PART OF THIS AGREEMENT:
G O O
D
S
: ERW MS BLACK PIPE BEVEL END IN 6.00MTR LENGTH
±0.05MTR CONFIRMING TO ASTM A53
Q
U
A
L I
T Y :
ASTM A53 GRB
P A C K
I
N G :
BUNDLES OF 20MT MAX.
*
F O B ( M
U
M B A
I
) B A S
I
S G R A N
D
T O T A
L
C O N T R A C T :
USD
T O
L E
R A N C
E
:
-0/+5% PER SIZE AND IN TOTAL QUANTITY
O R
I
G
I
N :
INDIA
SIZE PCS WEIGHT (MT) PRICE (USD/PCS) AMUNT (USD)
8”×6.35MM×6M33.31KGS/MTR 500 99.930 26.000 13000.00
10”×6.35MM×6M41.77KGS/MTR 300 75.186 31.006 9302.00
14” ×9.52MM×6M81.25”KGS/MTR 200 97.500 86.040 17208.00
GRAND TOTAL:
3 9 5 1 0 . 0 0
15
1 4 .
P R O
D U
C T
: ERW MS BLACK PIPE AND G.I. PIPE (ERW: Electronic Resistance Welding)
C A T
E
G O R Y
:ENGINEERING GOODS
G R O
U
P C O
D
E :61
I
T
E
M C O
D
E :107
H . S . C O
D
E :7306.10.21
P R O
D U
C T S P
E
C
I
F
I
C A T
I
O N
: (ACCORDING TO OUR COMPANY)
OD: 3” (75mm NB) To 16” (380mm NB)
THICKNESS: 3mm To 10mm
LENGTH: 06 MTR (General)
PIPE END:
S W S
= Screw Without Socket
S S
= Screw With Socket
P
E = Plane End
C
L
A S S
: THICKNESS WISE:
LIGHT, MIDIUM, HEAVY
Q
U
A
L I
T Y S T A N
D
A R
D
: I
S
: INDIAN STANDARD
B S
: BRITISH STANDAR
A P
I : AMERICAN PETROLIUM INSTITUTE
A S T M
: AMERICAN SOCIETY OF TESTING MATERIAL
16
EXPORT ER : JAI HIND INTERNATIONALS
PRAKASH NAGAR, ROHTAK ROAD
BAHADURGARH-124507 (HARYANA)
IMPORTER : FATIMA ENTERPRISES
POST BOX NO. 245738
JEBEL ALI, FREE ZONE (U.A.E.)
ORDER : FM/PO/921-00835
PRODUCT : ERW, MS BLACK PIPES
DESCRIPTION
PRICES : USD: 39510.00 FOB MUMBAI, INDIA
TOTAL QUANTITY: 1000 PICES WITH FOLLOWING SIZE:
8”×6.35MM×6M33.31KGS/MTR - 500
10”×6.35MM×6M41.77KGS/MTR – 300
14” ×9.52MM×6M81.25”KGS/MTR- 200
TOTAL AMMOUNT : USD: 39510.00 FOB MUMBAI
QUALITY : ASTM A53 GRB
PACKING : BUNDLES OF 20MT MAX.
PAYMENT TERM : ADVANCE PAYMENT 20% OF P.I. VALUE
AND REST ON D/P BASIS
DELIVERY TERM : SUPPLY TO BE SENT ON OR BEFORE 12 JUN 2012
SHIPMENT : TOTAL QUANTITY SHOULD BE SENT FROM
MUMBAI PORT, INDIA TO JEBEL ALI, UAE
TRANSSHIPMENT OR PART SHIPMENT
IS ALLOWED.
DOCUMENTS :
17
REQUIRED THE SHIPMENT SHOULD BE ACCOMPAINED BY
THE FOLLOWING DOCUMENTS:
• SIGHT DRAFT
• B/L(3 ORIGINAL AND 3 COPIES)
• COMERCIAL INVOICE (1 ORIGINAL AND4 COPIES)
• P/L (3 COPIES)
• Certificate by Beneficiary that one non-negotiable set has been sent to
applicant within 3 days of shipment date.
• Vessel Certificate “The carrying vessel of goods not more than 25 years”
THE DOCUMENTS MUST BE PRESENTED FOR NEGOTIATION WITHIN 7 DAYS AFTER THE DATE OF SHIPMENT.
18
9 . A c t i v i t y p r o f i l e
S N O A C T I V I T Y D A T E
1
Received the order from the Buyer 10-Apr-12
2
Scrutiny of the order 10-Apr-12
3
Confirmation from the Buyer 17-Apr-12
4
Acknowledgement & acceptance of the order 18-Apr-12
5
Application for ECGC cover 19-Apr-12
6
Received advance amount from Buyer against purchase order 22-Apr-12
7
Apply for Pre Shipment finance 22-Apr-12
8
Place the order to production department (PPC) 25-Apr-12
R
e g u l a r f o l l o w u p w i t h p r o d u c t i o n d e p a r t m e n t
F
o r P r e - s h i p m e n t I n s p e c t i o n & t o m a k e d e l i v e r y o f g o o d s i n t i m e
9
Production process 25.4.12 to 20.5.12
1 0
Export packing and Marking of goods as per requirement 24-May-12
1 1
Preparing pre- shipment Documents for custom clearance 25-May-12
1 2
Handover the pre shipment doc. To CHA 26-May-12
1 3
Goods Sent to ICD Tuglkabad 26-May-12
1 4
Transportation of goods to sea port Mumbai 28-May-12
1
5
Container reached to Mumbai port 3-Jun-12
1 6
Goods shipped to Buyer's country 5-Jun-12
1 7
Information to Buyer about the expected date of the consignment 5-Jun-12
1 8
Obtain shipping doc. From CHA 6-Jun-12
1 9
Prepare Document For Negotiation 7-Jun-12
2 0
Present the Document To Bank for negotiation 9-Jun-12
2 1
Obtain BRC 25-Jun-12
19
1 0 .
E
x p l a n a t i o n o f a c t i v i t y ( H o w
I
d i d i t )
We had been taught in the FTDC (Import Export Management course) about the complete activity for export
& import. First of all I planned to do export of steel in Dubai (UAE). And started locating the buyer and
participated in Yearly International Trade fair, at New Delhi. I got an enquiry from M/s Fatima Enterprises,
Dubai (UAE).
Later on did the following things:-
Sent a price quotation to M/s Fatima Enterprises and received a purchase order.
I scrutinize the export order and sent confirmation for acceptance to importer
Received acknowledgement and acceptance for order.
Then Started production execution of export order.
Meanwhile contact to Export inspection agency for pre-shipment inspection of goods.
After completion of production export packing & marking of goods as per requirements.
Then contacted to CHA (Clearing House agent) and submitted him pre-shipment document for custom
clearances.
Booking of container for goods sending to Tuglkabad ICD, New Delhi. From their vessel will be send to
Mumbai sea port.
When containers are shipped for the buyer’s country, expected date of consignment would be
reported to buyer.
After I would obtain the entire shipping document from Clearing House Agent.
Preparation of document for negotiation and submission it to the Bank.
After realization of export shipment. I would go for issuing bank realization certificate.
And taking Bank realization certificate from the Authorized dealer Bank, I would be able to apply for
benefit of post export.
This all activity involved many authorities like: Export credit and guarantee corporation of India, Export
Inspection agencies, Clearing House agent (Freight Forwarders), Shipping Lines, Custom authorities etc. And
for formulate the proper & smooth execution of export order every export must follow these above
mentioned activity.
20
1 1 . C o r r e s p o n d e n c e , w h e r e r e q u i r e d
I got an exporter through Trade fair (International trade fair). Initially M/s Fatima Enterprises Dubai
(UAE) raised an enquiry during the trade fair and didn’t respond for a few days. I started
communication through email in connection with enquiry & eventually they raised a purchase order
on us for USD 39 K Appx.
Correspondence for following required activity:-
• Acceptance of goods & payment from bank of buyer.
• Reply for discrepancy in export document: Description of goods was not as per export
contract on document. But specification of goods was true and good in physical form.
• After successful completion of order, contacted to buyer for the more futuristic business. And
we agreed on certain terms and conditions
21
1 2 .
D
o c u m e n t a t i o n f o r e x e c u t i o n o f t h e o r d e r
According the confirm Sale orders following document need to be presented those are here under:
1. Sight Draft
2. Bill of lading (3 Original and 3 copies)
3. Commercial Invoice(1 Original and 4 Copies)
4. Packing List (1 Original 3 Copies)
5. Certificate by Beneficiary that one non-negotiable set has been sent to applicant within 3 days of
shipment date.
6. Vessel certificate by beneficiary.
22
1 3 .
D
i s p a t c h o f g o o d s
When business sold goods from a company and the goods are shipped to another business men and business receives then that is
called dispatch of goods.
3 Major aspects needed for dispatch of goods those are as follows:
1 .
Identify the goods and check that the goods being dispatched match the specification provided.
2 .
Dispatch the goods in accordance with agreed control & instructions.
3. Indentify the problem with dispatching goods and take an appropriate action.
According the product i.e. exports of Steel Pipes:-
1. Checking of goods
2. Container shall be booked for pre carriage to the port.
3. Taking a insurance cover for transit.
4. Packing of goods in export standard like
V
Shaped Binded packing for steel pipes & spiral pipes.
5. Ensure that area used to dispatch the goods is clean and clear of obstructions and hazards.
6. Comply with all the relevant work and safety legalization, regulation standards and organizational procedure.
7. Ensure that the goods are shipped to the cargo in proper condition.
If the above points are remembered during the dispatch of goods it would be successful dispatch of goods.
I
n t e r a c t e d w i t h t h e f o l l o w i n g p e r s o n w h o h a s i m m e n s e e x p e r i e n c e i n
L
o g i s t i c a n d S u p p l y C h a i n m g m t .
(1)Mr. Tanuj Verma
Manager (Sales Solution & Support)
Fedex Transport & Supply chain Services (I) Pvt. Limited
D-16/1 Okhla Phase -2 New Delhi
(Regional office North & East)
Email: tanuj.verma@fedex.com
(2)Mr. Amit Sharma
Sr. Executive (Sales Solution & Support)
Fedex Transport & Supply chain Services (I) Pvt. Limited
Malhan Arcade 2 Vasant Kunj
New Delhi
(3) Mr. Anup Brhamankar
Asstt. Manager (Business development)
Transport Corporation of India Ltd.
Email: anup.bramhankar@tcixps.com
North Regional office- Rambagh
New Delhi
23
4 . C o l l e c t i o n / S e t t l e m e n t o f p a y m e n t
There are several ways to settlement of payment in Export & Import business. This should be applied wisely.
There are two ways of Method of Payment i.e. DP & DA (Documents against payment /Document against
acceptance). Herein Settlement of payment for export order is through 20 percent of advance payment and
balance through Document against (D/P) Mode.
If the documents are under letter of credit it must be as per compliance of Letter of credit and Uniform
Custom & practice for documentary credit version 2007 revision 600.
This project is based on collection basis under DP Mode Hence, URR (Uniform regulatory rules 600)would be
followed.
24
25
After the successfully execution of export order, I have observed the procedure deeply and while preparing
the Project report learnt the functions of different government and nongovernmental organizations.
And my more achievements are:
• I learnt how to deal with various people/bodies in export market.
• I had been visited various Export Promotion Councils& organizations, which made me aware of
different export incentives given by the government.
• I also visited an export house.
• However, this project report helped me gain throughout understanding for export process and
simultaneously related segments.

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Project Report_Export of Steel Goods

  • 1. 1 Raj Nagre April, 2012 - August 2012 Foreign Trade Development centre, South Extension Part –I New Delhi S u b m i t t e d b y : R a j N a g r e , S e s s i o n – M o r n i n g 9 . 3 0 a m – 1 1 . 3 0 a m B a t c h : A p r i l , 2 0 1 2 T o A u g u s t , 2 0 1 2
  • 2. 2
  • 3. 3 P a r t i c u l a r s P a g e N o . 1. Foreword 0 5 2. Acknowledgement 0 6 3. Objective of the study 0 7 4. Company profile (in brief) 0 8 5. Brief report on present status of industry: Problems & Prospects 0 9 6. Locating Buyer 1 2 7. Export order 1 4 8. Product in details 1 6 9. Activity profile 1 9 10. Explanation of activity ( How I did it) 2 0 11. Correspondence, where required 2 1 12. Documentation for execution of the order 2 2 13. Dispatch of goods 2 3 14. Collection/Settlement of payment 2 4 15. Summery 2 6
  • 4. 4 This project is the part of Foreign trade development management course i.e. Diploma in Import-Export management. During the span of four months vocational academic course every student are compulsory to perform several test and presentation for their learning. This provides them experience to stand in practical life. Each lecture pertaining with purpose of proper completion of foreign trade. Theoretical, lecture starts with basic of foreign trade and history of export-import into India. How gradually, it strapped into India and other countries. Why International trade is indispensible for country’s growth and development. Reason, because post independence our demands were hefty and coffers were empty. Hence it was started with export policy, where as only export policy announced by government of India and promoted to export oriented activities. But to produce as per the international requirement, technology and quality standard are must. Then Import also initiated and government announced Exim Policy (Export Import Policy) This project is test for our understanding about practical approach of foreign Trade (Export Import Trade).During this project I interacted with several process heads of foreign trade viz. Manufacturers, Freight forwarders, Clearing House Agent, Export Import Mangers, Banker, Renowned financial institution, Logistic managers, Marketing experts etc. They all are expert in their field. I may mention that the views and process expressed in this project are best of my understanding and are not to be attributed to any organization or institution. I welcome suggestion for improving future process of the trade and export import business. R a j N a g r e New Delhi September 2, 2012
  • 5. 5 2 . A c k n o w l e d g e m e n t I would like to express my deep sense of gratitude to FTDC and its Member faculty for keeping this Project report in our syllabus. Because working on this project gave me a great confidenc e and practical knowledge. I would like to thanks my all faculty members, which gave us many tips regarding to execute any export order. M y s p e c i a l t h a n k s t o : My Mother, Leela Nagre and My Sister, Gayathri. Her motivation and encouragement has enabled me to complete this course. And I am also thankful to my Dear Friend Ashish Sethia and Jai Joshi. Who enlightened me a lot about this course. Once again I am thankful to all people who supported me to complete this Project report, without their corporation I won’t be able to complete this project. Raj Nagre
  • 6. 6 3 . O b j e c t i v e o f t h e s t u d y This project gives us much aspect to learn the intricacy about export import business and behavior of foreign market as well as standard practices in overseas trade. Until we step into the on field work of export import. One’s can’t have knowledge of step by step process therefore this project study and Training of FTDC, South Ex. New Delhi give us knowledge about what is export Import, International marketing, How to start a export firm, How to select a product, How to locate a Buyer, Payment methods for business, Its documentation process as per ADS system, Rules and regulation for Export Import from exporting country and Importing country’s trend. Which are regulated by Reserve Bank of India, Ministry of finance & commerce, Director General of foreign trade in India, Authorized dealers Bank, Custom Authorities, Export Promotion Councils & etc. Those all are accumulated for controlling export import trade. Main objectives are as under given below:- My objective of doing this Project report is to execute the given export order on foreign market. This first involves to scrutiny of the export order and find the discrepancies in the export order, is it executable or not in the given time by the buyer. Another objective is to learn the basic function of the Export Trade. How one person can export with the help of different government organization? To learn how to enter this competitive export market. Thus this Project report is very important for me because I learnt many essential and practical things during making this Project report. I am sure that this experience will be helpful to enter the export trade.
  • 7. 7 4 . C o m p a n y p r o f i l e ( i n b r i e f ) Company Name : RAGA INTERNATIONALS Prakash Nagar Bahadurgarh, Haryana-124507 Type of Exporter : Manufacturer Exporter Type of Company : Private Limited (set up in 1998-99) IE Code : 9355868151 Banker : SBI Bahadurgarh (Haryana) AD Code : 632-8753216 EPC : Engineering Goods Product : ERW MS Black Pipe & G.I. Pipe Production capacity: 100000MT per annum Export : 15000MT per annum RAGA INTERNATIONALS have a high technology plant. It is most growing company in international business. This is dealing in engineering goods as a manufacturer exporter.
  • 8. 8 5 . B r i e f r e p o r t o n p r e s e n t s t a t u s o f i n d u s t r y : P r o b l e m s & P r o s p e c t s India has traditionally been one of the major producers of steel in the world. Till the 1990s the steel industry of India was regulated and controlled by government policies. After the economic reforms of the early 1990s, the Indian steel industry has evolved significantly to conform to global standard. I ndia has set a vision to be an economically developed nation by 2020. By 2011 steel production of India has grown more than 66 MT. The Major sector where consumption of steel is expected to grow in the coming year are: • Construction • Housing • Ground Transportation • Hi Tech engineering industries such as power generation, petrochemicals, fertilizers. P r o b l e m s a n d T h r e a t s t o s t e e l i n d u s t r y : There are certain challenges before the steel industry of India in the recent times. India has been one of the major producers of steel in the world and has also been attracting a lot of foreign direct investment. A few issues would need to be attended to if India wants to be counted as one of the major and most economical producers of steel. The 3 areas that need to be improved upon in the view of the exports are: 1. The infrastructure, 2. A bility to draw the top names in steel, and 3. wealth creation issues. The condition of the infrastructural facilities of the steel industry in India is not at all conducive to a sustainable growth and development of the steel industry of the India. A n d s o m e m i s c e l l a n e o u s p r o b l e m s : I. The Indian steel industry has also not been able to draw the best professionals in the steel industry and that has been a major drawback of the industry. II. The experts are also of the opinion that not enough policies or measures have been adopted to amend the situation in case of the infrastructural facilities available in the steel sector. 1. One of the major reasons for such problems is the consistently increasing population of India.
  • 9. 9 Even though India is capable of producing steel at a good rate and also increase the volume of production there is not enough land available to support such activities. The design institutions in India have not been successful at recruiting the best of engineers and metallurgists in India. This has affected the technological aspect of the Indian steel industry. The experts are of the opinion that this issue has to be countered in order to reduce the dependence on the overseas technological assistance. T h e s t e p s t a k e n b y T a t a S t e e l a r e i n s t r u c t i v e i n s u c h a c o n t e x t . The company has been increasing public awareness about the steel industry through books and educational sessions at the Indian Institute of Technology at Kharagpur. In million tonnes Year Import Export Nett 2002-03 1.77 5.28 3.51 2003-04 1.83 5.89 4.06 2004-05 2.60 4.97 2.36 2005-06 4.81 5.19 0.38 2006-07 5.30 5.91 0.61 Source: Joint Plat committee, Annual Report 2007-08.
  • 10. 10 N o t e : R O W : R e s t o f t h e W o r l d S o u r c e : S t e e l S t a t i s t i c a l Y e a r b o o k 2 0 0 7 , I I S I C o m m i t t e e o n E c o n o m i c S t u d i e s - B r u s s e l s , 2 0 0 7 S N O C o m p a n y m m t S h a r e % 1 ArcelorMittal 116.40 8.66 2 Nippon Steel 35.70 2.66 3 JFE 34.00 2.53 4 POSCO 31.10 2.31 5 Baosteel 28.60 2.13 6 T a t a S t e e l 2 6 . 5 0 1 . 9 7 7 Anshan Benxi 23.60 1.75 8 Jiangsu Shagang 22.90 1.70 9 Tangshan 22.80 1.70 10 US Steel 21.50 1.60 11 Wuhan 20.20 1.50 12 Nucor 20.00 1.49 13 Gerdau Group 18.60 1.38 14 Riva 17.90 1.33 15 Severstal 17.30 1.29 T o p 1 5 P r o d u c e r s 4 5 7 . 1 0 3 4 . 0 0 O t h e r s 8 8 7 . 2 0 6 6 . 0 0 1 3 4 4 . 3 0 1 0 0 . 0 0
  • 11. 11 • L o c a t i n g B u y e r After completion of the preliminary task of export, we move for locating the buyer into overseas market that is possible through several ways. Unless we choose the proper method for locating the buyer, It may not be giving result. I would like to use 3 methods for locating the buyer: 1. Buying Agents 2. Trade Fairs 3. Internet 1 . B u y i n g A g e n t s : Buying agents are very use full where languages are problem in export market and they can be proven major role player. a . Middle East and Gulf country have lots of requirement for Steel and buying agents play very important role. b . Buying agents take commission 3% to 5% that is very less and easily affordable buy exporter. c . They provide support for exporter to timely payments and healthy relation between buyer & seller. d . They provide otherwise service also like legalization from importer country, warehousing facility, participation in trade fare in country. e. Buying agents can be located through internet and embassy/High commission of importing country or local chamber commerce. 2 . T r a d e F a i r s : T r a de fairs offers very best opportunity to exporter to meet their potential buyer information about international markets. a . There are some important points to remember before attending the Trade fairs. b . Our Objective should be clear about the product & its reliability. c . Planning for trade fair budget in advance. d . Presentation and location of your exhibition should on most visited place. e . Trade fair should be repeatedly not only once. f . Provide attractive broachers for product. g . T h e r e s h o u l d b e f o l l o w i n g i n f o r m a t i o n a b o u t t h e p r o d u c t . Space stands available. h. Application deadline & cost i . Insurance & security arrangement. j . Deadline for arrival of goods.
  • 12. 12 k . Duties and taxes Different types of Trade fairs:- i. General Fairs ii. Specialized Trade fairs iii. Permanent/Yearly Trade fairs iv. Solo exhibition. 3. I n t e r n e t : Internet is also suitable way to find out the buyer and Cost is only with some websites, almost it is free of cost. Exporter can launch its website also and can be resister to many export directories.
  • 13. 13 • E x p o r t o r d e r R A G A I N T E R N A T I O N A L S Prakash Nagar, Rohtak Road, Bahadurgarh-124507 (Haryana) Ref: JH/06/00147 10 April, 2012 F A T I M A E N T E R P R I S E S P o s t B o x N o : 2 4 5 7 3 J e b e l A l i , F r e e Z o n e U A E Kind Attn: Mr. Husein Abbas (Purchasing Manager) Dear Sir, Ref. to your visit at Indian Trade Fair (New Delhi) and are pleased to submit our quote as follows: E R W M . S . B l a c k p i p e s b e v e l e n d s i n t h e l e n g t h o f 6 . 0 0 m t r . + / - 0 . 0 5 m t r . C o n f o r m i n g t o B S : 1 3 8 7 / 8 5 . Size THICKNESS (IN MM) Class RATE PER PICE (USD) 4” 5.4 BK H 16.83 5” 5.4 BK H 19.72 6” 5.4 BK H 22.60 8” 5.4 BK H 25.00 10” 5.4 BK H 29.20 12” 6.0 BK H 38.48 14” 6.0 BK H 70.69 16” 6.0 BK H 88.43 T h e a b o v e r a t e s a r e o n F O B ( M u m b a i ) P o r t b a s i s . T e r m s a n d C o n d i t i o n s : - D e l i v e r y : Shipment within 45 to 60 days after receipt of L/C. P a y m e n t : 100% Irrevocable L/C at Sight. S h i p m e n t : By 20 ft. container. I n s p e c t i o n & L e g a l i z a t i o n C h a r g e s : To Buyer’s Account. W i t h b e s t r e g a r d s , F o r R a g a I n t e r n a t i o n a l s Manager (International Trade)
  • 14. 14 F A T I M A E N T E R P R I C E S JEBEL ALI, FREE ZONE UAE 15 April, 2012 SELLER: BUYER: R A G A I N T E R N A T I O N A L S F A T I M A E N T E R P R I C E S PRAKASH NAGAR, ROHTAK ROAD POST BOX NO: 245738 BAHADURGARH-124507 JEBEL ALI, FREE ZONE HARYANA, INDIA UAE (Dubai) P U R C H A S E O R D E R : 921-00835 IT IS HEREBY CONFIRMED THAT THE BUYER HAS AGREED TO BUY AND THE SELLER HAS AGREED TO SELL THE MATERIAL AS SPECIFIED BELOW SUBJECT TO THE TERM AND CONDITION AS SETOUT HERE UNDER, WHICH FORM AN INTIGRATED PART OF THIS AGREEMENT: G O O D S : ERW MS BLACK PIPE BEVEL END IN 6.00MTR LENGTH ±0.05MTR CONFIRMING TO ASTM A53 Q U A L I T Y : ASTM A53 GRB P A C K I N G : BUNDLES OF 20MT MAX. * F O B ( M U M B A I ) B A S I S G R A N D T O T A L C O N T R A C T : USD T O L E R A N C E : -0/+5% PER SIZE AND IN TOTAL QUANTITY O R I G I N : INDIA SIZE PCS WEIGHT (MT) PRICE (USD/PCS) AMUNT (USD) 8”×6.35MM×6M33.31KGS/MTR 500 99.930 26.000 13000.00 10”×6.35MM×6M41.77KGS/MTR 300 75.186 31.006 9302.00 14” ×9.52MM×6M81.25”KGS/MTR 200 97.500 86.040 17208.00 GRAND TOTAL: 3 9 5 1 0 . 0 0
  • 15. 15 1 4 . P R O D U C T : ERW MS BLACK PIPE AND G.I. PIPE (ERW: Electronic Resistance Welding) C A T E G O R Y :ENGINEERING GOODS G R O U P C O D E :61 I T E M C O D E :107 H . S . C O D E :7306.10.21 P R O D U C T S P E C I F I C A T I O N : (ACCORDING TO OUR COMPANY) OD: 3” (75mm NB) To 16” (380mm NB) THICKNESS: 3mm To 10mm LENGTH: 06 MTR (General) PIPE END: S W S = Screw Without Socket S S = Screw With Socket P E = Plane End C L A S S : THICKNESS WISE: LIGHT, MIDIUM, HEAVY Q U A L I T Y S T A N D A R D : I S : INDIAN STANDARD B S : BRITISH STANDAR A P I : AMERICAN PETROLIUM INSTITUTE A S T M : AMERICAN SOCIETY OF TESTING MATERIAL
  • 16. 16 EXPORT ER : JAI HIND INTERNATIONALS PRAKASH NAGAR, ROHTAK ROAD BAHADURGARH-124507 (HARYANA) IMPORTER : FATIMA ENTERPRISES POST BOX NO. 245738 JEBEL ALI, FREE ZONE (U.A.E.) ORDER : FM/PO/921-00835 PRODUCT : ERW, MS BLACK PIPES DESCRIPTION PRICES : USD: 39510.00 FOB MUMBAI, INDIA TOTAL QUANTITY: 1000 PICES WITH FOLLOWING SIZE: 8”×6.35MM×6M33.31KGS/MTR - 500 10”×6.35MM×6M41.77KGS/MTR – 300 14” ×9.52MM×6M81.25”KGS/MTR- 200 TOTAL AMMOUNT : USD: 39510.00 FOB MUMBAI QUALITY : ASTM A53 GRB PACKING : BUNDLES OF 20MT MAX. PAYMENT TERM : ADVANCE PAYMENT 20% OF P.I. VALUE AND REST ON D/P BASIS DELIVERY TERM : SUPPLY TO BE SENT ON OR BEFORE 12 JUN 2012 SHIPMENT : TOTAL QUANTITY SHOULD BE SENT FROM MUMBAI PORT, INDIA TO JEBEL ALI, UAE TRANSSHIPMENT OR PART SHIPMENT IS ALLOWED. DOCUMENTS :
  • 17. 17 REQUIRED THE SHIPMENT SHOULD BE ACCOMPAINED BY THE FOLLOWING DOCUMENTS: • SIGHT DRAFT • B/L(3 ORIGINAL AND 3 COPIES) • COMERCIAL INVOICE (1 ORIGINAL AND4 COPIES) • P/L (3 COPIES) • Certificate by Beneficiary that one non-negotiable set has been sent to applicant within 3 days of shipment date. • Vessel Certificate “The carrying vessel of goods not more than 25 years” THE DOCUMENTS MUST BE PRESENTED FOR NEGOTIATION WITHIN 7 DAYS AFTER THE DATE OF SHIPMENT.
  • 18. 18 9 . A c t i v i t y p r o f i l e S N O A C T I V I T Y D A T E 1 Received the order from the Buyer 10-Apr-12 2 Scrutiny of the order 10-Apr-12 3 Confirmation from the Buyer 17-Apr-12 4 Acknowledgement & acceptance of the order 18-Apr-12 5 Application for ECGC cover 19-Apr-12 6 Received advance amount from Buyer against purchase order 22-Apr-12 7 Apply for Pre Shipment finance 22-Apr-12 8 Place the order to production department (PPC) 25-Apr-12 R e g u l a r f o l l o w u p w i t h p r o d u c t i o n d e p a r t m e n t F o r P r e - s h i p m e n t I n s p e c t i o n & t o m a k e d e l i v e r y o f g o o d s i n t i m e 9 Production process 25.4.12 to 20.5.12 1 0 Export packing and Marking of goods as per requirement 24-May-12 1 1 Preparing pre- shipment Documents for custom clearance 25-May-12 1 2 Handover the pre shipment doc. To CHA 26-May-12 1 3 Goods Sent to ICD Tuglkabad 26-May-12 1 4 Transportation of goods to sea port Mumbai 28-May-12 1 5 Container reached to Mumbai port 3-Jun-12 1 6 Goods shipped to Buyer's country 5-Jun-12 1 7 Information to Buyer about the expected date of the consignment 5-Jun-12 1 8 Obtain shipping doc. From CHA 6-Jun-12 1 9 Prepare Document For Negotiation 7-Jun-12 2 0 Present the Document To Bank for negotiation 9-Jun-12 2 1 Obtain BRC 25-Jun-12
  • 19. 19 1 0 . E x p l a n a t i o n o f a c t i v i t y ( H o w I d i d i t ) We had been taught in the FTDC (Import Export Management course) about the complete activity for export & import. First of all I planned to do export of steel in Dubai (UAE). And started locating the buyer and participated in Yearly International Trade fair, at New Delhi. I got an enquiry from M/s Fatima Enterprises, Dubai (UAE). Later on did the following things:- Sent a price quotation to M/s Fatima Enterprises and received a purchase order. I scrutinize the export order and sent confirmation for acceptance to importer Received acknowledgement and acceptance for order. Then Started production execution of export order. Meanwhile contact to Export inspection agency for pre-shipment inspection of goods. After completion of production export packing & marking of goods as per requirements. Then contacted to CHA (Clearing House agent) and submitted him pre-shipment document for custom clearances. Booking of container for goods sending to Tuglkabad ICD, New Delhi. From their vessel will be send to Mumbai sea port. When containers are shipped for the buyer’s country, expected date of consignment would be reported to buyer. After I would obtain the entire shipping document from Clearing House Agent. Preparation of document for negotiation and submission it to the Bank. After realization of export shipment. I would go for issuing bank realization certificate. And taking Bank realization certificate from the Authorized dealer Bank, I would be able to apply for benefit of post export. This all activity involved many authorities like: Export credit and guarantee corporation of India, Export Inspection agencies, Clearing House agent (Freight Forwarders), Shipping Lines, Custom authorities etc. And for formulate the proper & smooth execution of export order every export must follow these above mentioned activity.
  • 20. 20 1 1 . C o r r e s p o n d e n c e , w h e r e r e q u i r e d I got an exporter through Trade fair (International trade fair). Initially M/s Fatima Enterprises Dubai (UAE) raised an enquiry during the trade fair and didn’t respond for a few days. I started communication through email in connection with enquiry & eventually they raised a purchase order on us for USD 39 K Appx. Correspondence for following required activity:- • Acceptance of goods & payment from bank of buyer. • Reply for discrepancy in export document: Description of goods was not as per export contract on document. But specification of goods was true and good in physical form. • After successful completion of order, contacted to buyer for the more futuristic business. And we agreed on certain terms and conditions
  • 21. 21 1 2 . D o c u m e n t a t i o n f o r e x e c u t i o n o f t h e o r d e r According the confirm Sale orders following document need to be presented those are here under: 1. Sight Draft 2. Bill of lading (3 Original and 3 copies) 3. Commercial Invoice(1 Original and 4 Copies) 4. Packing List (1 Original 3 Copies) 5. Certificate by Beneficiary that one non-negotiable set has been sent to applicant within 3 days of shipment date. 6. Vessel certificate by beneficiary.
  • 22. 22 1 3 . D i s p a t c h o f g o o d s When business sold goods from a company and the goods are shipped to another business men and business receives then that is called dispatch of goods. 3 Major aspects needed for dispatch of goods those are as follows: 1 . Identify the goods and check that the goods being dispatched match the specification provided. 2 . Dispatch the goods in accordance with agreed control & instructions. 3. Indentify the problem with dispatching goods and take an appropriate action. According the product i.e. exports of Steel Pipes:- 1. Checking of goods 2. Container shall be booked for pre carriage to the port. 3. Taking a insurance cover for transit. 4. Packing of goods in export standard like V Shaped Binded packing for steel pipes & spiral pipes. 5. Ensure that area used to dispatch the goods is clean and clear of obstructions and hazards. 6. Comply with all the relevant work and safety legalization, regulation standards and organizational procedure. 7. Ensure that the goods are shipped to the cargo in proper condition. If the above points are remembered during the dispatch of goods it would be successful dispatch of goods. I n t e r a c t e d w i t h t h e f o l l o w i n g p e r s o n w h o h a s i m m e n s e e x p e r i e n c e i n L o g i s t i c a n d S u p p l y C h a i n m g m t . (1)Mr. Tanuj Verma Manager (Sales Solution & Support) Fedex Transport & Supply chain Services (I) Pvt. Limited D-16/1 Okhla Phase -2 New Delhi (Regional office North & East) Email: tanuj.verma@fedex.com (2)Mr. Amit Sharma Sr. Executive (Sales Solution & Support) Fedex Transport & Supply chain Services (I) Pvt. Limited Malhan Arcade 2 Vasant Kunj New Delhi (3) Mr. Anup Brhamankar Asstt. Manager (Business development) Transport Corporation of India Ltd. Email: anup.bramhankar@tcixps.com North Regional office- Rambagh New Delhi
  • 23. 23 4 . C o l l e c t i o n / S e t t l e m e n t o f p a y m e n t There are several ways to settlement of payment in Export & Import business. This should be applied wisely. There are two ways of Method of Payment i.e. DP & DA (Documents against payment /Document against acceptance). Herein Settlement of payment for export order is through 20 percent of advance payment and balance through Document against (D/P) Mode. If the documents are under letter of credit it must be as per compliance of Letter of credit and Uniform Custom & practice for documentary credit version 2007 revision 600. This project is based on collection basis under DP Mode Hence, URR (Uniform regulatory rules 600)would be followed.
  • 24. 24
  • 25. 25 After the successfully execution of export order, I have observed the procedure deeply and while preparing the Project report learnt the functions of different government and nongovernmental organizations. And my more achievements are: • I learnt how to deal with various people/bodies in export market. • I had been visited various Export Promotion Councils& organizations, which made me aware of different export incentives given by the government. • I also visited an export house. • However, this project report helped me gain throughout understanding for export process and simultaneously related segments.