• IMPORTS

    IMPORTS

    Rules and Guidelines for Import

    Registration of importer is a pre-requisite for import of goods. The Customs will not allow clearance of goods unless the importer has obtained IEC Number from issuing authority. In India, IEC number or Importers Exporters Code is issued by the DGFT.

    There are various rules and guidelines in respect of various commodities and category of importers.  These are available in the following publications issued by the Ministry of Commerce, Government of India and revised from time to time:

    • Foreign Trade Policy, 2015 – 2020
    • Handbook of Procedures
    • Standard Input – Output Norms
    • ITC (HS) Classification of Import and Export Items

     

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  • TRADE FINANCE SERVICES -2

    TRADE FINANCE SERVICES

    Inward Remittance

    Receipt of foreign exchange in India is called Inward remittance. Apart from exports, there are other transactions, which generate inward remittance. For example, Non-resident Indian staying abroad may remit foreign exchange to their relatives in India.

    There are no restrictions on receiving remittances from abroad, through authorized dealers, in foreign exchange in India.

     

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  • STRUCTURED PRODUCTS

    STRUCTURED PRODUCTS

    Factoring

    In a factoring arrangement, the client makes a sale, delivers the product or service and generates an invoice.

    The factor buys the right to collect on that invoice by agreeing to pay the client the invoice’s face value less a discount—for example, 2 to 6 percent.

    The factor pays 75 percent to 80 percent of the face value immediately and pays the balance (less the discount) when the client’s customer pays.

     

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  • INTERNATIONAL TRADE

    INTERNATIONAL TRADE

    Overview 

    International trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labour or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production.

    Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labour, the United States imports goods that were produced with Chinese labour.

     

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  • IMPORT FINANCE

    IMPORT FINANCE

    External Commercial Borrowings (ECB)

    As per revised guidelines of Reserve Bank of India, ECBs are commercial loans raised by eligible resident entities from recognised non-resident entities and should conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc. The parameters apply in totality and not on a standalone basis. The framework for raising loans through ECB (herein after referred to as the ECB Framework) comprises the following three tracks:

    Track I: Medium term foreign currency denominated ECB with minimum average maturity of 3/5 years.

    Track II: Long term foreign currency denominated ECB with minimum average maturity of 10 years.

    Track III: Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years.

     

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  • export-2

    EXPORTS

    Reasons for exporting:

    • To expand the business and to reduce the dependence in the local market
    • To earn foreign exchange
    • To increase the profit
    • To explore newer customers and vendors in the overseas
    • To spread the risk, such as, to offset lack of demand for seasonal products
    • It improves the economic condition of the country

    Exporting a product is a profitable method that helps to expand the business and reduces the dependence in the local market. Government of India is also supporting exporters through various incentives and schemes to promote Indian export for meeting the much needed requirements for importing modern technology and adopting new technology from MNCs through Joint ventures and collaboration as well as to improve the balance of payments position of the country.

     

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  • Forex-1

    FOREX

    Introduction 

    The existence of national monetary units poses a problem in the settlement of international transactions. The exporter would like to get the payment in the currency of his country. For example, if America Exports, New York exports machinery to India Imports, Mumbai, the former would like to get the payment in US dollars. Payment in Indian Rupees (INR) will not serve their purpose because INR cannot be used as currency in USA.

    On the other hand, the importers in India have their bank accounts in India in INR. A need, therefore, arises for conversion of the currency of the importer’s country into that of the exporter’s country.

    Foreign exchange is the mechanism by which the currency of one country gets converted into the currency of another country.

     

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  • Forfaiting..1

    FORFAITING

    Definition 

    In international trade, forfeiting may be defined as the purchasing of an exporter’s receivables at a discount price by paying cash. By buying these receivables, the forfeiter frees the exporter from credit and the risk of not receiving the payment from the importer.

    It is a mechanism of financing exports by discounting export receivables evidenced by Bills of Exchange or Promissory Notes, without recourse to the seller (viz. exporter), carrying medium to long term maturities on a fixed rate basis (discount) upto 100 per cent of the contract value.

     

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  • Factoring _1

    FACTORING

    Introduction

    Factoring is basically a fund-based facility. In a typical factoring arrangement, the client (you) makes a sale, delivers the product or service and generates an invoice (accounts receivable), and a financial institution / funding source (factor) buys the right to collect on the accounts receivables of the client and pays up to 80% (and on rare cases up to 90%) of the amount immediately on agreement, and the remaining amount i.e. 20% or 10% when the customer pays. The factor also manages sales ledger and also follows up with client’s customers and collects the debts. Usually the period of factoring is 90 to 150 days. Some factoring companies allow even more than 150 days, depending upon the type of agreement or the relation between the factor and the client.

    Because factors extend credit not to their clients but to their clients’ customers, they are more concerned about the customers’ ability to pay than the client’s financial status. Factoring is not a loan; it does not create a liability on the balance sheet or encumber assets. It is the sale of an asset.

     

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  • TRADE FINANCE SERVICES

    TRADE FINANCE

    Definition

    Trade finance may be defined as the financing of international trade.

    Trade finance includes activities, such as, lending, issuing letters of credit, factoring, export credit and insurance, etc.

    Persons / entities involved with trade finance include importers and exporters, banks and financiers, insurers and export credit agencies, as well as other service providers.

    Trade finance is of vital importance to the global economy, with the World Trade Organization estimating that 80 to 90% of global trade is reliant on this method of financing.

     

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