ACKNOWLEDGEMENT

No creation in this world is solo effort. Neither is this summer report. I am obliged to my Faculty
of Management Studies & Research, Aligarh Muslim University Aligarh, for providing me with
the opportunity to choose the organization of my choice, i.e. Javaid Bhai Pvt. Ltd.
I wholeheartedly am grateful to GM-HR of the organization, Mr. Mohammad Aqleem , for
extending his support and helped me to get the internship program in Javaid Bhai Pvt. Ltd.
I would like to place on record my sense of deep appreciation to my supervisor, Mr. Mohd
Salman Assistant Manager at Javaid Bhai Pvt Ltd. who has been great inspiration for me and
provided me the practical exposure of corporate working environment.
I shall be failing in my duties if I do not record my deepest sense of gratitude towards Mr.
Sheeraz Zaidi, incharge of pre shipment documentation at Javaid Bhai Pvt Ltd., for providing
me the opportunity to work under his guidance. I will cherish this learning experience for years
to come.
I am very much obliged for the cooperation extended to me by all the Department members of
Javaid Bhai Pvt. Ltd. and also for their encouragement and guidance.
I am also indebted to all my teachers who have helped me directly or indirectly and to a number
of authors and experts whose references have helped me a lot.
Last but not the least, I express my deep sense of gratitude and sincere thanks to the entire Javaid
Bhai Pvt. Ltd. Team for their continuous and enthusiastic support. Much of the work I have done
would not have been achieved without their co-operation.
ALTAMISH IKRAM
(14MBA-IB-25)
1

DECLARATION
I, Altamish Ikram student of MBA-IB (2014-2016) Department Of Business Administration
Aligarh Muslim University, Aligarh hereby declare that I have completed this project on title of
EXPORT PROCESS AND DOCUMENTATION at JAVAID BHAI PVT Ltd. for the year
2014is an authentic work done by me and it is my own hard work and effort under the guidance
of Mr. Mohammad Salman in the academic year 2014-2015.
I declare that the information submitted is true and original to best of my knowledge.

ALTAMISH IKRAM
(14MBA-IB-25)
Aligarh Muslim University,
Aligarh.

EXECUTIVE SUMMARY
2

The Documentation is the engine of exports in global trade. Documentation facilitates the
movement of freight transfer of title, processing of payment and custom clearance. Without
documentation, the shipment is at a standstill even with the continuing advances in technology
playing a greater role in international business; documentation is still required by all parties
involved in global trade.
I have selected this topic to know about the Export-Import procedure and custom process.
Another objective is to know Documentation process done by CHA (Clearing House Agent) to
clear the goods from CUSTOM.
So understanding the impact of effective export procedure and documentation is very important.
This project details that export process and documentation is going on effectively in Javaid Bhai
Pvt. Ltd.

Table Of Contents
CERTIFICATE

P.No

ACKNOWLEDGEMENT

DECLARATION

EXECUTIVE SUMMARY

Chapter1- Introduction

1.1 Objectives and Limitations

1.2 Company Profile

1.3 Vision

13

1.4 Indian Export

14

1.5 Growth In Indias Export Sector Over the Last Decade

16

1.6 Indian Handicraft Industry

18

1.7 Problem of Indian Handicrafts

22

1.8 Future of Handicraft In India

23

Chapter -2 Research Design

24

2.1 Trends in Indian Handicrafts

25

2.2 SWOT Analysis

44

2.3 Globalization of Craft

45

2.4 Schemes for The Development Of Handicrafts

Chapter -3 Export Process and Documentation

46
51

3.1 Exporters Registration for Starting Export Business

51

3.2 Steps Involved In Export Process

55

3.3 Export Documentation

61

3.4 Incoterms

64

Chapter 4- Logistics

68

4.1 Basic Terms of Logistics

68

4.2 Important Details of C.L Gupta Export Ltd- Logistics

4.3 Workflow of C.L Gupta Export Ltd

73
75

Chapter 5- Billing and Insurance

76

5.1 Billing

76

5.2 Insurance

77

Chapter 6- Conclusion and Recommendations

78

6.1 Conclusion

78

6.2 Recommendation

79

Bibliography / References

81

Annexure 1
Annexure 2
Annexure 3
Annexure 4

CHAPTER- 1

OBJECTIVE OF STUDY

1. To understand the export process in an export house

2. To get familiar with all the parties involved in transferring the goods from the export
to the foreign buyer.
3. To understand all types of documents those are required for exporting.
4. To know the documentation process done by the CHA

LIMITATIONS
1. The research based on only on data provided by government and industry
regarding exports.
2. Due to confidential/security reasons various documents could not be accessed.
3. Often the supervisors were too busy with the official work.

Indian Handicrafts Industry

India is one of the important suppliers of handicrafts to the world market. The Indian handicrafts
industry is highly labour intensive cottage based industry and decentralized, being spread all over
6

the country in rural and urban areas. Numerous artisans are engaged in crafts work on part-time
basis. The industry provides employment to over six million artisans (including those in carpet
trade), which include a large number of women and people belonging to the weaker sections of
the society.
Although exports of handicrafts appear to be sizeable, Indias share in world imports is
miniscule. It is a sector that is still not completely explored from the point of view of hidden
potential areas. India, a country with 29 states and 18 languages and more than 1500 dialects
offers an enormous range of handicrafts from each of the states. Major export-hubs in Uttar
Pradesh are: Moradabad also known as the "Peetalnagari" (City of Brass), Saharanpur for its
wooden articles, Firozabad for Glass. The North Western state of Rajasthan has to offer the
famous Jaipuri quilts, Bagru and Sanganer printed textiles and wooden and wrought iron
furniture from Jodhpur. The coastal state of Gujarat comes with embroidered articles from
Kutch. Narsapur in Andhra Pradesh is famous for its Lace and Lace goods. But this is only a
small part of the total product range. India offers much more.
Handicrafts are classified into two categories:
1. Articles of everyday use
2. Decorative items
The craftsmen use different media to express their originality. The diversity of the handicrafts is
expressed on textiles, metals precious and semi-precious, wood, precious and semi-precious
stones, ceramic and glass.

Textile based handicrafts:

Hand printed textiles including block and screen printing, batik, kalamkari (hand printing by
pen) and bandhani (tie and die) are used in products ranging from bed-covers to sheets, dress
7

material to upholstery and tapestry. The famous embroidered articles of silk and cotton, often
embellished with mirrors, shells, beads, and metallic pieces are also found in India. Embroidery
is done too on leather, felt and velvet etc. This segment of the industry accounts for almost half a
million strong employment in addition to a large number of designers, block makers, weavers
and packers involved in the trade.
Clay, Metal and Jewelry:
Brass, copper, bronze, bell metal are used for a variety of wares and in a variety of finishes.
Scintillating ornaments are available in a wide range of patterns, styles and compositions. Made
from precious metals, base metals, precious and semi-precious stones; these ornaments have
traditional as well as modern styles.
Woodwork:
Wooden articles in India range from the ornately carved to the absolutely simple. One can find
toys, furniture, decorative articles, etc. bearing the art and individuality of the craftsman. India is
known particularly for its lacquered wood articles.
Stone Craft:
The intricately carved stoneware made of marble, alabaster or soapstone, etc., inlaid with
semiprecious stones carry on the heritage of Indian stone crafts.

Glass and Ceramic:

Glass and ceramic products are a fast upcoming segment in the handicrafts from India. The ageold production process of mouth-blowing the glass instills a nostalgic feeling. The varied shapes
of ceramic and glass in a number of colours, would appeal to Western aesthetics while retaining
the Indian touch.
Selected crafts pockets for achieving export goal:

Although each crafts pockets has its particular problems, a few selected craft pockets are
identified based on their past performance for immediate remedial attention to stimulate a
quantum in exports of handicrafts in the coming years.
Moradabad(UP)

For Art metal wares and imitation jewelry

Saharanpur (UP)

For Wooden handicrafts & Wrought iron handicrafts

Jodhpur (Raj.)

For Wooden, Wrought Iron and Sea Shell handicrafts

Narsapur (A.P.)

For Lace and Lace goods

INDIAN HANDICRAFT EXPORT

The exports of Handicrafts have shown an increase of

862.36 crores, from

3720.52 to

4582.88 crores, an increase of 23.18% in rupees term. In dollar terms, the exports have shown
the increase of US $ 101.16 million i.e. the exports increased by 15.21% over the similar period I
cvn 2013- 2014.
During the period, the exports of Art Metal ware, Wood wares, Hand printed Textiles & Scarves,
Embroidered & Crocheted goods, Shawls as art wares, Zari & Zari goods, Imitation Jewelry and
Misc. Handicrafts showed a increasing trend of 17.61%, 28.14%, 13.53%, 11.86%, 39.99%,
14.54%, 45.30% and 23.53% in rupees terms respectively and 7.51%, 17.15%, 3.78%, 2.25%,
27.95%, 4.68%, 32.84% and 18.40% in US$ term respectively. Overall an increase in the rupee
term was 21.70% and in the US $ term was 11.25%.
Export in India is reported by the Directorate General of Commerce. The export of handicraft

was merely Rs 387.00 crores during the year of establishment of EPCH i.e. 1986-87 rose to level
of 27746.84 crores in year 2014-15, reaching an all-time high of 1678.36 INR Billion in March

of 2013 and a record low of 3.75 INR Billion in May of 1978. Indias main exports are
engineering goods (19 percent of total exports), gems and jewelry (15 percent), chemicals (13
percent), agricultural products (9 percent) and textiles (9 percent). India is also one of Asias
largest refined product exporters with petroleum accounting for around 18 percent of total
exports. Indias main export partners are United Arab Emirates (12 percent of total exports) and
United States (11 percent). Others include: China, Singapore, Hong Kong and
Netherlands. This page contains - India Exports - actual values, historical
data, forecast, chart, statistics, economic calendar and news. 2013-08-24

Country-Wise Exports of Handicrafts

10

The major buyers for handicrafts (other than carpets) are as under:

Art Metal wares

U.S.A (27.65%), UAE (11.55%), France (6.18%)

Others (55%)

Wood Wares

U.S.A (30.50%), U.K. (12.87%), Germany (9.28%)

& France (5.56%), Others (41.79%

Hand Printed & Textiles :

U.S.A.

& Scarves

(10.88%). & U.K. (8.7%) Others (45.36%)

Shawls as Art wares

(23.95%),

Germany

(11.11%),

U.A.E

U.A.E. (19.25), Germany (12.62%) & U.S.A

(8.95%), Others (59.18%)

Zari & Zari goods

U.S.A. (26.87%), U.K. (14.07%), & Germany

(5.95%), Others (53.11%)

Imitation Jewellery

U.S.A. (31.85%), U.K. (14.07%), U.A.E. (5.56%),

Others (48.52%)

Miscellaneous
Handicrafts

U.S.A. (29.02%), U.K. (12.50%), Germany (6.50%)

U.A.E. (5.80%) Others (46.18%)

Trends in Indian Export Sector

Exports during August, 2015 were valued at US $21266.31 million (Rs.138384.74 crores) which
was 20.66 per cent lower in Dollar terms (15.22 per cent lower in Rupee terms) than the level of
US $26803.48 million (Rs.163220.33 crores) during August, 2014.Cumulative value of exports
11

for the period April-August 2015-16 was US $111094.47 million (Rs 708933.92 crores) as
against US $132529.64 million ( Rs. 796013.40 crores) registering a negative growth of 16.17
per cent in Dollar terms and 10.94 per cent in Rupee terms over the same period last year.
Indian businesses are losing competitiveness due to high borrowing costs and the relative
strength of the rupee, as well as the country's long-standing weaknesses - bad infrastructure, red
tape and corruption.
However the exports of handicrafts have shown an increase of

862.36 crores, from

3720.52

to 4582.88 crores, an increase of 23.18% in rupees term. In dollar terms, the exports have
shown the increase of US $ 101.16 million i.e. the exports increased by 15.21% over the similar
period in 2013- 2014.

The Government of India latest export policy for the exporters will help in stabilizing the export
growth levels. Similar trend was also observed in the exports of manufacturing sector. High
value commodities like engineering goods and rice registered very high growth rate in the 1st
quarter of this fiscal against the same period last year. The overall exports suggest that the Indian
exports

grew

considerably

across

all

major

exporting

destinations.

The steep decline of the Indian export sector was due to the following reasons -

Exports globally are shrinking as growth in China is contracting and this is a worrying

sign. None of the BRICs countries are showing any recovery in their international trade.
Global Demand: In a broader sense if you go to see our export markets are either

showing stagnant growth or negative for that matter so we need to be patient. In a

global selling market there are a number of things which matter like Forex, Stability
of the countrys currency

12

 Nature of goods: India predominantly exports goods which are produced by a

number of other countries also (except for polished and finished jewelry) and hence
any price fluctuation makes Indian goods unattractive.

Fall in Oil prices: India is a net importer of crude oil. However, the petroleum
products that India export constitute a significant part of our total exports and hence
with the oil glut, this area of our exports has contracted.

Trends In Indian Handicrafts

13

EXPORTS OF HANDICRAFTS
The exports of handicrafts (other than hand knotted carpets) was merely Rs.
387.00 crores during the year of establishment of the Council i.e. 1986-87 rose to
level of 27746.84 Crores in year 2014-15.

(Rs. in Crores)

14

SHARE OF EXPORTS OF HANDICRAFTS IN MAJOR COUNTRIES/REGIONS

15

INDIAN HANDICRAFTS & GIFTS FAIR ( SPRING & AUTUMN )

Indian Handicrafts & Gifts Fair which today had become a show window of Indian handicrafts
among all the leading overseas buyers needs no introduction the show is being organized since
1994. The participation trend is:

The Indian Handicrafts & Gifts Fair is one among the few fair in world where entry is only for
overseas buyers / buying agents. Apart from the number of participants indicated above, there are
16

900 permanent marts which are open throughout the year.

Problems of Indian Handicraft

Although, many domestic companies are positively responding to the global
conditions, but the international-domestic combination also comes with
considerable multiplicity. Despite the strong growth momentum, the sector
also faces various challenges.
Changing patron-client network.
17

It is believed that in the present market system, the craft industry has seen
many vulnerabilities. With the development of the modern market economy,
the old patron-client business network is fast declining. The artisans are
dependent on middle men and trader entrepreneurs to sell their products

Changing occupation:
Reports suggest that majority of the artisans in India is illiterate as they
usually do not have formal education. This is forcing many artisans to shift to
other professions rather than just sticking to their hereditary occupation.

Handmade vs Machine made.

Since mass production and rising mechanization are becoming the norms of
the day, handmade products are fast disappearing.

Procuring and processing raw materials: Traditionally, raw materials

used by artisans were widely available due to the close linkages between
evolution of crafts and locally available materials. With the breakdown of
these traditional structures, along with competition from organized industry,
artisans find it challenging to buy quality raw materials at affordable prices.
Low productivity The sectors informal nature and the low education of
most artisans create issues such as:
Unorganized production As a largely unorganized sector, handicrafts faces
problems such as a paucity of professional infrastructure such as work sheds,
storage space, shipping and packing facilities.
Low education- The lack of education makes it difficult to manage inventory,

access government schemes and market information and bargain with

18

traders and middlemen. It is estimated that in 2003 around 50% of heads of

households of crafts producing families had no education
Lack of market linkages While consumers of crafts products are
increasingly becoming urbanized, crafts continue to be sold through local
markets; artisans have few opportunities to reach new consumers through
relevant retail platforms such as department stores and shopping mall.
Dominance of middlemen Although middlemen are necessary to enable
effective market linkages, they often, if not always, exploit artisans by paying
them a fraction of their fair wages.

Schemes For The Development of Handicrafts

1. Baba Saheb Ambedkar Hastshilp Vikas Yojna

Enhancement of allocation for each cluster from Rs 20,000 per artisan to Rs 30,000
per artisan for 5 years
Shift from allocation based scheme to demand driven scheme. All projects must be
sanctioned based on a DPR prepared by a professional agency in consultation with
the cluster stakeholders
Focus on a strong marketing strategy; hiring qualified and committed designers
Design Workshops to be conducted based on proper market research and creation
of a digitized design bank
Stress on improving baseline surveys increase time period from 3 to 6 months
Classification of clusters into 3 categories:
Tier I: Small clusters with 100-1000 artisans
Tier II: Mid-sized clusters; No of artisans - >1000 & <5000;
Tier III: Export oriented clusters; >5000 artisans;

19

2. Design and Technology up-gradation scheme

The prototypes developed in the design workshops and integrated projects must be
allowed to be showcased
Young designers should also be sponsored to attend these marketing events.
Revamp the process of empanelment of designers at DC(H)
Introduce Young craftspersons award/scholarship (under 35 years of age) to
encourage and give recognition to the younger generation of craftspersons
Scholarship scheme for children to be extended to children of all craftsmen.
Exporters may be considered for financial assistance for engaging national &
international Designers.
3. Marketing Support and Services scheme
Domestic marketing
Introduce a national level event on the lines of National Handlooms Expo to ensure
more visibility to the sector
Initiate new consumer awareness scheme for domestic markets
Well managed, authorized kiosks/ shops at museums, airports, hotels, railways
stations, metros etc. may be supported
Introduce component for artisans to tie up with big retail chains and display their
products.
Make provision of hiring expert event management companies to organize the
marketing events.
Craft bazaars/melas to be planned in advanced to ensure participation and avoid
repetitive locations/participants. TA may be given to all artisans participating in fairs
and exhibitions on actual basis
Marketing infrastructure sub-component to be shifted to a separate scheme to
ensure focus.
International marketing
Budgetary provisions under each head have to be modified to meet the current
market trends and cost
Budget for overseas exhibitions should also account for interpreter cost along with
the cost of contributing factor in the respective countries.
20

Provisions for setting up of warehouses abroad for use by Indian exporters may be
considered
Special focus on the development of products to meet the export market
requirements
Other areas of special focus addressed in the MSS scheme are:
Brand Building: Focus on creating the Handcrafted in India brand and promotion
through dedicated campaign.
Geographic Indications: supporting post-GI and pre-GI activities at various levels
22
Marketing of handmade carpets: CEPC to be made eligible for seeking funds under
the scheme.
Entrepreneurship development.

4. Human Resource Development Scheme

Improve effectiveness of training programs
Guidelines should be developed for syllabus/training modules
Concept of participatory training may be adopted
Publicity of training programs
Introduce computer based training programs
Strengthening monitoring and feedback mechanisms
Improve infrastructure provision at training centers
Only agencies that display demonstrable capability of market linkages, network
relations with technology institutions, should be provided sanctions for such
programs
Procedures for processing of applications for sanction of various programs must
be streamlined
5. Handicrafts Artisans Comprehensive Welfare Schemes
Increase number of OPD/IPD facilities: Empanelled list of hospitals needs to be
revised to cover Government Hospitals
21

Increase financial coverage

Reducing medi-claim settlement period: All claims should be settled within 30 days
and in exceptional circumstances, 45 days.
Improve identification and monitoring mechanisms
Sum insured to be increased from the existing Rs.15,000/- to Rs.30,000/ and
Rs.50,000/- incase of critical illness
The limit of Rs.7,500/- should be increased to Rs.15,000/- for OPD
Introduction of new pension scheme
Focus on creating synergy with programs of other ministries and departments to
avail benefits for the Handicraft artisans on a priority basis.
Housie Marketing of handmade carpets: CEPC to be made eligible for seeking funds under
the scheme.
Entrepreneurship development

6. Research and Development Scheme

Regular studies to be commissioned for gathering market intelligence on saleable
designs and trends.
Various areas of research that are proposed to be the focus for the next 5 years are
Environment impacts of craft processes and compliance.
Occupational health and safety issues.
Low cost tools and equipment.
Regulatory compliance issues.
Geographic Indication.

22

FUTURE OF HANDICRAFTS IN INDIA

The dynamism of handicrafts industry in India is unparalleled - be it the traditional Indian arts
and crafts or a customized version of an overseas art form. Unlike in the past when the industry
was battling to carve a niche in the market, there is a great demand for Indian handicrafts today
that is being nurtured by different government and non-governmental organizations.
The sector is economically important from the point of view of low capital investment, high ratio
of value addition, and high potential for export and foreign exchange earnings for the country.
The export earnings from Indian handicrafts industry for the period 1998-99 amounted to US$
1.2

billion.

The market is developing due to the huge demand of its products in terms of utility, cost and
aesthetics. To centralize and better organize the sector, the government has also initiated the
concept of 'Towns of Excellence' that are providing recognition to production areas where the
handicrafts have been traditionally developed. Today, there are 35 urban 'Haats' all across the
country, that allow for the allotment of built-up stalls to artisans on a fortnightly rotation basis at
nominal

costs.

The industrial revolution and the increasing productivity had slowed down the growth and the
quality of arts and crafts, but for some decades now, the scenario has changed and machine-made
products no longer attract the people. Presently handicrafts are being considered as vocational
media and it is also opted for style statement and the leisure pursuit. Today, the crafts and
craftspeople have a vital role to play in modern India not just as part of its cultural and
tradition, but as part of its economic future.

23

Company Profile
JAVAID BHAI PVT Ltd started its operation in year 1971. This 100% export oriented
company was founded by Mr Javaid Shamsi, and it is one of the old and renowned players in
brassware items from Moradabad, Uttar Pradesh. JB Pvt. Ltd. as one of the leading ISO
(9001:2008) & BSCI certified exporters in Moradabad of all type of handicraft items like Brass,
Aluminum, Iron, Steel, Wood & Glass etc.

24

Mr Shamsi felt the scope and opportunity in handicraft export industry so he started the company
with the motive to help the society by employment generation in Moradabad city. Initially, the
company was involved in manufacturing metal (especially brass) decorative items.
Later to cater exclusively to export market, JB PVT LTD diversified itself in to manufacturing of
various decorative items made up of glass, wood and metals.

JB PVT LTD is managed by Mr. Javaid Shamsi, in the capacity as Chairman. Mr. Javaid Bhai
has rich industry experience and primarily looks after marketing & liaison activities. JB PVT
LTD is a closely held entity with promoter group (promoter & family friends) having 100%
shareholding.
JB PVT LTD has been granted two star export house status and various other merit certificates
for iron-crafts, wood- wares and glass art-ware by Export Promotion Council of Handicrafts.
Company is managed by a Board which comprises four members of which three are from
promoter family (Mr Javaid Shamsi & is two sons Mr. Bilal Shamsi and Mr. Abbas Shamsi)
looking after separate business areas. Day-to- day affairs of the company are looked after by Mr.
Bilal Shamsi, Managing Director and he is assisted by professionals and managers of various
departments.

INFRASTRUCTURE
We are 44-year-old company, in Moradabad, a city 150 KMS. From Delhi.
Factory Land Area: 25 acres, Covered Area: 1,80,000 sq.ft.
The vertical integrated units for manufacturing products in Brass, Aluminium, Copper, Zinc
Alloy, Stainless Steel, Mild Steel, Wrought Iron, Wood and Glass.
Task force: 500+ direct & indirect
Total Annual Turnover- Rs.100 crores
25

Social Compliance:
JB Pvt. Ltd has been audited successfully by CSCC, KPMG, SMETA, ITS, SGS, BVCPS,
CT- PAT and OMEGA on behalf of its customers.

Some Of Major Clients Of The Company Are,

WILLIAMS

SONOMA,

GRUNBERGER,

CINMAR,

MARKET, DESSAU BRASS,

IKEA,

CRATE

RESTORATION

&

BARREL,

HARDWARE,

WOHNMANUFACTUR
COST PLUS,

WORLD

MARKS & SPENCER, ETHAN ALLEN, Etc.

Products of The Company

Metal-: (i) Brass, Aluminum, Zinc Alloy, Copper: In house manufacturing and finishing right
from. Foundry to shipping in variety of finishes such as Polished, Brushed, Electro-Plated
finishes, Patinas etc.
Item:- Candle Accessories, Wall Decor, Decorative accessories, Server-ware, Kitchen
Accessories, Hurricanes, Garden, Bath Accessories, Window Treatment, Hardware,
Seasonal etc.

26

(ii) Iron: In-house facility to manufacture Wrought & Cast Iron items with in-house 7 tank
Phosphating (rust treatment), Spray Painting, On-conveyor Powder Coating and Hand applied
finishes.
Items:-Indooor Accesnt Furniture (CKD), Candle Accessories, Wall Decor, Decorative,
Server-ware, Kitchen Accessories, Hurricanes, Garden, bath Accessories, Windows
treatment, Hardware, Seasonal etc.
Metal Production Facilities: State of art production facility equipped with CNC and Pneumatic
machines for precision and volume manufacturing. Supported by 10 spray booths, 3 Conveyared
powder coating plants and a PLC based Electro -plating plant with 4 automatic production lines
capacity of 7500 sq.ft surface area per day.
Capacities:
1. Casting- 3 Ton per Day 2. Pressing - 25000 Units Per Day 3. Spinning - 35000 Units Per Day
4. Welding - 20000 Units Per Day
Polishing - 50000 Units Per Day 6. Plating - 7500 sq.ft Per Day (Approx.3000 chargers).
PLC(Programmable Logic Control) based Electro-Plating Plant.
Glass: We have Continuous Tank furnace with a capacity of 35 tons per day to make mouthblown glass, in crackle finish, frosted, seeded in clear & colored glass. We also have injection
molding for glass as well as automatic 16- station press. A new furnace of 50 Ton per day
capacity is being built.
Items: Mostly combinations of Glass with Iron, Brass, Bronze or Silver plated bases for Bowls,
Bath Accessories, Candle holders, Lanterns, Pillar holders, Tumblers & Decanters, Vases etc.
Glass Production Facilities: 1. Mouth Blown Glass 2. Machine Blown Glass 3. Press Glass 4. Injection Molded Glass
5. Colour Glass 6. Colour on Glass 7. Frosting
8. Etching by acid & Shotblasting, Hand Engraving
Wood: From Sawing, Seasoning, Treatment, Machining, Carpentry, Finishing (spray paint &
stain finishes).
27

Items:: Colonial Dutch furniture, Neo-Classical furniture & Desk sets, Candle holders,
Pillar holders, Lanterns, Photo- frames, Finials for drapery rods, Photo frames Trays,
Bowls etc.

Operations of The Company

JB Pvt Ltd is primarily involved in manufacturing & export of decorative items made of
glass, wood and metals such as aluminum, brass, copper, zinc alloys, stain less steel, mild
steel and wrought iron manufactured at its facility situated in heart of Moradabad city
(UP).
Over the years, metal decorative items have been the major contributor to company sales,
accounting for 55-60% of the total sales on account of increased demand and growing
realizations as compared to wood and glass items.
JB Pvt. Ltd.'s cost structure is dominated by raw materials and consumable stores &
packing material (53-57%) followed by manufacturing expenses (23-24%). Significant
proportion (85- 89%) of raw material is held in the form of Work- In-Progress (WIP)
since average order cycle is of 4-5 months. This requires JB PVT LTD to hold significant
level of inventory leading to higher working capital requirement.
Principal raw materials used are metal & scrap (67- 75%), wood (24-33%), soda ash,
propane gas, and semi-finished items of metal, glass and wood. Being a labour intensive
activity, the labour costs together with raw materials and labor cost constitute over 65%
of the total operating cost.
Need based orders for raw materials are placed mainly with various local traders and
suppliers as well as imported from countries such as China, South Africa and UAE.
Company also procures various semi-finished products from local manufacturers and
suppliers.
28

JB Pvt. Ltd. doesn't have any dealers and distribution set-up/ network for marketing and
sales. Order procurement is on the basis of participation and displays in various trade
shows, art fairs and exhibitions in the international markets on regular basis.
Major export destinations are US, UK and Germany, Spain, Sweden, Austria, Belgium
etc. with repeat orders from reputed clientele such as Pottery barn, IKEA, Wall- Mart
Target stores ,Crate & Barrel ,Restoration hardware and Pier -I.
Ongoing/completed projects
In response to a new order from IKEA for brass pots, JB PVT LTD has set-up two
production lines at its existing unit. Equipment for the same have been procured mainly
from Taiwan. Both the lines are completely installed & commercial production has
started since September-October 08.

Principles of The Company

29

We have continued to upgrade our quality standards and our commitment towards our
customers and this has helped us maintain a steady growth rate even when facing adverse
conditions in the industry.

Quality control using global testing standards.

Strict adherence to delivery schedule.
Competitive pricing and focus on other critical areas.
Sales maximization and attaining greater market share

QUALITY
We are one of the ISO Certified organizations ISO 9001-2000. Our commitment for excellence
and passion for quality have shown us the way to growth and prosperity. Our team of quality
experts maintains a strict vigil on the production process to make sure that quality standards and
client specifications are met precisely. The finished products pass through stringent quality
checks to ensure our esteemed clients get the finest quality products.
Every stage of manufacturing is closely monitored by our dedicated supervisors to ensure
smooth flow of production process. We ensure that the flow of information must run from top to
the bottom.
Quality Assurance: The Company has its own in-house Quality Assurance team of professional
and technically qualified personnel. This team is free to conduct any random checks during
production at any time. It is our commitment that we never take the quality factor as a last
minute formality.

VISION:

30

To be Indias largest Export house for providing world class quality handicrafts item
(mainly combination of Wood, Metal and glass) with aim of increasing employment and
growth every year protecting social & environmental aspects.

CHAPTER-2
Research Methodology and Research Design

31

Primary objective of doing this project is to get the firsthand knowledge of the functioning of an
export house. As we are not comparing two different entities on the basis of their functional
results, rather we are learning the export procedure. Hence exploratory research design is the
need of the hour.
Further there are few reasons which made me to use Exploratory Quantitative research:
It was not possible to use fully structured or formal methods to obtain information for this type
of study.
People may be unable & unwilling to answer certain questions or unable to give truthful answers.
Export and documentation is a structured process as prescribed by the governing bodies, that all
the organization needs to follow. Hence Exploratory Research design is used to understand these
processes.

Thus project research design is as follows

Primary data
Qualitative research through In-Depth Interviews has been adopted. For interviews non
structured open-ended questions were used.
Secondary data
In secondary data, both internal and external research was done.
For internal research ready to use documents available with the organization were used.
For external research Internet website & published books were consulted.
The practical knowledge gained from the organization worked as secondary data for the project.

CHAPTER -3
32

Export Procedure
Concept:
Export procedure consists of several commercial and regulatory formalities, which an exporter is
required to complete during the course of export trade transactions. These formalities are very
complex and time-consuming and involve considerable documentation. Hence, the exporters
must possess adequate knowledge of such formalities. At the same time, it should be ensured that
the rules and regulations of not only exporting country but also of importing country are duly
complied with. Last but not the least, it should be ensured that all the required documents,
whether commercial or regulatory, are prepared and filed with the appropriate authorities.
An export procedure can be studied under the following heads:1. Registration Stage
2. Pre-Shipment Stage
3. Shipment Stage
4. Post-Shipment Stage

Exporters Registration For Staring Export Business

Registration with Reserve Bank of India (RBI)

Prior to 1997, it was necessary for every first time exporter to obtain IEC number from Reserve
Bank of India (RBI) before engaging in any kind of export operations. But now this job is being
done by DGFT.
Registration with Director General of Foreign Trade (DGFT)

33

For every first time exporter, it is necessary to get registered with the DGFT (Director General of
Foreign Trade), Ministry of Commerce, Government of India.
DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required for the
purpose of export as well as import. No exporter is allowed to export his good abroad without
IEC number.
However, if the goods are exported to Nepal, or to Myanmar through Indo-Myanmar boarder or
to China through Gunji, Namgaya, Shipkila or Nathula ports then it is not necessary to obtain
IEC number provided the CIF value of a single consignment does not exceed Indian amount of
Rs. 25, 000 /-.
Application for IEC number can be submitted to the nearest regional authority of DGFT.
Application form which is known as "Aayaat Niryaat Form - ANF2A " can also be submitted
online at the DGFT web-site: http://dgft.gov.in.
While submitting an application form for IEC number, an applicant is required to submit his
PAN account number. Only one IEC is issued against a single PAN number. Apart from PAN
number,

an

applicant

is

also

required

to

submit

his

Current

Bank Account number and Bankers Certificate.

A amount of Rs 1000/- is required to submit with the application fee. This amount can be
submitted in the form of a Demand Draft or payment through EFT (Electronic Fund Transfer by
Nominated Bank by DGFT.

Registration with Export Promotion Council

Registered under the Indian Company Act, Export Promotion Councils or EPC is a non-profit
organisation for the promotion of various goods exported from India in international market.
EPC works in close association with the Ministry of Commerce and Industry, Government of
India and act as a platform for interaction between the exporting community and the government.

34

So, it becomes important for an exporter to obtain a Registration Cum Membership Certificate
(RCMC) from the EPC. The benefits provided in the current EXIM Policy are extended only to
the registered exporters having valid RCMC
The RCMC certificate is valid from 1st April of the licensing year in which it was issued and
shall

be

valid

for

five

years

ending

31st

March

of

the licensing year, unless otherwise specified.

Registration with Commodity Boards

Commodity Board is registered agency designated by the Ministry of Commerce, Government of
India for purposes of export-promotion and has offices in India and abroad. At present, there are
five statutory Commodity Boards under the Department of Commerce. These Boards are
responsible for production, development and export of tea, coffee, rubber, spices and tobacco.

Registration with Income Tax Authorities

Goods exported out of the country are eligible for exemption from both Value Added Tax and
Central Sales Tax. So, to get the benefit of tax exemption it is important for an exporter to get
registered with the Tax Authorities.

PRE-SHIPMENT STAGE:

35

a. Approaching Foreign Buyers

In order to secure an export order, a new exporter can make use of one or more of the
techniques, such as, advertising in international media, sales promotion, public relation,
public selling, publicity and participation in trade fairs and exhibition
b. Inquiry And Offer
An inquiry is a request from a prospective importer about description of goods, their
standard or grade, size, weight or quantity, terms of payments, etc. on getting an inquiry,
the exporter must process it immediately by making an offer in the form of a proforma
invoice.
c. Confirmation of Order
Once the negotiations are completed and the terms and conditions are finalized; the
exporter sends three copies of proforma invoice to the importer for the confirmation of
order. The importer signs these copies and sends back two back copies to the exporter
d. Production or Procurement of goods
On securing the pre-shipment finance. From the bank, the exporter either arranges for the
production of the requirement goods or procures them from the domestic market as per
the specification of the importer.
e. Packing and Marking
Then the goods should be properly packed and marked with necessary details such as port
of shipment and destination, country of origin, gross and net weight, etc.
If number of packages is more than one then Packing List must be prepared. If required
assistance can be taken from Indian institute of Packing (IIP)

f. Pre-shipment Inspection:
Realizing the importance of the need for supplying quality goods as per international
standards, the Government of India has introduced Compulsory Quality Control and PreShipment Inspection of over 1050 items of export under Export (Quality Control and PreShipment Inspection) Act 1963.
Systems of Quality Control:
For the purpose of pre-shipment inspection, EIC has recognized three systems of
inspection namely:
36

Self-Certification
In-Process Quality Control
Consignment Wise Inspection

g. Obtaining Insurance Cover:

The exporter must take appropriate policies in order to ensure risks.
- ECGE policy must be taken in order to cover credit risk.
- Marine policy, if the price quotation price agreed upon is CIF
h. Application of the Certificate Origin: In case the exporter has to obtain Certificate of
Origin from the concerned authorities, an application has to be made to the concerned
authority with required documents. While the simple invoice copy will do for getting C\O
from the chamber of commerce, in respect of obtained the same from the office of the
Textile Committee or Export Promotion Council, the documents requirement are
different.
i. Appointment of C&F agent
Since exporting is a complex and time-consuming process, the exporter should appoint a
clearing and forwarding (C&F) agent for the smooth clearance of goods from the
Customs and preparation and submission of various export documents.

SHIPMENT STAGE
The exporter has to generate series of document to be forwarde to Clearing &
Forwarding Agent for clearance of goods from Customs.

a. Pre-Shipment Documents:
Following are the documents which to be prepared by the exporter:
a) Commercial Invoice
b) Packing List
c) Application for removal (AR-4)
d) Certificate of Inspection
e) Marine Insurance Policy
f) Exchange Control Declaration Form:
Guaranteed Receipt Form (GR Form)
SDF form
PP form
SOFTX
b. Document to be forwarded to C&F agent:
37

The exporter is expected to provide the following documents to the CHA & Forwarder
agent:
-

Letter of credit along with the export contract or export order.

Commercial invoice (2copies)
Packing list or packing note
Certificate of Origin
GR Form (original and duplicate)
ARE- 1 form
Certificate of Inspection, where necessary (original copy)
Declaration in form SDF

The CHA has to file at ICEGATE (e commerce portal of CBEC) with the required
documents. ICEGATE is e-portal of CBEC of India.

c. Custom Clearance:
The shipment of export cargo has to be made with prior permission of, and under the
close supervision of the custom authorities.. The custom authorities grant this permission
only when it is being satisfied that the goods being exported are of the same type and
value as have been declared by the exporter or his C&F agent, and that the duty has been
properly determined and paid.
The Examining Officer of Customs may inspect and/or examine the shipment, as per
instructions contained in the checklist and enter the examination report in the system.
If the Appraiser/Supdt is satisfied that the particulars entered in the system conform to
the description given in the original documents and the physical examination, he will
proceed to give "Let Export for shipment.
Once Let Export is issued the system would generate the shipping bill in six copies as
follows:

Exchange Control copy

Exporter Promotion copy
Exporters copy
Customs copy
TR-1 & TR-2
Exchange control copy

The exporter also has to claim for Drawback on export using the Harmonization code
d. Obtaining Carting Order from the port trust authorities:
38

The C&F agent, then, approach the superintendent of concerned Port Trust for obtaining
the Carting Order for moving the cargo inside the dock. After obtaining the Carting
Order the cargo is physically moved into the port area and stores in the appropriate shed.
e. Loading Goods & obtaining Mates Receipt:
The goods are then loaded on the ship. The CPO supervises the loading operations. After
the loading is completed, the Chief Mate(Cargo Officer) of the ship issues the Mates
Receipt. The Mates Receipt is sent to the Port Trust Office. The CHA pays the port
trust dues and collects the mates receipt. The CHA then approaches the CPO and gets the
certification of shipment of goods on AR Forms and other documents
f. Obtaining Bill of Lading:
The Mates Receipt is then handed over to the shipping company (on whose vessel the
goods are loaded). The shipping company issues bill of lading. The Bill of Lading is
issued in:

3 negotiable copies of Bill of Lading

10 to 12 Non-negotiable copies of Bill of Lading.

Post-Shipment Stage
The post-shipment stage consists of the following steps:a) Submission of Documents by the C&F agent to the Exporter:
On the completion of the shipping procedure, the C&F agent submits the following
documents to the exporter:
- A copy of invoice duly attested by the Customs
- Drawback copy of the shipping bill
- Bill of Lading (B/L)
- A full set of negotiable and non- negotiable copies of bill of lading
- The original L/C, export order or contract.
- Duplicate copy of the ARE-1 form
b) Shipment Advice to Importer:
After the shipment of goods, the exporter intimates the importer about the shipment of
goods giving him details about the date of shipment, the name of the vessel, the
destination, etc. he should also send one copy of non-negotiable bill of lading to the
importer.
39

c) Presentation of Documents to Bank for Negotiation:

Submission of relevant documents to the bank and the process of getting the payment
from the bank is called Negotiation of the Documents and the documents are called
Negotiable Set of the Documents. The set normally contains:
- Full set of Bill of Lading or Airway Bill
- Original letter of credit
- Customs Invoice
- Commercial Invoice including one copy duly certified by the Customs
- Packing List
- Foreign exchange declaration forms, GR/SOFTEX/PP forms in duplicate
- Exchange control copy of the Shipping Bill
- Certificate of Origin, GSP or APR Certificate, etc.
- Marine Insurance Policy, in duplicate
- Bill of exchange, Sigh Draft.

d) Dispatch Of Documents to importers bank:

The bank negotiates these documents to the importers bank to enable him to clear the
consignment. Before negotiating documents, the exporters bank scrutinizes them in
order to ensure that all formalities have been complied. The bank then sends the Bank
Certificate and attested copies of commercial invoice to the exporter.
e) Acceptance of the Bill of Exchange
Bill of Exchange accompanied by the above documents is known as the Documentary
Bill of Exchange. It is of two types: Documents against Payment (Sight Drafts): In case of sight draft, the drawer
instructs the bank to hand over the relevant documents to the importer only

against payment.
Documents against Acceptance (Usance Draft): In case of usance draft, the
drawer instructs the bank to hand over the relevant documents to the importer
against his acceptance of the bill of exchange.

f) Exports receipt:
After dispatch of the goods, the exporter should approach his bank (authorized dealer)
with a formal request to realize sale proceeds from the foreign buyer. It is obligatory
to submit the shipping documents to an authorized dealer within 21 days of the date
40

of shipment. The exporter could get immediate payment by signing the letter of
indemnity or the bank will release after proceeds from importer.

g) Processing of GR Form
On receiving the export proceeds, the exporters bank intimates the same to RBI by
recording the fact on the duplicate copy of GR. The RBI verifies the details in duplicate
copy of GR with the original copy of GR received from the Customs, if the details are
found to be in order then the export trans action is treated to be completed.
h) Realization of Export Incentives
If the exporter is eligible for export incentives, then he should submit claim for the same
accompanied by the bank certificate to the appropriate authority.

Export Documents.
Introduction
An exporter without any commercial contract is completely exposed of foreign exchange risks
41

that arises due to the probability of an adverse change in exchange rates. Therefore, it becomes
important for the exporter to gain some knowledge about the foreign exchange rates, quoting of
exchange rates and various factors determining the exchange rates. In this section, we have
discussed various topics related to foreign exchange rates in detail.
Any export shipment involved various documents required by various authorities such as
customs, Excise, RBI, Inspection institution and accordingly depending upon the requirements,
these are categorized into two categories, namely:

Commercial Documents
Regulatory Documents

Commercial Documents: - Commercial documents are required for effecting physical transfer
of goods and their title from the exporter to the importer and the for realization of export sale
proceeds.

o Proforma Invoice:
The starting point of the export contract is in the form of offer made by the exporter to
the foreign customer. The offer made by the exporter is in the form of a proforma invoice.
It is a quotation given as a reply to an inquiry. It normally forms the basis of all trade
transactions.
o Commercial Invoice: Commercial invoice is an important and basic export document. It
is also known as a 'Document of Contents' as it contains all the information required for
the preparation of other documents. It is actually a seller's bill of merchandise. It is
prepared by the exporter.
Contents of Commercial Invoice:

Name and address of the exporter and consignee.

Name and the number of Vessel or Flight.

Name of the port of loading and port of Discharge

42

Invoice number and date.

Exporter's as well as Importers reference number.

Name of the country of origin of goods and of final destination.

Terms of delivery and payment.

Marks and container number.

Number and packing description.

Description of goods giving details of quantity, rate and total amount

Packing list:
The exporter prepares the packing list to facilitate the buyer to check the shipment. It contains a
detailed description of goods packed in each case, their gross and net weight, etc
Packing list itemizes the material in each individual package and indicates the type of package:
box, crate, drum, carton, and so on. It shows the individual net, legal, tare, and gross weights and
measurements for each package.

43

Certificate of Origin: The importers in several countries require a certificate of origin

without which clearance to import is refused. The certificate of origin states that the goods
exported are originally manufactured in the country whose name is mentioned in the certificate.
44

CERTIFICATE OF ORIGIN
No. _____________________

Exporter

INTERNATIONAL METAL DESIGN

Chamber of Commerce & Industry

Recognized by Ministry of Commerce & Industry
Govt. of India

159/D-20, KISROL,
KATH KI PULIA
MORADABAD 244001 INDIA

Consignee

Federation of Indian Micro and Small

& Medium Enterprises
B-4/161, Safdarjung Enclave, New Delhi 110029
Tel. : 26187948, 26712064 , 46023157 , 46018592
Fax : (+91-11-)26109470
E-mail : chamber@fisme.org.in
E-mail :
info@fisme.org.in
Web address : http://www.fisme.org.in

EURL TINHINANE PRODUCE HOUSE

IMPORT AND EXPORT,
CITE BAHLOULI EL EULMA

Vessel / Flight No.

BY SEA

Place of Receipt by Pre-Carrie

ICD,MORADABAD
Port of Loading
MUNDRA

Port of Discharge
ANNABA

Final Destination
ANNABA

Pre-Carriage by

Marks & Nos./

No. & Kind of Pkgs.

Container No.

650

Description of Goods

Quantity

INDIAN HANDICRAFT OF BRASS

8508
PCS

CTNS

it is hereby certified that goods

Are of Indian Origin

IEC NO. :
Inv. No. :
Invoice Dt. :

2998002153
IMD/102/650
20.04.2015

FOR INTERNATIONAL METAL DESIGN

AUTH. SIGN.
Signature of Exporter
CERTIFICATION
It is hereby certified that to the best of our knowledge and belief the above mentioned goods are of Indian origin.
Secy. General / Joint Secretary
/ Dy. Secretary
Federation of Indian Micro and Small
& Medium Enterprises
New Delhi

45

Mates Receipt:

Mates receipt is a receipt issued by the commanding officer of the ship when the cargo is loaded
on the ship. The mates receipt is the primer-facie evidence that goods are loaded in the vessel.

Bill of Lading: BL is a contract between the owner of the goods and the carrier. BL is a
document issued by the shipping company or its agent acknowledging the receipt of goods on
board the vessel, and undertaking to deliver the goods in the like order and condition as
received, to the consignee or his order, provided the freight and other chargers as specified in the
bill have been duly paid.
Contents of bill of lading:
Name and logo of shipping line while name of shipper.
Name and the number of the vessel.
Name of the port of loading and discharge with the place of delivery.
Marks and container number.
Packing and container description with total number of container and packages.
Description of goods in terms of quantity
Container status and seal number
46

Gross weight in kg and volume in terms of cubic meters

Amount of freight paid or payable
Shipping bill number and date
Signature and initials of chief officer

Shipping Bill/Bill of Export:

Shipping bill is the main custom of document, required by the customs authorities for granting
permission for the shipment of goods. The cargo is moved inside the dock area only after the
shipping bill is duly stamped, i.e. certified by the custom shipping bill is normally prepared in 5
copies

47

. Contents of Shipping Bill:

Name and address of the exporter
Name and address of the importer
Name of the vessel, master or agents and flag
Name of the port at which the goods are to be discharged
Country of final destination
Detail of packages, description of goods, marks and numbers, quality and detail of each
case.
FOD price and real value of goods as defined in the sea customs act.
48

Whether Indian or foreign merchandise to be re-exported

Total number of packages with total weight and value

Types of Shipping Bill

Based on the incentives offered by the government, customs authorities have introduced three
types of shipping bills:

Drawback Shipping Bill: - Drawback shipping bill is useful for claiming the customs
drawback against goods exported.

Dutiable Shipping Bill: - Dutiable shipping bill is required for goods which are subject
to export duty.

Duty-free Shipping Bill: - Duty-free shipping bill is useful for exporting goods on which
there is no export duty

*Harmonisation System (HS) codes are given by the exporter in shipping bill to claim the
duty payback.

Consular Invoice
Consular Invoice is a document required mainly by Latin American countries,New-Zealand,
Myanmar, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, etc. The main purpose of the consular
invoice is to enable the authorities of the importing countries to collect accurate information
about the volume, value, quality, grade, source, etc, of the goods imported.
In order to obtain consular invoice, the exporter is required to submit three copies of invoice to
the consulate of the importing country concern

49

INCOTERMS 2013
The International Chamber of Commerce (ICC) published the 8th and current version of its
International Commercial Terms, also known as INCOTERMS on January 1, 2011.
INCOTERMS are a set of three-letter standard trade terms most commonly used in international
contracts for the sale of goods. First published in 1936, INCOTERMS provide internationally
accepted definitions and rules of interpretation for most common commercial terms.
There are total 13 terms.
50

WHAT INCOTERMS DO - INCOTERMS inform the sales contract by defining the respective
obligations, costs and risks involved in the delivery of goods from the Seller to the Buyer.
WHAT INCOTERMS DO NOT DO - INCOTERMS by themselves DO NOT:

Constitute a contract;

Supersede the law governing the contract;

Define where title transfers; nor,

Address the price payable, currency or credit terms.

INCOTERMS are grouped into two classes:
1. TERMS FOR ANY TRANSPORT MODE

EXW - EX WORKS (... named place of delivery)

o

The Seller's only responsibility is to make the goods available at the Seller's
premises. The Buyer bears full costs and risks of moving the goods from there to
destination.

FCA - FREE CARRIER (... named place of delivery)

o

The Seller delivers the goods, cleared for export, to the carrier selected by the
Buyer. The Seller loads the goods if the carrier pickup is at the Seller's premises. From that
point, the Buyer bears the costs and risks of moving the goods to destination.
51

CPT - CARRIAGE PAID TO (... named place of destination)

The Seller pays for moving the goods to destination. From the time the goods are

transferred to the first carrier, the Buyer bears the risks of loss or damage.

CIP - CARRIAGE AND INSURANCE PAID TO (... named place of destination)

The Seller pays for moving the goods to destination. From the time the goods are

transferred to the first carrier, the Buyer bears the risks of loss or damage. The Seller,
however, purchases the cargo insurance.

DAT - DELIVERED AT TERMINAL (... named terminal at port or place of

destination)
o

The Seller delivers when the goods, once unloaded from the arriving means of
transport, are placed at the Buyer's disposal at a named terminal at the named port or place
of destination. "Terminal" includes any place, whether covered or not, such as a quay,
warehouse, container yard or road, rail or air cargo terminal. The Seller bears all risks
involved in bringing the goods to and unloading them at the terminal at the named port or
place of destination.

DAP - DELIVERED AT PLACE (... named place of destination)

o

The Seller delivers when the goods are placed at the Buyer's disposal on the
arriving means of transport ready for unloading at the names place of destination. The Seller
bears all risks involved in bringing the goods to the named place.

DDP - DELIVERED DUTY PAID (... named place)

o

The Seller delivers the goods -cleared for import - to the Buyer at destination. The
Seller bears all costs and risks of moving the goods to destination, including the payment of
Customs duties and taxes.

52

2. MARITIME-ONLY TERMS

FAS - FREE ALONGSIDE SHIP (... named port of shipment)

o

The Seller delivers the goods to the origin port. From that point, the Buyer bears
all costs and risks of loss or damage.

FOB - FREE ON BOARD (... named port of shipment)

o

The Seller delivers the goods on board the ship and clears the goods for export.
From that point, the Buyer bears all costs and risks of loss or damage.

CFR - COST AND FREIGHT (... named port of destination)

o

The Seller clears the goods for export and pays the costs of moving the goods to
destination. The Buyer bears all risks of loss or damage.

CIF - COST INSURANCE AND FREIGHT (... named port of destination)

The Seller clears the goods for export and pays the costs of moving the goods to the port of
destination. The Buyer bears all risks of loss or damage. The Seller, however, purchases the
cargo insurance.

PRACTICE POINTS

BE SPECIFIC:
o

If you use INCOTERMS in the Sales Contract or Purchase Order, you should
identify the appropriate INCOTERM Rule [e.g. FCA, CPT, etc.], state "INCOTERMS
2010" and specify the place or port as precisely as possible.

RECOGNIZE WHERE THE RISK OF LOSS TRANSFERS:

53

A common misconception when the Seller pays the freight is that the Seller has
the risk of loss until the goods are delivered to the place or port specified on the bill of
lading or airway bill. Actually, when using INCOTERMS CPT, CIP, CFR or CIF, risk
transfers to the Buyer when the Seller hands the goods over to the carrier at origin, not when
the goods reach the place or port of destination.

Understand that under CIP and CIF, the Seller is only obliged to obtain
insuranceon minimum cover.

UNDERSTAND

WHO

HAS

RESPONSIBILITY

FOR

LOADING

AND

UNLOADING CHARGES. FOR EXAMPLE:

o

DAT obliges the Seller to place the goods at the Buyer's disposal after unloading
at the named terminal at port or place of destination.

DAP and DDP oblige the Seller to place the goods at the Buyer's disposal on the
delivering carrier ready for unloading at the named place of destination.

CPT, CIP, CFR or CIF on the other hand, require the parties to identify as
precisely as possible the point at the agreed port of destination because the costs up to that
point are for the account of the Seller.

Under FCA terms, the seller satisfies his obligation to deliver when he has handed
over the goods, cleared for export, into the charge of the carrier named by the buyer at the
named place or point. The buyer is responsible for inland freight, unloading at port of
embarkation and loading on ocean carrier/airline.

UNDERSTAND WHO HAS RESPONSIBILITY FOR U.S. CUSTOMS ENTRY

DECLARATIONS:
o

DDP is the only INCOTERM where the Seller has responsibility for U.S.
Customs entry declarations.

54

IMPORTANT NOTE: An important factor to be considered when asking the Seller

to be responsible for international carriage, is if the goods ship by Ocean Freight, an
Importer Security Filing (ISF) must be electronically submitted to Customs 24 hours before
the cargo is laden on the vessel bringing the cargo to the U.S. The Buyer should specify in
the contract either (a) the shipper is responsible for the ISF or (b) the Seller is responsible
for providing the required data in a timely manner (i.e. 72 hrs before lading) to the Buyers
appointed agent (e.g. Customs Broker). In practice, when the broker and the international
forwarder are unrelated parties, this requirement is honored more in the breach than in the
observance. The Buyer responsible for customs entry should indemnify against the penalties
(US$5,000) for filing a late, inaccurate or incomplete ISF. The ISF does not apply at this
time to airfreight shipments

DETERMINE THE IMPORTANCE OF SUPPLY CHAIN VISIBILITY

o

When CPT, CIP, CFR or CIF are used the Seller fulfills its obligation to deliver
when it hands the goods over to the carrier, not when the goods reach the place of
destination.

DAT, DAP and DDP the Seller fulfills its obligation to deliver at the named
destination. The Seller has no obligation to provide transit status updates.

CHAPTER- 4
BASIC TERMS OF LOGISTICS
Customs House Agent (CHA) is a person who is licensed to act as an agent for transaction of
any business relating to the entry or departure of conveyances or the import or export of goods at
any Customs station.
Duties & Obligation of a CHA
55

Clearances only against authorization A CHA is required to clear goods for import or export
only against specific authorization from the principal and must produce it whenever required by
the Deputy/Assistant Commissioner.
Method of transacting business The CHA has to either personally clear the goods or clear it
through an employee who is approved by the Deputy/Assistant Commissioner who is designated
for this purpose by the Commissioner. All the documents prepared by him should prominently
bear the CHAs name at the top of the document. The CHA should not attempt to influence the
conduct of Customs officers in matters pending before him or his subordinates. There should be
no threats, false accusations or duress against such officers. No promise of advantage or benefit
or gift should be made or bestowed on such officers. Duty of CHA should be discharged with
utmost speed and avoid delays. He cannot charge for his services in excess of rates approved by
the Commissioner.

Freight forwarder(FF)
A freight forwarder, forwarder, or forwarding agent, is a person or company that organizes
shipments for individuals or corporations to get goods from the manufacturer or producer to a
market, customer or final point of distribution.
A freight forwarder is an agent who acts on behalf of importers, exporters or other companies or
persons to organize the safe, efficient and cost-effective transportation of goods

DUTIES OF FF
The role of the freight forwarder is to facilitate the smooth transit of import or export goods
through sea or air ports.
Completion and lodgment of CVED
Preparation of customs documentation

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Lodgment of Original Bill of Lading with shipping line (proves ownership)

Scheduling of delivery

Port:
A port is a location on a coast or shore containing one or more harbors where ships can dock and
transfer people or cargo to or from land.

BUFFER/WAREHOUSE
Is a commercial building for storage of goods. Manufacturers ,importers , exporters ,
wholesalers, transport businesses, customs etc use warehouses. They usually have loading docks
to load and unload goods from trucks.

Delivery order(D/O)
A Delivery Order (abbreviated D/O) is a document from a consignor, a shipper, or an owner of
freight which orders the release of the transportation of cargo to another party.
A delivery order refers to an "order given by an owner of goods to a person in possession of them
(the carrier or warehouseman) directing that person to deliver the goods to a person named in the
order.
D/O FLOW IN THE SYSTEM
Logistics department send container request to the freight forwarder.
As per the requirement given about container FF request the container from the shipping
line.
Shipping line send D/O and vessel detail to the FF.
FF handover that D/O to the logistics department.
Logistics department gives that D/O to the transporter and the transporter send empty
truck to the shipping yard to collect the container.
Transporter shows that D/O to the shipping yard to get the respective container.
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 Now the container is taken from shipping yard and truck comes to the JB Pvt. Ltd. for
loading of product.

Important details about JAVAID BHAI PVT Ltd- Logistics:

JB PVT LTD Logistics with following entity to complete its process of exporting its product to
its destination.
Freight Forwarders

Kareem Freight Forwarders Pvt. Ltd.

JCL Freight Forwarders Pvt. Ltd.

Transporter
Ideal Transporter.
CHA
Liberty Shipping Agencies Pvt. Ltd.

Shipping Lines.

MAERSK
CMA
Msc: Mediterranean shipping company.
Hds: Hafiz Darya Shipping.

Port-Nhava Sheva.
Nhava sheva is the largest port India, handling close to 50% of the country`s port traffic.
It is located at south east of Mumbai, it has three terminals:
JNPCT(Jawaharlal Nehru Port Trust)
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 NSICT(Nhava Sheva International Container Terminal)

GTI(Gateway Terminal of India)

Workflow of JAVAID BHAI PVT Ltd.

The workflow of Javaid Bhai Pvt. Ltd. is as follows.
Customer places the order to the marketing departments about their requirements and last
date of delivery or last date of shipment.
As the detail, requirement of product services by marketing department they contact with
Production planning and control department (PPC).
The next step is of order preparation and execution i.e. they analyze complete set of
process to develop the required product.
Now the production work starts and production department produces finished goods.
Now the work of dispatch department is to load the finished goods i.e. handicrafts to
proper container.
Container is ready to move towards the final destination.

Excise and documentation departments complees finally invoicing part. In the complete
process

logistics department coordinate with Dispatch, Excise and Documentation

department to complete the process effectively.

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CHAPTER- 5
BILLING AND INSURANCE BILLING
There are generally three kinds of billing done by C.L.Gupta Exports Ltd.
(1)Transportation payment
(2)Custom house agent payment
(3)Freight forwarder payment
Transportation billing

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JB Pvt. Ltd. has contract with Ideal transportation. Whenever any product has to be sent
to the source port JB Pvt. Ltd. deals with Ideal transportation. There are mainly two kinds

of transport facility available from Ideal Transportation .

Containerized
Break-Bulk
and bills are generated as per transport facility.

Freight forwarder billing:

There two types of bills in case of freight forwarder:
(a)Normal billing
This is applied when company comleates its task through 3PL and in case of C.L Gupta
Exports Ltd it is karam and OM are the main freight forwarders who work for them.

(b)FOB(freight on board) Billing:

This applies if the customer has selected its own freight forwarders but difference from
the above one is only that it does not consider freight charges.

Custom house agent billing

Custom house agent is a person who clears the custom related task for the company and
company pays the charges for it.

Insurance
Insurance is also one of important document because it covers physical damage to ,or loss
of company`s goods whist transit by land, sea and air.

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CHAPTER- 6
CONCLUSION AND RECOMMENDATIONS

CONCLUSION
The Indian handicraft industry is among the upcoming industries of the world. The Indian
handicrafts industry is spread all over the country in rural and urban areas. Thousands of skilled
artisans are engaged in craft work..
Handicrafts industry is playing a major role in the development of Indian economy. This sector is
economically important from the point of low capital investment.
Global marketing logistics, referred to earlier in chapter can present to the unwary and
uninitiated an enormously formidable barrier. Having the correct documentation internally and
externally is vital or goods and services just simply cannot be exported.
Marketers or their agents must be familiar with terms of access, contracts, trade terms,
commercial documents including insurance and financial documents, and the consequences of
breaking any of the terms and conditions.
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In many products,the more familiar the distribution network players are with each other and their
individual systems, the easier the documentation process becomes to set up and operate.
This reduction of transaction risk is a bonus and may involve the use of specialist agencies like
freight forwarders and shippers.

Recommendations
(1)Multiple loading points:
One way of loading the truck very fast is to have multiple loading points instead of
having only one or two.by having more than one loading point one truck does not
need to wait for another one to get loaded, it can also load its from another
loading point simultaneously .due to this waiting time will be reduced.
( 2)Warehouse management:
Warehouse management is one of the most important activities in logistics because
it is the place where your final product is being placed so the proper management
should be there in warehouse like:
(a)Codes nomenclature:
Product should be placed in such a way that it Can be easily found from the large
number of products for the purpose it should have standard specification.
For example:
Section
A

Row
2

Column
3
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Product No
456128

Here in the above example it shows that product no 456128 resides in A sections`s 2 nd row 3rd
column.by following such types of standard rule it is very easy to find the product where it is
actually.
(b) Place the product properly:
The product should not be placed one over another or if it is placed then it should not be more
than three levels because it will damage the product reside in bottom and its cost lakhs of rupees.
(c)Identification mark:
There should be proper identification mark on the product,which shows whether the product is
being exported at international level or domestic level.

(3).Sms Portal
As the plant is very big ,in order to maintain effective logistics in the company a proper
communication should be there among the people and sms portel would be one of the services
that will keep all the staff in contact. Whatever the necessary information that needs to be
delivered timely can be easily forwarded to everyone at a right time.many a times there is a need
of meeting to be conducted but in case if the management is short of time in this case also time
service would be helpful.

(4).Commercial vehicle operation (cvo)

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CVO is an application of intelligent transportation system for truck. Atypical system would be
purchased to track the location of truck

Bibliography and References

Books.

Indian art and craft industry- An overview : Sanjeev Pandey

Annual reports of various years, ministry of textiles, government of india, New Delhi
Globalization of indian handicraft: A human development approach: Pradeep kumar jena
Brodie, peter Dictionary of shipping terms,third Edition, 1997.
Keegen, W.J.1989,global marketing management ,4th
Edition, printice Hall

International edition.
Kwelepeta , S.L Export Documentation ,

Websites

www.tradingeconomics.com
www.exporterspages@infodriveindia.com
www.dgft.gov.in
www.iccwbo.org
www.indiaexport-import.com

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SWOT Analysis of The Indian Handicrafts Industry

STRENGTHS

Abundant and cheap labor hence can compete on price

Low capital investment and high ratio of value addition

Aesthetic and functional qualities

Wrapped in mist of antiquity

Handmade and hence has few competitors

Variety of products which are unique

Exporters willing to handle small orders

Increasing emphasis on product development and design up gradation

2
WEAKNESSES

Inconsistent quality

Inadequate market study and marketing strategy

Lack of adequate infrastructure and communication facilities

Capacity to handle limited orders

Untimely delivery schedule

Unawareness of international standards by many players in the market

OPPORTUNITIES

Rising appreciation for handicrafts by consumers in the developed countries

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Widespread novelty seeking

Large discretionary income at disposal of consumer from developed countries

Growth in search made by retail chains in major importing countries for suitable products
and reliable suppliers. Opportune for agencies to promote marketing activities

Use of e-commerce in direct marketing.

THREATS
Decline in Indias share due to

Better quality products produced by competitors from Europe, South Africa, South Asia, etc.

Better terms of trade by competing countries.

Consistent quality and increasing focus on R&D by competing countries.

Better packaging.

Stricter international standards.

HOW TO CLAIM DUTY DRAWBACKS

Duty Drawback is the most commonly availed incentive by exporters. It is the amount
reimbursed by the government to exporters as compensation for Customs Duty collected at
the time of import. For the purpose, CBR sets aside a certadocuments must be in order when
Exporter files the claim for export rebate and submits
the file to the customs rebate section
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1. Bank Credit Advice ( B.C.A

2. Bill of Lading (First Original).
3. Railway Receipt (Attested by the Railways).
4. Customs Signed Invoice with Two Photocopies.
5. Packing List.
6. Exchange Rate Certificate
7. Copy of Shipping Bill.
8. Photo Copy of Form E.
9. Laboratory Test Report. (if required)
10. Photocopy of SRO. (relevant to exporters product)
11. Copy of Cross Border Certificate (In case of export through land route).
12.Sales Tax Return of clearing agent of previous month (if claim launched through
clearing agent)

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