FOREIGN TRADE

Finding the Importers (find your buyers)

There are four methods:
1. Old Method 3. Support Method
2. Individual Method 4. New Method

1. Old Methods: Collecting Importers contacts from Helping Organisations such as Embassy /
High Commissions, ECGC, ITC etc.
2. New Methods: Collecting Importers contacts from B2B Business Portals such as
www.tradeindia.com etc
3. Support Methods: Collecting Importers contacts from EPC and CHA, orders can be obtained
through EPC & CHA.
4. Individual Methods: Collecting Importers contacts from Trade Fair etc.
Buyer Seller Meet (BSM) for single importers & exporters meet or 1 to 1 meet.
ITPO India Trade Promotion Organisation, Delhi, branch office in Chennai (above Air
India building), India International Trade Fair will be conducted between Nov 14 27 at
Delhi every year.
CTC Chennai Trade Centre, trade fair is conducted, at
www.tamilnadutradepromotion.org for program schedule of 2 3 years for every
specific products.
Marketing Development Assistance (MDA) is provided to put stall in overseas trade
meet
FICCI Trade Fair informations can be obtained, travel expenses can be claimed with
EPC through MDA, if order is bagged successfully.

Difference between Old method and New method

Old Method New Method
Free Service to obtain importer addresses Paid Service to obtain importer addresses
Less competition with buyer since his import More competition with buyer since exposed in
requirements are unknown website for his import requirements
Focussed / targeted with Country and Buyer Any country and any buyer can be identified
Success rate is less in bagging orders Success rate is more in bagging orders
Cannot identify the size of organisation by Can know the size of organisation with the
knowing just address of buyer & his country information available in inquiry
Collecting Information about Importers and their address
EPC (their website, in-person, by email) Importers Directory
ECGC (10 addresses @ Rs 2,700/-) Embassy / High Commissions of India

Fraud Importers can be identified:

The way of his communications Quantity of order in the first consignment
Payment terms itself (huge initial order)

Before sending Consignments, consult the following offices:

Bank EPC
ECGC Agilam Institute

Quality
1. Satisfying customer's requirements is quality
2. Export Inspection Council of India (EIC) controls quality of the exported Indian products.
3. Export Inspection Agency (EIA) is a government organisation come under EIC
4. SGS is a MNC, like BVQI, TUV etc also come under EIC, preferred by most of the
importers worldwide. SGS certification to verify the quality of consignment.
5. Consignment should obtain QC certificate if buyer's requirements demand it.
6. Otherwise, Intimation for Inspection to be given to Importers before shipping if buyer
arrange his own inspection agency.

Service Tax versus Value Added Tax

Service Tax Value Added Tax
For taxable services, not for non- For taxable products, not for non-taxable products
taxable services
It is under Central Excise It is under State Government
Any production made in India will Value added tax is a sales tax for the products which have
attract central excise duty. Edu obtained some value addition i.e. From thread to clothes and
cess is also a tax applicable for the tax is for the added amount only, i.e. Cost of thread Rs
agricultural products. 100 and Cost of clothes is Rs 120, then value added tax is for
Rs 20 only. It is under the control of state government.

Previously, TNGST act (Tamilnadu General Sales Tax Act) office issue RC and now it is TNVAT
(Tamilnadu Value Added Tax Act) office issue TIN. Both are same.
Any products imported from abroad will attract customs duty.
Tips: Language translator www.stars21.com and also google translator is good.

Double Weightage Countries

There are 109 countries are listed under double weightage countries (the list is provided by Agilam
Institute book The Handbook of Information for International Traders, page no 100, last page).
When turnover increases concessions & incentives increases in export business.

Foreign Trade Policy (EXIM Policy)

Now it is named as National Foreign Trade Policy (NFTP) announced on 27 August 2009 and valid
up to 31 March 2014 (5 years document). The next government will review and announce new
revised policy after it establish the government.

Requirement of Certificate of Origin

Under GPS scheme, some importers can claim concessions & incentives in custom duty, so
this certificate is required by importers
EPC, Licensing Office, Chamber of Commerce can issue certificate of origin
For imported raw materials, and making value added goods, if the value addition is done
more than 5%, then certificate of origin can be obtained in India.
Importer can declare to their customs that goods are not from undesired countries, so the
certificate is needed

Type of Importers in the world

Departmental Stores (5%) - eg. Wall Mart, Amazon etc
Chain Stores (15%) - eg. Vishal Mart, Pothys, Big Bazaar
Direct Importers (Merchant Importers) (80%)
Small Exporters cannot do business with Departmental Stores and Chain Stores, because
Departmental Stores requirements are huge and we cannot manage, Chain Stores deals with Agents.
Agents do import behalf of chain stores, so avoid exporting to agents (not advisable by Agilam
Institute). If the Agent is our man, then we can do export to them for Chain Stores.
Small Merchant Exporters should do business with Direct Importers. There are 2 types of Direct
Importers, they are Importers of Indian Origin and Importers of Non-Indian Origin. Avoid doing
business with Importers of Indian Origin (advised by Agilam Institute)
Importers of Non-Indian Origin are of 2 types, they are those who have visited India and those who
have not visited India. Avoid doing business with Importers of Non-Indian Origin who have visited
India (advised by Agilam Institute). So, it is concluded that ideal business for small merchant
importers are Direct Importers with Non-Indian Origin and who have not visited India.

Fixing Export Price

Cost of Product can get from supplier
Profit Margin we decide (for beginners, from 20% to 25% is enough)
Cost of Transportation can get from CHA (Quantity in kg / MT and Port Location to be
provided)
Total Cost = Cost of Product + Profit Margin + Cost of Transportations
Once order confirmed, book for sufficient space reservation for shipping with your CHA.

Vellore Exporter Osaka Exporter

Chennai Seaport Tokyo Seaport

Importer wants price for:

1. Price up to Port of Origin:
FOB price/Port Chennai Free On Board Price / Port Chennai scope is from Vellore to
Chennai sea port up to shipping. Total Price = Product Cost + Profit Margin + Land
Transportation Cost up to Chennai Sea Port + Loading Cost
2. Prices up to Port of Destination:
CIF price / Port Tokyo Cost and Insurance and Freight Price / Port Tokyo scope is
from Vellore to Tokyo sea port up to unloading of products. Total Price = Product Cost +
Profit Margin + Land Transportation Cost up to Chennai Sea Port + Loading Cost + Ship
Rent + Marine Insurance + Unloading Cost up to Tokyo Sea Port
CFR price / Port Tokyo Cost and Freight Price / Port Tokyo scope is from Vellore to
Tokyo sea port up to unloading of products. Total Price = Product Cost + Profit Margin +
Land Transportation Cost up to Chennai Sea Port + Loading Cost + Ship Rent +
Unloading Cost up to Tokyo Sea Port
C&I price / Port Tokyo Cost and Insurance Price / Port Tokyo scope is from Vellore
to Chennai sea port with Marine Insurance. Total Price = Product Cost + Profit Margin +
Land Transportation Cost up to Chennai Sea Port + Loading Cost + Marine Insurance
DDP price - Delivery Duty Paid Products reach up to Osaka Importers store i.e. Door
delivery. Total Price = Product Cost + Profit Margin + Land Transportation Cost up to
Chennai Sea Port + Loading Cost + Ship Rent + Marine Insurance + Unloading Cost up
 to Tokyo Sea Port + Customs Duty + Local Transportation Cost up to Osaka Importers
Store.
In general, about 7% of the cost, is an indicative amount, will be required for transportation cost i.e.
(7% of Product Cost + Profit Margin)
If an Importer asks for price of your products, in general without any details like quote your
price. Then, you should reply as follows: My price starts from Rs. 500 onwards and depends on
Specifications, No. of Quantity, port location, Packing & Shipping requirements etc. price can
vary.

Guest Lecture by Mr. Moorthi, ECGC, email: periamet.chennai@ecgc.in, Mobile no:

9442569878 / 044-25615721
ECGC Export Credit Guarantee Corporation of India Ltd is a non-life insurance company
It is a helping organisation and service oriented organisation
Having 55 branches all over India, 9 branches in Tamilnadu, exists since last 55 years
ECGC insurance is a non-compulsory insurance
Minimum coverage 80% to 95%
Small exporters turnover less than 5 Crore
237 countries covered
There are 14 types of policies to cover payment risks. They are 1 time policy, 1 year 1 buyer policy,
multi-buyer policy etc. According to the exporters requirements, policy can be obtained.
If there is a payment problem, if you have a policy with ECGC, according to the terms and
conditions when everything is in order, you can make claim. Quality dispute is not covered in the
policy.

Payment Types
1. Advance
2. L/C Letter of Credit
3. Non L/C
CAD Cash Against Delivery / DP Document Against Payment
Open Delivery / Delivery on Acceptance (DA)
On Rs 500/- charges, Importer can check buyer's genuineness with ECGC (buyers credit
worthiness) before accepting the order.

The Process of Claim:

Payment term accepted by exporter DP payment in 25 days
01 March 2014 Consignment shipped
26 March 2014 No Payment received even after 25 days as per agreed payment terms
25 April 2014 Waiting time to make claim in ECGC
26 April 2014 Insurer can submit ROD @ ECGC (Report of Default of the Supplier)
ECGC will added that supplier under Buyer Specific Approval List if the problem is faced by
other insurers also. The affected insurer should not accept further order with the problematic
importer.
4 months from 26 April 2014 Exporter has to wait for 4 months to get payment from importer, if the
money is not received, then 80% to 90% of the money will be refunded within 7 days by ECGC,
provided all the documents are in order and with no quality issues.

Guest Lecture by Mr. Sathishkumar K AM-BD, tradeindia.com, email:

sathish@tradeindia.com, Mobile no: 9884894952
Yellow pages 27 lakhs registered user
B2B platform / market place Rs 18,400 / annum subscription fee
Promotions:
Online Website CD @ trade meet for circulation
Yellow Pages Listing Google Ad words

Guest Lecture by Mr. D.V. Illaiyaraja, CHA, Mobile no: 9444295315/9840993426,

www.wlsshipping.com (15 years in Export/Import and Clearing & Forwarding)
WLS Containers Line India Pvt Ltd
New No.33; Thambu Chetty
Laxmi Towers 1st Floor; Chennai 1
Shipping related works are done by:
Line operators Those who have own containers
Freight Forwarding Brokers of Line Operators
Console Agents Part loading i.e. Loose Cargo Loading Agent
Clearing & Forwarding CHA / C&F
Brokers Brokers of CHA
Avoid CHA Brokers and Freight Forwarding Brokers
Merchant Exporters, once order confirmed, book sufficient space reservation with CHA for
shipping, then after packing the products, bring it to Customs Warehouse and contact CHA agent.
Packing requirements of the product will be given by buyer. Also know the documents required by
buyers. Containers are of 2 types, 20 ft and 40 ft. Both can carry only 27 MT.
Documents required to do shipping of agricultural products:
1 kg of product Rs 100
10 kg of product to be shipped Rs 1000
Transportation Cost of shipping Rs 5000
Total Cost Rs 6000
APEDA certificate required (RCMC to be obtained one time registration, 3 years once to
be renewed). It is certificate to do foreign trade in agricultural products. It is mandatory.
Plant Quarant PQ Certificate
Fumigation Certificate
Health Certificate
Spice Board Certificate (for chilli etc.)
Exchange Control Copy (from customs)
Bill of Laden (BL)
Above documents to be produced for every shipment and APEDA certificate is common for all.
Non-Quota countries are Malaysia, Singapore, Srilanka and Dubai (where a lot of crime occurs in
customs). US, UK, Canada and Europe are the countries safe for foreign trade.

Guest Lecture by Mr. Sam Prasad, Web Designer, Mobile no: 9566020127, info@brigita.co,
www.brigita.co
Requirement to create website
Select audience of all levels Domain Name
Objective based on audience Contents
Best design / content structured Infrastructure / server
Advantage of having website @ Brigita
Search Engine Optimization (SEO) E-Commerce (online trading) (flipkart)
service Customer Relationship Management
Social Media Advertising (FB, twitter) (CRM) consulting