EDUindex News

EDUindex News

IMPORT PROCEDURE

The buying of goods and services from outside the nation is called importing. Usually, it is done in case the country is not able to produce that good themselves efficiently due to lack of resources. The process of importing is a lengthy one. There are lots of paperwork and decisions made in order to trade internationally. Let’s have a look at the procedure here.

 

1.TRADE ENQUIRY

The first and foremost step is to enquire and collect all the information about the countries and the firms that can export the required goods in the importing nation. The importer comes into contact with the exporter with the help of a ‘trade enquiry’ where he requests for all the details related to the goods need to be imported.

In response to the enquiry, the importer receives a ‘Performa Invoice’ which contains all of the information that he asked for.

 

2.IMPORT LICENSE AND IEC NUMBER

Some goods can be shipped across nations freely without any restrictions. But some goods need a license to be imported to a certain territory. This list of restricted goods can be checked through the ‘Export Import Policy’ (EXIM). A license must be acquired if the required goods falls under this list.

Also, in India, it is necessary for all the importers to register themselves under the Directorate General Foreign Trade (DGFT) and get an Import Export Code (IEC) which must be mentioned on the import documents.

3.FOREIGN EXCHANGE

Now, the importer has to arrange for foreign exchange as the payment for the goods must be made in the currency of the exporting country. For instance, India will have to pay in US Dollars if the goods are being imported from USA. In India, these exchanges can be procured by the Exchange Control Department of Reserve Bank of India.

 

4.PLACE ORDER

After the foreign exchange is procured, the importer has to place an order to the exporter with all the necessary information such as quantity, quality, insurance, weight, date and time of delivery, packaging and lot more. This order can either be directly placed by the importer or could be placed through a middleman.

 

5.LETTER OF CREDIT (LOC)

An exporter needs to be sure about the financial condition of the importer to secure his payment. For this reason, he demands for an LOC from the importer which is issued by the importer’s bank as a guarantee that the importer is financially stable enough to make the payments. This LOC will only be issued by the bank if they are sure about his credibility.

 

6.FINANCE ARRANGEMENT

The importer has to pay for the goods when they arrive in order to retrieve them. Therefore, he must arrange the finance way before the delivery of the goods so that he won’t be penalized for letting the goods stay at the port due to insufficient funds.

 

7.RECEIPT OF SHIPMENT ADVICE

After the exporter has loaded the goods on the ship, he prepares a ‘shipment advice’ for the importer which contains information such as description of the goods, bill of lading, date and time, name of the ship, invoice number and more.

 

8.IMPORT DOCUMENTS

After the shipment of the goods, the exporter hands over the important documents like bill of lading, packaging list, marine insurance police, certificate of origin etc. to the banker of the importer to be sent to the importer. These documents are only delivered to the importer when he accepts the bill of exchange.

 

9.ARRIVAL OF GOODS

At the arrival of the goods, the one in charge of the ship informs the in charge of the dock and provides him with a ‘general manifest’ which contains all the information regarding the imported goods. The unloading of the goods in the importing country takes place on the basis of this document.

 

10.CUSTOMS CLEARANCE

In order to take the delivery, the importer has to clear the customs duty. Firstly, the importer has to get a delivery order by the shipping company in order to take the delivery. Then he must pay the dock charges for receiving the goods on the port. After this, a ‘bill of entry’ has to be filled by the importer for the assessment of the customs duty. This bill of entry consists of the name and address of importer and exporter and information about the goods.

Only after the completion of these process is the importer allowed to take away the consignment with him.