IMPORT PROCEDURE – Module IV

i. Trade Research: The importing company must first learn more about the nations and
businesses that export the specified goods. Such information can be gathered by the importer
through businesses, trade groups, and/or trade directories. The importing company contacts the
export companies via a trade enquiry after determining which nations and companies export the
product to find out about their export prices and terms of export.
A trade enquiry is a formal request made to an exporter by an importing company seeking details
on the price and other terms and circumstances the latter is willing to ship products under. In
response to this request, the exporter will provide the importer with a quote. Along with details
regarding the goods being offered, such as their quality and cost, the quotation also contains the
terms and conditions of the sale.

ii. Obtaining an Import License: While certain commodities can be imported without a licence,
others do. To find out whether the products he or she intends to import require import licencing,
the importer must examine the most recent Export-Import (EXIM) policy. If importing products
requires a licence, the importer must get a licensing. Every importer (and exporter) in India is
required to register with the Regional Import Export Licensing Authority (RIELA) or Directorate
General Foreign Trade (DGFT) and get an Import Export Code (IEC) number. The bulk of import
documentation call for this number.
India's import industry is governed by the Imports and Exports (Control) Act of 1947. A person
or business is not permitted to import products into India without a current import licence.

iii. Obtaining Foreign Exchange: Because they are based abroad, the supplier in an import
transaction asks payment in a foreign currency. To make a payment in another currency, Indian
currency must first be changed into a foreign currency. All foreign exchange transactions in India
are regulated by the Exchange Control Department of the Reserve Bank of India (RBI).
The existing requirements mandate that all importers acquire foreign currency approval. To
obtain such a sanction, the importer must submit an application to a bank that the RBI has
permitted to issue foreign currency. The application shall be in the form provided under the
Exchange Control Act and shall be accompanied by an import license.
The applications are approved by the exchange bank and sent on to the Reserve Bank of India's
Exchange Control Department. After carefully examining the application in light of the
Government of India's exchange policy in force at the time of application, the Reserve Bank of
India approves the release of foreign currency. The appropriate exchange bank provides the
importer with the required foreign currency. It should be noted that the exchange is only released
for a specific transaction, unlike import permits, which are provided for a set amount of time. As
the economy has become more open, most limitations have been removed, and the rupee is now
convertible on a current account.

iv. Placing Order or Indent: After receiving the import licence, the importer places an import
order or indents with the exporter for the supply of the specified products. The import order
contains information on the cost, size, grade, and quality of the ordered items, as well as
instructions on how to pack, ship, and arrive at the ports of departure and arrival, as well as the
delivery date, insurance, and payment options. The import order should be carefully worded to
prevent any ambiguity and later controversy between the importer and exporter.
It includes instructions from the importer regarding the kind and quantity of goods needed, how
to ship them, how to pack them, how much to pay, and other details. Usually, indentations are
made in two or three copies. There are three different sorts of indents: confirming, closed, and
open. The exporter is allowed to finish the formalities at his end since the indent does not include
all the necessary information about the items, price, and other details. A closed indent, on the
other hand, is one that explicitly mentions all of the product's details, including price, brand,
packing, shipping, insurance, and so forth. An order is placed with a confirming indent when it is
contingent on the importer's agent's confirmation.

v. Obtaining a Letter of Credit: The importer must obtain a letter of credit from its bank and
deliver it to the supplier if that is the preferred form of payment between the importer and the
foreign supplier. As was already explained, a letter of credit is a promise from the bank of the
importer that it will pay export bills to the bank of the exporter up to a specific sum. A letter of
credit (L/C) is an agreement that, up to a certain sum, the foreign dealer's bills of exchange drawn
on the importer will be honored upon presentation by the L/C's issuer, typically the importer's
bank.
vi. Financial Planning: The importer should make plans to pay the exporter before the products
arrive at the port. Planning ahead for financing imports is necessary to prevent grossly overpaying
demurrages (fines) on imported items that are standing uncleared at the port from a lack of
payments.

vii. Advice for Shipment Receipt: After loading the products onto the ship, the overseas
supplier provides the importer the shipment advice. Shipment advise contains details about the
shipment of products. The shipment advice contains details like the invoice number, bill of
lading/airways bill number and date, vessel name and date, port of export, item description and
quantity, and date of vessel sailing.
viii. Compilation & Processing of Documents: Following the shipment of the items, the
international supplier compiles the necessary documentation in accordance with the terms of the
contract and letter of credit and provides it to their banker for discussion with the importer in the
manner specified in the letter of credit. A set of documents often consists of a bill of exchange,
commercial invoice, airline bill or bill of lading, packing list, certificate of origin, maritime
insurance policy, etc. The act of accepting a bill of exchange in order to receive delivery of
import paperwork is referred to as retirement of such documents. The bank will deliver the import
documentation to the importer after retirement is complete.

ix. Items Arrival: In accordance with the contract, the international provider ships the items.
When goods arrive in the importing nation, the person in control of the carrier—whether it's a
ship or an airline—notifies the person in command at the dock or the airport. He then presents the
general import manifest document. An import general manifest document contains a list of the
specific information about the imported products. The unloading of freight is based on this text.

x. Customs Clearance: All imported products must pass through customs clearance after they
leave the Indian borders. Customs clearance is a fairly time-consuming process that involves a
number of formalities. It is advised that importers engage C&F agents who are knowledgeable
about such processes and are essential in obtaining the products' customs clearance. An
endorsement for delivery, also known as a delivery order, must first be obtained by the importer.
When the ship docks at the port, the importer often receives the endorsement on the back of the
bill of lading. This endorsement is given by the pertinent shipping firm. The shipping business
will occasionally issue a delivery order rather than approving the invoice. Under the terms of this
order, the importer may accept delivery of the goods. Of course, the importer must first pay the
freight fees before taking ownership of the products.