Export planning and finance
- Export planning – to sell goods in foreign markets
- - segmentation, target and positioning
- - market research
- - product development
- - pricing- freight, margins, currency
- - documentations- invoice, bill of lading (receipts, title and contract) , enclosures (packing list)
- - international shipping, insurance, labelling
- - legal compliance (certificates and check lists)
- - choose the agents
- - delivery mode for modus operandi
Export Finance:
• Pre-shipment- buy, process pack
• Post shipment- shipping documents, inventory and delivery
• Export credit- short term and long term
• Receivables-
• Lines of credit- by Govt banks- to promote Indian exports
• Institutions offering finance- EXIM bank, SBI, HSBC, HDFC etc
• ECGC (export credit guarantee corp- covers export risk
• Letter of credit, advances, credits
• Bank guarantee
• Packing credit
• Letter of credit:
• Written guarantee issued by bank
• Behalf of buyer, that payment will be made to the seller
• Required documents
• Commonly used method to reduce the risk of buyers and sellers
• Parties involved – issuing bank, advising bank, importer and exporters
• Exporting Licensing
• Official govt authorization to export
• By export control authorities
• Case- by- case
• To protect national security
• International agreement
• Export houses:
• Recognized and certified
• By Govt
• Specialized firms
• Generally large scale
• Sometimes on their own A/C or manufacturers
• Transportation and logistics
• DGFT- Directorate General of Foreign Trade
• They should have good records
• They should have license-
• Handling export documentation and procedures
• Warehousing and shipment
Export risk and insurance:
- Commercial risk- loss due to buyers not paying in time
- Buyers refusal to take it – in case it is not intact
- No clear letter of credit
- political risk- adversities
- Import bans
- Insurance risks
- Social/ civil unrest
- Currency exchange risk
- Legality issues
- Transportation risk- shipwreck, packing
- Cultural misunderstanding
• Insurance:
• Marine insurance
• Export credit insurance- protect exporters
• Political risk insurance
• Foreign exchange insurance
• Product liability insurance
• Transit insurance
• Export Promotion and incentives by GOI:
• Objectives- boost foreign exchange, competition, opportunity, right products,
employability
• Policy support- guidelines, simplify the process
• Industry specific bodies- FIEO,EEPC, AEPC ( Indian federation of export org,
Engineering export promotion council, Apparel export promotion council)
• Export promotion council
• Special economic zone- tax benefits and facilities
• Export processing zone- manufacturing
• Export incentive schemes- refund of all duties, m/c at concessions,
• Interest equalization scheme- low interest rates on export credit
• Tax incentives (GST refund)
• Market access/development assistance
• New schemes to boost exports and imports
• Remission of duties and taxes on export products
• Reinstated form 1 June 2025 for textiles, pharma, auto, agri, shrimp items
• Export promotion mission – Rs 2,300 crore
• Support against non-tariff barriers
• Digital platforms- Bharat trade net, export facilitation centre, trade infrastructure
for exports
• Product linked incentives- EV, pharma, solar, IT, health care
• State level policies- UP: certification cost
• Export- rice, agri, processed food
• Import- Rs 100 billion program on edible oil production
• Sagarmala project- international level facilities for logistics and SCM
• Defence equipments- Rs 30,000 cr for drone
• Initiatives for import substitutions
• - Make in India 2014
• - Atmanirbhar Bharat Abhiyan ) self reliant 2020
• -PLI
• - indigenization
• - electronics and semi-conductors
• - renewable energy and oil import reduction
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