Trade Cycle

This guide outlines the essential steps in the export business process. Each step plays a crucial role in ensuring successful exports from selecting the right products to leveraging government incentives. Understanding and implementing these steps is vital for a thriving export business.

Export Cycle

Product Selection

• Identify Products : Choose products that have demand in the target market and align with your expertise.

• Market Research : Conduct market research to understand the potential of the selected products in the target countries.

Regulatory Compliance

• Export Licenses : Obtain necessary export licenses and permits from government authorities.

• Tariff Classification : Determine the correct tariff classification for your products to calculate duties and taxes.

• Compliance with Standard : Ensure products comply with international quality and safety standards of the target market.

Market Entry

• Pricing Strategy : Develop a pricing strategy considering production costs, market demand and competition.

• Distribution Channels : Choose appropriate distribution channels like distributers, agents or direct sales.

• Marketing Plan : Create a marketing plan to promote your products in the target market through advertising, trade shows etc.

Shipping and Logistics

• Shipping Arrangements : Select reliable shipping methods and logistics providers.

• Documentation : Prepare necessary shipping and export documents such as commercial invoice, packing list and bill of landing.

• Custom Clearance : Ensure smooth customs clearance by providing accurate and complete documentation to customs authorities.

Payment and Finance

• Payment Terms : Negotiate payment terms with buyers, such as Letter of Credit (LC), Advance Payment or Open Account.

• Export Financing : Explore export financing options like export credit Insurance, Export working Capital or Export Factoring.

• Currency Exchange : Manage currency exchange risks by using hedging tools or forward contracts.

Government Incentives

• Export Promotion Schemes : Utilise government export promotion schemes like Export Credit Guarantee Schemes (ECGC), Merchandise Exports from India Scheme (MEIS).

Import Cycle

Product Selection

• Identify Products : Choose products that have demand in the domestic market and align with your business goals.

• Supplier Research : Conduct research to find reliable suppliers or manufacturers of the selected products.

• Quality Assessment : Ensure products meet quality standards and certifications required in your country.

Regulatory Compliance

• Import Licenses : Obtain necessary import licenses and permits from government authorities.

• Tariff Classification : Determine the correct tariff classification for your products to calculate duties and taxes.

• Compliance with Standard : Ensure products comply with local quality and safety standards of the local market.

Supplier Negotiation and Agreement

• Price Negotiation : Negotiate prices, payment terms and delivery terms with suppliers.

• Contract Signing : Formalise the agreement with suppliers through a purchase contracts or agreement.

• Terms and Conditions : Clearly define terms and conditions related to product quality, delivery and payment in the contract.

Shipping and Logistics

• Shipping Arrangements : Co-ordinate with shipping companies or frieght forwarders for transportation.

• Documentation : Prepare necessary import declaration such as commercial invoice, packing list and bill of landing.

• Custom Clearance : Ensure smooth customs clearance by providing accurate and complete documentation to customs authorities and paying applicable custom duties.

Custom Duty Paid

• Duty Calculation : Calculate custom duties based on the tariff classification and customs valuation.

• Duty Payment : Pay Custom duties through electronic or manual payment methods as required by custom authorities.

• Receipt and Verification : Obtain payment receipts and ensure they are verified by customs for clearance.