Encipher Exports

Pre Shipment Finance is issued by a financial institution when the seller want the payment of the goods before shipment. The main objectives behind preshipment finance or pre export finance is to enable exporter to: Procure raw materials. Carry out manufacturing process. Provide a secure warehouse for goods and raw materials. Process and pack the goods. Ship the goods to the buyers. Meet other financial cost of the business. Types of Pre Shipment Finance Packing Credit Advance against Cheques/Draft etc. representing Advance Payments. Preshipment finance is extended in the following forms : Packing Credit in Indian Rupee Packing Credit in Foreign Currency (PCFC) Requirment for Getting Packing Credit This facility is provided to an exporter who satisfies the following criteria A ten digit importerexporter code number allotted by DGFT. Exporter should not be in the caution list of RBI. If the goods to be exported are not under OGL (Open General Licence), the expo...

Introduction Post Shipment Finance is a kind of loan provided by a financial institution to an exporter or seller against a shipment that has already been made. This type of export finance is granted from the date of extending the credit after shipment of the goods to the realization date of the exporter proceeds. Exporters don’t wait for the importer to deposit the funds. Basic Features The features of Post-shipment finance are: 1) Purpose of Finance : Post-shipment finance is meant to finance export sales receivable after the date of shipment of goods to the date of realization of exports proceeds. In cases of deemed exports, it is extended to finance receivable against supplies made to designated agencies. 2) Basis of Finance : Post-shipment finances is provided against evidence of shipment of goods or supplies made to the importer or seller or any other designated agency. 3) Types of Finance : Post-shipment finance can be secured or unsecured. Since the finance...

Potential sources of financing for your new business are equity (shares of the business) and debt (loans).  Equity investors will look for potential profits and increases in value, whereas lenders will be concerned about cash flow, which for them boils down to generating enough cash every month to make your principal and interest payments In general, you cannot get financing without putting some of your own money into the business (usually at least a quarter of the total). Both investors and lenders look at the ratio of debt to equity, or leverage, to make sure it is not dangerously high. Your Own Resources:  Equity : Your personal savings Debt : Personal loans, especially home equity loans Note 1: "It is usually quicker, easier, and cheaper to use personal loans for a business start-up than to try to get a loan to the business itself. Home mortgages are an easy solution, but in the worst case you could lose your house." Note 2: " Try to avoi...

Most small businesses are started with inadequate market studies or with none at all.  Yet a market study is almost the only way to support your income (sales) projections and your marketing plan.  the two most important products had very low market potential. If the entrepreneur had equipped his plant before finding this out, he would have had a major problem.  The other two products had fairly high market potential, and because of the study, he knew how to market them and to whom to sell them. The following is a topical outline for a report on the market for any product being exported from one country to another.  If you can produce or buy this kind of information before you begin, you might decide to try another product or another market.  If you decide to go ahead, your chances of success will be increased considerably.  Moreover, a solid market study looks very good to potential investors and lenders. Basic Information Product name ...

Some countries require that goods shipped to the country be accompanied by a certificate of origin designating the place of manufacture or production of the goods. This is signed by the exporter, and, usually, a local chamber of commerce that is used to performing this service (again, for a fee) certifies to the best of its knowledge that the products are products of the country specified by the exporter. The exporter may exports to or imports from Canada or Mexico. In general, in order to be eligible for the duty-free or reduced duty rates under NAFTA, all items imported from outside of North America must have undergone the ‘‘tariff shift’’ specified in Annex 401 during the manufacturing process for that product. Certificates of Free Sale  Sometimes an importer will request that an exporter provide a certificate of free Sale. Loosely speaking, this is a certification that a product being purchased by the Importer complies with any U.S. government regulations for marketing ...

Because of tough competition, you can sell only if the quality of your product is better than that of your competitors, the price most competitive and the buyers get delivery on time . In order to achieve all this, one needs to have access to international standard quality materials and capital goods . We also need to have better technology at our command as there is a sea change in the markets worldwide. We have moved from letters to e-mails, telefaxes to video conferencing and manually operated phones to cellular phones via satellite. Today it is not possible to compete in the world without a better technological product. We cannot match the standards of quality and services that others offer if we happen to be out-dated – and that means out of market as well. By accepting membership of the World Trade Organisation (WTO) , India has become a part of the global village. New trade blocks are emerging and new world order is getting established. Even regional trading...

India’s economic structure today presents a distinctly different picture from what it was in 1991 when economic reforms started.  In 1991 our foreign exchange reserves had depleted substantially.  We then had just enough reserves to tide over the import requirements of three weeks.  It was in this context that India gradually started dismantling its quantitative restrictions, partially liberalised its exchange rate and reduced the peak rate of customs duties.  The average duty on all products stands reduced from over 70% in 1991-92 to 12% in 2008-09.  However, at the same time the whole world was rushing towards globalisation and integration.  Had India not joined the race, the economic scenario could have worsened.  The only recourse left to India was to increase its exports to tide over the ever-increasing imports.  We were aiming to gain a considerable proportion of international business and make our presence felt on the ...

The entire 14-step process for conducting an export transaction is summarized. Take for example an Indian importer and US exporter. Step1 : The Indian importer places an order with the US exporter and asks the American if he would be willing to ship under a letter of credit. Step 2 : the US exporter agrees to ship under a letter of credit and specifies relevant information such as price and delivery terms. Step 3 : the Indian importer applies to (e.g.) State bank of India for a letter of credit to be issued in favour of the US exporter from the merchandise the importer wishes to buy. Step 4 : the state bank of India issues a letter of credit in the Indian importer’s favour and sends it to the US exporter’s bank, the bank of New York. Step 5 : the bank of New York advices the US exporter of the opening of a letter of credit in his favour. Step 6 : the US exporter ships the goods to the Indian importer on a common carrier. An official of the carrier gives the export...

The degree of government involvement in trade varies from passive to active. The types of  participation include administrative guidance, state trading and subsidies – Administrative Guidance Many governments routinely provide trade consultation to private  companies.  Japan has been doing this on a regular basis to help implement its industrial  policies. This systematic cooperation between the government and business is labeled "Japan, Inc." To get private firms to conform to the Japanese government's guidance, the government  uses a carrot-and-stick approach by exerting the influence through regulations, recommendations, encouragement, discouragement, or prohibition.  Japan's government  agencies' administrative councils are influential enough to make importers restrict 'their  purchases to an amount not exceeding a certain percentage of local demand.  The Japanese  government denies that such a practice exists, claimi...

Trade barriers are the artificial restrictions imposed by the governments on free flow of goods and services between countries. Tariffs, quotas, taxes, duties, foreign exchange restrictions, trade agreements. and trading blocs are the techniques used for restricting free movement of goods from one country to the other. Trade barriers can be broadly classified into two categories Tariff barriers or fiscal controls. Non-tariff barriers or quantitative restrictions

Quotas are a quantity control on imported goods.  Generally, they are specific provisions limiting the amount of foreign products imported in order to protect local firms and to conserve foreign currency.  Quotas can be used for export control as well. An export quota is sometimes required by national planning to preserve scarce resources.  From a policy standpoint, a quota is not as desirable as a tariff since a quota generates no revenues for a country.  Two kinds of voluntary quotas can be legally distinguished: VER (voluntary export restraint) and OMA (orderly marketing agreement).  Whereas an OMA involves a negotiation between two governments to specify export management rules, the monitoring of trade volumes, and consultation rights, a VER is a direct agreement between an importing nation's government and a foreign exporting industry (i.e., a quota with industry participation).  Both enable the importing country to circumvent the GAT...