Import Procedures

Import

Import is explained as bringing products into own country from a place outside the national border. It can be said that Import trade refers to the purchase of goods from a foreign country. The procedure for import trade varies from country to country depending upon the import policy, statutory requirements, and customs policies of different countries. In almost all countries of the world import trade is controlled by the government. The aims of these controls are the appropriate use of foreign exchange restrictions, protection of indigenous industries, etc. The imports of goods have to follow a procedure.

A manufacturer's import department often grows out of the purchasing department, whose personnel have been assigned the responsibility of procuring raw materials or components for the manufacturing process. For importers or trading companies that deal in finished goods, the import department may begin as a result of being appointed as the distributor for a foreign manufacturer (Johnson, 2010).

In the Indian context, the import and export of goods is ruled by the Foreign Trade (Development & Regulation) Act, 1992, and India’s Export-Import (EXIM) Policy. India’s Directorate General of Foreign Trade (DGFT) is the major governing body and is responsible for all issues associated with EXIM Policy. Importers are essential to register with the DGFT to obtain an Importer Exporter Code Number (IEC) issued against their Permanent Account Number (PAN), before engaging in EXIM activities. After an IEC has been obtained, the source of items for import must be identified and declared. The Indian Trade Classification – Harmonized System (ITC-HS) allows for the free import of most goods without a special import license.

Basic Import Procedures

Setting Market Objectives:

Setting market objectives on pricing and terms

Sourcing Products:

Identifying potential suppliers
Sourcing channels of distribution

Trade Regulations:

Import regulations and requirements, and checking whether an import license is required
Patent, trademark, and copyright

Making Contacts:

Sending enquiries to suitable suppliers

Settling Quotation and Terms:

Analyzing the supplier's quotation and offers
Costs and terms of sale

Financing the Purchase:

Preparing for working capital
Types of bank financing and applications, such as exporter credit or other bank facilities

Sales Contract:

Confirming the sales contract and terms of transaction such as payment terms.

Preparing Payment and Insurance:

Preparing payments and insurance specified in the sales contract (eg. when the payment term is D/C, submit a D/C application to the issuing bank; when the trade term is FOB, arrange a cover note with an insurance company).
Preparing insurance, and cover notes, when necessary

Acquiring Goods:

Receiving shipping advice and arrival notice
Receiving export documents from the exporter
Collecting goods from the specified shipping company or forwarder

Customs Clearance: Arranging customs clearance and import declaration

Import Procedure

All importers must have to follow detailed customs clearance formalities when importing goods into India. A complete overview of EXIM procedures can be found on the Indian Directorate of General Valuation's website.

It is established in finance literature that smooth, efficient, and compliance-oriented exporting, and importing needs specialized knowledge of personnel. In many companies, some or all functions of the export and import department are combined in some way. In smaller companies, where the volume of export and import does not justify more personnel one or two persons may have responsibility for both export and import documentation and procedures. In giant companies, these functions tend to be separated into the export department and import department (Johnson, 2010).

It is beneficial for companies to have export and import manual of procedures and documentation. These manuals serve as an effective tool for smooth operations and as a training tool for new employees. Exporters and importers must maintain records relating to their international trade transactions. Many companies offer software programs for managing the export process such as order taking, generating of export documentation compliance with export control regulations, and calculation of transportation charges and duties. On the import side, many companies offer supply chain management software.