Page 22 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 1: Export Procedure and Documentation

control, i.e. exchange regulations of importing country, sanitary phyto-sanitary regulations etc. Notes
The important aspects to be examined carefully of export order as follows:
1. Item (product): The exporter has to check whether he has received the order for the same
product for which he has sent per forma invoice/quotations, etc. as the same exporter may
have sent two or three quotations for other purchase orders to the same importer. It is
advisable to check the quotation number with the export order.

Did u know? The usual errors that happen in international trade are:
(a) The exporter has sent an order for supply of goat meat but receives an order for
lamb meat.
(b) The exporter has sent an order for male trousers but receives order for female
trousers.
(c) The exporter has sent a quotation for supply of P-3 computers and has received an
order for P-4 computers.

2. Sizes and Specifications: The exporter shall check that size and specifications are same as
quoted. A minor difference may create havoc.
(a) An Indian exporter of pharmaceuticals receives an order from an American importer.
After scrutiny of the export order he supplies pharmaceuticals to the importer. After
receiving the medicines, the importer refuses to make payments as the medicines
supplied vary slightly on specifications as per the US Federal Drug Authority.
(b) A firm based at Hyderabad supplies meat to a firm in the United Arab Emirates. The
exporter has checked all specifications but forgets to get certificate from the local
maulvi, certifying that it is halal meat as per Islamic traditions. The importer refuses
to make payments although the meat was biologically safe for consumption and
best in quality and price in keeping with industry standards.

(c) An Indian exporter gets an order from a German importer for supply of iron pipes.
As per export quotation; the circumference size was given as 0.5 cms. In the export
order, the circumference size was mentioned as 0.50. The exporter makes a mistake
in judging that zero is a limiting factor here and supplies pipes, the circumference of
which was 0.51. The importer refuses to make payment, as goods supplied are not as
per order. It is to be noted that zero acts as limiting factor in this case. Hence it is
advisable that exporter should read between the lines and may take inferences from
the zero as well.

3. Pre-shipment Inspection: The Government of India, through its Export Quality Control
Act 1963, has made it mandatory to get goods inspected before shipments. Now it is to be
seen that inspection is to be done by the buyer-nominated agency or exporter’s agency. If
it is by the importer’s nominated agency, it is advisable to get that agency named in the
export order itself. Otherwise, there may be problem to the exporter later on, as the
buyer’s chosen agency may be located at a distant place and it can have financial
implications to the exporter.

4. Terms of Payments: The exporter has to check whether the terms of payments are the same
as mentioned in the quotation he has given. Advance payments are considered to be the
safest mode of payments but no importer is willing to make payments in advance in this
globally competitive era. A letter of credit is another preferred method of payment, but
the exporter needs to check its authenticity and transactional cost involved. Documents
against Payments and Documents against Acceptance are other method of payments,

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