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Unit 3: EXIM Strategies

brokers in the United States are certified as such by the US Customs Service to perform the Notes
functions needed to transport products into the country.
2. Requirement of Customs Agencies’ Essentials: When importing goods, a company must be
familiar with the customs operations of the importing country because once cargo reaches
the port of entry, customs officials take control of the product and process. In this context,
‘customs’ are the country’s import and export procedures and restrictions, not its cultural
aspects.
An importer needs to know how to clear goods, what duties to pay, and what special laws
exist regarding the import of products. On the procedural side, when merchandise reaches
the port of entry, the importer must file documents with customs officials, who assign a
provisional value and tariff classification to the merchandise.
A broker or other import consultant can help an importer minimize import duties by:
Valuing products in such a way that they qualify for more favorable duty treatment.
Different product categories have different duties. For example, finished goods
typically have a higher duty than parts and components.

Qualifying for duty refunds through drawback provisions. Some exporters use in
their manufacturing process imported parts and components on which they paid a
duty.
Deferring duties by using bonded warehouses and foreign trade zones. Companies
do not have to pay duties on imports stored in bonded warehouses and foreign
trade zones until the goods are removed for sale or used in a manufacturing process.
Limiting liability by properly marking an import’s country of origin. Because
governments assess duties on imports based in part on the country of origin, a
mistake in marking the country of origin could result in a higher import duty.
3. Understanding of Import Documentation: Generally, there is a great deal of paper
work involved in the import business. The arrival of a shipment at a port requires the
importer to file specific documents with the port director in order to take title.
Specifically, the importer receives the products without purchasing them–that is, it
takes the title of ownership but without laying out any money. These documents are
of two different types: (a) those that determine whether customs will release the
shipment, and (b) those that contain information for duty assessment and statistical
purposes. The specific documents that customs requires vary by country but usually
include an entry manifest, a commercial invoice, and a packing list. For example, the
exporter’s commercial invoice contains information such as the country of origin, the
port of entry to which the merchandise is destined, information on the importer and
exporter, a detailed description of the merchandise, including its purchase price, and
the currency used for the sale.

3.5 International Marketing

Globalisation renders the business environment increasingly global even for domestic firms.
The major competition which many Indian firms encounter in the home market now, for instance,
is from goods produced in India by MNCs and imports. For example, Nirma encounters
competition from global, e.g. MNCs like Unilever, P&G, Colgate Palmolive, Henkel, etc. besides
competition from imported products. Thus, many firms in their home market face the
technological, financial, organizational, marketing and other managerial prowess of the
multinationals.

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