INTRODUCTION India Textile Industry is one of the leading textile industries in the world.

India textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. Indian textile industry can be divided into several segments, some of which can be listed as Below: Cotton Textiles Silk Textiles Woollen Textiles Readymade Garments Hand-crafted Textiles Jute and Coir Conclusion: India has the potential to increase its textile and apparel share in the world trade from the current level of 4.5 per cent to 8 per cent and reach US$ 80 billion by 2020. Textiles and apparel industry exports, valued at US$ 20.02 billion (INR 963.05 billion), contributed about 11.5 per cent to the countrys total exports in 200809.

Export Procedure
Preliminaries for Starting Export Registration Register with Export Promotion Council Despatching Samples Appointing Agents Specimen Copy of Agreement Acquire an Export License Acquire Export Credit Insurance Arranging Finance

Rates of Interest Understand Foreign Exchange Rates & Protect Against Their Adverse Movement Forward Contracts Procuring/Manufacturing Goods for Export & Their Inspection by Government Authorities Labeling, Packaging, Packing & Marking Goods New Excise Procedure Preliminary- setting up an appropriate business organisation, choosing appropriate mode of business, naming the business, selecting the company, selecting the market, selecting prospective buyers, channel of distribution, processing an export order, entering into export contract, export pricing and costing, understanding risks in international trade. Registration - Registration with Reserve Bank Of India: No longer required. Prior to 1.1.1997.
Registration with Regional Licensing: Authorities (obtaining IEC Code Number) The Customs Authorities will not allow you to import or export goods into or from India unless you hold a valid IEC number. For obtaining IEC number you should apply to Regional Licensing Authority .Before applying for IEC number it is necessary to open a bank account in the name of your company / firm with any commercial bank authorised to deal in foreign exchange. The duly signed application form should be supported by the following documents: Bank Receipt (in duplicates)/Demand Draft for payment of the fee of Rs. 1,000/-. Certificate from the Banker of the applicant firm as per Annexure 1 to the form given in Appendix 1 of this Book. Two copies of Passport size photographs of the applicant duly attested by the banker to the applicants. A copy of Permanent Account Number issued by Income Tax Authorities. If PAN has not been allotted, a copy of application of PAN submitted to Income Tax Authorities. In case the application is signed by an authorised signatory, a copy of the letter of legal authority may be furnished.

Register With Export Promotion Council (image) In order to enable you to obtain benefits/concession under the export-import policy, you are required to register yourself with an appropriate export promotion agency by obtaining registration-cum- membership certificate. An application for registration should be accompanied by a self certified copy of the Importer-Exporter code number issued by the Regional Licensing Authority concerned and bank certificate in support of the applicant's financial soundness. In case an exporter desires to get registration as a manufacturer exporter, he should furnish evidence to that effect. In the case of a manufacturer exporter the licensing authority may seek copy of registration with SSI/any other sponsoring authority in addition to the application in the prescribed form for the Import Export Code Number. Despatching Samples As the overseas buyers generally insist for the samples before placing confirmed orders, it is essential that the samples are attractive, informative and have retention and reminder value. Besides, the exporter should know the Government policy and procedures for export of samples from India. He should also be aware about the cheapest modes of sending samples. Export of trade samples is allowed by sea/air (as distinguished from sea/airmail) without any value restriction, provided the customs authorities are satisfied about the bona fide of the goods that they do not fall in the export control restrictions. Appointing Agents Selling through an overseas agent is an effective strategy. These agents serve as a source of market intelligence. Regularly sending the latest trends on the current fashion, taste and price in the market. Being a man on the spot, the agent is in a position to render his advice to exporter or new methods and strategy for pushing up sales of your

products. He also provides you support in the matter of transportation, reservation of accommodation, appointment with the government as and when required by you. In some countries it is compulsory under their law to sell through local agents only. It is, therefore, essential that you should carefully select your overseas agent. Specimen Copy of Agreement (image) An agreement made this the ....... day ....... of between .......(name and address) hereinafter called the exporters of the first part and ........ (name and address) hereinafter called the importers of the second part, wherein the exporters grant to the importers the importation and selling right in the territory of ..........(fill name of country) for .........(names and brief description of product) subject to the terms and conditions mentioned. Acquire Export License (image) For Application for an Export License, Application for an Export License, Trade Fairs/Exhibitions, Gifts/Spares/Replacement Goods, Export through Courier Service, an application may be made to the Director General of Foreign Trade.

Acquire Export Credit Insurance

Export credit insurance protects you from the consequences of the payment risks, both political and commercial. It enables you to expand your overseas business without fear of loss. Further, it creates a favourable climate for you under which you can hope to get timely and liberal credit facilities from the banks at home. Specific policies designed to protect you against the risk of not receiving payment in respect of:

exports on deferred payment terms services rendered to foreign parties construction work, including turnkey projects undertaken abroad

Documents required to apply for export credit insurance are: i. ii. iii. Bank Certificate about the financial position Application form for fixing the credit limit Name/address of foreign buyer fixing sub-limits

Arranging Finance Financial assistance to the exporters are generally provided by Commercial Banks, before shipment as well as after shipment of the said goods. The assistance provided before shipment of goods is known as per-shipment finance and that provided after the shipment of goods is known as post-shipment finance. Pre-shipment finance is given for working capital for purchase of raw-material, processing, packing, transportation, ware-housing etc. of the goods meant for export. Post-shipment finance is provided for bridging the gap between the shipment of goods and realization of export proceeds. The later is done by the Banks by purchasing or negotiating the export documents or by extending advance against export bills accepted on collection basis. While doing so, the Banks adjust the pre-shipment advance, if any, already granted to the exporter.

Pre-shipment finance: An application for pre-shipment advance should be made by you to your banker. Special
schemes are also available in respect of pre-shipment finance: Exim Bank's scheme for grant of foreign currency pre-shipment credit to exporters for financing cost of imported inputs for manufacture of export products. Scheme of export packing credit to sub-suppliers from export order. Packing credit for deemed exports. Pre-shipment Credit in Foreign Currency (PCFC). For further details refer to Nabhi's How to Borrow from Financial and Banking Institutions.

Post Shipment Finance

Post-shipment finance is the finance provided against shipping documents. It is also provided against duty drawback claims. It is provided in the following forms:

Purchase of Export Documents drawn under Export Order, Advances against Export Bills Sent on Collection, Advance against Goods Sent on Consignment Basis, Advance against Undrawn Balance, Advance against Retention Money, Advances against Claims of Duty Drawback, Negotiation of Export documents.

Understand Foreign Exchange Rates & Protect Against their Adverse Movement I. Exchange Rates: Export contracts are concluded either in Indian rupee or in foreign currency. Where the
contracts are in Indian rupee, the related documents are also prepared in Indian rupees and no conversion is involved. However, where the bill is drawn in foreign currency, like US $, , DM etc., you will get Indian rupees only after the conversion of foreign currency at the appropriate exchange rate. Thus the exchange rates become very important to determine the Indian rupees payable. A favourable exchange rate will fetch you more rupees and vice-versa. It, therefore, becomes essential for you to gain some basic knowledge about exchange rate, the working out of its quotation by the banks, the factors determining the exchange rates in the market and the precautions you should take so as to avoid possible losses in future, due to adverse movement of the exchange rates. In the following paragraphs we shall endeavour to explain these issues. The rates applied by the banks for converting foreign currency into Indian rupees and vice versa are known as exchange rates. In other words, exchange rate is the rate at which one currency can be exchanged for another. There are two systems of quoting exchange rates : a. Direct Quotation: Where the price of foreign currency is quoted in terms of home or local currency. In these system variable units of home currency equivalent to a fixed unit of foreign currency is quoted. For example : US $ 1 = Rs. 40.00 b. Indirect Quotation: Where exchange rates are quoted in terms of variable units of foreign currency as equivalent to a fixed number of units of home currency. For example : US $ 2,500 = Rs. 40.00 Till 1.8.1993 banks were required to quote all the rates on indirect basis as foreign currency equivalent to Rs. 100 except in case of sale/purchase of foreign currency notes and traveller cheques where exchange rates on direct quotation basis were quoted.

Procuring/Manufacturing Goods for Export & their Inspection by Government Authorities I. Procuring / Manufacturing Goods
Once you are ready with the infrastructure for exporting goods and have obtained necessary finance, you should proceed to procure the goods for export. Procuring the goods should be done with extreme care and caution as to the quality and cost. However, procuring the raw materials etc. and manufacturing the goods for export will need extra efforts on your part. If you are an established exporter, you can have the facility of procuring raw materials under the Duty Exemption Scheme.

II.

Compulsory Quality Control & Pre-shipment Inspection

An important aspect about the goods to be exported is compulsory quality control and pre-shipment inspection. Under the Export(Quality Control and Inspection) Act, 1963, about 1000 commodities under the major groups of Food and Agriculture, Fishery, Minerals, Organic and Inorganic Chemicals, Rubber Products, Refractoriness, Ceramic Products, Pesticides, Light Engineering, Steel Products, Jute Products, Coir and Coir Products, Footwear and Footwear Products / Components are subject to compulsory pre-shipment inspection. ISO 9000

the ISO-9000 Series of Standards evolved by the International Standards Organisation has been accepted worldwide as the norm assuring high quality of goods. The ISO-9000 is also the hallmark of a good quality- oriented system for suppliers and manufacturers. It identifies the basic principles underlying quality, and specifies the procedures and criteria to be followed to ensure that what leaves the manufacturer / supplier's premises fully meets the customers requirements. The ISO-9000 series of standards are basically quality assurance standards and not product standards.ISO-9000 spells out how a company can establish, document and maintain an effective and economic quality control system which will demonstrate to the customer that the company is committed to quality. The series of Standards aims the following:

Increased customer confidence in the company

Shift from a system of inspection, to one of quality management Removing the need for multiple assessments of suppliers Gaining management commitment Linking quality to cost-effectiveness Giving customers what they need

Labelling, Packaging, Packing and Marking Goods An important stage after manufacturing of goods or their procurement is their preparation for shipment. This involves labelling, packaging, packing and marking of export consignments. Labelling requirements differ from country to country and the same should be ascertained well in advance from the buyer. The label should indicate quality, quantity, method of use etc. Packaging fulfils a vital role in helping to get your export products to the market in top condition, as well as in presenting your goods to the overseas buyer in an attractive way. While packaging, quality should not be compromised merely to cut down costs, packaging should also be in conformity with the instructions issued by the importer. Packing refers to the external containers used for transportation. The shape of packing cases play a very important role in packing the cargo, and the nature of packing material to be used will depend upon the items exported As regard specification for the size, weight and strength care must be taken to ensure that the weight of standard case does not exceed 50 Kg. for easy handling of the cargo. Before packing and sealing the goods, it should be ensured that all the contents are properly placed in the case and the list of contents of packing notes should be prepared so that the buyer, the Customs authorities and the Insurance authorities can easily check the contents of each and every case.

New Excise Procedure

All excisable goods exported out of India are exempt from payment of Central Excise Duties, for which two different procedures have been approved. Rebate of Duty on Goods Export Procedure Under the first procedure, known as 'Rebate of duty on Goods Export. The manufacturer has first to pay the excise duty on goods meant for export and then claim refund of the same after exportation of such goods to countries except Nepal and Bhutan. This is done under Rule 12 of Central Excise Rules. Under this rule, rebate of duty is granted for the finished stage as well as input stage. Rebate of duty in respect of the excisable materials used in the manufacture of the exported goods shall not be allowed if the exporter avails of the drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995 or Modvat. Exports under Bond Under the second procedure known as "Exports under Bond" goods can be exported out of India except to Nepal or Bhutan without prior payment of duty subject to the execution of the Bond with security / security for a sum equivalent to the duty chargeable on the goods to be exported. This is done under Rule 13 of Central Excise Rules which deals with export of goods in Bond as well as utilisation of raw materials etc. without payment of duty for manufacture and export of excisable goods.