Pre-Shipment Documents for Exporting from India
“Pre-shipment” generally refers to the period before goods are physically shipped, encompassing activities like financing, quality control, and preparation for transport.
Preparing your goods for export from India involves a detailed process, and ensuring you have all the necessary pre-shipment documents is critical.
These documents facilitate smoother shipping and customs clearance and validate with the Foreign Trade Policy of the Government of India.
The Process involves the below listed main activities:
Here’s a more detailed breakdown:
- Finance:
“Pre-shipment finance” involves providing funds to exporters to cover costs associated with producing, processing, and preparing goods for export.
- Quality Control:
“Pre-shipment inspection” (PSI) is a crucial step where the quality and quantity of goods are verified before they are shipped, ensuring they meet the required standards.
- Preparation for Transport:
This stage includes tasks like packing, labeling, and preparing necessary documentation for the shipment.
- Tracking Status:
The Pre-Shipment Documents
In the context of shipping tracking, “pre-shipment” can indicate that a shipping label has been created, but the item hasn’t been physically received by the carrier for transport yet.
- Pre-Shipment Invoice:
This Invoice mentions all about the product, seller, buyer, port of loading, destination port and the invoice amount and currency.
This is used for Customs clearance.
- Bill of Lading:
The Bill of Lading (B/L) is crucial. It acts as the contract between the goods owner and the carrier / Vessel. It’s your proof of contract and essential for the recipient to claim possession of the goods.
- Commercial Invoice:
A Commercial Invoice isn’t just a formality; it’s a cornerstone of international trade. This legal document outlines the sale between you, the exporter, and the foreign buyer, which is pivotal in determining customs duties. It’s crafted precisely, adhering to specific governmental mandates on form, content, and language.
Think of it as the detailed narrator of your product’s journey across borders, ensuring all financial and regulatory requirements are transparent and accounted for.
- Packing List:
The Packing List for your exports ensures customs officials never have to guess. Packing list informs what’s inside the container, the details, description and quantity with HS codes. It includes comprehensive details like seller and buyer information, shipment details, and itemized descriptions of each package. It’s a crucial tool for customs verification, ensuring every piece of your cargo is accounted for without substituting a commercial invoice.
- Shipping Bill / Bill of Export:
When you’re ready to send your goods overseas, the Shipping Bill or Bill of Export is your go-ahead from customs.
Filed electronically through ICEGATE, this document is a staple in the roster of pre-shipment documents for export. It marks your goods’ final clearance for departure from India. It’s not just paperwork; it’s your product’s departure ticket, stamped and approved.
- Pro Forma Invoice:
The Pro Forma Invoice sets the stage before a deal is sealed. This preliminary bill lays down the goods’ description, quantity, price, and weight and is used as a negotiation tool between you and your international buyers.
It’s the blueprint of your agreement, providing a snapshot of the terms and helping both parties align expectations before the official documents roll out.
- Export Order or Purchase Order: Confirming Your Deal
Following the Pro Forma Invoice, the Purchase Order (PO) or Export Order is where things get official. This document, filled out by the buyer, specifies everything from cost to shipping details and currency type, cementing the transaction details.
It’s a commitment to ensure both parties are on the same page and ready to proceed with the transaction.
- Proof of Origin: Identifying Your Goods’ Roots
Just as a birth certificate identifies your place of origin, the Proof of Origin (POO) does the same for your goods. This document is crucial, especially when your exports must meet specific trade agreements or regulations stating where your goods were made.
Ensure you attach a POO for each item; it’s not just paperwork; it’s your goods’ geopolitical passport.
- Bill of Exchange:
The Bill of Exchange is a formal demand for payment from the buyer to the exporter or a designated bank. It’s an essential financial document that keeps the transaction’s integrity, ensuring you, the exporter, are paid on time.
Think of it as a polite financial nudge, ensuring your business flows as smoothly as your goods across seas.
- Commercial Invoice:
In international trade, trust is good. This will help create an invoice on the Buyers for his payment according to the payment terms.
- Inspection or Quality Check:
Before your goods set sail, an Inspection or Quality Check can be requested. This scrutiny ensures that everything from product quality to packing meets the agreed standards.
For exporters, having the necessary documents ready for this process is critical. It’s not just about compliance; it’s about demonstrating your commitment to quality and reliability.
Legal Pre Shipment Documents Required for Export from India
- KYC Documents Required by The CHA for Custom Clearance
The Customs House Agent (CHA) requires to Know Your Customer (KYC) documents to verify the exporter’s identity. These documents are crucial for fulfilling legal compliance and facilitating customs clearance.
2. GST (LUT)/ IGST Declaration
Allows exporters to ship goods without paying IGST, enhancing competitiveness in international markets.
3. Export License (If required)
It ensures that goods with potential military applications or other sensitive uses are controlled and legally exported.
4. AD Code on (Bank Letter Head)
The Authorized Dealer Code (AD Code) is a 14-digit code given by the bank where the exporter’s account is held. It must be registered with the customs authorities.
5. RCMC / EPC Certificate (If required)
Registration-Cum-Membership Certificate (RCMC) issued by Export Promotion Councils (EPC) is proof of registration with these councils. RCMC is often required to avail of benefits under the Foreign Trade Policy, such as duty drawbacks, export promotion schemes, etc.
Additional Pre Shipment Documents Required for Export from India
1. Marine Insurance Policy
This policy covers the loss or damage of ships, cargo, terminals, and any transport by which goods are transferred, acquired, or held between points of origin and final destination.
2. Mate’s Receipt
Once the cargo is loaded onto the ship, the chief officer at the port issues a receipt confirming the exact condition and quantity of goods received.
It’s your proof that the goods have been loaded correctly and are on their way to their destination. The Mate’s Receipt is necessary for issuing the Bill of Lading.
3. FEMA Declaration for Exporters
It is a declaration that the exporter complies with the Foreign Exchange Management Act 1999, which governs all foreign trade transactions from India.
It ensures you’re legally covered and adhering to the regulations controlling the flow of foreign exchange related to your export activities. This declaration form can be filled out and submitted through your freight forwarder or directly to customs officials.
4. Let Export Order
An order issued by customs officials after all the clearance procedures have been completed officially allows the export of goods.
It’s the final go-ahead from the customs department, confirming that your shipment complies with all export regulations and is cleared to leave the country. The customs officer will issue this order once your goods pass all customs checks and verifications.
This is issued with the Shipping Bill.
5. Export General Manifest
It is a document filed by the carrier / vessel detailing all the cargo on board, which is submitted to the customs at the loading port.
It is a formal declaration by the vessel operator of all goods transported, crucial for customs and port authorities.
The shipping company or airline operating the vessel or aircraft will prepare and file this document.
Summing Up
Proper pre-shipment documents for export are crucial to navigating international markets and strengthening your trade relationships seamlessly.
From the Bill of Lading to the Letter of Credit, each document plays a pivotal role in the safety and efficiency of your exports from India.
Prepare your pre-shipment documents well so that your export is smooth and hassle free.