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How to start Exports

Organisation related with the promotion of Exports



Export Trade Procedure and Related Issues


  • Select a “quality” product based on the export potential and demand

  • Select a particular overseas market.

  • Concentrate only on few products and minimum three countries, if you are a beginner.

  • Ensure that you can manufacture or procure from other sources the selected product(s) at the competitive prices and in sufficient quantity and will be able to meet the quality specifications, delivery schedule and other terms and conditions of the overseas buyer.

  • Get the full information of similar products of other manufacturers if already available in selected markets, their prices, marketing techniques, terms of business etc. To offer your product(s) to foreign buyers with a bargaining edge in order to capture the market.

  • Assess the degree of competition of product (s) which you propose to export in a particular market.


Procedure for becoming an Exporter


  • To apply for an import export code with the concerned office of the joint director general of foreign trade with all the particulars and necessary fees in this regard.

  • To find out the particular market and select a quality product and quote the prices in u.s. dollars which is an universally accepted currency for all import – export trade. The prices may be quoted as under:-

    1. F.O.B: it means “free on board” the delivery of the cargo is given till the same is loaded on to the vessel. All future expenses like freight, insurance will be to the account of the buyer.

    2. C & F: It means cost & freight. The price includes even the freight charges till the destination. The buyer has to bear only the insurance and other delivery charges etc at the port of destination.

    3. C I F : it means cost, insurance and freight. The price includes all expenses till the port of destination.

  • Once the price is acceptable to the buyer, he will immediately open the letter of credit or will send an advance remittance through the banking channels to the seller’s account.

  • The letter of credit should be always in the form of irrevocable and sight letter of credit.

  • Once the lC is opened the seller has to prepare the cargo as per the quality, packing specifications mentioned in the lC and send the same to the port of loading so that the C&F (clearing and forwarding) agent will do the rest of forwarding the consignment to the buyer.

  • Once the shipment is over C&F agent will prepare all the shipping documents called for in the lC.

  • Once these original shipping documents are received, seller has to prepare his commercial invoice, packing list, bills of exchange and submit all the documents along with the original lC received from the buyer to the bank for negotiation.

  • The banker will thoroughly scrutinize the documents strictly as per the terms and conditions of the lC and give credit to the sellers account and send the documents to buyers’ bankers for getting the payment.  Normally the payment is received within 10-15 days time.

  • In addition to l/C and advance remittance, the payments can be in the form of D.P (documents against payment) at sight which means exporter will ship the material and send all the original shipping documents through his bank to the buyer’s bank. Buyer’s bank will collect the money from the buyer and release the documents to him and send proceeds to Indian exporter through the banking channels.

  • In case of perishable commodities, no buyer will open l/c, send advance remittance or even agree for D.P terms on a pre agreed price. It is all done on consignment sale basis. Exporter will ship the material and send the original documents to the buyer and the buyer in some cases may send some part payment as advance and the final account will be settled only against the sale of exported cargo.

  • THE ROLE OF E.C.G.C. ( EXPORT CREDIT GUARANTEE CORPN OF INDIA LTD). In order to offset the exporter against unforeseen circumstances in exports, ECGC plays an important role. ECGC covers various types of risks such as default by importer or the country, non receipt of payment due to wars, riots etc and charge a nominal premium for this based on the country classification ( eg. 0.3% to 0.8% of the value). ECGC also helps an exporter in assessing the credit worthiness of the importer and will fix the credit limit accordingly. This will help an exporter to expose his risks only to that extent.

About W.T.O

     The WTO is the outcome of the continuous negotiations under the general agreement on trade and tariff (GATT) since the inception of GATT in 1947. W.T.O came into existence on 1.1.1995. Currently there are 145 member countries, India being the founder member of W.T.O

Basic Principles


  • Non discrimination between member countries

  • Non discrimination within a country

  • Freer trade – gradually through negotiation

  • Predictability – through binding tariff

  • Promoting fair competition


Withdrawal Provision:

Any country can withdraw from membership by giving six months’ notice.

India’s tariff binding commitments:

100% for primary products

150% for processed products

300% for edible oils

Last Updated: 27-05-2020 01:16 PM Updated By: Approver kappec

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