Import Procedure

Import means to bring an item from foreign country to your country.

But how is this done?

Let's understand its procedure in a common language. 

The entire import procedure has certain steps. 

We have outlined those steps involved in import procedure below.

1.Trade Enquiry 

Traid enquiry is a written request from exporter by importer asking some questions like ; Is the item i am looking for available with you? How much quantity do you have? How much I need to pay for this? Many more such questions are asked in this step.

The exporter responds this enquiry with a letter called 'quotation' or 'Performa Invoice'. 

2.Procurement of import  licence

 Now this is the most important step because one who wants to import something from any other country must have a licence (some rights to import or export). In India Directorate General of Foreign Trade(DGFT) and Regional Import Export Licensing Authority (RIELA) are the bodies which provide Import Export Code(IEC) as licence to those who register here. This IEC a 10 digit number is mandatory for any person/company/business starting a venture for exporting or importing internationally. This process to register to get your IEC may take 10 to 15 days. 

3.Foreign exchange 

Since you are getting that item from another country, then you will have to pay for it in the currency of that country only. Hence you need to get your money converted with the currency of that country first. 

4. Place your order

Now after having completed all these steps you are all set to place your order in the exporter's book. 

5. Obtaining LoC

When the order has been placed the exporter asks you to get LOC from your concerned Bank. LoC stands for Letter of Credit. This happens so that if the exporter does not get the price of his goods,you have demanded for any reason, in such a situation the bank will pay that amount on your(importer) behalf. 

In simple words LoC is like a guarantee letter that is given by the bank to show that if the important does not pay to you we will pay to you. 

6. Arranging for Finance

Importer has to arrange for proper finance or money before receiving his goods in order to avoid any kind of problem i.e the penalty if not makes payment on time (at dock).

7. Receipt of shipment advice

Shipment advice is document which contains all the details like ship details, shift details,day of arrival, invoice number ,description of goods and its quality, and insurance policy etc. When the exporter gets your goods loaded in a ship(he can consider any other space as well), he immediately sends you the receipt of this letter which is called shipment advice. 

8. Retirement of import documents

 here the exporter after having shift the goods ,will prepare a set of certain documents and handover to his banker for the purpose of transmission and negotiation of them. This set of documents usually contains bill of exchange, bill of lading /airway bill, and tracking list etc.

9. Arrival of goods 

In this step in charge of carrier (say ship in our this case) informs the officer in charge at the dock about this arrival of goods in the importing country.  Import General Manifest(IGM) is given to Dock officer by ship in charge. Import General Manifest is  that document which has details of the goods that are imported. 

10. Custom clearance and release of goods

 Now importer is just one step away from his desired goods. Importer needs to pay charges on this goods and complete certain  formalities to get these goods released. Since this is a lengthy procedure and takes too much time, the importer has a Clearing and Forwarding agent (C&F agent) for this entire work. He is highly skilled in this job. 

Once the formalities are completed and the custom and other related charges are cleared importer gets release order for his goods from Dock Officer.  

This is how the import takes place. 

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