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8/7/2019 Indian Textile Industry (1)
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Lala Lajpatrai College of Commerce &
Economics
Presentation on Export Import Management
Submitted To: Prof. Neelam Arora
By Group No.: 8
S.Y.BMS Div: A
Project Topic: Export of a Textile Company
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Indian Textile Industry
- It is one of the largest in the world with a massive raw material and textilemanufacturing base.
- About 27% of the foreign exchange earnings are on account of export of
textiles and clothing alone.
- The textiles & clothing sector contributes about 14% to the industrial
production & 3% to GDP of the country.
- Indian textile industry is constituted of the following segments: Readymade
Garments, Cotton Textiles including Handlooms, Man-made Textiles, SilkTextiles, Woollens Textiles, Handicrafts, Coir, and Jute
- India ranks sixth among the top garment exporting countries globally. Nearly
78% of garments are exported from India are cotton-based. The main products
are ladies garments, blouses, skirts, T-Shirts and trousers
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- The textile industry accounts for as large as 21% of the total employment
generated in the economy. Around 35million people are directlyemployed in the textile manufacturing activities.
- Indirect employment including the manpower engaged in agricultural
based raw-material production like cotton and related trade and
handling could be stated to be around another 60million.
- India can also grab opportunities in the export market. The textile
industry is anticipated to generate 12mn new jobs in various sectors
- The outlook for textile industry in India is very optimistic. It is expectedthat Indian textile industry would continue to grow at an impressive rate.
- Textile industry is being modernized by an exclusive scheme, which has
set aside $5bn for investment in improvisation of machinery.
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VISION OF INDIA 2011 FOR TEXTILES
� Textile economy to grow to $85billion by 2011
� Creation of 12 million new jobs in textile sector.
� To increase Indias share in world trade to six per cent by 2011.
� Achieve export value of $40 billion by 2011.
�
Modernization and consolidation for creating a globally competitiveindustry.
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Star Exports
INTRODUCTION TO THE COMPANY
� Set up as an SSI unit in the year 1992 with a minimum investment of
Rs.1 Cr. Currently having a net worth of Rs.7 Cr.� Purely an Export Oriented Unit [EOU].
� Its Head Office is located in Mumbai.
� The factory is located in city of Vapi, in the State of Gujrat.
� Manufacturer and Exporter of knitted garments to top end customers in
the International Market.� Specialized in mercerized knitted fabric garments.
� Produces styles for kids, children, ladies and mens outer wears, night
wears and sports wears.
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� We have employees about 120 people including contract labour.
� Equipped with modern high-speed sewing machines, zig zagmachines, button hole & button stitch machines, Vacuum Steam Iron
Tables, Stain removers and Fusing machines and others which serve the
purpose of completion of an order.
� Lead Time of 1,25,000 pieces in a month of the basic styles.
� It has a separate in-house stitching unit which is now concentrating on
the domestic sale of knitted garments and the other for exports.
� Imports raw material from local sources within the country & also
imports raw material, knitted processed fabric from overseas.
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Vision of the Company
The vision of the Company is to become a leading manufacturer and
exporter of apparel by continuously excelling in Quality, Service andCustomer Satisfaction using the best technology, processes and people.
Mission of the CompanyTo become the most preferred one-stop source for ready-made garments
& ready to cut fabricsTo constantly update the technology and skill sets to cater to the everchanging needs of the apparel & textile industry.
Quality Policy of the companyThe company is committed to achieve total customer satisfaction byproducing superior products at competitive price and timely deliverywith total involvement and excellence.
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Hierarchy of Star ExportersCompany
Managing Director
General Manager
Merchandising
Department
Export - Import
Department
Accounts
Department
ProductionDepartment
Sampling
Department
Purchase
Department
Quality
Department
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Star Exports Overseas Buyer & Suppliers Share
Overseas Buyers:
- Macys , USA
- Quick Silver, USA
- Henrich Opermayer , Germany
- GMBH , Germany
55%36%
9%
Exports
USA Europe Canada
Overseas Suppliers:
- Taiwan and China are the main
players of imports here
- Star Exports imports the raw
material, the fabric which is not
manufactured in home Country
28%
72%
Import
China Taiwan
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Export Procedure
Pre-Shipment Procedure
� On receiving the purchase order from merchant, export department
issues an invoice. Two invoices are prepared i.e. commercial invoice &
custom invoice. Commercial invoice is prepared for the buyer & Custom
invoice is prepared for the Custom authorities of both the countries.
� Packing list is prepared which details the goods being shipped.
� GSP certificate is prepared if the consignment is exported to EU or
countries mentioned in the GSP list.
� Buying house inspects the goods & issues an inspection certificate.
� Certificate of origin is also issued and attached.
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Documents given to Customs for reference:
Custom Invoice
Packing list IEC certificate
Purchase Order or L/C.
Custom annexure
On receipt of above documents, customs will issue clearance certificate.
Documents sent to buying as per buyers requirement:
Invoice
Packing List
GSP (if exports to Europe)
Certificate of Origin (if required)
A copy of FCR/ Airway Bill/ Bill of Lading
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Buyer collects the consignment from the destination port by
showing the following documents:
� Invoice
� Packing List
� Bill of lading or Airway Bill
On shipment of goods, exporter will send the documents to the
importers bank.
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Post-Shipment ProcedureA foreign buyer will make the payment in two ways:
T/T payment (Advance payment, as per the clause 50% advance &remaining 50% on shipment)
Letter of Credit
If the payment terms are a confirmed L/C then the payment will be
made by the foreign bank on receiving the following documents: Invoice
Packing list
B/L
Any other required by the buyer or the country of import.
The payment terms can be:
At Sight, or;
Within 15, 30, 60 or 90 days as agreed before, from the Bill of Lading or
Airway Bill date.
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� After shipment, exporter sends the documents to the buyers bank for
payment. As the buyers bank receive the documents it will confirm with
the buyer for release of payment.
� On confirmation, it will make the payment in the foreign currency. The
transaction will be Bank to Bank.
� The domestic branch will credit the exporters account, as against the
respective purchase order or invoice, in Indian rupees by converting the
foreign currency as per the current bank rate.
� If the payment is through T/T payment, the payment will be made as per
the terms agreed by the exporter (Advance payment, as per the clause
50% advance & remaining 50% on shipment).
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Realisation of Export Proceeds
Once the goods have been physically loaded on board the ship, the
exporter should arrange to obtain his payment for the exports made bysubmitting relevant documents.
Negotiation
- A complete set of negotiable documents is presented to the negotiating
bank through whom the documentary letter of credit has been advised.
Where the exporter has complied with all the terms and conditions of
the letter of credit while submitting his documents to the negotiating
bank, the documents are deemed to be clean.
-The letter of credit opened by the buyer through his bank authorizes
drawing a bill of exchange against which payment will be made by the
opening bank on behalf of the buyer, provided the terms and conditions
specified in the letter of credit are complied with.
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Bill of Exchange
It is the negotiable instrument through which the amount of exportinvoice will be collected from the corresponding bank specified by the
importer through exporters bank.
The drafts drawn are of two types.
� Sight Draft:
If the letter of credit stipulates payment at sight, the exporter draws asight draft on the buyer or his bank.
The exporter expects the buyer to arrange for payment immediately onpresentation of the draft. Until payment for the draft is made, shippingdocuments will not be handed over to the buyer to enable him to clearthe goods
� Usance Draft:
When the exporter has offered credit terms for payment, a Usancedraft is drawn by the negotiating bank of the exporter. It is drawn forthe payment after a specified period. The buyer on whom the draft isdrawn retires the draft after 30, 60or 90days as agreed at the time of concluding the contract.
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Some of the Important Inco terms used
Ex Works: Ex means from. Works means factory, mill or warehouse, which
are the sellers premises. EXW applies to goods available only at the
sellers premises. Buyer is responsible for loading the goods on truck orcontainer at the sellers premises and for the subsequent costs and risks.
Ex Factory, which means the same as Ex Works.
FOB (Free on Board): The delivery of goods on the board the vessel at the
named port of origin (Loading) at sellers expense. Buyer is responsible forthe main carriage/freight, cargo insurance and other costs and risks.
CFR (Cost & Freight): The delivery of goods to the named port of
destination (discharge) at the sellers expenses. Buyer is responsible for
the cargo insurance and other costs and risks. The term CFR was formerlywritten as C&F.
CIF (Cost, Insurance & Freight): The cargo insurance and delivery of goods
to the named port of destination (discharge) at the sellers expense. Buyer
is responsible for the import customs clearance and other costs and risks.
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Letter of Credit:
This method of payment has become the most popular form in recent
times; it is more secured as company to other methods of payment
(other than advance payment). A letter of credit can be defined as anundertaking by importers bank stating that payment will be made to the
exporter if the required documents are presented to the bank within the
variety of the L/C.
A letter of credit is an important instrument in realizing the payment
against exports.
D/A AND D/P:
D/P: Documentary upon Payment
Documents are released to buyer upon payment.
D/A: Documentary upon Acceptance
Documents are released to buyer upon his acceptance.
D/A is like open account.
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Foreign Trade Policy 2009-2014 Special Focus
Initiatives
� Government of India makes concerted efforts to promote exports in all
sectors by specific sectoral strategies that shall be notified from time to
time, Rs. 325 crores would be provided under promotional schemes for
textile for exports made with effect from 1st April 2010.
� EPCG Scheme at zero duty has been introduced for certain engineering
products, electronic products, basic chemicals and pharmaceuticals,
apparel and textiles, plastics, handicrafts, chemicals and allied productsand leather and leather products.
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Incentives given by the Government to the exporters
Duty Drawback
� This refers to a rate fixed by the government based on the customs duty
and excise duty components which go into the production of an export
product
� Every year the Department calls for latest data on these through the
Export Promotion Councils, determines the drawback rate and publish it
for the exporters by June of the year.
� When the shipping bill is submitted to the customs for the shipping of
goods, it consists of a set of five copies. The duplicate copy is known as
the Drawback copy, and this will contain all the details like description
of the product, the port of destination, the total amount of drawback as
per government notification etc.� This copy is endorsement by customs and sent directly by them to the
drawback cell in the customs department situated in the port from which
goods were exported. The exporter can approach this cell for his
drawback payment with any additional details they may ask for.
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ECGC - Export Credit Guarantee Corporation of India
Limited
� Offers insurance protection to exporters against payment risks
� Provides guidance in export-related activities
� Makes available information on different countries with its own credit
ratings
� Makes it easy to obtain export finance from banks/financial institutions
� Assists exporters in recovering bad debts
� Provides information on credit-worthiness of overseas buyers
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(In Crore)
TURN OVER
OF
STAR EXPORTS
YEAR SALES (RS) VARIATION (RS) PERCENTAGE
2006 21.74 13.312007 24.94 3.2 15.27
2008 40.67 15.73 24.90
2009 48.63 7.96 29.77
2010 27.33 -21.3 16.735
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Certificates
Star Exports has enhanced its position in the International Market by
satisfying the standards of quality needed by the oversees buyer.
It has created a brand in the market by having various certificate of
compliances like:
ISO 9001:2008
WRAP Certificate
GOTS Certificate (Global Organic Textile Standard )
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Marketing strategiesStar Exports is improving itself and increasing its brand value in theinternational market as it is a member of Export Promotion Councils:
� Apparel Export Promotion Council (AEPC)
� Federation of Indian Export Organizations (FIEO)
Through this membership:
� We attend International Sourcing Fairs in various countries for marketingour company.
� We attend Buyer Seller Meet
� And also, through various seminars, workshops, Education and Training
Initiatives organised by the export promotion council, we have improvedour position in the international market.
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Thank You
Presented By:
Hamza Burhani 9100116
Akshay Dedhia 9100125
Fatema Halvadwala 9100139
Akash Jain 9100144
Aatif Sumar 9100156
Grishma Khajanchi 9100157
Eshank Khandelwal 9100158