Why Understanding Export Procedures is Critical

After shortlisting your products, identifying markets, and securing suppliers, the next crucial step for SMEs is to understand and execute the export procedure correctly. Poor handling of export procedures can lead to:

• Delayed shipments

• Fines or penalties

• Lost export incentives

• Disputes with buyers

A stepwise understanding ensures smooth operations, compliance, and timely delivery, setting your business up for success in international trade.

Step 1: Receive and Confirm Export Order

1. Receive Order

   • Export orders can come via email, B2B portals, or direct negotiations.

   • Ensure all order details are clear: product quantity, price, delivery timeline, and payment terms.

2. Confirm Order with Buyer

   • Send Proforma Invoice (PI) for confirmation.

   • Includes HS code, quantity, unit price, total value, delivery terms, and payment terms.

   • Clarify shipping terms using Incoterms (EXW, FOB, CIF, etc.).

Actionable Tip: Keep a Proforma Invoice template ready for all export orders.

Step 2: Arrange for Export Documentation

1. Commercial Invoice

   • Final invoice for shipment; buyer uses it for customs clearance.

2. Packing List

   • Details each package, weight, and dimensions.

3. Bill of Lading / Airway Bill

   • Contract between exporter and shipping company.

4. Export Declaration Forms

   • Shipping Bill (Electronic), GST details, IEC number, etc.

5. Certificates (if required)

   • Certificate of Origin, Phytosanitary Certificate, ISO or Organic Certifications

Tip: Use official DGFT and Customs portals to download templates and ensure compliance.

Step 3: Register with Customs & Apply for IEC

• IEC (Import Export Code) is mandatory for all exports.

• AD Code registration with your bank ensures foreign exchange transactions.

• Verify your HS codes from Post 6 are correct.

Actionable Tip: SMEs should maintain an IEC & AD code master sheet with all product HS codes for faster clearance.

Step 4: Choose Mode of Transport

1. Sea Freight

   • Suitable for bulk shipments

   • Economical but slower

2. Air Freight

   • Faster, suitable for perishable or high-value goods

   • Higher cost

3. Courier / Express Services

   • Small shipments

   • Quick but costly

Decision Criteria: Consider cost, urgency, product type, and destination.

Step 5: Custom Clearance

1. Filing Shipping Bill

   • Mandatory for exports

   • Include HS code, product value, quantity, and exporter details

2. Customs Assessment

   • Customs may verify documents and inspect goods

   • Ensure all documentation is accurate and complete

3. Duties and Refunds

   • Some exports eligible for Duty Drawback, RoDTEP, EPCG

   • Apply after shipment using correct HS codes and export invoice

Pro Tip: SMEs can hire a licensed customs clearing agent for smoother processing.

Step 6: Insurance & Risk Mitigation

• Cargo Insurance protects against loss, theft, or damage during transit

• Optional but recommended for high-value shipments

• Verify coverage before shipment

Step 7: Shipment & Tracking

1. Hand Over Goods to Freight Forwarder

   • Ensure packing matches declared specifications

   • Confirm bill of lading / airway bill issuance

2. Track Shipment

   • Most freight companies provide tracking portals

   • Regular updates help manage buyer expectations

3. Communicate with Buyer

   • Share tracking information

   • Prepare for arrival and customs clearance at destination

Step 8: Payment Collection

1. Agree on Payment Method in Advance

   • LC (Letter of Credit), DA/DP (Documents Against Acceptance / Payment), advance payment

2. Confirm Receipt

   • Ensure funds are received in your export account

   • Coordinate with bank for any foreign exchange conversions

Actionable Tip: SMEs should maintain a payment follow-up log for all shipments to avoid delays.

Step 9: Apply for Export Benefits

• RoDTEP (Remission of Duties on Export Products)

  • Refund of taxes and duties

• Duty Drawback

  • Refund of customs duties paid on inputs used for exports

• EPCG Scheme

  • Capital goods import at concessional duty

Tip: Correct HS codes, export invoices, and shipping bills are essential to claim benefits.

Step 10: Post-Shipment Follow-up

1. Document Retention

   • Maintain records for 5 years for customs audits

2. Buyer Feedback & Quality Check

   • Gather insights for improving future shipments

3. Plan Next Shipment

   • Evaluate cost, timelines, and logistics for repeat orders

Step 11: Actionable SME Exercise

1. Take your first export order

2. Prepare Proforma Invoice & Commercial Invoice

3. Confirm HS codes, IEC, AD Code, and required certificates

4. Choose mode of transport and freight partner

5. File shipping bill and arrange customs clearance

6. Track shipment and confirm payment receipt

7. Apply for export benefits if applicable

Completing these steps ensures your first shipment is compliant, on time, and profitable.

With your export procedures mastered, it’s time to understand financing options to scale operations without cash flow stress.

Read: Export & Import Financing Options for SMEs