Q.Explain the important steps involved in the import trade procedure.

Import trade procedure moves the importer from an initial enquiry with a foreign supplier through to taking delivery of the goods and paying for them.

Import trade procedure involves the following broad steps:

1. Trade enquiry and placing the order — The importer studies quotations from foreign suppliers and places an import order (indent) specifying goods, quantity, price and delivery terms; the importer must hold a valid Importer-Exporter Code (IEC), and an import licence where the goods are restricted.

2. Arranging finance — The importer typically arranges for its bank to open a Letter of Credit in the exporter's favour, assuring the exporter of payment once the agreed documents are presented.

3. Shipment and documents — Once the exporter ships the goods, a shipment advice is sent, and the shipping documents (invoice, bill of lading/airway bill, packing list, certificate of origin, insurance certificate) reach the importer through the banking channel.

4. Customs clearance — On arrival, the carrier files an Import General Manifest; the importer, or a clearing agent, files a Bill of Entry with customs, which assesses and collects customs duty (basic customs duty, IGST, cess as applicable) before releasing the goods. …

Students sometimes describe only the customs-clearance step (Bill of Entry) as if it were the whole procedure, omitting the earlier trade-enquiry/order and Letter of Credit steps and the fina …