Selecting an overseas exporter raises a number of issues
for the importer such as language differences, payment methods and increased
paperwork requirements. However, with a little research and proper planning these
challenges can be easily overcome. In this chapter, we will discuss the various
factors required for consideration of an overseas exporter or supplier and the
methods for selecting overseas suppliers.
Trading with overseas supplier is quite different from trading in India,
particularly when dealing with a country outside Asia, so an importer should
consider the following factor before import.
Whether there are import or restricted trade at
either end of the transaction.
Whether technical standards in supplier's country meet
Who is liable if a product causes harm or loss?
Whether imported goods infringe any intellectual
property rights or not.
Who bears insurance costs at each stage of transit?
A well-drafted written contract will help to avoid
disagreements or disputes.
There is a range of other factors that an importer should bear in mind:
- Language differences are important. It's not just a matter of communication -
make sure any labelling or other printed materials are error-free.
- Payment methods for international trade transactions are an import issue for import.
So, importer must take a proper care while selected a payment methods such as
Letter of Credit (Documentary Credit, or Lc), Documentary Collection, Advance
- Shipping of goods is also a complicated process. Given the increased distances
and the need to cross borders.
- Understanding the business and social practices of supplier's country can help
build trust and develop relationships.
- The origin of your goods can affect the level of duty you pay. Some goods
attract a preferential rate of duty, so you need to check where your supplier's
raw materials have come from. Visiting suppliers is the best way of doing this.
Capability of Overseas Supplier
Successful completion of an import transaction mainly depends upon the
capability of the overseas supplier to fulfill that contact. Therefore, it
becomes important for the importer to properly verify the foreign exporter
before entering into a contract with the exporter. Confidential information
about the exporter may obtain through the banks and Indian embassies abroad. The
importer can also take the assistance of Credit Information Agencies for
specific commercial information on overseas suppliers.
Sources of Information
The information regarding overseas exporter and suppliers can generally be
obtained from the following sources:
- Trade Directories and Yellow pages, like Singapore yellow pages, Japan
yellow pages, USA yellow pages etc. available from leading booksellers in
- Consulate Generals and Trade Representative of various countries in
India and abroad.
- Friends and relatives in foreign countries.
- International Trade Fairs and Exhibitions for which you may contact:
International Trade Promotions Organization (ITPO), Pragati Madian, New
- Chambers of Commerce as per addresses.
- Directorates of Industries, etc.
- Indenting Agent of Foreign Suppliers.
- Visiting popular Web-sites.
Role of Overseas Agents in India
Some overseas suppliers have appointed their agents in India. These agents
procure orders from the Indian parties and arrange for the supply of goods from
abroad. It is advisable to import through such agents as they
can be readily contacted in case of any difficulty with regards to quality of
goods, payment and documentation, etc.
Finalizing the Terms of Import
Once importer is satisfied with the sample and the creditworthiness of the
overseas exporter, importer can proceed further to finalization the terms of the
import contract. Import’s contract need to be carefully and comprehensively
drafted incorporating there in precise terms, all relevant conditions of the
trade deal. There should not be any ambiguity regarding the exact specifications
of the goods and terms of the purchase including import price, mode of payment,
type of packaging, port of shipment, delivery schedule, replacement of defective
goods supplied, after sale services/warranty coverage etc.
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