Trading with the 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 Indian requirements.
- 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 labeling or other printed materials are error-free.
- Payment methods for international trade transactions are an import issue for import. So, the importer must take a proper care while selecting payment methods such as Letter of Credit (Documentary Credit, or Lc), Documentary Collection, Advance Payment Receipt.
- Shipping of goods is also a complicated process. Given the increased distances and the need to cross borders.
- 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 India.
- 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 Maidan, New Delhi.
- Chambers of Commerce as per addresses.
- Directorates of Industries, etc.
- Indenting Agent of Foreign Suppliers.
- Visiting popular Websites.
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, the importer can proceed further to finalization the terms of the import contract. Import’s contract needs 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.