Indian Textile Industry (1)

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



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



- 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.



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.



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.



� 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.



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.



Hierarchy of Star ExportersCompany

Managing Director

General Manager

Merchandising

Department

Export - Import

Department

Accounts

Department

ProductionDepartment

Sampling

Department

Purchase

Department

Quality

Department



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



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.



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



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.



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.



� 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).



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.



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.



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.



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.



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.



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.



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



(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



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 )



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.



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