FAQs on Export Import Business - Chapter 12| AskiiiEM

Question by Mr. Hevan as on 09.07.19 –

Is ECGC possible without advance payment?

Mr. Dipak Manohar’s reply –

When there are advance payment criteria, what is the need for ECGC?

There is no need of ECGC when there is an advance payment. ECGC is a security, which helps when the importer does not make payment after receiving the goods. If I have received advance payment then I need not require ECGC policy at all. When I will be getting paid after the delivery of goods, I need to take ECGC for being secure. ECGC should be taken when you are not sure about the buyer’s payment, his country policies.

Question by Mr. Hil Shah as on 11.07.19 –

For a beginner exporter, which payment method is best suited i.e. L/C or T/L? How to draft the sales contract?

Mr. Dipak Manohar’s reply –

I would advise that please do not directly jump into L/C. Although L/C is safe it has various terms and conditions. If any of them is not been fulfilled there would be a problem. There are times when delivery cannot be done on time for any reason but as per one of the terms of L/C, you need to deliver the product on time.

To all the new exporter or those existing exporter who are dealing with a new buyer, I would advise that talk to them and plan to make 30 percent advance payment and make the rest of the 70 percent payment once you load the product. It can be considered as an ideal payment condition.

Question by Mr. Mohit Aneja as on 12.07.19 –

If we become a consultant and we get order for an exporter, the exporter would come in touch with the buyer directly. Once that happens, why would exporter need a consultant for further orders?

Mr. Dipak Manohar’s reply –
Why would he do that? I do not think he would do it. Remove this fear from your mind.

It is very important that you gain the trust of the buyer as well as the exporter. Whether it is domestic trade or international trade, there are consultants/ mediators involved. Trust is the first rule of business. It is a vice- a- Versa process. There are various procedures/ activities that need to be done after getting the order and for this a mediator/ agent is necessary. It is the work of an agent to gain trust and work as a fevicol between buyer and seller/ exporter.