Though financial transactions involved in ‘factoring’ and ‘forfaiting’ appears alike, these two terms are different in their nature, perception and scope. From the below table, let us find out the key difference between factoring and forfaiting; FACTORING FORFAITING Factoring is a financial arrangement whereby a supplier of goods sells its trade receivables to the factor…
(This post covers latest updates and amendments to earlier policies envisaged in Foreign Trade Policies 2015-2020 in respect of status holders.) The status- holder position allotted to the exporters of goods and services depending upon certain level of export performance achieved by them. The exporters of goods/service who hold valid importer-exporter code no. (IEC) may…
Labeling is an important element for products for exporting/importing a container out of/into the country. Primarily, labeling is the technique of identifying the cargo during the operation till the cargo touches the importer’s doorstep. The label on the consignment also gives information about how the package or product should be used. Labeling on the product…
The Exporters of services may seek finances from banks for their requirements to buy consumables, supplies, and wages. Such exporters shall register with the Electronic and software Export Promotion Council or Services Export Promotion Council or with Federation of Indian Export Organizations, as applicable to their unit to be qualified for working capital export credit…
Trade Credit (Buyer’s credit/supplier credit) can be raised by Indian importers in any freely convertible foreign currency (FCY-denominated TC) or Indian Rupee (INR-denominated TC), as per the Trade Credits (TC) framework. Buyers’ credit finance means finance for payment of imports in India arranged by the importer (buyer) from a bank or financial institution outside India.…
Advance Authorisation Scheme (AAS) or Advance License Scheme is a duty exemption scheme issued by the Government of India (GOI) under the Foreign Trade Policy 2015-2020. The scheme exempts the payment of import duties on raw materials/inputs required for manufacturing products for export. In addition to any inputs, packaging material, fuel, oil, and catalyst which…
In the year 2015, the World Bank ranked India at 123 in the ‘Trading across Borders” component of “Ease of Doing Business”, out of 189 countries. In view of facilitating ease of doing business in our country, the Government of India simplified the mandatory documents for exports and imports. The DGFT’s Notification dated 12-3-2015, made…
Where exports made under the Duty Drawback Scheme and such bill remain outstanding beyond the prescribed time limit, the exporter needs to submit a negative statement/certificate to the nodal officer of Department of Excise and Customs on a 6 monthly basis. The negative statement /certificate will be issued either by the authorized dealer (AD) bank(s)…
The terms ‘bills purchase’,’ bills discount’, and ‘bills negotiation’ are respectively used by the bank for financing against ‘Demand Bills’,’Usance Bills’, and LC bills. The seller of goods (exporter) gets immediate money from the bank for the goods sold by him irrespective of whether it is a purchase, discount, or negotiation by the bank according…
Reserve Bank of India on Monday said it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR. All Category-I Authorised Dealer (AD) banks shall require prior approval from the Foreign Exchange Department of Reserve Bank of India, Central Office at Mumbai, before putting in place…
