Easily Manage All Kinds of Risks in Exports | Any Origin

Using an interesting real story, the form and nature of risks that generally emerge during exports transactions and operations are discussed in the next few videos.

Friends, before I tell you about the different types of risks associated with international trade and export transactions, I would like to share with you a very small, simple, and interesting story.

One of the exporters from India shared this story with me. For privacy reasons, I have not used his real name, so I will call this exporter Mr. Gupta. I have titled this story “Mr. Gupta in South Korea.”

Mr. Gupta befriended Mr. Pyne from South Korea while attending one of the trade fairs in a European city. Mr. Gupta had attended this trade fair, where he met Mr. Pyne, who was from Seoul, South Korea. Mr. Pyne was trading in two different types of goods, both into and out of South Korea—he was engaged in both exports and imports.

Mr. Gupta is also a merchant exporter from India who has some interest in imports as well. However, his major interest lies in the export of goods, especially those related to handicrafts, handmade products, handmade paper, and even handloom and handloom furnishings. These are the kinds of goods that Mr. Gupta has been exporting, although he also imports certain items from different countries, including mill-made paper.

Mr. Gupta became acquainted with Mr. Pyne, who was from South Korea, at one of these trade fairs in Europe. There, Mr. Pyne suggested that Mr. Gupta visit Seoul. He proposed to show him the Seoul market and the potential of the South Korean market for both exports and imports between India and South Korea. He did not specify any particular items but simply suggested that Mr. Gupta visit for about a week to conduct some market research.

Mr. Gupta spent about a week in Seoul with Mr. Pyne, who took him to different wholesale markets in the city. One of the markets was called Namdaemun Market, a very famous market in Seoul that has many wholesalers and traders dealing in different types of products, including handicrafts and handloom items. The market also offers exotic products from different countries, such as fresh flowers, gift items, and gift materials.

Mr. Pyne also took him to several trading centers that included wholesalers, importers, exporters, and commission agents for various products and services. As I mentioned earlier, Mr. Gupta is a merchant exporter from India, so he had a definite interest in understanding these markets.

As stated before, Mr. Pyne is also a merchant exporter and imports certain items into South Korea. They had agreed that the expenses of Mr. Gupta’s trip to Seoul would be shared equally between them. Mr. Gupta found this proposal reasonable, as it was essentially a market research trip for him.

During his one-week stay in Seoul, Mr. Gupta observed that there was great potential for several items, including handmade paper, to be exported from India to South Korea—especially for manufacturing gift boxes. South Koreans are enthusiastic gift givers. Almost every month, they celebrate some event or festival during which they exchange gifts. Consequently, there is a strong demand for gift boxes of various types and materials.

This visit made it very clear to Mr. Gupta that there was a significant demand in South Korea for handmade paper, which could be used for gift boxes, wrapping paper, and even handmade paper bags. Mr. Gupta shared his assessment with Mr. Pyne, who agreed and confirmed that this was indeed true. He also noted that probably no one was exporting handmade paper from India to South Korea on a large scale at that time.

In the next video, the interesting story of Mr. Gupta in South Korea continues.

Mr. Pyne agreed with Mr. Gupta that there was a good scope for handmade paper from India. They met an importer of handmade paper in Seoul, who assured them of a trial order for the product.

During that same week, Mr. Pyne somehow managed to collect the full advance payment for the trial order shipment of handmade paper. He gave this advance payment to Mr. Gupta after deducting his commission and instructed him to send the goods within one month after returning to India.

The money was handed over to Mr. Gupta, who was supposed to send the goods within one month. All the details of the trial order were provided. Mr. Gupta received the money in cash and noted down the specifications of the goods, such as texture, color, grammage, weight of the paper, and the sizes of the paper sheets, which were to be produced as per the practices and customs of South Korea. The types, sizes, and varieties of paper required for gift boxes and similar purposes were clearly specified.

After returning to India, Mr. Gupta sourced the goods and placed an order with one of the manufacturers of handmade paper, as per the agreed specifications. He realized that the type of paper and the specific color agreed upon were not available off the shelf, so the material had to be custom-produced on order.

After the order was placed, the Indian manufacturer produced the goods as per the specifications, colors, and sizes required, and the goods were ready in three weeks. Mr. Gupta still had one week remaining to ship the goods by sea, as agreed.

After three weeks, Mr. Gupta informed Mr. Pyne that the goods were ready for dispatch. At that point, Mr. Pyne replied to Mr. Gupta and informed him that the original importer now wanted the goods in a different color. For some reason—perhaps a change in market trends or preferences—the Korean importer said that the previously selected color would not work and requested a new one.

Mr. Gupta explained that the goods were already ready and that the color could not be changed. The manufactured texture and sizes were customized and not available in the newly requested color. Producing them again would mean manufacturing a completely new lot.

Mr. Pyne told Mr. Gupta that the importer did not understand why the color could not be changed and suggested that Mr. Gupta should produce the new color anyway and try to sell the earlier lot in the Indian market. He requested Mr. Gupta not to dispatch the already manufactured goods and instead make a new lot for export.

Mr. Gupta became very confused. Manufacturing the goods again would surely mean a loss for him. The existing goods could not be sold in the Indian market because the particular size and color were not in demand there. He informed Mr. Pyne about this difficulty. Moreover, Mr. Gupta was not experienced in domestic sales and was not equipped to sell those goods in India.

The manufacturer also refused to take back the goods and was unwilling to produce a new lot without payment for the earlier one. At the same time, failing to supply the new specifications would mean no future business from South Korea for Mr. Gupta, at least from this importer. Mr. Pyne, on the other hand, was unable to understand the full extent of the problem and the potential loss Mr. Gupta would incur by manufacturing the goods again.

After reflecting on the entire situation, Mr. Gupta realized that the whole thing seemed illogical, and he was not confident that similar issues would not arise again in future, larger orders.

Finally, Mr. Gupta informed Mr. Pyne that he could only ship the goods that had already been produced and could not manufacture a new lot. As a result, Mr. Gupta lost interest in maintaining a long-term business relationship with Mr. Pyne and his importers.

Ultimately, Mr. Pyne refused to accept the originally agreed shipment. Consequently, the relationship between Mr. Gupta and Mr. Pyne did not move forward.

This is a very common and simple situation often faced by exporters when they try to start business in new markets, with new products, and with new importers or commission agents. These things do happen.

The export-related risks can relate to aspects like:

• Cultural Risk

• Buyer’s Insolvency/Credit Risk

• Legal Risk

• Buyer’s Acceptance

• Foreign Exchange Risk

• L/C Risk

• Knowledge Inadequacy

• Interest Rate Risk

• Seller’s Performance Risk

• Political/Sovereign Risk

• Documentation Risk

• Transit Risk

• Economic Risk

What is important to understand in this story is that if you look at the different types of risks associated with any export transaction, they include cultural risk, which arises due to differences in culture, customs, and practices of people in different countries, and how they perceive things.

There can also be risks such as the buyer’s insolvency or lack of creditworthiness, differences in the legal systems of different countries, and the risks that emerge from those differences, as well as the failure of the buyer to accept the goods for one reason or another. These kinds of risks are very common.

Even if the goods are accepted by the buyer and payment is to be made upon delivery, there can still be a gap between the signing of the contract and the actual payment. This can lead to foreign exchange risks as well, because foreign exchange rates fluctuate daily. There is always a strong possibility that the exchange rate on the actual day of remittance for the exported goods may differ from what the exporter expected. This fluctuation may result in either a profit or a loss for the exporter or the importer.

A lack of knowledge, or inadequate knowledge, about the product—whether on the part of the importer, the agent, or the exporter—can also lead to certain risks. Another potential risk can arise from the changing cost of financing the exported goods. Because of the time gap between contract signing and receiving the export proceeds, interest rates may change, thereby affecting the entire calculation.

There can also be risks related to the seller’s inability to produce the right quantity, specification, or quality of goods on time and at the agreed price. Political upheavals and events can pose additional risks, as can incomplete or inaccurate documentation and procedures used by the exporter or any of the channel members in the supply chain and logistics process. Errors can occur in documentation, customs, or even by port authorities.

Furthermore, there are risks associated with the transportation of goods from one country to another, including pilferage, theft, leakage, damage from seawater or storms, and even the sinking of ships. Transit risks are very common in export consignments. Economic risks also exist, which stem from medium-term changes in the macroeconomic factors of countries and can significantly affect export transactions.

In the story I just shared with you, it is quite clear that there were certain cultural differences between the South Korean importer, the commission agent, and the exporter, Mr. Gupta. Because of these cultural differences, they could not fully understand the gravity of the situation, which led to a lack of trust between the importer and the exporter.

The cultural gap made it difficult for the Indian exporter to trust that the importer’s last-minute request to change the color specifications—just when the shipment was about to be dispatched—was reasonable or manageable. Such a change was neither a simple nor a small matter. Due to this cultural risk, trust could not be built between the two parties. They failed to understand each other’s perspectives because of inadequate cultural communication.

The second type of risk in this story was the buyer’s inability to accept the goods as ordered and agreed. There was also a lack of adequate knowledge about handmade products. In handmade items, uniform quality is difficult to achieve, and there is very limited flexibility to change colors, sizes, and specifications once production has begun. It is extremely difficult to alter the final product in handmade items, especially handmade paper.

Other risks were not evident in this particular story, but three major risks were clearly visible—cultural risk, buyer’s acceptance risk, and knowledge inadequacy risk.

In every story, event, or situation involving challenges in international trade, you will find certain types of risks that occur during the process of executing and managing export shipments of this kind.

What went wrong with Mr. Gupta in South Korea? There can be several lessons from this case study. A short analysis of the case is given in the next video.

Friends, if you look at the story I shared with you, Mr. Gupta in South Korea, there are a few important lessons to learn. These lessons focus on how to mitigate the types of risks explained in this simple story.

If you look at the problem that actually arose in the case of Mr. Gupta’s dealings with Mr. Pyne, it was quite clear from the actions of the commission agent and the importer in South Korea that they were not very familiar with international business and trade. The biggest indication, which Mr. Gupta should have noticed at the very beginning, was that they paid the advance money without any proper accounting.

It was a cash transaction, handed over to Mr. Gupta to produce and send goods to South Korea, without following any international trade practices.

Let me explain what this means. Many domestic businesspeople begin doing international business without proper knowledge of documentation, procedures, and the norms and practices of international trade. They try to use the same methods and practices that they have been following for years in the domestic market and attempt to replicate them in the international trade market.

That is exactly what happened in the case of Mr. Pyne. It was clear that Mr. Pyne was trying to establish himself in the export and import business and was not yet well established. When he went to Europe and met Mr. Gupta, he was exploring business opportunities and trying to understand how international trade is conducted. He was not fully conversant with the complete procedures and customs of international business.

That is why he chose the method of simply giving an advance payment to Mr. Gupta and asking him to send the goods. Later, for some reason or another, the importer realized that the colors and details provided to Mr. Gupta for production were not what was actually required. This shows that there was no proper research done either by the importer or by Mr. Pyne.

It is, therefore, very important to carefully observe and select the right overseas partners with whom you wish to do business. If they are not well established, if they are not familiar with international trade documentation and procedures, and if they try to use traditional domestic practices in international trade, you should be cautious about working with such partners. You cannot go very far in business with people who lack professionalism.

You need partners who believe in proper documentation, written orders, and formal business communication, which should take place before placing orders or making international payments—whether through advance payments, letters of credit, or other forms of documentary credit.

International trade has to be conducted professionally. There must be a valid and strong reason for an importer to give cash advances in any international transaction. If they do so casually, it clearly indicates that they are not well-versed in international trade practices.

This was the major lesson Mr. Gupta learned from his experience—that he must be very selective with overseas partners. Mr. Pyne was not exactly the kind of person suitable for conducting proper international trade.

It is important for exporters, especially when dealing with a new customer, to be careful about the issuing bank that is opening the letter of credit. Failure to do so may result in serious consequences. In the next video, a real case study is shared on this aspect of international payment modes for exports transactions.

Okay friends, now I will discuss with you another real story as a case study, where I have changed the names of the persons and the company involved.

With certain changes for privacy reasons, I am sharing this real story of Mr. Shah, who is the owner of a company called Toner India. This company manufactures toners for photocopiers and laser printers in India. Mr. Shah has been exporting these goods to countries like Singapore, Dubai, and a few others, while also selling them in the Indian market.

Mr. Shah received suggestions from some of his business contacts that Bangladesh could be a good market for selling photocopier and laser printer toners. One fine day, Mr. Shah decided to visit Dhaka to identify distributors for his products in Bangladesh.

He stayed at the Dhaka Sheraton Hotel and placed an advertisement in a local newspaper in Dhaka, the capital of Bangladesh, announcing his visit and promoting the products manufactured at his factory in Gujarat, India. This advertisement was placed about one week before his arrival, and he began receiving responses to it. Several import agents, potential importers, and distributors visited him at the hotel for discussions. He met them at different times, mostly at the hotel, though some distributors also took him to their offices in Dhaka to show their establishments during his stay.

Mr. Shah found a few of these business contacts to be serious and asked them to place trial orders for the toners, promising that if everything went well, he would supply them regularly on an exclusive basis for certain regions of Bangladesh. These types of discussions were held during the meetings.

Among the interested parties, one readily agreed to place a trial order and was also willing to open a letter of credit (LC) for it. After returning to India, Mr. Shah followed up with this particular party to open the LC as agreed during their discussions.

The Bangladeshi party opened an irrevocable LC through a local bank in Bangladesh, based on which Mr. Shah shipped the goods to Dhaka by road transport. Since India and Bangladesh share a common border and have a good road network between major cities in Gujarat and Dhaka, the goods were dispatched by truck. After the dispatch, Mr. Shah obtained the transport documents from the trucking company and submitted all commercial and transport documents required under the LC to his bank for negotiation with the issuing bank in Bangladesh, which is the standard procedure for letter of credit transactions.

However, upon receiving the LC documents, the issuing bank in Bangladesh refused to honor the LC, claiming that the importer had informed them that Bangladesh Customs had confiscated the goods due to some violation, though the reason was unclear.

Mr. Shah called the importer, who said he had visited the customs office but was unable to understand the reason for the confiscation. The importer even offered Mr. Shah the phone number of a customs head and suggested he speak with him directly. Mr. Shah called the number provided but could not get a clear explanation about the confiscation. It became evident that the customs department was not willing to help him. They stated that it could take years to clear the goods and that various formalities, documentation, and arbitration might be required.

It was not clear how the goods could be released or recovered from customs. The goods remained in the custody of customs—or so it seemed. Based on the phone numbers provided by the importer, it appeared that the contact might have been a customs official, but this was uncertain.

Mr. Shah informed the local bank that the contract was on a Free on Board (FOB) basis, and therefore, there was no reason for the Bangladeshi bank to refuse payment under UCP 500 guidelines. He was correct—under a letter of credit, it is the bank’s responsibility to make the payment, and anything that happens at customs is not the exporter’s responsibility.

When Mr. Shah insisted on his payment, the Bangladeshi bank advised him to approach the International Chamber of Commerce (ICC) in France, which governs UCP 500 and 600 matters, and file a complaint for arbitration. However, Mr. Shah found that the minimum fee for ICC arbitration was around USD 5,000—too high to justify the small shipment involved.

Further, Bangladesh Customs reportedly refused to allow the goods to be sent back to India. This information again came from the importer and the contacts he had provided. It was still unclear whether the customs officials truly had the goods or who was actually in possession of them. The only way to find out would have been for Mr. Shah to personally visit Bangladesh, but the value of the order did not justify such an expense or effort.

After some inquiries and research, Mr. Shah realized that he had been cheated by the Bangladeshi importer, who likely had connections in Bangladesh Customs—or was himself in possession of the shipment. The phone numbers given were probably not those of customs officials. It also appeared that the importer had connections with the local bank, which was colluding with him and not acting in good faith. The bank was clearly unwilling to make the payment for the export consignment.

Ultimately, there was nothing Mr. Shah could do to recover his loss.

This is a very typical kind of experience that many Indian exporters have faced while dealing with Bangladesh. Often, such outcomes result from mistakes made by Indian exporters when handling transactions with Bangladeshi partners.

What went wrong with Toner India? The case is discussed in the next video.

If we try to analyze this story and look at the different types of risks associated with international trade and export shipments, we can draw several conclusions.

There was no real cultural risk or cultural difference in this case because Bangladeshi and Indian cultures are not very different. There was also no issue of the buyer’s insolvency. However, the creditworthiness of the buyer was not checked by Mr. Shah, and this was the first mistake he made in this case.

Legal risk was also present because the legal system in Bangladesh is not very elaborate or advanced. Therefore, it would not have been very helpful for Mr. Shah to take any legal recourse for this loss, considering the value of the shipment was not very large and that legal proceedings would have involved significant additional costs.

In this case, there was no question of the buyer’s acceptance or non-acceptance of the goods, as it appeared that the goods were actually in the possession of the importer himself. Hence, this point is not relevant here. There was also no foreign exchange risk involved.

However, the biggest risk in this particular story was the letter of credit (LC) risk.

The second major mistake made by Mr. Shah was accepting a poorly issued LC. It is quite evident that the majority of local banks in Bangladesh are not first-class banks. If you look at the list of first-class banks, you will not find even a single local Bangladeshi bank listed. Therefore, any letter of credit issued by these banks should not be accepted by exporters. This was one of the major mistakes made by Mr. Shah in this story.

He should have accepted a letter of credit issued by an international bank or by an Indian government bank, as some Indian government banks also have branches in Bangladesh. An LC from a reputed Indian or international bank would have been far safer than one issued by a local commercial bank that was not listed among first-class banks.

There may also have been some knowledge inadequacy regarding customs practices, but that was not particularly relevant here because, under an FOB (Free on Board) contract, what happens at the importer’s customs is not the exporter’s responsibility. Once the goods have been loaded onto the main carrier and the transport documents have been received as per the LC terms, if the LC is issued by a reputed, first-class bank, the chances of failure are very low.

There were no other types of risks in this case—no documentation risk, no transit risk, and no economic risk.

It is therefore very clear that in this case, the major mistake made by Mr. Shah was casually accepting a letter of credit issued by a local commercial bank.

These are the kinds of precautions that are extremely important for any exporter. Although this transaction took place between India and Bangladesh, similar situations can arise in other countries with different exporters and importers.

It is therefore crucial that the issuing bank of a letter of credit is properly verified, and due diligence must always be conducted before accepting any LC.

With the help of a real case study as discussed in the next video, exports documentation and procedural risks associated with exports transactions are explained. This real case study is a classic example of how a lack of knowledge of exports documentation and procedures may result in serious consequences.

Hello friends!

In today's episode, I will discuss a very interesting story, which is a real one, although I will not divulge the exact names of the parties involved. But the story itself is real.

This story relates to a company called Malhotra Exports, based in Mumbai, which was engaged in the export business of high-fashion, readymade garments. The company entered into an export contract to supply fashion garments to a French importer, Saint Laurent Company of Paris. The goods were supplied a few years ago under an agreement between the importer and the exporter, with payment to be made through international banking channels. Both an Indian bank and a French bank were involved, and the payment terms were on a DA basis (Documents Against Acceptance) with a 60-day acceptance period. The value of the contract was approximately €55,000.

The Indian bank representing Malhotra Exports was the International Bank of India, and the importer’s bank in France was Credit Lyonnaise. These were the banks handling the DA payment contract.

After the shipment was made by Malhotra Exports from Mumbai by sea to the French company, the exporter submitted all required documents as per the contract— including the invoice, certificate of origin, insurance certificate, freight certificate, and, most importantly, the bill of exchange. In the bill of exchange, Malhotra Exports clearly stated that all documents, including the bill of lading (the transport document), were to be released to the importer only against the co-acceptance of the French bank.

This meant that in any eventuality, if the French bank accepted the DA terms as per the bill of exchange, payment would be made and guaranteed by the French bank.

Malhotra Exports submitted these documents to their Indian bank, which, routinely, forwarded the shipment documents to the French bank, Credit Lyonnaise. The French bank then handed over the documents to the Saint Laurent Company of France against the 60-day acceptance terms.

However, after the 60 days had passed, no payment was received by Malhotra Exports. The Indian company contacted its bank, which in turn communicated with the French bank regarding the payment. The French bank replied that Saint Laurent Company had gone bankrupt and, therefore, it was unable to make any payment. This response was conveyed by the Indian bank to Malhotra Exports.

In response, Malhotra Exports informed its bank that, according to the bill of exchange, the documents were to be released only against the co-acceptance of the French bank. Therefore, since the importer was bankrupt, payment had to be made by the French bank as per the agreement. The Indian bank communicated this request to the French bank.

However, the French bank replied that it was unable to pay because it had not received any clear instructions from the Indian bank regarding the co-acceptance condition for releasing the documents to the French importer. Indeed, the Indian bank had failed to give explicit instructions for document collection as per UCP 522, which governs documentary collections.

As a result, Malhotra Exports approached the National Consumer Forum in Delhi, claiming that the Indian bank had failed to act according to the instructions mentioned in the bill of exchange regarding the co-acceptance clause by the French bank. The National Consumer Forum ruled in favor of Malhotra Exports, holding that the services of the Indian bank were deficient. The Forum ordered the Indian bank to pay €55,000 plus 15% interest to Malhotra Exports.

After this ruling, the Indian bank filed an appeal with the Supreme Court of India. After hearing both parties, the Supreme Court ruled that neither the Indian bank nor the French bank was liable to pay any compensation to Malhotra Exports. The Court reasoned that the Indian exporter had not given any explicit written instructions to its bank regarding the co-acceptance clause and that there was no supporting underlying agreement or contract between the exporter and the importer mentioning the co-acceptance condition.

Furthermore, there was no agreement between the exporter and the French bank to that effect. In the absence of these underlying documents and explicit instructions, the Supreme Court held that banks are not responsible for verifying commercial shipment documents—they are only responsible for following the explicit instructions provided by their clients concerning document collection.

The same reasoning provided by the French bank applied to the Indian bank as well.

In the end, the Indian company lost its money, its reputation, and its business. The loss resulted from a lack of knowledge about export documentation and procedures on the part of Malhotra Exports. Had the company taken proper precautions, it would not have faced such a situation.

Several precautions could have been taken in this case—starting with a clear, explicit contract with the French importer specifying the co-acceptance clause, an agreement with the French bank confirming this clause, and, at the very least, clear written instructions in a proper covering letter to the Indian bank stating that the documents should not be released without the French bank’s co-acceptance. In that case, if the French bank had refused, the documents would have been returned, and Malhotra Exports could have at least recovered part of its payment.

This story clearly illustrates the critical importance of exporters understanding and meticulously following all export documentation and procedures with accuracy, diligence, and experience.

In the next video, lessons from the case of Malhotra Exports fiasco in exporting high-fashion garments to France are discussed.

Hello friends!

In this episode, I will analyze and discuss the problem mentioned in the Malhotra Exports case study from the last episode.

The Malhotra Exports case study shows that international payments are very complicated in nature, and a proper understanding of international payment systems and their consequences is extremely important. Malhotra Exports was not new to the business, and they should have foreseen this kind of problem much earlier and taken several precautions.

Let us see what Malhotra Exports and the banks involved could have done in this case study, and let us try to analyze it in detail.

First of all, it is very important for international transactions that, unless you are absolutely sure of the foreign buyer and have a long-term relationship with them, export contracts should always be based on a Letter of Credit (LC). The LC payment system is one of the costliest, and to save costs, many exporters try to avoid it. However, other payment methods, though cheaper, can be extremely risky and may lead to serious consequences of the kind discussed in the Malhotra Exports case.

In the absence of the possibility of securing a Letter of Credit—which was probably not feasible for Malhotra Exports in their contract with Saint Laurent—they should have at least insisted on Documents Against Payment (DP) instead of Documents Against Acceptance (DA), which was the case here. Even in the case of DA payments, Malhotra Exports should have agreed with the French bank, Credit Lyonnaise, for a co-acceptance clause in the DA payment arrangement.

The bank might have charged a fee for this, but it would likely have agreed. And even if Credit Lyonnaise had refused the co-acceptance clause, Malhotra Exports should have requested the buyer to approach another bank that would agree to such a clause, which is quite common in DA payment collections.

It should be noted, as mentioned by the Honorable Court in this case, that there was a need for an underlying agreement between the exporter and the importer regarding the co-acceptance clause. Technically speaking, this is not actually required because the buyer is not directly concerned with the co-acceptance of the overseas bank. The purpose of co-acceptance is strictly between the overseas bank and the exporter. Therefore, the buyer’s involvement or a separate agreement with the buyer is not necessary unless the bank specifically requires it, which is normally not the case.

Another important precaution Malhotra Exports should have taken, knowing that this was a DA payment arrangement with a 60-day usance period, was to seek professional documentary and payment advice from a reputed export consultancy organization or a professional familiar with international payment systems, UCP provisions, and related procedures. Such professionals could have advised Malhotra Exports on safer alternatives when the importer was unwilling to agree to LC or DP payment terms.

The best step Malhotra Exports could have taken in this case would have been to approach the Export Credit Guarantee Corporation (ECGC), which operates in most countries. The main objective of ECGC is to provide insurance cover against commercial risks—such as those faced by Malhotra Exports in this case—by assessing the creditworthiness of international buyers.

If ECGC had refused to provide cover for this transaction, it would have been a clear indication that the buyer’s financial standing and creditworthiness were doubtful. That should have been a strong warning to Malhotra Exports that entering into a DA contract without a co-acceptance clause or a pre-arranged agreement with any overseas bank could be disastrous.

Without any prearrangement for co-acceptance, no exporter can compel an overseas bank to agree to such a clause at the time of presenting commercial documents for DA payment. Including such a condition in the Bill of Exchange without prior agreement was therefore naive on the part of Malhotra Exports, as no bank would have accepted that condition at the last moment.

Another important step Malhotra Exports should have taken was to clearly communicate this co-acceptance clause to their local negotiating bank in the covering letter accompanying the shipping documents. This was extremely important. If they had done so, the local bank’s responsibility would have been clearly established, and its failure to comply would have been considered a clear deficiency in service.

Had such explicit instructions been given, the Supreme Court appeal that the local bank later won would likely have had a different outcome. If Malhotra Exports had instructed their bank clearly not to release documents to the foreign buyer without the explicit co-acceptance of the overseas bank, their case would have been much stronger.

Overall, the main advice for exporters like Malhotra Exports dealing with overseas buyers is that document collection and payment terms must be strictly avoided in the absence of co-acceptance by the overseas bank.

If the overseas buyer fails to pay under such arrangements, the exporter’s legal case to recover payment from the overseas bank is generally very weak in international forums. This is why it is always recommended that DA payment terms for document collection be strictly avoided in international trade.

In the next video, the role of banks, both local as well overseas, as demonstrated in the Malhotra Exports case study, is discussed.  It is important to be careful about choosing and accepting the partnership with the right and reputable banks in international trade, even when the payment terms are not based on a Letter of Credit.

Now, friends, in this particular case study, if we look at the role of the local bank, its responsibility as a negotiating bank is crucial. Since it charges negotiation fees, the local bank is expected to provide meticulous and professional service in such cases.

The local bank should therefore be selected very carefully. It should be a professional and experienced institution. Normally, professional banks may charge slightly higher negotiation fees for international transactions, especially in DA or DP cases, but such banks carefully examine documents and provide better and more reliable services.

In this case, however, the role of the local bank appears questionable. The bank may not have acted intentionally, but it certainly did not handle the situation carefully. It should have provided better advice and banking support to the exporter. The bank should have pointed out the significance of the condition stated in the Bill of Exchange by Malhotra Exports and discussed it with the client, rather than keeping the client uninformed and simply forwarding the documents to the overseas bank without reviewing them.

The Bill of Exchange is, in fact, a banking document that must be carefully read and verified by the local bank. It is the duty of the local bank to check all conditions, particularly those mentioned in the Bill of Exchange, even if not in other documents. Clearly, in this case, the local bank’s handling of the matter was not professional or diligent.

Now, if we look at the role of the overseas bank in this case study, certain questions arise regarding the conduct of Credit Lyonnaise. In DA payment collections, when a specific condition has been mentioned in the Bill of Exchange, the overseas bank should have red-flagged that condition and refused to release the documents if it was not accepting the co-acceptance clause.

Although this condition may not align with UCP (Uniform Customs and Practice) guidelines—which do not require DA payment collections to impose such obligations on overseas banks—a good, first-class bank would still take note of the conditions mentioned in the Bill of Exchange.

In this case, the choice of the overseas bank by Malhotra Exports—possibly influenced by the importer—appears casual. The exporter seems to have assumed that since this was not an LC contract, the overseas bank’s role was not very significant. Such an approach should always be avoided. Whether the transaction involves LC, DP, or DA payment terms, the overseas bank must always be a first-class bank. In this case, the role of Credit Lyonnaise appears questionable, as it seems the bank took advantage of both the UCP clauses and the lack of understanding on the part of the Indian bank and the exporter.

In a DA case, as per accepted practice, any bank that hands over documents to the importer assumes a certain level of responsibility. At the very least, the overseas bank should have noted the condition mentioned in the Bill of Exchange and refrained from releasing the documents so casually. A reputed overseas bank would have taken the condition seriously and handled the matter more responsibly.

Although many banks, in the absence of clear instructions from the local bank, might have acted the same way as Credit Lyonnaise, a high-quality international bank would likely have recognized the importance of the condition stated in the Bill of Exchange. After all, the Bill of Exchange is not a buyer’s document—it is a banking document. For a bank to claim it is not responsible for the content of the Bill of Exchange is highly unusual.

Looking at the overall lessons from this case study, it is very clear that knowledge of UCP clauses and guidelines is essential for any bank, including the local bank. A reputed, high-quality local bank would have understood the potential consequences of this transaction and would have raised a red flag. It seems that even the local bank’s knowledge of UCP provisions was inadequate.

Whether it is a local bank or an overseas bank, both must be well-versed in UCP clauses and guidelines. At the same time, exporters themselves should be aware of UCP provisions and should handle DA payment collections professionally and in accordance with these standards.

In the absence of proper knowledge of UCP, exporters should always seek professional advice and guidance from knowledgeable entities or individuals experienced in international banking and trade documentation.

Financial risk management involves maneuvers in both operational and financial measures to minimize and contain risks of variation of the ROI within tolerable limits. The next case study demonstrates what are the different approaches that can be adopted to reduce typical financial risks in typical situations.

Hello friends,

Welcome back to the VJ Export-Import Mastery Series course titled Manage All Export Risks | Any Country of Exports.

In the last episode, I discussed some case studies—especially the last one, which dealt with major commercial risks. The majority of cases involving commercial risks are similar to the one I discussed in the case study of Malhotra Exports, which exported garments to France.

These situations are very common, and exporters around the world—not only from India—face similar challenges. However, this situation represents only one among many different types of problems and risks associated with exporting.

In today’s episode, I will discuss another real case study. I have changed the names of the persons involved, and this case focuses on financial risks, particularly those related to foreign exchange fluctuations.

This case study represents the type of situation that small and medium exporters often face. Similar situations can also occur with large and multinational companies, but this case mainly highlights the difficulties commonly encountered by small and medium-sized exporters from various countries.

This particular case study deals with the supply of toners by Mr. Shah, based on an order he received from Hungary. We will discuss this order, how Mr. Shah managed it, what financial benefits he expected, and what actually happened during the execution of the order.

Mr. Shah received an order to supply toners for laser printers from an importer in Hungary. This case is set in November 2018, when Mr. Shah received the order.

The toners were to be used for laser printers and supplied in bulk packing, meaning 20 kg drums of toner powder. The order quantity was 10 metric tons per month, starting from January 2019 and continuing until December 2019.

The payment terms were through a revolving Letter of Credit (LC), which meant that the LC amount, based on the 10 metric tons ordered each month, would be renewed or revolved after every shipment. The LC amount covered 10 metric tons multiplied by the unit price of the order, which was USD 132.5 per kilogram. The contract currency was US dollars.

This was the export contract Mr. Shah received from Hungary, and we will now analyze it further. The agreed price, as mentioned, was USD 132.5 per kilogram FOB (Free on Board), Kandla Port, India.

The goods were to be packed in 20 kg drums, as already noted. The order was received in November 2018, when the foreign exchange rate was approximately ₹76 per US dollar.

At this exchange rate, the price Mr. Shah received for the toner was USD 132.5 per kilogram.

Mr. Shah was very happy with this order because, based on the financial calculations he made in November 2018, he found the order to be quite profitable. The cost to Mr. Shah included imported raw material, which cost around USD 60 per kilogram, and local raw material, which was to be used to complete the entire order throughout the year 2019—from January to December—at a rate of 10 metric tons per month, totaling 120 metric tons for the full order.

The local raw material cost was around USD 40 per kilogram. At the exchange rate of ₹76 per USD in November 2018, the price of the local raw material required for the entire order amounted to ₹364.8 million.

The other costs, including conversion costs, packaging, employee expenses, and other sundry charges, amounted to around USD 15 per kilogram, which came to approximately ₹136.8 million.

Adding ₹364.8 million for raw materials and ₹136.8 million for conversion and other costs, the total cost came to approximately ₹547 million, or 1 billion Indian rupees, when rounded for the entire order.

Based on these calculations, Mr. Shah estimated that his expected profit from this order would be USD 17.5 per kilogram.

This meant that, in November 2018, at an exchange rate of ₹76 per USD, for a total order quantity of 120 metric tons, the total expected profit was ₹159.6 million, that is, 159.6 million Indian rupees.

In the next video, issues related to the failure of Mr. Shah to effectively manage the foreign exchange fluctuation's impact on the expected profits from the exports order are discussed.

Now, if we look at the historical data—which we can now check because it is available—we can analyze the actual figures that Mr. Shah calculated.

In November 2018, the exchange rate was ₹76 per US dollar, and by February 2020, it had come down to ₹71.50 per US dollar. This means the Indian rupee appreciated significantly during this period. The month-wise average dollar rates are provided for reference.

During these months, Mr. Shah placed his first order for imported raw material in December 2018 because the supplies were to begin in January 2019. The month-wise local raw material costs are also recorded. The second order for imported raw material was made in April 2019.

The conversion costs are given month-wise, starting from January 2019, and the total receipts began in March 2019. These receipts represent the inward remittances received through the Letter of Credit (LC).

The total cost of the imported raw material, local raw material, conversion costs, and total receipts are all shown in the records. These give a clear picture of the total cost incurred by Mr. Shah and the total receipts received from exports.

Based on these calculations, Mr. Shah found that the actual gross profit was ₹125 million, compared to the expected profit of ₹160 million calculated in November 2018. This resulted in a shortfall of about ₹35 million, which was approximately 22% less than the expected profit.

In other words, there was a 22% dip in profit. This was the actual scenario faced by Mr. Shah.

The meaning of this is that the actual profit was significantly lower than the expected profit. Mr. Shah had instructed his finance personnel to ensure that the difference between expected and actual profit should not vary by more than ±5%, but in this case, the actual profit was 22% lower, which represented a substantial reduction.

The purpose of this case study is to highlight this financial risk, which arose because the Indian rupee continuously appreciated during that period. The appreciation of the rupee resulted in a fall in profits.

Now, the key question is: what could Mr. Shah have done correctly to avoid this situation?

That is what we will discuss in this case study.

Many financial risks can be reduced and managed by correct operational measures.

Okay, friends.

It is very clear that Mr. Shah did not carry out any kind of financial risk management in this particular case. This was a reasonably large order and involved both the receipt and outflow of foreign exchange for Mr. Shah. Professionally, if he had implemented some operational and financial risk management strategies, it would have been possible to limit the loss in profit to a manageable level, within plus or minus 5% of the expected profit. That deviation could have been controlled if the appropriate financial and operational tools had been applied.

I will now discuss what Mr. Shah could have done in this case to avoid such a large deviation from the expected profit.

If we categorize the possible solutions, there are mainly two types that Mr. Shah could have applied: operational solutions and financial solutions. Operationally, if he had exercised more caution and applied basic risk management practices, he could have benefited significantly—perhaps even more than through financial tools. The irony is that financial risks are often best managed first through sound operational measures.

Let us discuss these operational solutions.

The most important thing Mr. Shah should have done was to sign the contract in Indian rupees, the local currency. In this case, since the order was from Hungary and the actual currency of Europe is the euro, and since the order was made in US dollars, the buyer would most likely have agreed to a contract in Indian rupees. It is unclear why Mr. Shah agreed to a contract in US dollars.

Even if there were some pressing reasons for accepting the contract in US dollars, there were still many other actions he could have taken to avoid such a major dip in profits. Apart from the best solution—signing the contract in Indian rupees, which would have saved him from foreign exchange risk—Mr. Shah should have followed another prudent measure.

He should not have ordered all the imported raw material in advance. Instead, the imported raw material should have been procured through monthly shipments rather than importing the entire quantity upfront. That was not a wise decision. Mr. Shah probably expected the Indian rupee to depreciate and was speculating that he would earn extra profit if the rupee weakened.

However, as an exporter, it is not advisable to become a speculator. Exporters and importers should not indulge in speculation. Instead, Mr. Shah should have acted logically and ordered the raw material in monthly installments. This approach would have helped him manage financial risks better and would have also protected him from commercial risks, such as the possibility of the international buyer becoming insolvent during the year-long contract.

Since the contract period was long—twelve months—if, for any reason, the letter of credit had failed midway, Mr. Shah would have been exposed to significant risk by having already imported a large quantity of raw material in advance. Hence, that decision was not prudent.

For example, if we look at the revised financial worksheet and assume Mr. Shah had imported the raw material monthly, the calculations show that this operational measure alone would have reduced the loss to ₹27.9 million, or about 17%, instead of 22%. This means he could have reduced the deviation from expected profit by almost 5% simply by managing the imports more efficiently.

This operational step would have definitely benefited him because, naturally, since the order was to be executed monthly, the raw material should also have been imported accordingly—perhaps one or two months in advance, but not the entire quantity upfront.

Another important operational measure Mr. Shah should have taken was to use an EEFC account (Exchange Earner’s Foreign Currency Account), which is available to exporters in many countries, including India.

The purpose of an EEFC account is to allow exporters to retain their inward remittances in foreign currency without converting them immediately into local currency. The benefit of this is that Mr. Shah could have saved significantly on bank conversion charges and commissions that arise when converting US dollars to Indian rupees and again converting rupees back into dollars for paying for imported raw materials.

By using an EEFC account, Mr. Shah could have avoided multiple conversions and saved a considerable amount of money in bank charges. This was another operational protection and a viable solution available to Mr. Shah—but one he unfortunately did not use.

Currency risk is the financial risk that arises from potential changes in the exchange rate of one currency in relation to another. And it's not just those trading in the foreign exchange markets that are affected. Adverse currency movements can often crush the returns of a portfolio with heavy international exposure, or diminish the returns of an otherwise prosperous international business venture/exports deal. Companies that conduct business across borders are exposed to currency risk when income earned abroad is converted into the money of domestic currency, and when payables are converted from domestic currency to foreign currency.

Now, let us look at the financial solutions that would have helped in managing export risks of this type—specifically, the financial risk management measures that Mr. Shah could have applied for the supply of toners for laser printers to Hungary.

Financial solutions are usually quite technical in nature, and Mr. Shah would not have been able to implement them on his own. He should have sought the help of knowledgeable professionals or banking experts who regularly handled his export transactions. They could have suggested the appropriate measures.

Mr. Shah should have gone for hedging of the foreign exchange rate through different tools such as swaps, forwards, futures, or derivatives. There is a range of financial instruments available that function as insurance against foreign exchange fluctuations of the kind described in this case study.

For example, the cost of hedging in this case would vary depending on the chosen instrument—whether a swap, forward, futures, or derivative contract. Normally, swap solutions are quite inexpensive and cost-effective, while futures instruments are highly secure because they are exchange-traded and offer certainty, with very low chances of default. Though forwards are quite similar to futures, they are easier to arrange through banks and therefore more convenient to execute.

However, futures contracts offer greater security when it comes to insuring and protecting against foreign exchange fluctuations of this type.

If Mr. Shah had used these measures, he would have been able to keep the deviation of actual profits from expected profits within plus or minus 5%. Generally, the cost of hedging would not have exceeded 0.75% of the total order value, which would have kept the variation in profit within that acceptable 5% range.

These were the different types of financial options available to Mr. Shah for his export of toners for photocopiers and laser printers to Hungary.

Both operational and financial instruments of this kind are simple and commonly used solutions. Larger and multinational companies may use more complex derivatives and advanced financial instruments, which can be costly and may not be suitable for small and medium exporters.

The solutions discussed here are practical, common, and regularly used operational and financial tools for managing such export-related risks effectively.

Hi there!

I hope you are doing well and making great progress in this course.

I wanted to take a moment to congratulate you on your remarkable progress. Your dedication and commitment to learning have truly impressed me. I have been following your journey closely, and I must say, I am delighted with the effort you are putting in.

This course is part of the VJ Export Mastery Courses Series, a collection of 25 different courses focused on export management, designed to equip you with the knowledge and skills needed to excel in the field of export and international trade.

On my part, I am committed to helping you expand your learning journey by providing access to more courses in this series. At the same time, I have a small request from you as well.

Your feedback is incredibly valuable in refining this course and ensuring it remains world-class and continually improving. I kindly ask you to leave a rating for the course along with your honest feedback if you have not yet done so. Your input will help me enhance the course and tailor it to better meet your needs and those of future learners.

Thank you once again for your dedication and enthusiasm. Keep up the fantastic work that you are doing, and remember, I am here to support you every step of the way.

Together, let’s continue on this journey of learning and growth.

In the next few videos, a case study will be discussed, which demonstrates the complexities involved in international trade transactions and why meticulous planning is a must before finalizing the operational strategies to carry out exports or import transactions. Movement of goods, insurance risks, transfer of ownership, responsibility of costs, and accounting are some of the major issues involving the operational strategic management of exports transactions.

Hello friends,

Welcome to the course.

Today, I will take up an interesting case study to illustrate several types of risks involved in executing international orders, with a special focus on transit risks—that is, the risks associated with the movement of goods from one country to another and the people involved in such transactions.

The role of the company arranging the goods internationally, whether exporter or importer, and the responsibilities and risks that can be transferred to different channel members depending on their roles in international trade, will also be discussed.

This particular case study will show what it indicates and what we can learn from it. This is a real case study, but the names of the companies and products have been changed for privacy reasons.

In this case, we are talking about a company named ABC Company, based in India, which supplies imported Malaysian cookies to another company also based in India, located in Varanasi, a city in the state of Uttar Pradesh (U.P.).

This case study can be scaled and applied to any country because the events and situations described here would be quite similar in other nations, unless there are drastic differences in their rules, regulations, or trade practices. Generally, the practices illustrated in this case study are common and relevant irrespective of the countries involved.

ABC Company purchases cookies from a Malaysian manufacturer for shipment to a designated Indian port, as agreed between both parties based on a purchase order. ABC Company then makes arrangements with a C&F agent or customs broker to pick up the cargo—Malaysian cookies—from the Indian port. The shipment may arrive at a seaport or an airport, depending on the manufacturer’s choice of transportation mode and the size and quantity of the shipment.

The customs broker collects the cargo at the Indian port for final delivery to the customer, i.e., the ultimate buyer based in Varanasi, India.

In this case, ABC Company is the importer of Malaysian cookies, responsible for bringing them into India and ensuring delivery to the final customer in Varanasi.

The main problem associated with this situation lies with ABC Company, as it acts as the importer. ABC Company is responsible for receiving the shipment from Malaysia, picking it up at the Indian port, owning the goods upon their arrival in India, and selling them to the Indian company (the Varanasi buyer) based on a domestic purchase order.

Thus, while the relationship between the ultimate buyer in Varanasi and ABC Company is domestic, the relationship between the Malaysian company and ABC Company is international, as it involves an export-import contract.

This structure makes the transaction more complex for ABC Company. The complexity depends on the type of contracts signed with both the Malaysian supplier and the ultimate Indian buyer in Varanasi—what kind of purchase order, sales policy, and order policy are used.

These factors are critical for ABC Company because the risks associated with this shipment are complex. Managing these complications requires careful attention to various aspects, including the international purchase order, sales order, sales policy, and order policy, all of which must be created by ABC Company, the main player in this entire deal.

In preparation for this first international transaction with the party in Varanasi, ABC Company created a document to guide its team on risk management—specifically, international export and import risk management.

This document includes terms and conditions based on Incoterms (International Commercial Terms) 2010, which I will explain in greater detail in the next episode. I will discuss the different terms of Incoterms 2010 that must be well understood, as they directly apply to international shipments.

The responsibilities under Incoterms 2010, along with other policy documents, order documents, and purchase documents, need to be clearly established by ABC Company.

Before finalizing these documents, it is essential to create a master document that serves as a guideline for ABC Company and its team to ensure there is no confusion among internal team members, the Malaysian supplier, or the ultimate buyer in Varanasi.

This is the situation we need to analyze and address based on the relevant laws, regulations, and agreed terms and conditions between the importer (ABC Company), the supplier (Malaysian manufacturer), and the ultimate buyer (Varanasi-based company).

These aspects will be discussed further.

An understanding of the international commercial terms with its latest version 2010 is essential to make the operational aspects of the international journey of exports-imports shipments smooth and conflict-free. At the same time, local laws governing delivery terms, payment terms, and accounting laws also play an important role. In the next video, a brief introduction is provided on how to use the INCPTERMS 2010 in this case study. In the next section, additionally, a complete set of videos is provided explaining the latest version of INCOTERMS®2020.

Now, friends, before we look at the contents of the document that will guide all the parties involved in this shipment to manage the risks and ensure the goods are shipped safely, securely, timely, and smoothly, we need to understand the 11 terms incorporated in the International Commercial Terms (Incoterms) 2020.

The purpose of these terms is to define costs, risks, and responsibilities—specifically, the points at which the responsibility for cost rests with the international supplier, and the points after which the costs shift to the international buyer.

Similarly, these terms define the points up to which the risk is borne by the international seller and the points after which the risk is borne by the international buyer. They also determine the responsibilities—that is, the points after which the responsibility and title of the goods transfer from the international seller to the international buyer.

Here, you can see in the Incoterms 2020 diagram the point of delivery and transfer of risk. The diagram shows key locations such as the seller’s premises, the first carrier, alongside the ship, port of loading, carrier, destination port, alongside the ship at destination, agreed place, and the buyer’s warehouse.

This range of points illustrates where the transfer of obligation or risk can occur between the seller and buyer.

In the diagram, in the left column, you can see all the 11 Incoterms—ExW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DPU, DAP, and DDP.

I have already discussed these terms with you, but in this diagram, the most important thing to understand is how the seller’s and buyer’s obligations are represented:

• The seller’s obligation is shown by the blue bar, which indicates up to what point the seller is responsible. Obligation also means that the cost is borne by the seller.

• The red star in the diagram marks the point of transfer of risk from the seller to the buyer (the importer).

• The pink-shaded area represents the buyer’s obligation, which begins after the transfer of risk.

In summary:

• Blue color = Seller’s obligation

• Pink color = Buyer’s obligation

• Red star = Transfer of risk

You can copy this diagram or download it from the resources section of this lecture, where I have placed one copy for your reference. Keep it handy for future use—it will help you understand, for all 11 Incoterms, the exact points where the transfer of obligation and transfer of risk occur between the seller and the buyer (the importer).

This image will remain very useful until the next version of the Incoterms, which will be released in 2030, making this diagram applicable until then.

Choosing the best delivery term acceptable to both the international seller and buyer is the first step in creating a successful operational strategy for international trade transactions.

In this particular case of ABC Company, it is very clear that since the goods have to be ultimately supplied to the buyer in Varanasi, that part of the transaction is not the concern of the international seller.

The best Incoterm to be used by ABC Company in this situation would be FCA (Free Carrier). Under this term, ABC Company—the importer and domestic supplier of the goods—can arrange both the insurance and the cost for the two stages of transportation:

1. The journey from the Malaysian-named place to the Indian named place, and

2. The journey from the Indian named place to the ultimate buyer in Varanasi.

It is quite obvious that in this whole deal, the international seller would not be concerned with anything beyond delivering the goods to the agreed point. Therefore, using FCA terms is the best option, as it places the remaining costs and risks on ABC Company.

In return, ABC Company will be duly rewarded because, under FCA terms, the international supplier will quote a better price. The supplier will be free from additional responsibilities and hassles, leading to a lower export price for the Indian importer.

Similarly, ABC Company will combine the international transaction with the domestic transaction, managing the supply of goods from the designated Indian port to the ultimate buyer in Varanasi.

Since the risks and costs for this second leg of the journey are borne by ABC Company, the company will be duly compensated by the Varanasi buyer for taking on these responsibilities. All the hassles, risks, and liabilities will rest with ABC Company, which is the main player in this transaction.

As a result, ABC Company will earn a good profit from the ultimate buyer in Varanasi—and that is precisely its role in this entire arrangement.

Next, we will discuss the guiding documents that will help ABC Company make this transaction smooth, risk-free, and efficient, minimizing delays and ensuring timely execution while providing the best service to the ultimate buyer in Varanasi.

Let us now look at those guiding documents that will help minimize the various risks associated with this transaction.

In the next video, a template for a guiding document has been suggested, which can be replicated in many situations of exports and import transactions management. In the next few videos, different sections of this document are discussed in this example.

Friends, this is the document prepared by ABC Company to guide its team and all the parties involved in this particular transaction. Based on this document, it becomes much easier for ABC Company to create the international purchase order, the sales policy, the order policy, and the sales order with the ultimate buyer in Varanasi.

In this document, there are three columns and several rows:

1. The International Import Purchase column

2. The Domestic Sales column

3. The Comments column

In the first column, which relates to international shipping, the document specifies that ABC Company will make arrangements with the Malaysian manufacturer’s freight forwarder, as the freight forwarder on the Malaysian side is likely to be an organization based in Malaysia and suggested by the international supplier.

Therefore, ABC Company must coordinate with that particular named freight forwarder suggested by the Malaysian supplier—or, if necessary, with their overseas freight forwarder. Whether it is a domestic or overseas freight forwarder depends on the manufacturer’s location, whether it is near the designated airport or seaport, or far from it in Malaysia. That will determine whether a domestic freight forwarder or an overseas one is used.

The freight forwarder will be instructed to ship the goods to a designated Indian seaport or airport, such as Mumbai or New Delhi. In this case, the named place and designated port would be the same because the goods must ultimately be supplied further to a third party within India.

Hence, under place-to-place terms, the destination place is the port itself.

In the domestic part of the transaction, ABC Import Company will make arrangements with a customs broker in India and a clearing and forwarding agent to pick up the products after they are cleared from customs at the Indian seaport or airport of import—again, either Mumbai or New Delhi—for final delivery to the customer’s facility in Varanasi.

The Varanasi customer understands that the goods are made in another country—Malaysia, in this case—but that fact is irrelevant to them. They are not concerned with the international origin of the product because their contract is with the Indian company, ABC Import Company.

From the Varanasi company’s perspective, they are placing an order with an Indian firm under Indian local laws.

This document clearly states that the transaction is divided into two parts:

1. ABC Import Company, acting as the importer of the cookies, is subject to the customs laws of India.

2. The Varanasi company is involved only in the domestic sale and purchase of goods.

Under Indian customs law, duties, documentation for clearance, and the Bill of Entry (the import entry form) are all matters concerning ABC Import Company. These responsibilities have no connection with the Varanasi buyer.

The document also highlights that, for this transaction, the Varanasi customer does not communicate any customized specifications or requirements to either the Indian or the international vendor. The Varanasi customer is not concerned with the international vendor at all. Instead, they are purchasing a standard mixed variety of cookies—a typical assortment prepared for the Diwali festival.

These are standard gift boxes sold on a unit price basis, meaning the exact contents of each box are not specified.

Furthermore, the Varanasi firm’s name and address do not appear as the ultimate consignee on the import entry form or Bill of Entry. Their name is absent from all international documentation because they are not the importer. The importer, in this case, is ABC Import Company.

Based on this arrangement, the Varanasi company is neither a direct nor an indirect importer. They are entirely unconnected with the international aspect of the transaction and are involved solely in the domestic part of the business.

Now, the document also discusses the accounting aspects—that is, the international accounting, domestic accounting, and the overall accounting to be done by ABC Import Company. These points need to be carefully reviewed.

The question raised in this document is whether it is appropriate for ABC Import Company to record the liability for the goods and book the inventory as of the bill of lading date or the onboard date. The reasoning here is simple: in this case, it is not clear whether the Malaysian manufacturer is located near the port of loading or farther away from it.

Since FCA Incoterms have been suggested, the freight forwarder will receive the goods at the FCA point. Therefore, it must be checked whether the bill of lading date or the onboard date should be used for accounting purposes.

For the domestic accounting, the question is also addressed in this document. The concern here is that ABC Import Company will recognize the revenue and record the sale as of the delivery date, that is, when the goods arrive at the customer’s facility in Varanasi. This point must be verified for accounting purposes, along with the payment terms, which determine when the sale, delivery, and revenue are to be recognized by ABC Company.

Another important question raised is whether the order policy—which states that the title transfers to the customer only after full payment—affects the timing of accounting entries, especially when payment terms extend beyond the delivery date. In other words, if the goods are delivered to the Varanasi buyer but the full payment is made later, the title transfer definition must be clearly stated in this document.

This clarification is crucial because such details must be explicitly mentioned in the order policy, sales policy, and purchase order between ABC Company and the Varanasi company. Clear definitions here help reduce potential risks and misunderstandings.

Regarding accounting for the ABC terms, the comments in this document clarify that Incoterms 2020 is silent on revenue recognition. Incoterms do not address the payment or revenue aspect; this must be handled separately in the contract.

However, as per Indian accounting laws, it is consistent and standard practice to have the title transfer occur at the same time as delivery and risk transfer. This means identifying the exact point at which delivery is considered complete and the risk of goods transfers from one party to the other.

In this particular case, ABC Import Company will recognize the cost or obligation for debt when the goods are delivered to the named seaport or airport in Malaysia, under FCA terms.

Because FCA terms have been used, two documents can serve as proof of delivery: the Dock Receipt or the Signed Delivery Notice. Alternatively, companies may use the Ocean Bill of Lading date or the CTD date, depending on what has been mutually agreed upon.

Ultimately, under FCA terms, as explained earlier, the international delivery is considered complete the moment the goods are received by the first carrier or freight forwarder after leaving the manufacturer’s facility.

At this point, the delivery has been effected, and the risk has transferred from the international seller to the international buyer.

This has been clearly mentioned and defined in the document.

Now, friends, the document also discusses the use of Incoterms, which we have already talked about—specifically, whether FOB or FCA should be used. This needs to be clarified depending on whether the goods are being shipped by air or by sea. In both cases, whatever is finally decided must be clearly stated and checked.

Under this scenario, since both an ocean or air carrier and a domestic carrier will be used—because there is a domestic leg of the journey as well—it must be determined whether Incoterms or domestic FOB shipping terms should apply.

There are, therefore, two sets of delivery term structures to consider:

1. The international part of the journey, from Malaysia to India, which is governed by International Commercial Terms (Incoterms) 2020, and

2. The domestic shipping terms that apply within India after the goods arrive at the port.

Every country has its own local shipping terms. For example, in the United States, the terms FOB Origin and FOB Destination are used. Similarly, in India, these same terms—FOB Origin and FOB Destination—are also applicable for domestic transactions.

Therefore, both frameworks must be used: one for the international part and one for the domestic part of the transaction.

For the international purchase from the Malaysian vendor, the shipment will be subject to Incoterms 2010. The term FOB should not be used because, as already discussed, FOB is a sea term intended for bulk or non-containerized cargo and is not suitable for containerized or packaged goods.

Since the cookies in this case are containerized products, whether shipped by sea or air, the correct term to use is FCA (Free Carrier) at a named place in Malaysia.

In this example, it would be an FCA named Ocean Port or Airport Offloading Point in Malaysia.

As mentioned earlier, in the case of air freight, the applicable Incoterm would be FCA (named place), where the freight forwarder, acting as the first carrier, receives the goods in Malaysia.

For the domestic part of the shipment—i.e., the sale to the Indian customer in Varanasi—the transaction is governed by the Indian Commercial Code.

In the United States, the equivalent is the Uniform Commercial Code (UCC), which provides for the use of FOB Origin and FOB Destination terms, along with a designation for freight terms—either Freight Prepaid or Freight Collect.

These indicate whether the freight has already been paid by the seller (Freight Prepaid) or will be paid by the buyer upon delivery (Freight Collect).

In this particular case, the final decision will depend on the payment terms, which will determine whether the freight is prepaid or is to be collected later.

If we look at the payment terms, ABC Import Company will pay net 45 days from the Bill of Lading date to the vendor. This means the Malaysian company will receive the payment 45 days after the date of the Bill of Lading. This term has been clearly stated in the purchase order.

Now, the reason for suggesting and agreeing to this payment term is simple. ABC Import Company wanted these terms to ensure that payments are well-aligned with the overall cash flow of the transaction.

The domestic payment terms specify that the Indian customer will pay ABC Import Company net 20 days from the date of delivery, meaning the customer will make the payment 20 days after the goods reach the facility of the ultimate buyer in Varanasi.

This arrangement has been agreed upon because ABC Import Company negotiated the payment terms in a way that positions it to receive payment from the Indian customer before its own payment becomes due to the Malaysian vendor.

If production, transportation, customs clearance, and delivery all occur as scheduled, then, in all probability, ABC Import Company will first receive the money from the customer and will therefore be in a comfortable position to pay the Malaysian vendor on time.

To ensure a smooth flow of payments and avoid financial stress, these payment terms must be suggested, implemented, and incorporated in both the international purchase order and the domestic sales order.

Next, the document also discusses the issue of the delivery of goods.

Under Incoterms 2020, delivery of goods from the Malaysian supplier to ABC Import Company occurs when the goods are delivered to the freight forwarder or consolidator, if the term used is FCA (Free Carrier) at a named freight facility.

In this case, the question arises whether this should be considered the delivery point, or if delivery should instead be considered complete only when ABC Import Company delivers the goods to the Varanasi customer, that is, when the goods arrive at the customer’s facility.

According to FCA terms, the international delivery point is defined as the point when the goods are received by the first carrier, and that is the correct interpretation.

For the domestic purchase order, it is appropriate to define the delivery of goods as delivery at the customer’s facility in Varanasi.

The document clarifies this point as follows:

For the international part, ABC Import Company takes delivery of the goods as specified under the Incoterms applied in the agreement with the Malaysian vendor. If the term used is FCA (named ocean port of loading, Malaysia), then delivery occurs when the goods are received by the main carrier or its agent, which in this case is the freight forwarder.

Proof of delivery may include the forwarder’s cargo receipt, dock receipt, ocean freight document, or the Combined Transport Document (CTD) if the freight forwarder acts as an MTO (Multimodal Transport Operator).

In such cases, the MTO may issue a CTD or confirm that once the Bill of Lading is available, it will be forwarded to the supplier (the international seller). Regardless of the form, delivery is considered complete once the goods are received by the first carrier.

This makes the international part of the transaction very clear.

For the domestic part, delivery of goods from ABC Import Company to the Varanasi customer occurs when the goods arrive at the customer’s facility by truck, under Indian terms of FOB Destination.

This means that in the purchase order or contract between the Varanasi buyer and ABC Import Company, the delivery terms will be clearly mentioned as FOB Destination.

This makes the delivery terms for both the international and domestic parts of the transaction very clear and well-defined.

Now, the issue of the delivery of goods has to be mentioned in this document. The question here, friends, is:

Under Incoterms 2010, the delivery of goods from the Malaysian supplier to ABC Import Co occurs when the goods are delivered to the freight forwarder or consolidator, if the term used is FCA (named freight facility).

Will that be considered the delivery point, or will the delivery of goods be defined as the point when ABC Import Co delivers the goods to the Varanasi buyer, that is, when the goods arrive at the customer’s facility?

Is it correct to assume that the international delivery point is when the goods are received by the first carrier? According to FCA terms, that indeed is the case.

Is it also correct to incorporate in the domestic order that the delivery of the goods will be defined as delivery at the Varanasi factory? The answer to this question has been clearly mentioned here.

For the international part, ABC Import Co takes delivery of the goods as specified under the Incoterms applied to the agreement with the Malaysian vendor. If the Incoterm is FCA (named ocean port of loading, Malaysia), then delivery occurs when the goods are received by the main carrier or its agent.

In this case, the freight forwarder acts as the first carrier because it is a place-to-place transaction.

Proof of delivery may include the forwarder’s cargo receipt, dock receipt, ocean freight document, or the CTD (Combined Transport Document). If the freight forwarder is acting as an MTO (Multimodal Transport Operator), it can issue a CTD or ensure that, as soon as the Bill of Lading is received, it will be handed over to the supplier (the international seller).

Whatever the proof of delivery document may be, delivery is defined as the point at which the goods have been received by the first carrier. This makes the international part very clear.

For the domestic part, delivery of goods from ABC Import Co to the Varanasi customer occurs when the goods arrive at the customer’s facility by truck, under the Indian terms of FOB Destination.

This means that in the purchase order or contract between the Varanasi buyer and ABC Import Co., the delivery term will be clearly mentioned as FOB Destination.

It is, therefore, very clear that both the international and domestic delivery points are well-defined and distinct in this transaction.

Now, it is always better to have the issue of title transfer clearly settled in this document.

The question is: At what point does the title of the goods pass to ABC Import Company?

Is it true that the title of the goods will pass to ABC Import Company when the product crosses the ship’s rail in Malaysia?

According to the sales policy (referring to the domestic sales), the title of goods shall remain with ABC Import Company, even though the goods may be in transit within India, during the domestic or international journey, or even if they are at the customer’s premises. The title will not transfer until the payment has been received in full.

This is quite obvious and also very fair — until the full payment has been made, the title should not transfer. The risk and delivery may occur, but the title may not transfer until payment is complete.

Is this the correct approach, or should the title pass to the customer upon delivery itself, even before the full payment? This is the key question that needs to be addressed in this context.

If we look at the international part, it is clear from the Incoterms (although they are silent on the issue of title or ownership transfer and focus mainly on delivery and cost) that under FCA terms, when the first carrier receives the goods, delivery has occurred, and the risk has transferred.

Therefore, it can be understood that the title is also transferred at that point. There is no ambiguity about the title transfer in this case.

In the domestic part, the situation is also clear. Since the transaction follows Indian terms of FOB, specifically FOB Destination, the Indian accounting laws provide for ownership transfer at the moment of delivery, or they recognize revenue realization only after delivery.

It is also legally acceptable and consistent with Indian accounting principles that ownership (title) transfer may not occur until the payment has been fully realized, even after delivery.

Hence, there is no legal issue in retaining ownership until full payment is received.

This document, therefore, has clearly and effectively addressed this particular point regarding the transfer of title.

Now, the last point is about the insurance risk, both international insurance as well as domestic insurance.

Because this is a two-part journey, it involves two types of insurance — international insurance and domestic insurance.

The question is whether the insurance risk will be the responsibility of ABC Import Company once the product passes the ship’s rail in Malaysia, or whether their insurance policy will cover the risk of goods all the way to Varanasi. This has to be carefully checked.

As far as insurance risk is concerned, the insurance responsibility will remain with ABC Import Company from the time the goods are delivered to the first carrier in Malaysia until they are delivered to the ultimate buyer in Varanasi.

The insurance risk will transfer to the Varanasi customer only upon delivery of the product to their facility.

It is, therefore, clear that the entire insurance risk — for both the international and domestic legs of the journey — lies with ABC Import Company.

Under the selected Incoterms for this transaction — FCA (named ocean port, Malaysia) — ABC Import Company is responsible for the international cargo insurance, including both risk and cost. This has already been discussed under Incoterms.

If these terms are used, there will be no confusion.

In this example, for the domestic part, it is also the responsibility of ABC Import Company to obtain cargo insurance through its insurance agent or customs broker to cover potential cargo losses.

It is possible to have a comprehensive insurance cover starting from Malaysia up to the Indian designated port, and further extending to the ultimate customer’s facility in Varanasi.

According to available insurance products, coverage can be provided on a warehouse-to-warehouse basis — meaning from the warehouse of the Malaysian manufacturer (when goods are received by the first carrier) to the warehouse of the Varanasi buyer.

There is, therefore, no need for a separate domestic insurance policy.

The recommended insurance scope is All Risks, which offers maximum coverage. The insurance should be for a value equal to 110% of the CIP value.

CIP means Cost, Insurance, and Freight, which includes the cost of the goods, freight, and insurance. Therefore, the insured value should be 110% of the total landed cost in India.

Another issue related to insurance is determining when the insurance coverage begins and when it ends.

Under Incoterms DDP (Delivered Duty Paid), delivery is defined as delivered to the destination, not unloaded. But what if the goods are damaged before unloading? What if damage is discovered during unloading? Does the policy cover that event?

These points must be clarified with the insurance company.

Additionally, ABC Import Company should confirm whether it needs to purchase additional insurance to cover the goods during the final leg of the journey, when the freight forwarder picks up the cargo from the Indian port for delivery to the Varanasi customer.

Such matters must be clearly discussed and confirmed with the insurance provider, though in most cases, the insurance company provides a combined cover.

It is also critical to confirm with the insurance agent or company exactly when and where the international insurance terminates and when it becomes necessary to add domestic coverage.

This point of inflection — where the international insurance transitions to domestic insurance — must be clearly defined in the documentation.

This type of document is extremely important for risk management in international shipments, whether for exporters, importers, or intermediaries.

Regardless of the roles or parties involved, such documentation is essential before creating the international purchase order, the domestic purchase order, the sales policy, or the order policy.

A clear understanding of Incoterms, domestic shipping terms, insurance provisions, and transit insurance coverage is crucial for preparing this kind of comprehensive document.

In the next several video exports, risks associated with bad contracts are discussed using a popular real case study involving exports of Animal Feed from Raipur, India, to the Netherlands and the failure of the exporter due to weak contract terms agreed.

Hello friends,

Welcome back to the class.

In the last episode, I discussed a case study about the supply of cookies from Malaysia to India. I talked about a very interesting tool — the guiding document, which is required to be made by every exporter or importer for managing such kinds of transactions.

This kind of guiding document can really reduce many awkward outcomes, any adverse events, or risks associated with the movement of goods from one country to another, and even within the same country.

Such movements come with several types of transit risks, which can be easily protected against using the various insurance products available in the market. The only requirement is to plan everything properly.

This kind of guiding document can really help a lot.

In today’s episode, I will discuss another very interesting case study related to the structure of the export contract and the different terms and conditions agreed upon between the exporter and the importer, and the consequences of such export contracts and agreements.

What type of agreement is it? What is its nature, jurisdiction, and legal framework? These aspects matter a lot because the consequences can sometimes be quite disastrous.

To illustrate this point, I am going to take up a real case study today. The names of the players and the parties involved have been changed for privacy reasons.

This case study deals with the export of animal feed, which is the leftover product from the extraction of oil from soybeans. That leftover is commonly used as animal feed. The case concerns the export of large consignments of such animal feed from Raipur, India.

This contract was signed between Raipur Exports Consortium and Deep Skin N.V. of the Netherlands to supply 5,000 metric tons of animal feed on FOB (Free on Board) terms. The port of loading was Mundra Port, located in the state of Gujarat, India.

As per the agreement, the last date of shipment was April 30, 2019, and the jurisdiction of the contract, for legal matters, was the Netherlands — that is, the country of the buyer.

Under the terms of the contract, the exporter of animal feed was required to arrange for a quality certificate at the time of loading — specifically, an SGS quality certificate, as well as transport documents like the bill of lading and other regular commercial documents, as normally required under a letter of credit.

This contract was executed through a letter of credit payable at sight.

The exporter from India was a consortium of manufacturers based in Raipur, engaged in soybean oil extraction, with the leftover material being exported through a cooperative marketing agency mandated by the Indian government. This agency handled the export of the animal feed in large quantities — in this case, 5,000 metric tons.

The shipment was carried in breakbulk form from Mundra Port in Gujarat, India, to the designated port in the Netherlands.

This contract was a Free on Board (FOB) contract.

Now, let us see what happened later with this contract.

The goods were exported with the correct quality certificate, and all other documents were arranged by the exporter.

However, unfortunately, the date on the bill of lading was 31st May 2019 instead of 30th May 2019, which was the last date of shipment as per the contract.

There was a small discrepancy in the date issued by the shipping company, and the company did not rectify it. They could not correct due to various reasons.

The exporter submitted the documents to the local bank, which then sent the LC documents to the issuing bank based in the Netherlands — the buyer’s bank that had issued the letter of credit in favor of the exporter.

Upon receiving the documents, the Netherlands bank refused to make payment due to the discrepancy in the shipment date, which was mentioned as 31st May 2019.

The reason given was that this was a stale bill of lading — “stale” meaning it was delayed by one day beyond the contractual shipment date.

Following this, the exporter directly approached the buyer for an LC amendment or for any alternative mode of payment.

However, the buyer refused to accept the shipment, stating that the quality of the commodity upon arrival at the port of discharge in the Netherlands was below the agreed quality standards.

Upon investigation, it was found that the quality likely deteriorated during transit, over which the exporter had no control.

As per the agreement, the quality certificate was duly arranged by the exporter at the time of shipment and submitted to the bank.

Once the shipment was handed over at the ship’s rail at the port of loading, the responsibility of the exporter ceased, as per the FOB contract terms.

The responsibility for the goods had thus transferred to the buyer in accordance with the standard FOB practice.

As per the INCOTERMS 2010, FOB is a Sea Term and suitable for this case study. In the FOB terms, the delivery of the goods is effected as soon as the goods are received on the rails of the ship or on board. In the next video, FOB terms are defined in legal terms.

Let us try to understand what an FOB contract is.

The basic principle of a Free on Board (FOB) contract is that the seller has a duty to deliver the goods over the rails of the ship.

The issue of the bill of lading or mate’s receipt is irrelevant to the matter of property and risk. The legal definition of FOB does not include the possession of the bill of lading or the mate’s receipt. These documents are not legally significant in determining when the transfer of risk or property occurs.

What is important is that the goods are handed over by the seller to the shipping company over the rails of the ship.

Further, the seller’s duty is to ensure that the buyer is properly notified about the vessel, the shipment details, and the date of shipment. All these notifications and arrangements must be made by the seller for the buyer.

In an FOB contract, the buyer remains the legal shipper of the goods and is the main contracting party in the contract of carriage.

The property and risk pass to the buyer when the goods are taken over the rails of the ship.

This is the standard legal position and the normal procedure under an FOB contract.

When the risk passes, it means that the buyer must arrange for insurance. The buyer has an insurable interest in the goods and is entitled to insure them.

Whether or not the buyer actually insures the cargo is their choice, but the responsibility for insurance is transferred to the buyer as soon as the goods are handed over the rails of the ship.

This is the essence of an FOB contract, and it is a well-accepted international trade practice.

As discussed in the next video, due to a bad contract and a bad jurisdiction for the legal course, the exporter had to bear heavy losses. The reasons are explained in the next video.

In this particular case, the outcome was that the buyer accepted that the responsibility of insurance was with them.

However, due to the failure of the seller to provide the bill of lading with the requisite date — that is, 30th May — and the fact that it was delayed by one day, the buyer absolved themselves of further responsibility because the seller failed to meet the contractual obligation regarding the date of delivery.

This point was actually contestable in court, because, as explained earlier, under the legal definition of an FOB contract, the matter of the bill of lading date is not really relevant from a legal standpoint, depending on the jurisdiction.

Moreover, it was a minor discrepancy — just a one-day delay — which courts generally overlook in such commercial cases.

If the matter had gone to court, the exporter would most likely have won, because the exporter was not at fault in this particular contract.

However, what actually happened was that, due to the faulty export contract and the error in the bill of lading, the seller agreed to sell the goods to the same buyer at a 50% discount, as the buyer refused to accept the cargo, claiming that the quality was unsatisfactory.

Since the jurisdiction of the contract was the Netherlands, the seller realized that the cost and inconvenience of pursuing a legal case abroad would be significant.

In view of this situation, the seller had to accept the buyer’s demand and sold the shipment at a 50% discount, resulting in major financial losses.

The major mistake made by the exporter in this case was agreeing to the jurisdiction of the Netherlands at the time of signing the contract.

Had the jurisdiction been India, the situation would have been entirely different. The exporter would not have agreed to the 50% discount and would have taken the matter to an Indian court, where their position would have been much stronger.

In situations where both the exporter and importer cannot agree on jurisdiction in their own countries, the contract should include a jurisdiction clause specifying a third country that is mutually acceptable to both parties.

Such an arrangement would ensure that both parties stand on equal footing, and such disputes are less likely to occur.

In this case, the buyer was not correct in their actions. It was clearly the buyer’s responsibility to deal with the insurance company, as the deterioration of quality during transit was not the fault of the exporter.

Nevertheless, due to the poorly structured export contract, the exporter had to agree to a 50% discount, resulting in a significant loss in the deal.

While several recent efforts to provide high-tech solutions to international trading and foreign trade have not really taken off or failed, Blockchain-based new platforms provide compelling solutions to all kinds of international traders, including smaller ones and the larger ones. The biggest advantage of the technology is that the solutions can reduce export-related risks while making international trading transaction costs much cheaper.

Friends, we have gone through several case studies in this course that illustrated how the wrong letter of credit, the acceptance of the wrong issuing bank, the acceptance of the wrong payment terms, the acceptance of the wrong export contracts, and the failure to plan out the movement of goods and operations can create serious problems.

There are several controllable and uncontrollable export risks associated with the shipment of goods from one country to another. For exporters dealing with buyers in different countries, this business is very lucrative.

This global business is highly profitable. International trade is truly rewarding and profitable.

At the same time, these operations, deals, and types of trading come with their own risks, which have to be managed.

Traditionally, we have been dealing with physical papers, physical goods, and manual methods of moving goods from one country to another. There are many intermediaries involved, which add to the different types of risks.

For example, in the case of Malhotra Exports exporting garments to France, the failure of both the Indian bank and the overseas bank to examine the merit of the case, along with the mistakes made by Malhotra Exports, led to major issues.

These manual operations involve many intermediaries. All these factors add to the level of risk, which increases further due to documentation requirements and central authorities such as local governments and their regulations. Of course, these regulations need to be followed, but they add to the difficulties faced by exporters as well as importers.

In recent times, several new technologies have been tried for carrying out international business. Many of these technologies and their applications have miserably failed. As a result, most businesses still operate through traditional methods—using various types of transport documents, letters of credit, and banks located in different countries.

They deal with different laws and regulations, different versions of the UCP, and varying interpretations of its clauses, all of which add to the difficulties, problems, and risks associated with these transactions. This continues even today because of the failure of several new technologies that were tried to help exporters and international traders reduce their risks.

In the next few videos, we will try to understand the concept behind Blockchain and how it can help make life easier for international traders and exporters.

But friends, recent developments in blockchain technology, the blockchain ecosystem, and blockchain platforms have provided a lot of hope for exporters and international traders to drastically reduce their risks.

Let us see the role of blockchain in reducing export risks associated with such situations. Although the use of blockchain platforms is not yet very widespread, very practical and possible solutions are already available in the market.

If you try to find such solutions, which are mostly based on the Ethereum ecosystem of blockchain, you will find many successful and tested applications in the form of smart contracts.

Let us try to understand how blockchain can help reduce such risks. First, let us look at what exactly blockchain is.

Blockchain is a decentralized, distributed ledger consisting of a chain of blocks containing lists of financial transactions, agreements, and steps involved in international deals. All this information can be stored on blocks that are decentralized and distributed.

These are not governed by any central authority or government.

Blockchain listings in the distributed ledger are very difficult to manipulate because of the nature of the technology. It is absolutely safe and tamper-proof.

Information tracking and tracing on blockchain platforms are available in real time, 24 × 7, 365 days a year.

If anything goes amiss anywhere in the deal, the information can be easily flagged by the exporter or the international trader in a very short time.

This means it is easy to check the history and trace transactions. Blockchain also resists any fraudulent entry because it is extremely difficult and very rare for anyone to manipulate entries in the blockchain ecosystem.

Friends, let us look at how using blockchain can reduce international trade risks.

For this, I would ask you to recall the Malhotra Exports case study, in which two different authorities were mentioned. One was the Consumer Forum based in Delhi, and the other was the Supreme Court of India.

Both authorities gave two different verdicts despite being legal authorities. Both were competent, knowledgeable about the legal aspects of the transactions, and strong in their positions—yet they gave directly opposite judgments.

This means there was definitely something wrong somewhere, because similar legal authorities gave two different verdicts. The conclusion is that both parties may have been right, and both may have been wrong in the case of Malhotra Exports.

It was not actually clear which party was right or wrong by the traditional method. Ultimately, the beneficiaries in this particular case were the banks—both the Indian bank and the overseas bank. The ultimate loser in this case was the exporter.

Now consider an Ethereum blockchain-based smart contract that could have been used between Malhotra Exports and the Saint Laurent Company of France in this case. Here, the role of any bank or bank guarantee would have become obsolete. There would have been no need for any co-acceptance by an overseas bank.

This is because smart contracts are based on algorithms listed on the blockchain that cannot be tampered with and are self-activating. The transaction, including the financial aspect, takes place automatically between the exporter and the importer.

The entire ecosystem functions without manual intervention from banks, legal authorities, or any other regulatory body. Nobody actually regulates these smart contracts.

Smart contracts are well-defined, mutually agreed-upon contracts that are “smart” in nature and self-triggering algorithms embedded in the blockchain. The main parties in a smart contract are only two—the buyer and the seller.

In a traditional ecosystem, payment is guaranteed by a financial intermediary such as a bank or service provider. This intermediary often becomes a source of problems.

In the case of blockchain, there is a high level of data integrity that goes beyond UCP clauses. Hence, UCP clauses become less relevant in this context.

There is absolutely no scope for confusion in a blockchain-based smart contract system. Even within the blockchain ecosystem, there may be an online blockchain-based financial guarantor, which could be an international bank or a non-bank entity.

A bank doesn't need to be involved, but if it is, its role is automatically triggered within the algorithm—meaning it cannot back out of the guarantee provided in such smart contracts.

In blockchain-based smart contracts, neither the exporter nor the importer can introduce new conditions or provisions once the contract is executed. Whatever is agreed upon is already fixed in the algorithm.

No one can alter the algorithm or the automatic financial transaction triggers based on the events or entries made by the exporter and importer.

Similarly, the buyer or any intermediary cannot create new conditions in blockchain-based smart contracts. There is no possibility of a lack of knowledge on the part of either the seller or the buyer.

There is no question of failure by the exporter, mistakes by the importer, or any misadventure by the buyer. Such possibilities simply do not exist in blockchain-based smart contracts.

These multi-language, multi-country, legally binding smart contracts ensure transparency and ease of understanding. They definitely help exporters and international traders reduce their international commercial risks.

Now, if we look at the case of Mr. Shah’s export of toner to Bangladesh, to a new party there, the failure on Mr. Shah’s part was that he accepted a letter of credit from a dubious bank that was not a first-class bank. In the case of blockchain-based smart contracts, there is absolutely no issue regarding the intermediary role of banks, and whether a bank is dubious or not becomes inconsequential.

In this particular case, even when dealing with a first-time buyer in a new country, it would not have mattered under a blockchain-based smart contract, because everything is clearly defined. Its self-triggering and automatically activating algorithms are already in place. All types of eventualities are already accounted for in the smart contracts.

Here, blockchain-based smart contracts make the letter of credit or the issuing bank inconsequential. That is a major benefit. In this particular case study, too, if a blockchain-based smart contract had been in place, such risks would have been avoided.

Now, if we look at and consider the ABC Import Company case study, the smart contract coupled with smart supply chain solutions—including smart packaging, e-tagging, and smart tagging of packages—would have made both the international and domestic journey of the goods much simpler and more transparent.

It would have integrated both international and domestic requirements on a single blockchain platform with smart contractual templates. The visibility of different types of contractual templates and their choices, if mutually agreed upon between the buyer and the seller, would have simplified the process for both. The buyer also wants the goods to be supplied efficiently and promptly, while ensuring their own interests are protected. Hence, buyers would also welcome such smart contracts.

While protecting the interests of the exporter, smart contracts also safeguard the interests of the buyer. They make cargo tracking easier and reduce delays, enabling companies like ABC Import Company to benefit from the agreed payment terms.

In the case of ABC Import Company, there was concern that the payment made by the Indian buyer based in Varanasi might not align with the schedule of other operations. The worry was that when it came time for ABC Company to pay the Malaysian seller, they might not have received payment from the Varanasi buyer in time. In a blockchain-based ecosystem, such risks are almost non-existent or drastically reduced.

Now, consider the export of animal feed from Raipur, India. If that contract had been a blockchain-based smart contract, the issue of jurisdiction being overseas would not have mattered. It would have become inconsequential.

In fact, there would have been no need for any arbitration outside the blockchain ecosystem, although such provisions can still be included in smart contracts. It is possible to extend beyond smart contracts, and in very rare cases where disputes still arise, jurisdictional issues might come into play—but the likelihood of such an eventuality would be drastically reduced.

In the next few lectures, some smart tips are given for reducing export-related risks, especially related to exports business generated through online digital channels.

Hello, friends.

Welcome back to the course.

In this episode, I will be talking about practical tips for online export marketing and getting online orders.

In present times, digital channels have made many things easier for exporters — from finding information and conducting research to identifying which products should be exported, how they should be exported, where to export, and where to find buyers.

These things have become digitally possible — to research, act upon the findings, gain insights, and benefit from them.

I am going to discuss certain practical tips for online exports, setting up your online export business, and export marketing techniques that are general in nature but very effective. These practices have emerged as a new and dynamic way of exporting goods through digital channels.

Let me first start with tips for export pricing in the present times.

The pricing goal for online digital global sales, especially in the case of B2C sales, should be to obtain a net profit of around 100%. This is a normal benchmark for all the efforts you put into digital channels, including advertising, optimization, and other online activities. All these efforts must be rewarded.

If you are selling to B2C customers, the net profit should be approximately 100%. Similarly, for B2B sales, the target should be a 66% profit unless the order quantity is quite large.

If you can secure large B2B orders, how you get them — whether through direct sales or digital platforms — will determine your pricing strategy. Depending on several factors, you can consider a lower profit margin, but in general, a 66% margin is expected and is a common practice.

Another pricing tip for online exports is to avoid deep price cuts. Good buyers are looking for a fair price rather than the cheapest price. In present times, no buyer wants to take unnecessary risks. Most good buyers prefer to maintain long-term relationships with their suppliers and do not want to switch suppliers frequently.

They usually keep two or three suppliers in their network, but their main aim is to secure a fair price rather than the lowest one.

Maintaining workable quality — a level of quality that may not be the best but is acceptable to customers — is crucial. You can check this by studying reviews on digital marketplaces, purchasing one or two sample items, and testing their quality.

If such quality is acceptable to customers and reviews are positive, then the key is to determine the fair price you can offer for that quality. That is the real trick of the game.

The main aim of buyers today is to focus on relationship building rather than simply looking for the cheapest suppliers. Therefore, focus on building strong relationships rather than becoming the price leader in the marketplace.

In the medium to long term, becoming a price leader is not a good strategy. Generally, you will not get repeat orders because, to maintain the lowest price, you may have to compromise on quality. This will eventually lead to poor customer reviews, and your digital reputation will decline.

It is very important to focus on building relationships, keeping in mind the medium and long-term interests of the buyer, explaining the merit of your pricing and associated quality, giving a clear picture to the buyer, and helping them build a successful long-term business in their own country.

This should be your goal in the present times.

According to the buyer’s requirements, you can also offer ex-factory prices, which are often more attractive and can encourage buyers to purchase on such terms. In this case, many shipment-related difficulties are avoided unless shipping is part of your regular operations.

If you want to avoid the challenges of moving goods from your factory to the port, you can encourage buyers to buy on EXW (Ex-Works) or FCA (Free Carrier) terms. FCA means “place-to-place” delivery, where you hand over the goods to the first carrier.

EXW or FCA terms are comfortable and convenient, allowing you to focus more on your production rather than logistics.

Now, friends, the second very important tip for an online export business is to be very careful about communication with buyers.

International buyers judge you based on your communication. In the present times, it is very difficult for an international buyer to perform physical due diligence or travel to your factory or location. Therefore, buyers evaluate you digitally — through your communication, your online assets, your website, your online export store, and especially through what you write in your emails while communicating with them.

Are you able to understand what the buyer is asking for? Are you able to supply the right information? Are you answering all the buyer’s questions? And if a buyer misses certain important questions related to his business, are you able to provide those answers proactively and encourage the buyer to be aware of the issues involved — even the ones he may have overlooked?

If you can do this effectively, the buyer will be impressed because buyers look for complete, accurate, and high-quality information — almost 100% clarity. If you can provide that, it becomes the main due diligence process for the buyer.

Your knowledge about lead time, payment terms, payment policy, and delivery terms that are win-win for both parties is very important. Similarly, information related to your products — such as patents, certifications, or any restrictions on the buying and selling of your products — should be clearly understood by you and conveyed to the buyer at the right time, whether he asks for it or not. This is essential for building buyer confidence.

You should also clarify your sample pricing policy and provide the ASIN number (Amazon Standard Identification Number), which has become a global norm similar to the UPC (Universal Product Code). These identifiers help buyers conduct digital market research on your products and on you as a supplier.

If you are a good supplier, these numbers make it easier for the buyer to make a quick decision to place an order with you. The initial orders may be small trial orders, but you should focus on them because they can later convert into large repeat orders.

Your replies to buyer inquiries should be reasonably prompt. There should not be unnecessary delays because, as mentioned earlier, today’s online digital customers expect quick, accurate, and complete information.

You should also ask the buyer about his brand-use policy and whether there are any restrictions in his country that you may not be aware of. Since buyers come from different countries, it’s better to ask if they know the rules, and if they don’t, try to find the information from third-party sources and convey it to them. This makes your communication professional, reliable, and desirable.

It is also beneficial to be ready with testimonials about your products — what your past buyers have said about you. If possible, provide a list of buyers from reputed countries such as the US, UK, or other European nations, as this indicates the quality of your products and builds credibility.

Photographs of your manufacturing unit, details of special or latest machines you are using, and short video clips of your production process can also help. Showcasing innovative processes, methods, or practices adopted in your factory, warehouse, or inventory management — especially those that help reduce costs or improve efficiency — adds great value to your communication.

If you have any special patents in your manufacturing process, whether partial or complete, make sure to communicate and prove this to the buyer. If your competitors cannot use those patented methods, it strengthens the buyer’s confidence in you and makes them more likely to accept your fair price.

Your existing status in the international marketplace — whether through past buyers, direct sales, or an established brand — should also be highlighted. If your brand has a good reputation and excellent customer reviews, share these with the buyer.

You should also provide details about your standard packing methods, especially those used for customers in the same country as your new buyer. Explain why your standard packing helps you quote a better price (due to regular use) and why it would be suitable for the buyer’s needs.

Be ready with complete and comprehensive information — technical details, aesthetic features, and product specifications. You should understand the buyer’s concerns based on your experience and the specific conditions of the buyer’s country.

If you can also discuss relevant legal aspects — whether related to your own country or the buyer’s — it adds significant value. Sharing knowledge of applicable legal matters related to buying and selling your products builds confidence and trust.

You should also emphasize the special differentiating features of your product compared to competitors and explain why your fair price benefits the importer, helping them sell better in their own market.

It’s always a good idea to discuss with the importer how they intend to use your product — whether for selling through international or digital marketplaces, supplying to large domestic buyers, or for their own use.

Gathering this information and including it in your communication helps you tailor your approach effectively.

Keep a good record of customer reviews from different countries and international marketplaces, whether the products are sold directly by you or by your past buyers. This helps you demonstrate to new buyers that your products are of good quality.

As mentioned earlier, if you are already selling to sophisticated markets like the US, Europe, the UK, Japan, or other high-income regions with regular importers, conveying this information to new buyers will reinforce your credibility. It proves your quality standards and attracts the buyer’s attention to your products.

Now, friends, talking about the payment aspects for online export business,

in today’s world, especially in B2C sales, it is always suggested that payments should be received through the right channels. This means that if you are selling your goods through international market channels for B2B or B2C sales, and especially B2C, you should always insist on receiving payments through the marketplace if that option is provided.

Certain digital marketplaces allow you to receive payments directly, but the majority of popular international marketplaces offer payment collection services, which are much safer. Of course, these platforms charge a commission whether you take payment directly or through them, but it is always better to receive payment through the platform because it is much safer.

Normally, international marketplaces collect advance payments and keep them in their own escrow accounts until the shipment is made. In such cases, both the buyer and the supplier are protected from payment risks.

As a thumb rule, you should always try to avoid any payments made outside digital platforms unless the order quantity is unique, large, and the products are customized, and you are dealing directly with the buyer through banking channels, with full trust established. The buyer should also agree to open a confirmed letter of credit through a first-class international bank.

In such cases, after taking all protection and safety measures, you can accept payments outside the platform. However, such payments must always be through an irrevocable, confirmed letter of credit issued by a first-class international bank.

You should always avoid local banks, especially those not included in the list of first-class banks. As mentioned earlier, local banks in the buyer’s country should generally be avoided unless the buyer is located in a sophisticated or high-income market such as the US, Europe, Japan, or the UK. In such cases, you may accept a letter of credit from a local bank, but due diligence on the bank’s status and reputation must be done.

In the case of a letter of credit, it is always better to insist on your own country’s local currency, as this will help you save money on currency exchange risks. If the buyer agrees, it is preferable to have your local currency as the main currency of the letter of credit.

It is also important, as part of your payment term strategy for an online business, to clarify who will bear the LC amendment charges. When a letter of credit is opened, you have the right to accept or reject it depending on its terms, the required documents, and whether you can comply with them.

If you face any difficulty in supplying certain documents, you can always approach the buyer before accepting the letter of credit to request amendments — whether related to documents, quality inspection requirements, or delivery timelines.

In any such eventuality, it is very important to clarify who will pay for the amendments. If the buyer is willing to pay for certain amendments, ask clearly which types of amendments will be covered by the buyer and which ones must be paid for by you, the exporter.

Always request your own local bank to act as the advising and negotiating bank for the letter of credit. This can significantly reduce LC-related risks. Your own bank, which manages your account, will be able to provide better advice and serve as a protective layer against payment risks.

It is always advisable to nominate your own local bank as both the advising and negotiating bank.

Now, friends, looking at the legal aspects.

Tips regarding legal aspects:

It is better to be sure about your product’s legal validity, which means understanding the issues connected with patents, certifications, or any other restrictions on the buying and selling of goods from your country, as well as to the destination country. This is especially important for B2B sales.

To stay safe, it is important to be selective about the choice of law and the legal jurisdiction of the court, which should preferably be your own country. The choice of law should also be as close as possible to the exporter’s country.

If that is not possible, or if the buyer does not agree, then it is better to choose a third country’s law and jurisdiction. This ensures that there is no undue pressure from the importer on you, the exporter.

It should never be the buyer’s country, especially in the case of B2B sales.

Now, friends, talking about the delivery terms for business generated through online channels, it is always important to explain the commercial terms clearly to the buyer and clarify the point at which the transfer of ownership or title of the goods takes place.

You should be very clear about the international commercial terms being used for the particular transaction and the exact point where the responsibility, liability, and ownership of the goods are transferred from the exporter (you) to the buyer.

In the case of an FOB contract, it is important to know the shipping details from the buyer because, under an FOB contract, the main carrier — the ship in the case of sea shipment or the airline in the case of air shipment — is arranged by the buyer.

In order to match the delivery terms and the last date of delivery, it should be emphasized to the buyer that they must provide the details of the carrier in advance. These details should fall within the agreed range of the last delivery date and should be mutually confirmed between the buyer and the exporter.

It is important to stay in touch with the buyer to obtain the shipping details and to clarify whether you are required to load the goods onto the ship or aircraft, and who is responsible for the loading.

Generally, in an FOB contract, it is expected that the goods will be loaded by the exporter. However, it is better to confirm this with the buyer, as the buyer may have a special arrangement with the main carrier for loading the goods.

In the case of ex-factory (ExW) terms, it is important to clarify your delivery policy and the exact point at which the title transfer occurs, as this can be subjective. Whether the transfer happens at the factory warehouse, factory gate, or another named place must be clearly understood.

It is also important to determine who is responsible if any damage occurs during loading — whether it is the exporter or the importer.

It is better to clarify the loading responsibility for the goods to the first carrier, especially in the case of an FCA contract. For place-to-place delivery, when sea terms are not used, terms like FCA are preferred. In such cases, it is advisable to insist on a Combined Transport Document (CTD), which is normally issued by a logistics company or a Multimodal Transport Operator (MTO).

They can issue a Combined Transport Document (CTD) even before the goods are loaded onto the main carrier, and this CTD can serve as the main transport document. It is therefore better to insist on the acceptance of the CTD in the letter of credit as the main transport document.

It is also very important to know the buyer’s special packing requirements in advance, as these can significantly affect costs. You should clarify your standard packing details and determine whether any customization is required by the buyer.

If customization is required, you should include the extra cost of customized packing in your price quote, as it can be substantial depending on the buyer’s requirements.

You should also confirm whether the buyer wants their brand name printed on the boxes, retail boxes, or retail packs, how the branding will be applied, and whether the buyer is authorized to use that branding. These details must be discussed in advance.

It is always better to ask for the buyer’s specified marks that they want printed on the export shipment boxes, as these help the buyer identify their shipments easily.

This is particularly important for B2B sales, especially when the number of boxes is large.

Friends, about export documentation, especially in the case of Ex-factory, that is, Ex-Works terms of the Incoterms, it is better to ask for the exact documents required by the buyer in advance, as customs clearance under this term will be the responsibility of the buyer.

You should also know which documents the buyer requires, as this information will be conveyed by the buyer’s CNF agent. It is a good practice to obtain these details beforehand.

While accepting the letter of credit, it is important to study thoroughly all the terms and documents required before accepting it. If you are unable to supply a particular document, the payment will not be released by the issuing bank.

If there is any discrepancy in the letter of credit or any condition that is not acceptable, you can always ask for an LC amendment — especially if a particular document is difficult to obtain or not valid in your case.

It is very important for the exporter to ask the buyer about any special document requirements in the host country, as many such documents are required by the customs and local authorities of the importing country, which you may not be aware of.

It is a very good practice to get in writing from the buyer the exact description of the goods that must be used in the documents, such as the commercial invoice, bill of lading, airway bill, certificate of origin, quality certificate, freight certificate, and insurance policy.

You should ensure that the description of the goods matches the one acceptable to the customs authorities of the importing country. Therefore, it is always better to have the buyer provide in writing the exact description of the goods, so that there is no misunderstanding between the buyer and the exporter.

The letter of credit should also reflect this exact description of the goods, so that the documents you submit for payment release under the LC match the buyer’s required description.

It is very important that the buyer also provides you with the International Trade Classification Harmonized System (ITC HS) code for the product being imported. This code is used by the customs of both the exporting and importing countries.

Sometimes, however, there may be a mismatch between the ITC HS code accepted by the exporting country and the one accepted by the importing country. Therefore, it is important for the exporter to check with the buyer to confirm the correct ITC HS code that will be accepted by the importing country, so that there are no complications during customs clearance.

Finally, regarding insurance-related concerns, the exporter needs to clarify with the buyer the details of the transit insurance for inland transportation within the home country, up to the port of loading.

Sometimes, the buyer arranges a door-to-door insurance policy — a single comprehensive transit insurance from warehouse to warehouse. In such cases, the exporter does not need to arrange additional insurance coverage for the movement of goods from the factory warehouse to the port of loading.

Thank you.

Congratulations on completing this important course, which has attempted to explain the common types of export-related risks using certain popular case studies. The course tried to give you an understanding of a variety of situations that a typical exporter and international trader is likely to face every now and then. And certain suggestions have been provided on how to tackle those situations so as to reduce the risks associated.

As a free bonus to you for completing this comprehensive course, I am pleased to share with you a free copy of the eBook written by me for the students of this course. The title of the book is - How to Set Up exports and Import Business in India. See the resources section of this lecture to download the PDF file.

Do rate the course if not yet done. It helps. And share your new learning and eCertificate on your social media.

Friends, this particular course took the help of some very popular and well-known real case studies, which gave you an idea of the different types of situations an exporter or importer can face in international trade and the export of goods and services.

My idea for this course was to help you understand various situations, though not exhaustively. There may be situations quite different from the ones demonstrated in these case studies, but the events depicted here give you a fairly good understanding of the different types of common eventualities that need to be managed and the risks that must be reduced in such cases.

I hope you have found these case studies, along with the solutions and discussions provided in this course, very interesting and informative, and that they have given you greater confidence and certain planning skills to manage export operations in a way that drastically reduces export-related risks.

I truly wish that the learnings from this course help you save millions of dollars. The knowledge gained here will definitely make you a more confident international exporter, equipped with several ways and means to minimize export-related risks.

If you liked this course, kindly refer it to your friends and colleagues.

Thank you very much.

Hello to you. Today,

I have some appreciative comments for you.

I want to take a moment to congratulate you on fully completing this course.

Your dedication and perseverance throughout this journey have been truly commendable. Completing a course is no small feat, and I am incredibly proud of the progress you have made and the knowledge you have gained along the way.

I also want to remind you that this course is just one piece of the puzzle. It is part of our larger VJ Export Mastery Courses series, consisting of 25 courses, as I mentioned earlier. These courses are designed to provide you with a comprehensive understanding of the export industry.

On my part, as I mentioned earlier, I am committed to helping you expand your learning even further by giving you access to more similar courses in the series. On your part, I have a small request.

Your feedback and rating are incredibly valuable in refining this course and ensuring it remains world-class. I kindly ask you to leave a rating for the course along with your honest feedback, in case you have not done so yet.

Once again, congratulations on completing the course.

Keep up the fantastic work you have done here, and remember, I am here to support you every step of the way — even after you have completed this course. You can reach out to me anytime for any mentoring or support you may need.

Thank you very much.

Hello and welcome, and thank you so much for completing this amazing course.

I truly appreciate the time and effort you have invested in developing all types of skills, whether related to export documentation, compliance, international regulations, logistics, or global marketing strategies.

In this short bonus video lecture, I want to share with you a few optional ways you can continue your learning journey, access additional resources, and stay connected with me for future guidance, all while remaining fully compliant with Udemy policies.

If you want to continue receiving educational content on exports, global compliance updates, HS code classification tips, EU/US regulations, logistics strategies, and real-world case studies, you are welcome to connect with me on LinkedIn.

I regularly post export-related insights, free updates, and practical examples that many learners find very useful.

Again, this is completely optional, but if you would like to connect, this is my LinkedIn profile: LinkedIn.com/in/vijeshjain. Along with my activities on LinkedIn, YouTube, Instagram, and many other social media platforms, I frequently share publicly available articles, guidance notes, and updates related to topics such as documentation and compliance, Indian and international customs rules, labeling requirements, global market trends, and policy changes in the EU, USA, UK, and Middle Eastern regions, as well as best practices for exporters.

These free resources can help you stay informed and confident as your export business grows.

For learners who need personalized clarity on specific export matters, such as HS decisions, regulatory compliance, product classifications, labeling reviews, customs queries, international market strategies, or even Amazon US product launch advisory, I also provide such guidance outside Udemy.

If you ever require any of this tailor-made support, you may contact me directly. My email ID is vijesshjain@gmail.com.

Please note that this is only an optional way to reach me outside Udemy, and it is not required to complete this course. It is also not part of the Udemy purchase for this course, which keeps this message fully compliant with Udemy policies.

In addition, I want to cordially invite you to my Discord Knowledge Hub, which has several channels, including the Q&A section, discussion channel, discussion lounge, video lectures channel, and announcement channel. No registration is required to access this knowledge hub or any of these channels.

Simply click the invite link, which is also provided in the resource section of this lecture, and you can access my Discord Knowledge Hub.

Before I close, I want to sincerely thank you once again for joining this course.

I truly hope that this specialized training has added real value to your knowledge base and to your professional journey in international trade.

My mission is to help learners navigate exports more confidently, whether it is compliance, export documentation, import documentation, logistics, or expanding into global markets.

I wish you tremendous success in your future business endeavors, and I look forward to staying connected with you on your path ahead.

Thank you once again, and all the best in your international journey.

Take care of yourself, and see you in another course in this course series.