What is international trade? International trade means doing business with a foreign country. It is a term used for those who are expanding their business internationally, where people import or export goods between two countries.
This task has unlimited exposure and is very adequately performed by the government, individuals, and companies.
What are the five major things India imports from international countries like China, Saudi Arabia, Iraq, UAE, and the USA? They’re Crude Petroleum, Gold, Coal Briquettes, Diamonds, and Petroleum Gas.
What is the difference between import and export? Let’s define the difference with an instance. Korean beauty products are one of the most famous Korean things after K-Drama and BTS music. When you live in India and buy a beauty product from a cosmetic brand in Korea, you import a foreign product.
On the other hand, the Korean brand is exporting its beauty products in India by accepting your order and couriering your products.
International trade is not as easy as it sounds. You need to prepeare yourself with International trade documents these legal procedures have a role to play in completing the process of importing or exporting goods between countries.
Read More: Documents Attestation
List of 10 Must Have International Trade Documents
1. Proforma Invoice
A proforma invoice is a quote provided by the company to the buyer in an international transaction. A proforma invoice is necessary for the international prospect, which is vital for calculating financing, opening a letter of credit, applying for import licences, etc., and documents used in international trade.
A complete proforma invoice looks like a commercial invoice, which includes the following details.
- The details, like who is the buyer and seller in the transaction.
- Complete information on the goods or services, like the price and quantity for international trade.
- The source used for payment.
- The delivery details of the goods or services, like the location and source of delivery.
- The currency used for payment.
Carefully add the expiration date of your proforma invoice to avoid the hassle of even a minor error, which could prove harmful to your business.
2. Commercial Invoice
Once you have shared a proforma invoice with your buyer, start preparing goods for shipping and complete the documentation work for international trade.
The commercial invoice for international trade looks very different from the commercial invoice you use for domestic.
Commercial invoices and invoices you create for your companies are different. The invoices used for your business on a domestic level are generally the ones you need for accounting to get paid.
What is the commercial invoice in international trade included?
- Order number
- Purchase order number
- Customer reference number
- Banking and payment information
- Detail, value, and quantity of products or goods.
Furthermore, in a commercial invoice, you can add marine insurance information or other details that might help the buyer to get a clear vision of the delivery of the goods.
3. Packing List
An export packing list is a crucial international trade document for freight forwarders, banks, and customs officials. A freight forwarder requests an export packing list because with the help of the information included in the packing list, he will know about the bills of lading for the shipment.
On the same side, the bank of the seller also reads the packing list so you can receive the payment from the buyer under a letter of credit.
Furthermore, a customs official needs an export packing list to know which pack they can examine instead of checking the entire shipment.
The packing list includes the following details:
- Items in the shipment
- Packages net, gross weight, and dimensions
- Special safety instructions for delivery of the goods
In case of any damage or loss of cargo and disagreement between the carrier and exporter, the company can file an insurance claim on the bases of the packing list.
4. Shipper’s Letter of Instruction (SLI)
This letter is one of the vital documents used for international trade. This document comes into use to process the export with a freight forwarder. No matter who will hire the freight forwarder for the transport of goods, the shipper’s letter of instruction is a document mandatory for international trade.
Depending on your terms of the sale agreement, SLI with all the necessary information required for successful international trade.
SLI includes a limited Power of Attorney, providing authority to someone to complete the shipment on your behalf.
5. Certificate of Free Sale
A certificate of free sale is sometimes called a certificate for export and a certificate to foreign governments. It is evidence that goods like food items, cosmetics, medical devices, or biologics are legally free for sale in the open market and have no restrictions. The goods have approval from the regulatory authorities in the country of origin.
A Certificate of Free Sale is one of the documents used for registering your new product in a country for international trade. It is a kind of information you share with the authority that you have launched a new product or started a new service for importing and confirms that the good or service is legal to sell in its origin country.
6. Certificates of Origin
This document includes information about the country from where the goods originated. The certificate of origin comes into use when it has a sign of a semi-official organisation, like a chamber of commerce or a consulate officer.
A certificate of origin is still a document used for international trade if you have included the name of the country that originated the goods in your commercial invoice.
7. Inland Bill of Lading
This document is for the export of goods between the exporter and the shipper of the goods. This document includes the name of the delivery state for goods. It is also a receipt to confirm that goods are not in the warehouse and successfully picked up for delivery.
8. Air Waybill
It is a negotiable bill for the goods that are shipped on a plane. This document is used for international trade, like a contract of carriage between the shipper and the carrier. The International Air Transport Association (IATA) distributes air waybills.
9. Ocean Bill of Lading
There are two ocean bills of lading to export your goods by ocean vessel. A straight bill of lading is not negotiable and is signed by a specific consignee. A negotiable bill of lading is a document to prove that the ownership of the product or good is successfully transferred to another person and forwarded to the bank of the buyer.
10. Dangerous Goods Forms
This form is required to ship dangerous goods. No matter if your product comes under the category of dangerous goods of the International Air Transport Association (IATA) or the International Maritime Organisation (IMO), you need a dangerous good form for international trade.
Conclusion
Gather all the documents necessary for expanding your business abroad. If you require help with document attestation, then contact us. The Ministry of External Affairs (MEA) has authorised us to complete the certificate attestation procedure on the applicants’ behalf.