Terms of Payment in Export and Import
Wednesday, January 04, 2017     Category : Inco Terms

 

Click here to know latest update on  Export Benefit Schemes in India

 

 

 

The information provided here is part of Online export import business guide course


4 Different types of terms of payment in International Trade.

 

If we do not go in detail about definition and deep parameters, I will call this slogan – ‘ Business is money’. Although business man enjoy his day to day life in trade, if a loss occurs in business, everything collapse. So payment of any sales proceeds plays a very important role than any other roles in business.

Terms of Payment in Export and Import copy

Most of the beginners of exports may worry about the terms of payment. Because, unlike other domestic business, you are dealing with a buyer who situates thousands of miles away from your place crossing borders of your country.  You may or may not know the financial condition or credit worthiness of  your buyer.  You may not be meeting the buyer personally at initial stage, may not be  aware of the specific policy of trade of buyer’s country, no idea about political status or natural calamity chances of the region etc.etc.

 

Payment term in any business is a major part of sales contract. Terms of payment in exports and imports plays an important role in international business. What are the different types of mode of payment in exports and imports?

 

Let us discuss different type of terms of payment in international trade.

 

The Major ways of making payment in export and import are given below:

 

How to make payment to overseas seller in International trade of exports and imports? 


Advance payment

 

With a seller’s point of view, an advance payment is the safe mode of payment for any business including export business. Receiving amount of sales in advance helps exporter in various ways to plan his financial activities smoothly. However with a buyer’s point of view, advance payment carries little risk, as he advances payment before dispatch of goods. Advance payment of term in exports and imports is opted by a buyer only when he knows the seller in details on genuineness as a seller. Also read   Advance payment the best way of terms for business

 

Letter of credit.( L.C.)

 

Letter of credit is another type of payment term opted by importers and exporters. I have explained in detail about Letter of credit and its mechanism in a couple of articles in same website. The details about letter of credit includes advantages of LC to an exporter, advantages of LC to an importer Disadvantages of Letter of credit to an exporter, disadvantage of letter of credit to an importer, different types of letter of credit etc.. You may read the same to have a clear knowledge on Letter of credit. Although letter of credit has some advantages and disadvantages, it is a safe mode of payment in international trade for both exporter and importer. So LC is one of the safe types of mode of payment in international trade.    Also read

    Letter of credit - How does LC work?      What are the advantages of Letter of Credit to Exporter? How LC is benefited to Importer?   Are there any disadvantages to importer for a consignment under Letter of Credit?   What are the disadvantages of LC to an exporter?   Who are the parties involved in Letter of Credit?   How to check authenticity of LC? What is Prime Banker?    

 

D.A.P or D/P basis - Documents against Payments

 

Documents against Payment – DP/DAP is another term of payment in international trade. The documents under consignment are delivered to buyer/importer only after collecting payment of goods by buyer’s bank. A detailed article has been written in same website about DP/DAP terms of payment. You may go through the same to know more about DP/DAP terms of payment in exports and imports.  Also read

  Is DP terms of payment safe in export business?   How does Bill of Lading work in DP payment terms?

 

D.A terms means Documents against Acceptance

 

Documents against Acceptance are another term of payment in international payment. I have written a detailed article about DA terms of payment in same website. You may go through the same for further read.

 

Can a Buyer (Importer) make part payment in Advance and balance on credit basis in exports and imports?

 

Yes, In an international trade, a Buyer can effect  part payment  as advance and balance amount with a credit period or under DP terms.  Also read    Documents against Acceptance. - How reliable the terms of payment in exports    How to make DA mode of payment safe

 

I believe this article is only a window to have deep knowledge about terms of payment in international trade. I know, some of you may have a good experience in handling different types of terms of payment in exports and imports.

 

Terms of Paymnet  in International BusinessI request you to share your experience about terms of payment in exports and imports.

 

Comment below your thoughts on payment terms in international trade.

 

 

Click here to know latest update on  Export Benefit Schemes in India

 

 

 

 


The above information is a part of Guide on howtoexport and import


Other information about Export import tutorial

Disadvantages of LC (letter of Credit) to Importer.
Documents against Acceptance. - How reliable the terms of payment in exports
Is D.A.P terms of payment safe in export business?
What is LC Letter of Credit in export import business
Advance payment the best way of terms for business
CNF,C&F or CFR. Which term is correct.
How to start Export Business?
How to get Export Orders?
What are the risks and solutions in Export Business?
Click here to know India Trade Classification(ITC)
Service Tax - Click here to read complete notification under Budget 2014
What is Bank post shipment credit to exporters?
Types of export containers
Measurement of export containers
Export Import Policy of India 2015-2020
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation

Refund of Input Tax Credit (ITC) of GST, FAQ
Migration procedures for existing VAT payers to GST online in India 
Refund of GST paid in India, FAQ
4 Conditions when applying for refund of Input Tax Credit (ITC) under GST
Enrolling an existing VAT taxpayers at the GST Common Portal 
Difference between types of goods and services and types of GST
4 types of Goods and Services in India for GST rate
Difference between IGST on International goods and IGST on domestic goods.
Navigation controls to enroll with GST in India for existing VAT payers in IndiaHow is IGST calculated under Imports?
How is IGST rate on imports treated?
How to register a Digital Signature Certificate under GST in India.GST and e-Commerce Business, FAQ
Definition of E-Commerce under GST
How to identify the steps in enrolment process of a tax payer at the GST common portal. 
TDS under GST, Frequently Asked Questions
Does Interest attract on GST Tax payment delay?
Step by step procedure to login with GST common portal in India
Mechanism of Payment of GST tax in India
Levy of late fee for GST Tax returns filing in India
I pay Service Tax on my services. But I am not sure how do I pay the new GST?
Notice to GST return filing defaulters
When to file Annual Return of GST online?
Procedures to claim reduction in output tax liability of GST in India
Process to issue GST Provisional ID to existing VAT payers in India

 


Comments

 
Qazi Faheeem Says :
Wednesday, August 28, 2013
I want to know about terms of Payment in Export and Import.
NAVED Says :
Friday, September 13, 2013
SIR, YOUR WEBSITE IS QUITE WONDERFUL FOR BEGINNER IN THIS BUSINESS AND ALSO THANKS TO FOR YOUR IMPORTANT ARTICLES. BUT ONE QUESTION I HAVE KNOW THAT IF ONE IMPORTER HAS FILLED BILL OF ENTRY AND EXAMINE THE GOODS BUT UNFORTUNATELY THERE DISPUTES ARISE BETWEEN IMPORTER AND EXPORTER AND GOODS WERE NOT NOT RELEASED FROM IMPORTER. NOW IMPORTER CAN GET CANCEL BILL OF ENTRY WHICH WAS FILLED.
surendran Says :
Friday, October 04, 2013
Hi Naved, Please read my article 'uncleared' goods procedures in same website
Armaan singh Says :
Tuesday, March 18, 2014
Hello Administrator.. You have done very nice work on your site. I am going to start export business in India. Will you please give me some information, I will be very thankful to you. Some confusions in my mind are- 1. How to get strong and real buyers offline because through internet we get mostly fraud buyers. How to identify fraud buyers ? 2. What if buyers do not pay and he want to return our goods because of quality because quality is the main issue for buyers in international trade. So how can we get payment from this type of buyer.Is it a loss for exporter? Will he notify us before return our goods or Any legal aggrement happens before contract if this type of problem arises? 3. I have heard about complaint about quality through buyer against exporter. I think mos fraud buyers may do that. Is it a harmful situation for exporter or any action against exporter ? Please give me proper knowledge. I am waiting for you reply. Thank you
Surendran Kollerath Says :
Tuesday, March 18, 2014
Hi Armaan Singh, You may gently go ahead in setting up an export business. I have clarified all your doubts in different articles in this web blog. You may read all.
Dhaya Says :
Monday, August 25, 2014
U done a great job, Thank u administrator for your useful concern and references, i am planning of import electronic goods and toys from china or from Japan. still confused on where to choose. please let me clear in this issue.
v.Jayakumar Says :
Thursday, September 25, 2014
Sir`iam Jayakumar i want to export metriyal packing detils
mohanan Says :
Monday, January 19, 2015
sir, want to export fresh tapioca to middle east, please help
Ayaz Ahmad Says :
Thursday, March 12, 2015
sir, what is the meaning of T/T in export payments. Please elaborate
Mohd Sajid Says :
Thursday, March 19, 2015
sir, want to export ladies garments, please help
krishna kumar Says :
Tuesday, March 24, 2015
Sir I want export a lady garments please help is this possible if yes please advice how can start.thanks
Md Ashikuzzaman Janu Says :
Thursday, March 26, 2015
Hello Administrator.. You have done very nice work on your site. I am going to start export business in India. Will you please give me some information, I will be very thankful to you. Some confusions in my mind are- 1. How to get strong and real buyers offline because through internet we get mostly fraud buyers. How to identify fraud buyers ? 2. What if buyers do not pay and he want to return our goods because of quality because quality is the main issue for buyers in international trade. So how can we get payment from this type of buyer.Is it a loss for exporter? Will he notify us before return our goods or Any legal aggrement happens before contract if this type of problem arises? 3. I have heard about complaint about quality through buyer against exporter. I think most fraud buyers may do that. Is it a harmful situation for exporter or any action against exporter ? Please give me proper knowledge. I am waiting for you reply. Thank you
subramanian Says :
Tuesday, April 07, 2015
please clarify Once the Importer Bank sent an acceptance for a D/A Bill with due date, is there any chance to the importer to dis honor the payment on Maturity? in such situation will the importer Bank honor their acceptance given to the Exporter? please clarify. Regards
Amit Kumar Says :
Monday, April 27, 2015
Sir material export to dubai but importer company not release any payment till now. B/L date- 03.02.2015 and party not receive my call, not give answer on my mail please give me suggestion to release payment from this company regards Amit Kumar Mob- 09825995847
R. L. Dhingra Says :
Thursday, May 21, 2015
please educate me what are of credits in custom and import can be availed or taken for excise credit by industry in India when import goods received in factory.
bimaldas Says :
Thursday, July 23, 2015
I want to export flower in middle east country.pl.help me.
Mahamoudou Cisse Says :
Sunday, July 26, 2015
Hi I would like to different mode of maritime transport, Like danger cargo. What does it stand for. Best regards, Cisse
Gopinath Says :
Sunday, August 23, 2015
Hi sir iam going to start export of vegetables from chennai .How can i trust importers.
anuvika jain Says :
Tuesday, October 06, 2015
Sir our team exported onions from india to dubai...nd now that buyer is not giving our payment...tha main issue is that neither we have Insurance by ECGC nor any other typee of security..what we can do now...what are the options available..????plz rply..thank u..
Anuvika jain Says :
Tuesday, October 06, 2015
Sir our team exported onions from india to dubai...nd now that buyer is not giving our payment...tha main issue is that neither we have Insurance by ECGC nor any other typee of security..what we can do now...what are the options available..????plz rply..thank u..
anuvika jain Says :
Tuesday, October 06, 2015
Sir our team exported onions from india to dubai...nd now that buyer is not giving our payment...tha main issue is that neither we have Insurance by ECGC nor any other typee of security..what we can do now...what are the options available..????plz rply..thank u..
vishnu Says :
Saturday, November 07, 2015
I amplanning to export coconut to singapore malasya dubai how can i search buyer
usman Says :
Wednesday, November 11, 2015
i wan to export handmade bags how can i start this n i wan to importers for my electronic goods how can i get?
ashok shah Says :
Saturday, January 02, 2016
I m dealing in poly propline rope.i want to know that in wich of the country are use it...and wt is the importence in dealing and if i want to became in exporter then wt can ido......plase gidence me.....to became succeful exporter...
Md.Adnan Says :
Sunday, March 27, 2016
What is the maximum time period Exporter can give in DA Payment terms ?
Sujith Sugunan Says :
Monday, April 18, 2016
However I have a doubt in our real business life or we facing a problem with one of our new buyer from Dubai. We got an export order for Coconut from Dubai and the buyer saying that the payment will be after arrival of goods(Not willing to do the LC also). Also they inviting us or our representative to visit their office for business confirmation. But now a days its not possible for us. In the above matter any possible and risk free way to do a business with this buyer? If after arrival of goods the buyer didn't pay, is have a way to extract our money?
salim Says :
Sunday, May 01, 2016
Wich is best pyment method credit export?
Joshua V Abraham Says :
Wednesday, May 18, 2016
Mr. Sujith Sugunan, You can deal with CIF. It stands for cost, Insurance and freight should paid by you. So he cannot get the product before showing NOC paper to the shipping agent. You can issue the NOC after get paid.
Jeevan Karuppasamy Says :
Tuesday, May 31, 2016
We have exported Semi-husked Coconuts to Dubai.The payment term is '100% on scan copy of shipping documents’.We have sent scan copy of documents to the buyer/importer. Believing the buyer's information that the payment was made by him, we have sent all the original shipping documents directly to the buyer.The buyer has informed that the consignment was received in good condition.But even after nearly 3 months lapsed, despite frequent reminders by e-mails and over phone calls, so far we have not received any payment.We are having all the documentary evidences Please guide us how to proceed for realisation of the payment from the buyer?
George Melendez Says :
Monday, June 06, 2016
Is it true that Indian banking regulations do not allow for extended terms, must be t/t at site ?
Ghulam Rasul Nasir Says :
Monday, July 11, 2016
After careful and deep study of the Article I am of the firm opinion that the material therein is very informative and supportive not only for the businessmen interested in Importers & Exporters but for the Bankers as well.
abhishek bajaj Says :
Friday, August 05, 2016
We Want to start the exports to middle east countries and got to know that you ar the good advisors for the export.
Rishank Pandey Says :
Tuesday, August 16, 2016
I saw your website, which is very encouraging for understanding the concept of export and imports. I'm working in a bank in Delhi as a Relationship Manager in Corporate Banking, can you please advise the consultants who are dealing in import / export business.
Ajay Kumar Says :
Tuesday, August 16, 2016
Can u tell me what is different in export and import.
gaurav dugar Says :
Tuesday, September 20, 2016
Our buyer wants DEP30 as payment terms. Please let me know what he means by that
manojkumar Says :
Thursday, September 22, 2016
hello sir, i am rack manufactuer.i need export order
Rajalingam Industry Says :
Saturday, November 05, 2016
Dear Sir, I am manufacture and supplier of Cotton Knitted and Hoisery Hand gloves in India. I would like to do export of my products. I need export orders. Please let me the prodcedure to get export orders.
naveen kumar shakya Says :
Wednesday, December 28, 2016
Dear Sir, I am manufacture and supplier of cotton dress in India. I would like to do export of my products. I need export orders. Please let me the prodcedure to get export orders
PETER Says :
Wednesday, March 01, 2017
Hi Admin I am in Botswana(Africa) I want to start exportation of cattle hides but cant just find serious buyers please help. email:prserunya9@gmail.com
Abdul Rasheed Says :
Monday, March 20, 2017
Sir I Would Like To Know Which Payment Term is More Effective And Suitable For Me. AS Iam The Exporter From Dubai And Also Iam The Importer in india.so the seller and buyer is me. or is it possible to go with out any payment terms.Please Advise Me Which is more Suitable For Me..thnx
Akash Agro Industries Says :
Saturday, April 08, 2017
Dear Sir Hope you are in good health, Further to inform, you that we have done one shipment to the mexican buyer and we have given material on credit of 90days but after 90days buyer haven't paid us and its now 150days and we havn't got any payment from the buyer. Please suggest us what we can do to get the payment.
Tejas Shah Says :
Monday, April 24, 2017
We are facing a problem as have shipped a consignment where we are facing payment issues from our buyer. 1) Our export sales is against sight LC to Bangladesh. 2) We shipped consignment by sea. 3) We have submitted all documents in our bank. 4) We have proof that buyer has already released the documents and take delivery of the goods. 5) We have not received any payment nor any swift copy of payment. 6) Now buyer is raising quality complain for this cargo after taking the delivery. Please let us know your view in this matter.
Rodolfo Says :
Tuesday, May 23, 2017
Dear Sir, Greetings. Kindly explain the difference between net 30 days PDC and 30 days PDC only. Thanks
Emmanuel Says :
Thursday, June 22, 2017
thanks for this great job
hummer rock Says :
Saturday, July 15, 2017
Thank you so much for your articles which has helped very much for beginners like me in Export and Import. I am into import business currently, I import raw materials of Agarbathi from China and Vietnam. I am now stuck in a dilemma, I have found a supplier in China who has offered us competitive price and thus I proceeded further with the same. The bank account details he has provided is of a Bank in Hong kong, when asked him about it he said that he has other company in Hong kong for foreign exchange, he does not have account in China because of tax evasion. He has to say that having company account in China will cause them more taxes and hence they cannot offer the competitive price which he has offered us. So my question is 1) Can i make the payment to Hong kong and get goods from China ? The company name in China is different and in Hong kong its different, he has invited me to China to visit their factory and then make payment. He has to say that his other Indian customers does it in same way(i.e pay to hong kong and get goods from China). I would be very grateful to you if you could please advice me if this kind of system is permissible.
Kanaiya Says :
Tuesday, September 05, 2017
I want to make import payment from my two different bank partially as a buyer, whether it's possible as per RBI guidelines ?
Suleiman Abdulkadir Says :
Saturday, October 14, 2017
Quite interesting and informative.
 

Discussion Forum


You can also share your thoughts about this article.
Any one can answer on question posted by Readers



  Your Name - required  
  Email ID will not be published - Required  
   
(Enter above code)  


 

   
Track Your Air Shipment Here 
Track Your Sea Shipment Here 
   
   
   
   
   
 
Most Recent Articles
» Revised GST rate on Densified wood, in blocks, plates, strips, or profile shapes
» Revised GST rate on Plywood, veneered panels and similar laminated wood
» Revised GST rate on Fibre board of wood or other ligneous materials
» Revised GST rate on Particle board, OSB and similar board of wood or other ligneous materials
» Revised GST rate on Articles of artificial fur
» Revised GST rate on Articles of apparel, clothing accessories and other articles of furskin
» Revised GST rate on Hand bags and shopping bags, of jute
» Revised GST rate on Hand bags and shopping bags, of cotton
» Revised GST rate on Articles of gut, of goldbeater's skin, of bladders or of tendons
» Revised GST rate on Other articles of leather or of composition leather
  Import  |
  Export  |
  For Beginners  |
  Track Your Shipment  |
  Abbreviations  |
  Inco Terms  |
  Export India  |
  Import India  |
  Import US  |
  Export Import Terms  |
  Export incentives and benefits  |
  FAQ  |
  Bill of Lading  |
  Foreign Trade Policy 2015-20  |
  Start your own Export Import Business  |
  HS code  |
  Indian Budget 2014-15  |
  Banking (India)  |
  India Trade Classification (ITC)  |
  How to Import  |
  Containers  |
  Indian Budget 2015-16  |
  Income Tax  |
  Forms  |
  How to export  |
  Foreign Trade Policy 2014-19  |
  Freight forwarding Terms  |
  Business Terms  |
  Terms in Banking  |
  Shipping Terms  |
  Import Terms  |
  Export Terms  |
  Customs Terms  |
  Excise Terms  |
  International Business Terms  |
  Notifications  |
  GST  |
  SVB  |
  Indian Budget 2016-17  |
  Income Tax  |
  HS Codes  |
  GST Law  |
  GST,FAQ  |
  HSN Codes for GST  |
  SAC for GST  |
  Indian Budget 2017-18  |
  Service Tax 2017  |
  GST rates  |
  Logistics  |
  GST service code  |
  GST exemptions  |
  GST tariff  |
  GST rate  |
  GST Circulars  |
  GST EXIM  |
  Me  |  Privacy policy  |  Terms and conditions  
Designed and Hosted by Adsin Media