Import and export are commonly used terms in the international trade. These activities are carried out by all countries of the world. In other words, International trade consists of two parts import and export; both involve circulation of goods between countries. Let us see how import differs from export!
It is a type of international trade or foreign trade in which goods or services are brought into one country from another country then sold in the domestic market of the importing country. In other words, one country buys goods and services from another country. Basic steps involved in the import are as follows:
- Trade Enquiry: The importing company gathers information about the exporting companies then communicates with them to know about their rates, terms and conditions and time of delivery.
- Obtaining Import license: Some goods need import license, so for these goods, the importer is required to obtain an import license.
- Procurement of foreign exchange: The exporter belongs to a foreign country so the importer has to obtain foreign exchange.
- Placement of order: After completing the above steps, the importer places the order with the exporter for supplying the goods.
- Acquire letter of credit: After finalizing the payment terms, the importer is required to obtain the letter of credit from its bank to show the credibility related to the realization of obligation.
- Receipt of shipment advice: Once the ship is loaded with goods, the exporter delivers the shipment advice that contains the necessary information like invoice number, vessel name, bill of lading, description of goods etc.
- The Arrival of goods: The in charge of the ship informs the concerned person at the dock that the products are arrived and provides a document called import general manifest.
- Customs clearance and release: The goods received at the dock are subject to customs clearance which involves a number of legal formalities.
It is a type of international trade or foreign trade in which goods or services of one country are sent or sold to another country. In other words, export involves sending products, which are produced locally, for the consumers of another country. Basic steps involved in the export are as follows:
- Enquiry and sending quotations receipt: The importer sends an enquiry to various exporting countries for quotation. The exporting countries send the quotation that contains details like product description, charges, mode of payment, mode of delivery etc.
- Order receipt: The buyer shortlists the exporter and place an order for dispatching the goods.
- Obtaining license: The exporter needs to have an export license before the goods are dispatched.
- Customs clearance: The goods should be customs cleared before dispatching to the importer.
- Preparation of Invoice: After the goods are dispatched to the destination, invoice of goods is prepared which contains details like quantity of goods and amount to be paid by the importer.
- Securing payment: The importer needs certain documents like a bill of lading, invoice, letter of credit, insurance policy etc., to claim the goods title. These documents are provided by the exporter to importer.
Based on the above information some of the key differences between import and export are as follows:
|It refers to the process of buying goods and services by one country from another country then selling them in the domestic market.||It refers to the process of selling goods or services by one country to another country.|
|Its objective is to meet the demands for goods in the domestic market.||Its objective is to increase the market share and global presence.|
|A high level of import indicates a robust domestic demand.||A high level of export indicates trade surplus.|
|If the import is more than export in a country, the country has a trade deficit.||If the export is more the import in a country, the country has a trade surplus.|
|It is an expenditure for the country.||It earns money for the country.|