How the Foreign Currency Conversion system, used by Shipping lines and freight Forwarders of India effect the Import or export shipments of Indian Importers and Exporters.
In India while doing Import or Export trade, the Importers and Exporters has to pay many expenses in Foreign Currency, specially in USD. i.e. sea or air freight, shipping lines delivery order charges, Detention of containers and load port charges if any to shipping companies in India.
Even they have to pay the custom duty in Indian Rupees which are calculated with the Invoice Value Declared in Foreign Currency in Bill of entry or Shipping Bills. However the Government issues Exchange rate notifications valid for period of time for calculation and collections of custom duty while assessment of shipments for clearance.
The Importers also has to pay the shipment cost in foreign currency to Shippers/suppliers through their bank with the respective bank’s exchange rate of foreign currency.
The Importers here has the option to pay the remittance of their shipment cost to foreign supplier as per their choice and date which they like, even they have the option to negotiate with their bank depending upon the transaction amount and their relation with the bank. It helps them to minimise their cost of product.
But while dealing with the shipping lines and freight forwarders they don’t have any choice about the exchange rate charged to them by the shipping companies or freight forwarders, they don’t have the option to verify or negotiate about that with the lines.
Now the reason to highlight this issue here is that if the Government of India or the Concerned Ministry can issue the notifications on weekly or monthly basis for conversion of foreign currencies for payment of Shipping Lines charges or Freight amounts, then it will create uniformity in trade and helps the importers and exporters to deal with as per their convenient.
