Import from India FOB and paying for the invoice

Discussion in 'International Business' started by Senga7, Sep 9, 2019.

  1. Senga7

    Senga7 UKBF Newcomer Free Member

    2 0
    Hi,
    I'm first time importer from India, I have agreed with the supplier for 30% pay in advance and 70% at the time when the goods will be on board.
    The terms are FOB.

    My supplier requires from me to pay the rest of the invoice, is claiming that this is required by the bank and by the custom, otherwise they will not release the goods at the port.
    It seems strange that they agreed be paid after the goods will be on board and now it came out that this will not be possible due to the government rules?

    I add that they said there is no reference on the gov website and that it is a verbal agreement.

    Did anyone have similar situation? did anyone from you imported the goods from India on the FOB basis? did you pay invoice in full before its departure from India?

    many thanks for sharing any experience which you have
     
    Posted: Sep 9, 2019 By: Senga7 Member since: Sep 9, 2019
    #1
  2. Import Expert

    Import Expert UKBF Regular Free Member

    298 128
    30% in advance and 70% before vessel arrives is pretty normal. If that balance is not paid then the shipping line will not release the goods to you.
     
    Posted: Sep 9, 2019 By: Import Expert Member since: Feb 1, 2012
    #2
  3. KellyBDE

    KellyBDE UKBF Contributor Full Member

    25 0
    @Senga7 they are referring to a Letter of Credit which is used a form of promise to pay based on criteria of certain documents being received, one of these being the Bill of Lading. Speak with your bank who can prepare this for you. Depending on the product you are purchasing and the end result you may be able to obtain Trade Finance. If you would like to discuss in further detail then please do not hesitate to contact me directly.
     
    Posted: Sep 11, 2019 at 2:34 PM By: KellyBDE Member since: Nov 30, 2014
    #3
  4. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

    5,069 1,085
    Dont understand how you arrive at that conclusion.
    Sounds more like you are trying to promote your own business.
     
    Posted: Sep 11, 2019 at 2:42 PM By: GraemeL Member since: Sep 7, 2011
    #4
  5. Senga7

    Senga7 UKBF Newcomer Free Member

    2 0
    thanks a lot for you replies.

    Actually my concern was: do I have to pay the invoice in full before the goods are cleared and released by the customs with the FOB terms.

    Sorry I wasn't precise enough.

    Update about it:

    I have received the reply from India goverment (at least!!) :

    "Please note that for Exports from India to UK, there is no such condition that the invoice from your supplier has to be paid in full. These are payment terms and can be negotiated between you and the supplier. There are no Government of India rules mandating any full advance payment."

    Conclusion
    It was my supplier which played with me and made up the rules. My advice for others is: do not trust in each word which the seller is telling you, confirm the information with someone else before you the trust in someones words, always be caution especially if your transaction is not high where raising the letter of credit it not an economical and worth doing.
     
    Posted: Sep 16, 2019 at 4:46 PM By: Senga7 Member since: Sep 9, 2019
    #5
  6. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

    5,069 1,085
    Read this again.
    This is true.

    You are misleading yourself and the post about Letter of Credit is rubbish.
     
    Posted: Sep 16, 2019 at 5:28 PM By: GraemeL Member since: Sep 7, 2011
    #6