Letter of credit is an undertaking by its issuer (i.e. Importer's Bank) that bills of exchange drawn by the foreign dealer on the importer will be honoured upon its presentation by exporter's bank up to a specified amount.

1. After the scrutiny of quotation / proforma invoice, the buyer who intends to buy the goods sends an indent to exporter.
2. An indent actually points to an order received from abroad for export of goods. i.e. sale of goods.

Bill of Lading, refers to a document signed by the shipowner or to his agent mentioning that goods specified have been received and it would be delivered to the importer or his agent at the port of destination in good condition subject to the terms and conditions mentioned therein.

A Charter Party is a formal agreement between the ship owner and the exporter under which the exporter hires an entire ship or a major part of ship either for a particular voyage or for a specific time period when the shipping is heavy.

Content of an Indent:
(i) Quantity of Goods sent
(ii) Design of Goods
(iii) Price
(iv) Nature of Packing Shipment
(v) Mode of Shipment
(vi) Period of Delivery
(vii) Mode of Payment.

The functions of export houses are given below:
1. Identifying potential market for a product.
2. Finding buyers and their agent and eliciting their response for export proposal.
3. Establishing product specification in the light of market needs, standards and regulation in accordance with suppliers capabilities.
4. Determining appropriate mode of transportation and routing keeping in mind the cost, quality of service and security.
5. Preparing the goods for delivery at destination.
6. Determining buyer's credit worthiness.
7. Negotiating the transactions.
8. Arranging proper insurance coverage against maritime risk and currency fluctuations.
9. Preparing document for international trade.
10. Settling claim.
11. Financing the transactions and paying for goods and service received.

 Sl.No   Basis   Domestic Business   International Business    1 Meaning  This represents a document acknowledging the receipt of goods on board for carrying them over to specified port of destination It refers to an agreement to hire a whole or major part of ship when the goods take exported is heavy.   2 Transferable  It can be transferred to third party by endorsement and delivery It cannot be transferred to third party   3 Loan Loan can be raised against it Loan cannot be raised it.   4 Crew Master and crew remain the agent of the ship owner Master and crew become the agent of exporter for a temporary period.   5 Lease It is not a lease of ship It is a lease of ship.