Business Between Germany and India: Tips



SUPATH
International Air Freight Consultant

Introduction

India is a booming economy and one of the most important future markets. A growing middle class and increasing standards of living have changed the relaxed and complex country into a powerhouse of economic development. There is a lot of movement of goods on the international trade lane to and from India. This article proposes to show prospective industries both in India and in Germany a few salient points, which will help both the sides avoid headaches and unnecessary stress.

It must be mentioned in advance that no negativity is meant in the article. It considers the facts in all honesty and the attempt, here, is to offer solutions and not to cause discomfort.

Important note:

The masculine pronoun ‘he’ is being used here in the historical neutral sense and it implies not only the male members of society but also the female.

The German scenario

No matter what trade is being done and from where, the simplest factor that forms the most important part of the foundation is the human one. The German approach is a systematic one, set in an apparently, rigid frame-work.

The German work flow has a linear functionality compared to the relaxed approach found in India. An order will be processed in a certain pre-determined way. Although many people consider the German system inflexible, it is not really the case. One must approach it from the German way, that is all. The Indian way of functioning is, in comparison, quite different. There is a relaxed nature to everything, which is not meant in a deliberate way. One just needs to know in advance the functioning of the subcontinent.

A typical work flow that takes place in Germany would be as follows. I shall not go into details but just give an approximation of the entire process.

The order will be processed by a particular department

A particular person will be responsible for the order and he will always have a standby person, who will take care of the order in the absence of the former.

Once the order is placed, it is a standard practice to send the buyer an order confirmation letter. This document will, almost always, carry an order confirmation number, the date and the name of the person who processed it.

The order in its technical sense, I. e. the technicalities of the item ordered, will be the sole concern of the sales department. This department is not directly involved in the despatch of the items, its packaging or in the customs formalities.

The despatch department will handle the packaging, the customs documents, the putting together of the papers that go with the goods and the communication with the freight forwarder.

Once the goods are ready, they are packaged in conformity with the regulations of international trade. Depending on the amount shown on the commercial invoice, the pre-export customs formalities are set in motion. This usually has a delay of at least one day. There are exceptions to this rule, where an export declaration will be released by the German customs on the same day.

Once the export papers are ready the freight forwarder can organise the pick up of the freight. The pick up will be subject to the conditions of the shipper. There might be limitations, such as pick up timings, pick up formalities (if it is a big company), pick up equipment etc.

Communication is always to the point. Unnecessary points are almost never included resulting in short and concise interaction. The German principle is: be short and precise.

Communication regarding the invoicing, pricing, commissions, discounts etc. are to be directed to the sales department.

Communication about despatch, customs formalities, air way bill etc. are to be directed to the despatch department.

The person on the German side is to be addressed by Mr or Mrs followed by the surname and not by the first name (the latter way is common in India). One may use the first and the last name, too. If the gender is not known, please use the first and the last name (Correct spelling is important. Speaking from experience).

The Indian scenario

Emails from India will, almost always, be copied to (several) persons that are involved in the process. If the gender of the person is not known (which is often the case) please use the first and the last name, as mentioned above.

The promptness in replying, often seen on the German side, may not be reciprocated from India, but it is not meant in an impolite way. Decision making processes in India is quite a complex affair but things are changing.

A short email confirming the pick of the goods is a big help to the client in India. He needs to set an enormous bureaucratic machinery in motion and can face delays with processes, over which he may not have any control.

It is very important to send very clear copies of the way bill, commercial invoices, packing lists and if needed the certificate of origin, well in advance. The Indian customs demand that the documents to the consignment arriving be advised to the customs office, at the airport of destination, 24 hours in advance. That means 24 hours before the consignment lands in India (Indian time)

Please avoid short shipments to India! An amendment to the consignment advice sent to Indian customs can be time-consuming and will incur penalties.

Three to four days for customs clearance is quite possible, in India. The amount of imports arriving in India is huge and the Indian customs authorities need time to manage the processing as the regulations are quite vast and complicated.

Companies in India are permitted to import only if they are in possession of the so-called IEC or Import Export Code. The Indian importer has to pass on this code to the freight forwarder to help him with the import clearance

Companies in India please note: Please pass on to the shipper, in Germany, the contact details of at least two persons in India, so that the freight forwarder at the airport of destination can despatch the incoming documents without delay. This will help speed up the import clearance. If you are using a broker of your own, please convey the details to the Indian freight forwarder who will receive the goods from abroad. It is a very good practice to give the shipper these details. The shipper can be instructed to pass on this information to the German freight forwarder, so that the details can be printed either on the air way bill or mentioned in the communication going to the partner forwarder in India.

Letters of Credit: Attention Indian Importers

Please communicate with the German shipper in advance and clarify three important details:

  • German Airport of Departure
  • Indian Airport of Destination
  • Transshipment

A transshipment may be necessary if no direct flights to the airport of destination is possible. For example a direct flight from Frankfurt am Main, Germany, to Nasik, Maharashtra state, is not possible, as no airline operates a flight to there. Another example is, the airline Emirates, whose flight first lands in Dubai. The consignments to Mumbai, India, will be offloaded and transferred to another aircraft that continues to Mumbai as the end destination.

Description and nature of goods are to be kept within reasonable limits. An air way bill has only a limited space and the freight forwarder has to process quite a lot of freight in a given day. The workload per head in Germany is more than the one in India. Hence, mutual understanding will make the day lighter.

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Published on Ezine Articles: Original Article

Author: surenpillai

Experienced freight forwarder. Managed freight movements across all the continents. Highlights were the technology roadshows (EMEA) and Trade Lane Management India. All the above combined with Customer Relationship Management, foreign agent management, dedicated key account management. Previous experience as a teacher of English. Member of the Queen's English Society