Import and Export Procedures in Textile and Garment Industry

Introduction

The textile and garment industry is one of the largest contributors to global trade. Countries like Bangladesh, India, China, and Vietnam rely heavily on textile exports, while importing raw materials and accessories from different parts of the world. Understanding the import and export procedures in this industry is essential for manufacturers, exporters, and importers to ensure smooth business operations.

Import and export of goods or services are the primary means of foreign trade in the global textile and garment supply chain. Exporting is selling of goods and services from the home country to a foreign nation whereas, importing refers to the purchase of foreign products and bringing them into one’s home country. In garment industry, factories often import raw materials such as cotton, yarn, fabric, trims, dyes, and accessories, and export finished apparel to international brands and retailers.

Every nation has some strengths with certain resources, assets, and abilities. For instance, a few nations are rich in wool, cotton, petroleum products, timber, fertile soil, or valuable metals, etc. while other nations have deficiencies of these resources. Therefore, countries with strong garment manufacturing capacity may depend on imported fibers or fabrics but earn foreign currency through apparel exports.

In this article, we will explore the step-by-step procedures for importing and exporting textile and garment products, along with the necessary documents, compliance requirements, and best practices.

General Terms Used In International Trade (Import and Export) In Textile and Garment Industry

In sea transport, it is often difficult to precisely determine the arrival and departure of a ship on account of various reasons during voyage. At times the same can happen with air travel too, which directly affects shipment schedules in time-sensitive fashion seasons. Some essential terms related to sea/air transport are:

1. ETA (Expected Time of Arrival): Expected time of arrival at destination port/airport, important for buyer delivery planning.

2. ETD (Expected Time of Departure): Expected time of departure from loading port.

3. ATD (Actual Time of Departure): Actual time when the vessel or aircraft leaves the port/airport.

4. FCL (Full Container Load): It refers to a shipment where all the goods in a container belong to one party, commonly used for large-volume garment export orders.

5. LCL (Less than Container Load): It involves multiple parties’ goods packed together in one container.

6. FOB (Free on Board): The seller delivers goods to the carrier nominated by the buyer at the port; the buyer is responsible for freight and other charges beyond that point. FOB is the most widely practiced pricing term in ready-made garment exports.

7. CIF (Cost, Insurance, and Freight): The price includes sea freight charges and insurance to deliver the goods to buyer’s nearest port; from the port onwards, expenses are borne by the buyer.

8. DDP (Delivered Duty Paid): Seller has the responsibility to deliver goods at the buyer’s premises or agreed place, bearing all expenses including duties, taxes, and transport costs.

9. Shipper or Consignor: A shipper (also known as a consignor) is a person or a company responsible for organising and transporting goods from one point to another in an international textile and garment transaction. When goods are sent by the manufacturer or the producer to the buyer, the act is referred to as consignment. In garment exports, the manufacturer or exporting company usually acts as the consignor when dispatching finished apparel to overseas buyers.

10. Consignee: In a consignment, the receiver of the goods is termed as the consignee. A consignee is only a receiver and not the owner of the goods, especially in export-import transactions. The ownership is transferred only when the consignee has paid the consignor. In the ready-made garment trade, the foreign buyer, buying house, or their nominated agent is typically mentioned as the consignee in shipping documents such as the bill of lading.

11. AD Code of Bank: An Authorised Dealer Code (AD Code) is a numerical code provided by a bank with which the business has a current account for export-import operations. The company will need to register an AD Code at every port from where its goods are cleared by customs. At the time of customs’ clearance the company’s Customs House Agent (CHA) will ask you to provide the AD Code for that particular port to process export documentation. For textile exporters, AD Code registration is essential to link customs clearance with foreign currency realization through the banking system.

12. Customs House Agent (CHA): Most companies who are involved in import and export business, including textile and garment manufacturers, appoint a CHA for fast and smooth customs clearance of goods. The CHA is like a legal adviser in that area and handles all the documentation and complications, if any, on behalf of the company, such as preparing shipping bills, coordinating inspections, and ensuring compliance with customs regulations for yarn, fabric, or garment shipments.

A clear understanding of these essential trade terms ensures proper costing, risk allocation, and smooth international transactions in the textile and garment industry.

Import Procedures in Textile and Garment Industry

A. Trade Enquiry

The first stage in an import transaction is making trade enquiries, which is common when textile mills or garment factories need to import yarn, fabric, dyes, chemicals, trims, machinery, or spare parts. An enquiry is a written request from the intending buyer or his agent for providing information regarding the price and the terms on which the exporter will be able to supply goods.

The importer should mention in the enquiry all details such as the goods required, their description, catalogue number or grade, size, weight and the quantity required, for example fabric GSM, fiber composition, shade, or machine specifications. Similarly, the time and method of delivery, method of packing, terms, and conditions about payment should also be indicated. In reply to this enquiry, the importer will receive a quotation from the exporter.

The quotation contains the details as to the goods available, their quality, etc., the price at which the goods will be supplied and the terms and conditions of the sale, such as FOB, CIF, or other agreed trade terms relevant to textile imports.

B. Procurement of Import Licence and Quota

The importer consults the Export Import (EXIM) Policy in place to know whether the merchandise is subject to import licence or not, which is particularly important when importing restricted textile chemicals or specialized machinery.

A person or a firm cannot import goods into Bangladesh without a valid import licence. An import licence may either be a general licence or specific licence. Under a general licence, goods can be imported from any country, whereas a specific or individual licence authorises one to import only from specific countries.

For issuing licences, importers are divided into three categories:

Established importer,
Actual users, and
Registered exporters, i.e., those importing under any of the export promotion schemes.

In order to obtain an import licence, the intending importer has to make an application in the prescribed form to the licensing authority. If a person imports goods belonging to the class in which he is interested during the period prescribed for such class, he is treated as an established importer. An established importer can make an application to secure a Quota Certificate.

The certificate specifies the quantity and value of goods, which the importer can import. For this, he furnishes details of the goods imported in any one year in the basic period prescribed for the goods, together with documentary evidence for the same, including a certificate from a chartered accountant in the prescribed form certifying the CIF value of the goods imported in the selected year. The CIF value includes the invoice price of the goods and the freight and insurance paid for the goods in transit. The Quota Certificate entitles the established importer to import up to the value indicated therein (called Quota) which is calculated on the basis of past imports.

If the importer is an actual user and wants to import goods for their own use in industrial manufacturing process, such as a spinning mill importing raw cotton or a garment factory importing fabric, they have to obtain a licence through the prescribed sponsoring authority. The sponsoring authority certifies their requirements and recommends the grant of licence.

In case of small industries, they have to apply for licences through the Director of Industries of the state where the industry is located or some other authority expressly prescribed by the government.

Registered exporters importing against exports made under a scheme of export promotion and others have to obtain licence from the Chief Controller of Exports and Imports. The Government issues a list of commodities and products from time to time, which can be imported by obtaining a general permission only, known as the OGL or Open General Licence, which may cover certain textile inputs depending on policy updates.

C. Obtaining Foreign Exchange

After obtaining the relevant licence (or quota, in case of an established importer), the importer has to make arrangements for obtaining necessary foreign exchange for making payments for imports in the currency of the exporting country, which is essential for paying overseas textile suppliers of fabric, yarn, machinery, or accessories.

The foreign exchange reserves in many countries are controlled by the government and are released through its central bank. The importer gets the necessary foreign exchange from the exchange bank concerned. It is to be noted that whereas import licence is issued for a particular period, exchange is released only for a specific transaction, which helps regulate textile import payments and foreign currency outflow.

D. Placing the Indent or Order

After the initial formalities are over and the importer has obtained a licence, quota and the necessary amount of foreign exchange, the next step is the placing of order. This order is known as indent. An indent is an order placed by an importer to the exporter for the supply of certain goods, such as fabric, yarn, dyes, trims, or textile machinery.

It contains instructions by the importer about the quantity and quality of goods required, method of forwarding them, nature of packing, mode of payment and the price etc. In textile imports, details like fabric construction, GSM, fiber content, shade, or machine specifications are clearly stated.

An indent is usually prepared in duplicate or triplicate. The indent may be of several types like open indent, closed indent and confirmatory indent.

In an open indent, the necessary particulars of goods, price, etc. are not mentioned. The exporter is not certain on completing formalities, at his own end.

On the other hand, if complete particulars of goods, the price, the brand, and packing, shipping, insurance, etc. are mentioned clearly, it is called a closed indent.

In a confirmatory indent, an order is placed subject to a confirmation by the importer. The importer puts in an import request or indents to the exporter about the supply of merchandise. The request contains information regarding cost, quality, quantity, size, instructions about packaging, delivery shipping, and a method of payment etc.

E. Dispatching a Letter of Credit

Generally, foreign traders are not familiar with each other and do not have control in other countries. Therefore, an exporter wants to be sure about the credit worthiness of an importer before shipping goods. This is very common in textile imports where shipment values are high.

Usually, for this purpose, he asks importers to send a letter of credit to him. A letter of credit, popularly known as L/C or L.C, is an undertaking by its issuer, usually the importer’s bank, that the bills of exchange drawn by the foreign dealer on the importer will be honoured on presentation up to a specified amount.

Once payment terms are agreed between the importer and the exporter, the importer gets the letter of credit from its banker and forwards it to the overseas supplier. The importer arranges for money in advance to pay the exporter on arrival of goods at the port, which helps textile manufacturers avoid delays in raw material clearance.

F. Obtaining Necessary Documents

After dispatching a letter of credit, the importer has little left to do. On receipt of the letter of credit, the exporter arranges for the shipment of goods and sends an Advice Note to the importer immediately after shipment. An Advice Note informs the importer that goods have been dispatched and may indicate the probable date of arrival, which is crucial for production planning in garment factories.

The exporter then draws a bill of exchange on the importer for the invoice value of goods. Shipping documents such as the bill of lading, invoice, insurance policy, certificate of origin, and consular invoice are attached to the bill of exchange. Bill of Exchange with all these attached documents is called a Documentary Bill.

There are two types of Documentary Bills:

D/P (Documents against Payment)
D/A (Documents against Acceptance)

If the bill is a D/P bill, documents are delivered to the importer only after full payment. In case of a sight bill, payment is made immediately, usually within a short grace period.

In a D/A bill, documents are released on acceptance of the bill and payment is made on maturity, usually within 30 to 90 days, which is often preferred by textile importers for cash-flow management.

G. Customs Formalities and Clearing of Goods

After receiving the documents of title, the importer’s main task is to take delivery of goods after arrival at the port or airport and move them to the factory or warehouse. The importer has to comply with several formalities for clearance of goods.

Imported goods are subjected to customs procedures which are detailed and time-consuming. In textile imports, classification under HS codes and duty assessment are especially important. The importer often appoints a C&F operator for completing these customs formalities.

The importer obtains a delivery order after paying cargo charges and port dues. After this, the importer fills a bill of entry for assessment of customs duty. An inspector examines the goods and submits a report. After approval, the port authority issues release instructions, allowing the importer to take delivery of the goods, so that textile production or garment manufacturing can begin without delay.

Documents Used in Import Transactions in Textile and Garment Industry

1. Proforma Invoice: A record containing points of interest about the quality, design, weight, etc. of the exported merchandise and the terms and conditions of transaction, such as fabric composition, GSM, shade, machinery specifications, and agreed Incoterms.

2. Import Order or Indent: It is a document in which the importer orders for supply of imperative merchandise to the supplier, for example yarn, fabric, dyes, trims, or spare parts. The order contains data such as amount and nature of merchandise value, technique for sending the merchandise, packing process, method of payment, etc.

3. Shipment Advice: The exporter sends a shipment advice to the importer informing him that the merchandise has been dispatched. It contains invoice number, bill of lading/airway bill number and date, name of the vessel or flight, port of export, description of products and amount, date of sailing of the vessel, etc., which helps textile factories plan production schedules.

4. Bill of Lading: It is prepared and signed by the captain of the ship recognizing the receipt of merchandise on board. It contains the terms and conditions on which the products are to be taken to the destination, and serves as a document of title for imported textile goods.

5. Bill of Entry: It is a form provided by the customs office to the importer to be filled at the time of getting the merchandise. It is usually in triplicate and is to be submitted to the customs office, for assessment of customs duty on imported textile materials or machinery.

6. Letter of Credit: It is a document that contains a certification from the importer’s bank to the exporter’s bank—an assurance to respect the payment up to a specific sum of the bills issued by the exporter for transportation of products to the importer, commonly used in high-value textile imports.

7. Trade Enquiry: It is a written request made by a logistic firm or buyer giving data regarding the cost and different terms and conditions for trading merchandise, often the first step before importing textile inputs.

Import Flow Chart for Textile and Garment Industry

Purchase Order / Contract Scrutiny
Search and fix Freight Forwarder & CHA (Custom House Agent)
Delivery Terms Ex Works / CIF / CFR / FOB (CIF–Cost, Insurance and Freight; CFR–Cost and Freight; FOB–Free on Board)
Material Availability & ETD from Port (Estimated Time of Departure)
Shipping – Copy of Documents
Shipping Original Documents
Documents submitted to CHA / Verify ETA (Estimated Time of Arrival)
Shipping Line Payment & Delivery Order
CHA to Pre-check and confirm Duty Tariff (HS Code classification for textile goods)
Customs Clearance and Duty Payment
Material Transportation up to Plant
Service Payment to Transporter / CHA
Foreign Supplier Payment
Stock Entry in the Plant / Purchase Department

Import Documentation and SOP in Textile Factories

Ascertain and scrutinise Purchase Order given by the Purchase Department and provide logistics support.
Search suitable freight forwarder and CHA for customs clearance of container/box cargo by Sea or Air.
Check delivery terms in P.O such as Ex-Works / FOB / CFR / CIF / DDP / DDU and verify payment terms.
Coordinate with supplier for availability of material to be shipped from origin country.
Check and verify copies of documents received and send to concerned CHA.
Coordinate with Purchase or Accounts Department for original documents.
Find ETA of cargo at Port/Airport and arrange submission of documents to CHA.
Coordinate with Shipping Line or Agent for Delivery Order and statutory charges invoice.
Follow up with CHA for Bill of Entry and verify customs duty and tariff details.
After arrival at Port, pay customs duty or arrange applicable licence benefits (if applicable).
With help of CHA, arrange transport to bring material to plant from Port/Airport.
Make payment to service providers and supplier after receiving material, as per agreed terms.
Submit copy of Bill of Entry to bank for supplier payment processing.
Send documents including Bill of Entry to Purchase Department for stock entry and inventory record.

Export Procedures in Textile and Garment Industry

Firstly, an exporter gets a request from the potential buyer asking for data with respect to the cost, standard and different terms & conditions for transportation of merchandise, such as fabric specifications, garment size ratio, labeling, and packing requirements. The exporter responds with a quotation known as a Proforma Invoice.
Once the purchaser approves the terms and conditions, he raises an ‘indent’ for the merchandise, confirming order details for yarn, fabric, or ready-made garments.
After receiving the indent or before, the exporter tries to inquire about the financial condition and credibility of the importer to evaluate the risk of default, especially in bulk garment export orders.
As indicated by customs laws, the exporter or the export firm should have a valid export permit before proceeding.
After getting the export licence, the exporter meets with his banker to sanction pre-dispatch finance for carrying out production (if required), commonly used in garment manufacturing to manage working capital.
Exporter, after getting the pre-shipment fund from the bank, starts production as per the requirements of the importer, ensuring quality, compliance, and delivery timeline.
As per Bangladeshi laws, selective products are permitted for export. The exporter needs to introduce pre-shipment examination report along with other required papers at the time of dispatch, particularly for textile items subject to quality inspection.
Excise duty on the material is to be paid, as prescribed by the Central Excise Tariff Act. Exporter applies to the concerned Excise Commissioner with a receipt, if applicable under prevailing tax regulations.
To get tariff concessions or diverse exclusions, the importer may ask the exporter to send a certificate of origin, which helps buyers claim preferential duty benefits.
The exporter applies to the logistics organization for booking transportation space, providing full information about the merchandise, possible date of shipment and port of destination. The logistics organization issues a shipping order after accepting the application.
The merchandise is packed and marked with crucial data like name and address of the importer, gross and net weight, port of shipment and destination, etc. The exporter then arranges transportation of merchandise to the port.
To protect the merchandise during sea or air travel, the exporter gets the goods insured through an insurance agency, especially important for high-value garment consignments.
Before loading the merchandise on the ship, all documents are submitted. The exporter prepares the shipping bill and submits required copies along with:

Certificate of Origin
Commercial Invoice
Export Order
Letter of Credit
Certificate of Inspection (where required)
Marine Insurance Policy

On submission, the port authority allows the cargo to enter the dock for loading.

After the merchandise is loaded onto the ship, the captain issues a Mate’s Receipt containing vessel number, bill details, description of merchandise, date of shipment, and condition of goods.
The Clearing and Forwarding (C&F) agent hands over the Mate’s Receipt to the shipping company. The shipping company then issues a Bill of Lading, which is a legal document between the shipper and the carrier detailing the type, quantity, and destination of the goods, and serves as proof of shipment in textile exports.
The exporter issues a commercial invoice for the outgoing merchandise mentioning quantity and amount payable by the importer. It is confirmed by customs.
After dispatching the merchandise, the exporter forwards documents to the importer through his bank, including attested copies of invoice, bill of lading, packing list, insurance policy, certificate of origin, and letter of credit. These documents are required by the importer for clearing goods from customs at destination, ensuring smooth completion of the international textile trade transaction.

Documents Used in Export Transactions in Textile and Garment Industry

A. Documents related to Goods

Seller’s Bill: Contains data about textile and garment products like amount, number of packages, blemishes on packaging, the name of the ship, port of destination, terms of delivery and payment and so on.
Certificate of Inspection: For giving guarantee about quality, the government has made inspection of specific textile items compulsory by some approved organizations like Trade Inspection Board, Export Inspection Council etc. Post reviewing the garments and fabrics, the organization issues a certificate of inspection.
Packing List: This document shows the number of cases or packs and the details of garment items or textile rolls contained in these packs. It gives finish insights with respect to the products sent out and the condition in which they are being sent.
Testament of Origin: This authentication indicates the nation in which the textiles or garments are produced. This authentication empowers the importer to claim levy concessions or different exemptions.

B. Documents related to Shipment

Transportation Bill: It is the basic document based on which consent is accorded for the export of textile and garment merchandise by the customs office. It contains details of as to whom the merchandise is being sent to, the name of the vessel, exporter’s name, and address, a destination country.
Mate’s Receipt: This receipt is issued by the captain or mate of the ship to the exporter after the textile goods are stacked onboard the ship. It contains the name of the vessel, quantity, marks, condition of the packaging at the time of receipt on board or ship, etc.
Bill of lading: It is a record issued by the shipping organization. It is a proof of acknowledgment of the delivery organization to convey the textiles/garments to the port of destination.
Airway Bill: Similar to a shipping bill, it is a record issued by the airline organization on getting the garment consignments onboard.
Cart Ticket: Also known as cart chit or gate pass, the exporter establishes it. It contains insights with respect to sending out pay load like number of items, shipping charge number, port of destination, etc.
Marine Insurance Policy: It is a contract between the exporter and the insurance company to safeguard garments and textiles against the risks of ocean/air travel. The amount paid to cover the insurance is called premium and in case of any damage of goods, the insurance company is liable to reimburse the loss as per the terms and conditions of the policy.

C. Documents related to Payment

Letter of credit: It is an assurance letter issued by the importer’s bank expressing that it will respect the export bills to the bank of the exporter up to a specific sum.
Bill of exchange: In export and import exchange, exporter draws the bill on the importer requesting that he will pay pre-determined monies to someone in particular or the owner of the textile or garment goods. The records required by the importer for guaranteeing the title of exported merchandise, are passed on to him just when the importer acknowledges this bill.
Bank Certificate of Payment: It is a declaration that the required documents identifying the specific export deal have been arranged and payment is received as per the exchange control regulations.

Export Flow Chart

Compliance with Sales Department / Legal framework
Concluding an Export Deal for garments, fabrics, or textile products
Arranging Export Finance
Producing / Manufacturing Goods (garments, apparel, textile rolls)
Appointing C&F Agent (CHA)
Arranging Cargo Insurance for textile/garment shipments
Negotiating Ocean / Air Freight Charges with C&F Agent
Booking Shipping Space
Dispatch of goods to C&F Agent (at Port/Airport)
Sending Documents to C&F Agent (CHA)
Receipt of documents & cargo by C&F Agent (CHA)
Customs Clearance, completion of port/Airport formalities, and cargo loading by C&F Agent (CHA)
Receiving Docs from C&F Agent / Shipping Line or Airline
Sending Shipping advice to Buyer
Claiming Export Incentives DBK + MEIS
BANK Presentation of documents to negotiating Bank
Receiving Export Incentives DBK, as per tariff
Receiving payment from Buyer
Check BRC with Bank / Submit POF
Receiving Export Incentive MEIS on FOB

Export Documentation and SOP

Coordinate with Sales department, send garment/textile samples to Buyer as per their advice
As soon as order confirmed by Sales department, ask for sales contract and Letter of Credit (if required)
Coordinate with Accounts department, Export Advance booking with Bank (PCFC – Packing credit loan in foreign currency, a form of pre-shipment finance)
Coordinate with the Production Department for availability of produced textile/garment material to be dispatched on due date
Identify suitable CHA for customs clearance of Container / Box cargo from sea port / airport
Coordinate with Insurance Agency or their agent for Export Insurance of textile or garment material (by road / sea / air)
Negotiate with Shipping Line for Ocean (Sea) Freight / Air Freight Charges up to Destination (CIF/C&F)
After freight is finalized, obtain booking slip of space allocation with concerned shipping line or airline
Dispatch Material at required port of loading such as JNPT / NSICT / GTIL or SAHAR Air Cargo Mumbai, etc.
After material dispatch or stuffing inside container, send documents to related CHA for Customs Clearance
Confirm with CHA / freight forwarding agent for receiving of documents & Cargo / Material at site
Coordinate with CHA & get confirmation of proper Customs Clearance of textile/garment material and loading of container / cargo at allocated space provided by shipping line or airline
Check and receive documents from CHA shipping / airline, shipping bill, bill of lading, etc.
Send cargo-loading information to buyer through shipping advice and prepare post-shipment documents
Follow up with CHA for export incentives and submit documents if any query is raised by customs
Submit all post-shipment documents of export against LC or other payment terms to bank for CAD/LC and direct to buyer in case of TT
Check with Accounts Department if DBK claim received, if not follow up with CHA
Check with Accounts Department if payment from buyer is received via LC or TT, if not follow up with Sales Department
Check with Documents Negotiating Bank for BRC (Bank Realisation Certificate) through Accounts Department
Check if MEIS Licence is issued by the concerned agency, and is available online; if not, follow up with Agent or Dealer

Conclusion

Import and export procedures in the textile and garment industry involve multiple steps, from documentation to customs clearance and payment collection. By following the proper procedures, businesses can reduce risks, ensure timely delivery, and maximize profits while maintaining strong international relationships. Whether exporting garments to overseas buyers or importing raw materials, a structured approach makes the entire supply chain efficient and reliable.