Export Packing Credit: Meaning, How It Works, How to Get It
When you get a new export order, you normally agree to get paid after 60 to 120 days. That’s considered standard payment terms in the export industry. But this creates a problem: you need working capital to buy raw materials, manufacture, and ship your products. It is at this point that export packing credit steps in.
Export packing credit bridges this cash gap by providing you with pre-shipment funds at concessional interest rates, far cheaper than standard bank loans.
In this blog, we discuss what export packing credit is, why this loan facility matters for Indian exporters, how to apply for such a loan, and what are its different types.
How to get pre-shipment credit — step by step (INFO-1)
Secure Your Export Order
A confirmed purchase order or an irrevocable Letter of Credit (LC) from your buyer is required to start the process.
Approach Your Bank
Meet with your Authorized Dealer (AD) bank to discuss your production needs and share your export track record.
Submit Your Documents
Gather your IEC, GST, and proforma invoice, and generate your UIN on the DGFT portal to lock in concessional interest rates.
Bank Assessment & Sanction
The bank will evaluate your creditworthiness and sanction a limit.
Fund Release & Monitoring
Draw the funds in a lump sum or in stages to pay for raw materials and labor.
Ship & Liquidate
Close the loan by converting it into post-shipment credit or settling it directly from your incoming export proceeds.
How to get pre-shipment credit — step by step (INFO-2)
Secure Your Export Order
A confirmed purchase order or irrevocable LC from your buyer is required to start.
Approach Your Bank
Meet your AD bank to discuss production needs and share your export track record.
Submit Documents
Gather IEC, GST, proforma invoice and generate UIN on DGFT for concessional rates.
Bank Assessment
The bank evaluates your creditworthiness and sanctions a limit.
Fund Release
Draw funds in a lump sum or in stages for raw materials and labor.
Ship & Liquidate
Close the loan via post-shipment credit or settle from export proceeds.
Follow these steps below after you have made your decision to avail pre-shipment credit from the bank:
Step 1: Secure your export order
A confirmed purchase order or an irrevocable Letter of Credit (LC) from your buyer is required to start the process.
Step 2: Approach your bank
Meet with your Authorized Dealer (AD) bank to discuss your production needs and share your company’s export track record.
Step 3: Submit your documents
Gather your IEC, GST, and proforma invoice, and ensure you’ve generated your UIN on the DGFT portal to lock in your concessional interest rates.
Step 4: Bank assessment and sanction
The bank will evaluate your creditworthiness and sanction a limit
Step 5: Fund release and monitoring
You can draw the funds in a lump sum or in stages to pay for raw materials and labor
Step 6: Ship and liquidate
Once you ship the goods, you must close the loan by either converting it into post-shipment credit or settling it directly from your incoming export proceeds.
How to apply for export packing credit — step by step (INFO -1 )
Foundation step
Bank relationship
Documentation heavy
75–90% FOB funded
End-use monitored
180-day window
How to apply for export packing credit — step by step (INFO -2 )
