How to Execute an Order L/C in Apparel Industry

By | April 16, 2016

How to Execute an Order L/C in Apparel Industry

Senthil Kumar B
Production & Cutting Incharge
Tiruppur, India
Phone: +9199444-35333


Letter of Credit (L/C):

The meaning on L/C is letter of credit given by the buyer via bank, The L/C included some terms and condition given by the buyer and really it is safer side for the both seller and buyer. We can get the money from our buyer’s bank at the agreed time in the L/C. An agreement between the buyer and seller that declared the credit period from the date of shipment. Now I am going to explain Letter of Credit according to the view of the apparel industry.

Importance of L/C in Apparel Industry:

Letter of Credit plays an important role both buyer and manufacturer. The main thing in our export garment field is payment so the L/C will support and this is the safest mode, both buyer and the seller and it helps to meet our delivery dates. Which provide a good security for our order. The bank acts as buyer so this will be an evidence for the payment. We will get the loan against L/C form our bank.

Sample of L/C Form

 How to Execute an Order L/C:

The following the steps to involve that to execute an export order-

  1. The exporter should know the terms and conditions of the contract. The mode of payment will mention in the L/C.
  2. Details of exporters, negotiating bank, Shipping Company, Insurance Company.
  3. Directorate General of Foreign Trade, Clearing Agents, Customs House, Port Trust.
  4. Get the buyer details from ECGC, Inspection Agency.
  5. Order and PO confirmation from the buyer side.

    General Cycle of L/C in Apparel Industry

  6. Need to get the following approvals from buyer-

 Lab Dip, Fit, PP, Photo Shoot, Size Set, Salesmanship, Bulk Production, Shipment Sample.

  1. Actual Fabric and Accessories.
  2. After finishing of inspection prepare the following list-

Bill of Exchange, Commercial invoice, Bill of lading, Marine insurance, packing list, Export inspection certificate.

  1. Finally the exporter will get the value for the good by the bank.

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