Global Traders Ltd., an Indian importing company based in Delhi, enters into a contract with Asia Tech Electronics, a South Korean exporter, for the import of electronic components worth USD 500,000. Since the two compan

Global Traders Ltd., an Indian importing company based in Delhi, enters into a contract with Asia Tech Electronics, a South Korean exporter, for the import of electronic components worth USD 500,000. Since the two companies are engaging in business for the first time and are unfamiliar with each other, Asia Tech Electronics insists on a secure mode of payment to mitigate the risk of non-payment after dispatching the goods. To address this concern, Global Traders Ltd. approaches Secure Bank India to issue a Letter of Credit (LC) in favor of Asia Tech Electronics. Secure Bank India issues an irrevocable, confirmed, standby revolving LC, naming Korea Trust Bank, located in Seoul, as the advising and confirming bank. The LC specifies that payment will be made upon submission of the following documents : A bill of lading evidencing shipment of the goods from Seoul to Mumbai. Commercial invoice specifying the details of the goods shipped. Insurance certificate covering the shipped goods. Certificate of origin confirming that the goods are manufactured in South Korea. Asia Tech Electronics ships the goods and submits the required documents to Korea Trust Bank. However, upon inspection, Korea Trust Bank notices that the insurance certificate submitted only covers 80% of the shipment value, whereas the LC required insurance coverage for 100% of the shipment value. Additionally, the bill of lading is dated two days after the last permissible shipment date mentioned in the LC. In view of the above facts, answer the following questions: Explain the advantages of using a Letter of Credit in international trade for both the importer (Global Traders Ltd.) and the exporter (Asia Tech Electronics) in this scenario.