2. Contents
SR. NO PARTICULARS
1 Introduction
2 Foreign Trade Policy
3 Need And Importance Of Foreign Trade
4 Documents Used In Foreign Trade Transactions
5 Salient Features Of Foreign Trade
6 Benefits & Limitations Of Foreign Trade
7 Foreign Trade Performance Of India - Exports & Imports
8 Conclusion
9 Bibliography
3. Introduction
International trade means trade between the two or
more countries. It involves different currencies of
different countries and is regulated by laws, rules
and regulations of the concerned countries.
There are 2 types of Trade
1. Internal Trade
2. External Trade
4. Introduction
Foreign Trade can be classified into
Visible Trade
Invisible Trade
Deemed Exports – Those transactions in which
goods supplied do not leave the country and the
payment for such supplies is received either in
Indian Rupees or in free foreign exchange.
5. Introduction
Balance Of Trade
The difference between the value of goods and services exported out of
a country and the value of goods and services imported into the
country.
The balance of trade is the official term for net exports that makes
up the balance of payments.
The balance of trade can be a "favorable" surplus (exports exceed
imports) or an "unfavorable" deficit (imports exceed exports).
The official balance of trade is separated into the balance of
merchandise trade for tangible goods and the balance of services.
6. Introduction
Balance Of Payment :
• The balance of payments accounts of a country record the payments and receipts
of the residents of the country in their transactions with residents of other
countries.
• If all transactions are included, the payments and receipts of each country must be
equal.
• Although the totals of payments and receipts are necessarily equal, there will be
inequalities — excesses of payments or receipts, called deficits or surpluses. Thus,
there can be a deficit or surplus in any of the following: merchandise trade
(goods), services trade, foreign investment income, unilateral transfers (foreign
aid), private investment, the flow of gold and money between central banks and
treasuries, or any combination of these or other international transactions.
7. Introduction
Dumping: When goods are sold in the foreign market
without contract of sale.
Types of dumping :-
Sporadic
Predatory
Persistent
Reverse
8. Introduction
Foreign Trade includes :-
Involvement of different monitory units
Imposition of restrictions in Import and
Export by various countries
Imposition of restrictions on release of
foreign currencies existence of multiple
regulations
9. Foreign Trade Policy 2009-14
• India has become the largest exporter or rice and second
largest exporter of wheat.
• The Export Promotion Capital Goods (EPCG) scheme would
be available to all sectors.
• Any exporter who takes benefit of the technology
upgradation scheme is now eligible to use the zero per cent
EPCG scheme.
• Extension of the zero-duty export EPCG scheme beyond
March 2013.
• The minimum area requirement for Special Economic Zones
(SEZs) has been reduced to fulfil the contiguity norms.
• Norway & Venezuela have been added to Focused Market
Scheme
10. Foreign Trade Policy 2009-14
• Engineering, Pharma & textiles have been added to Focused
Product Scheme.
• For multiproduct SEZs, the minimum area required now is
500 hectares from 1,000 hectares.
• For sector specific SEZs, the minimum area required now is
50 hectares from 100 hectares while for IT SEZs, the
developers will have to meet minimum built up area
criteria.
• Since SEZs do not have an Exit Policy, it has now been
decided to permit transfer of ownership of SEZs units,
including sale.
• The 2 per cent interest subvention has been extended to
134 sub sectors of engineering sector.
11. Need & Importance Of Foreign Trade
1. Division of labour and specialization
2. Optimum allocation and utilization of
resources
3. Equality of prices
4. Ensure quality and standard goods
5. Raises standard of living of the people
6. Generate employment opportunities
7. Maintains Balance of Payment
12. Documents Used In Foreign Trade
Transactions
1. Indent
2. Mate’s Receipt
3. Bill of Lading
4. Letter of Credit
5. Certificate of Origin
6. Consular Invoice
7. Bill of Entry
8. Dock Receipt
9. Commercial Invoice
13. Salient Features Of Foreign Trade Of
India
1. Negative or unfavorable Trade
2. Diversity in Exports
3. Worldwide Trade
4. Change in Imports
5. Maritime Trade
6. Trade through selected ports only
7. Insignificant Place of India in the World Overseas
Trade
8. State of Trading
14. Benefits Of International Trade
1. Greater Variety of Goods Available for
Consumption
2. Efficient Allocation and Better Utilization of
Resources
3. Promotes Efficiency in Production
4. More Employment
5. Consumption at cheaper cost
6. Reduces Trade fluctuations
7. Utilization of Surplus Produce
8. Fosters Peace and Goodwill
15. Limitations Of Foreign Trade
1. Rapid Depletion of Exhaustible Natural Resources
2. Import of Harmful Goods
3. It may Exhaust Resources
4. Over Specialization
5. Danger of Starvation
6. One Country Gains at the Expense of Other
7. May Lead to War
8. Language Diversity
17. Exports By Principal Commodities
1. Plantation Crops
2. Agriculture and allied Products
3. Ores and Minerals
4. Leather and Leather Manufactures
5. Gems and Jewelry
6. Chemical and related products
7. Engineering Goods
8. Electronic Goods
9. Textiles
10. Handicrafts and Carpets
11. Projects Goods
12. Petroleum Products
25. Imports By Principal Commodities
1. Fertilizers
2. Petroleum Crude and Products
3. Pearls, Precious, and Semi-Precious Stones
4. Capital Goods
5. Organic and Inorganic Chemicals
30. Conclusion
• India’s foreign Trade has undergone a positive
change.
• After the implementation of the Foreign trade
policy, the Import and export among foreign
countries have increased and have become
more secured
• Setting up of EPZ and SEZ have also increased
foreign investors
