This document provides an overview of India's import and export institutional framework. It discusses the various government departments and agencies involved in regulating trade policy and promoting exports and imports, including the Department of Commerce, commodity organizations like export promotion councils, and autonomous bodies like APEDA and MPEDA. It also describes advisory bodies like the Board of Trade and Export Promotion Board. The objectives of the EXIM policy to promote trade and the factors considered in international sales contracts like product details, quantity, delivery terms, and price are summarized as well.

1. ◤
Faculty in charge
Dr.Harris
EXIM

2. ◤
What does India Import and Export

3. ◤
Where India Import and Export?

4. ◤
Syllabus

5. ◤

6. ◤
How Import and Export affect Economy
Imports are an important indicator and a vital component of the
economy. A high level of imports indicates robust domestic demand and a
growing economy. Let’s take an example – today market has a growing
demand for electronic gadgets, clothing, food, automobiles and other
consumer goods. Many of them are foreign brands. It is because of imports
they are accessible to us. When you purchase these goods, you are paying
for these goods and that makes the economy grow. Therefore, a high level
of imports indicates robust domestic demand and a growing economy. Now
It’s even better if these imports are mainly of productive assets like
machinery and equipment. These assets are used for long term productivity
and productivity is necessary for an economy to grow.

7. ◤
Contd..
▪ When net exports exceeds net imports, the nation has a trade surplus. And that is
really good for any nation’s economic growth. It means more output from
factories, more number of people are employed, inflow of foreign money in to the
country.
▪ in a healthy economy, exports and imports are both growing. if imports are
growing and exports are sharply declining, it means the rest of the world is in
better shape than the domestic economy. If the opposite happens, it means the
domestic economy is doing better. When the imports are higher than the exports
trade deficit occurs. If the trade deficit keeps increasing, then it can have a
negative effect on the domestic currency.
▪ If domestic currency is week, that stimulates exports and makes imports more
expensive. And a strong domestic currency hampers exports and makes import
cheaper.

8. ◤
Contd..
▪ Inflation has a direct relation with interest rates. inflation means increase in the general price
level of goods and services in an economy over a period of time. if the interest rates are low,
then there is an increase in the money supply in the economy, In simple terms people have
more money in their hands, and then they tend to consume more which eventually increases
the prices of goods and services. Now try to understand this, higher inflation typically leads to
higher interest rates, if the prices of goods and services are high, to bring it down the govt
generally increases the interest rates so that there is less money supply in the economy.
▪ Now if the inflation is high, that decreases the consumer spending because the prices of
goods and services are high. Similarly, high inflation lead to decreases in imports, as people
don’t have money to buy foreign goods anymore they would instead rely on domestic goods.
Therefore we can also say that high inflation of a country decreases the exports of another
country.
▪ If inflation is high, which means consumer spending is low on foreign products but fairly good
on domestic products, that increases the demand of domestic goods. Then exports may
increase because businesses export their goods in a hope of higher competitive price. Again
that may not be the case every time, but it happens.

9. ◤
Introduction to Institutional Framework for
International Trade
1. Department of Commerce
2. Advisory Bodies
3. Commodity Organizations
4. Autonomous Bodies
5. Service Institutions
6. Government Participation in Foreign Trade
7. States’ Involvement in Promoting Exports

10. ◤
Contd.

11. ◤
Department of Commerce
▪ The Department of Commerce is the primary governmental agency responsible for
developing and directing foreign trade policy and programmes, including commercial
relations with other countries, state trading, various trade promotional measures and
development, and regulation of certain export-oriented industries.
▪ Besides, the Economic Division monitors work relating to technical assistance, management
services for exports, and overseas investment by Indian entrepreneurs.
▪ The Trade Policy Division keeps track of development in international organizations, such as
WTO, UNCTAD(United Nations Conference on Trade and Development), Economic Commission of Europe,
Africa, Latin America, and Asia and Far East (ESCAP). The Trade Policy Division is also
responsible for India’s relationship with regional trading agreements, such as EU,
NAFTA(North American Free Trade Agreement), SAFTA(South Asian Free Trade Area),
Commonwealth, etc. It also looks after GSP and non-tariff barriers.

12. ◤
Subordinate offices of DOC:
▪ Directorate General of Foreign Trade:
The directorate is responsible for execution of export-import policy announced by the
Government of India. It is headed by Director General of Foreign Trade (DGFT). The directorate also
looks after the work relating to issuing of licenses and monitoring of export obligations.
▪ Directorate General of Commercial Intelligence and Statistics:
The Directorate General of Commercial Intelligence and Statistics (DGCI&S) was set up in
1962 and is headquartered at Kolkata. It is responsible for collection, compilation, and dissemination of
trade statistics and commercial information. The DGCI&S also brings out a number of publications,
mainly on inland and coastal trade statistics, revenue statistics, shipping and air cargo statistics, etc.
▪ Directorate General of Anti-Dumping and Allied Duties:
Constituted in April 1998, the Directorate General of Anti-Dumping (DGAD) is responsible
for carrying out anti-dumping investigations and to recommend wherever required, the amount of anti-
dumping/countervailing duty under the Customs Tariff Act, on identified articles which would be
adequate to remove injury to the domestic industry.

13. ◤
(II)Institutional Framework –
Advisory Bodies:
▪ In order to deploy an effective mechanism for maintaining
continuous dialogue with trade and industry on issues related to
international trade, the Board of Trade was set up under the
chairmanship of the Union Minister of Commerce and Industry
in May 1989. It was reconstituted on 1 April 2005 with an
eminent representative from trade and industry as its
Chairperson.
▪ Secretaries of Commerce and Industry, Finance (Revenue),
External Affairs (ER), Textile, Chairman of ITPO, Chairman/MD
of ECGC, MD of Exim Bank, and Deputy Governor of Reserve
Bank of India are official members of the Board.

14. ◤
Roles of AB
▪ i. To advise the government on policy measures for preparation and implementation of both
short- and long-term plans for increasing exports
▪ ii. To review the export performance of various sectors, identify constraints, and suggest
industry specific measures to optimize exports earnings
▪ iii. To examine the existing institutional framework for exports and suggest practical
measures for further streamlining to achieve the desired objectives
▪ iv. To review the policy instrument, package of incentives, and procedures for exports and
suggest steps to rationalize and channelize such schemes for optimal use
▪ v. To commence studies for promoting trade
▪ Thus, the Board of Trade ensures a continuous dialogue with trade and industry in order to
advise the government on policy measures, to review export performance of various sectors,
identify constraints, and suggest industry specific measures to optimize export specific
earnings.
▪ It meets at least once every quarter and has the power to set up sub-committees, co-opt
experts, and make recommendations on specific sectors.

15. ◤
Contd..
▪ Export Promotion Board:
▪ In order to provide greater coordination among concerned
ministries involved in exports, the Export Promotion Board
works under the chairmanship of the Cabinet Secretary to
provide policy and infrastructural support.

16. ◤
III. Institutional Framework –
Commodity Organizations
▪ In order to focus on the commodity-product-specific exports,
there are various commodity organizations such as export
promotion councils, commodity boards and autonomous bodies.
These organizations look after sectors specific exports right from
product development to export marketing.

17. ◤
Contd..
▪ Export Promotion Councils:
▪ Export promotion councils (EPCs) are non-profit organizations.
They are supported by financial assistance from the central
government. At present there are 21 EPCs, as given in Exhibit
4.6. The basic objective of the EPCs is to develop and promote
the country’s exports of specific products from India.
▪ EPCs aim to project India’s image abroad as a reliable supplier
of high-quality goods and services. In particular, the EPCs
encourage and monitor the observance of international
standards and specifications by exporters.

18. ◤
The major functions of the export
promotion councils are:
▪ i.To provide commercially useful information and assistance to their
members in developing and increasing their exports
▪ ii. To offer professional advice to their members in areas, such as
technology up gradation, quality and design improvement, standards and
specifications, product development, innovation, etc.
▪ iii. To organize visits of delegations of its members abroad to explore
overseas market opportunities
▪ iv. To organize participation in trade fairs, exhibitions, and buyer-seller
meets in India and abroad
▪ v. To promote interaction between the exporting community and the
government, both at the central and state levels
▪ vi. To build a statistical database and disseminate information.

19. ◤
IV.Institutional Framework –
Autonomous Bodies:
▪ Set up under an act of Parliament of 1986, the Agricultural and Processed
Food Products Export Development Authority (APEDA) looks after the
promotion of exports of agriculture and processed food products. It works
as a linkage between Indian exporters and global markets.
▪ The products which fall under the purview of the APEDA, known as
scheduled products, include fruits, vegetables and their products, meat and
meat products, poultry and poultry products, dairy products, confectionary,
biscuits and bakery products, honey, jaggery and sugar products, cocoa and
its products, chocolates of all kinds, alcoholic and non-alcoholic beverages,
cereal products, cashew nuts, groundnuts and papads, guar gum,
floricultural products, and herbal and medical plants.

20. ◤
Marine Products Export
Development Authority
The Marine Products Export Development Authority
(MPEDA), established in 1972, is an autonomous body under the
Ministry of Commerce aimed at increasing export- oriented
production, specifying standards, processing, and export marketing
of all kinds of fisheries and its products.

21. ◤
V. Institutional Framework – Service
Institutions:
▪ A number of institutions and organizations have been established to meet the requirements
of industry and trade.
▪ The fields in which these institutions are engaged include development of export
management personnel, market research, export credit insurance, export publicity,
organization of trade fairs and exhibitions, collection and dissemination of export-related
information, inspection and quality control, development in packaging, etc.
▪ A brief review of the activities and functions of some of these institutions is given below.
▪ Indian Institute of Foreign Trade:
▪ The Indian Institute of Foreign Trade (IIFT) was set up in 1963 by the Government of India
as an autonomous organization to induce professionalism in the country’s foreign trade
management. The institute has significantly contributed to India’s foreign trade policies,
rationalizing the framework of procedures and documentation, and developing the country’s
international trade strategy.

22. ◤
Export-Import Bank of India:
The Export-Import (Exim) Bank of India was setup by an
act of parliament in September 1981. It aims to provide financial
assistance to exporters and importers, and to function as the
principal financial institution for coordinating the working of
institutions engaged in financing export and import of goods and
services with a view to promote India’s international trade.

23. ◤

24. ◤
VI.Institutional Framework –
Government Participation in Foreign
Trade
▪ For supplementing the efforts of the private sector in the field of
foreign trade, the Government of India has set up a number of
trading corporations, namely, the State Trading Corporation (STC),
the Minerals and Metals Trading Corporation (MMTC), Spices
Trading Corporation Limited, and Metal Scrap Trading Corporation
(MSTC).
▪ The STC itself has a number of subsidiaries, namely the Handicrafts
and Handlooms Export Corporation, the Projects and Equipment
Corporation, the Tea Trading Corporation of India, and the Cashew
Corporation of India. The Mica Trading Corporation is a subsidiary
of the MMTC.

25. ◤
VII. Institutional Framework – States’
Involvement in Promoting Exports:
▪ States being the prime centres for export production need to be
involved actively in export promotion. The central and state
governments, therefore, have enacted a number of measures to
promote exports; these measures are discussed under this section.
▪ Inter-State Trade Council:
▪ The Inter-State Trade Council has been set up in order to ensure a
continuous dialogue between the state governments and union
territories. It advises the governments on measures for providing a
healthy environment for international trade with a view to boost
India’s exports.

26. ◤
Objectives of EXIM Policy
▪ As you know that EXIM policy is regulated by the Foreign Trade Development and Regulation Act,
1992. The main objective of this act is to provide the development and regulation of foreign trade
by facilitating imports into and augmenting exports from India. Foreign Trade Act has replaced the
earlier law known as the imports and Exports (Control) Act 1947.
Objectives of EXIM Policy of India
• To promote persistent growth in exports to acquire a share of at least 1% of international
merchandise trade
• To encourage stable economic expansion by offering access to necessary capital goods, raw
materials, intermediate products, consumables, installations, and elements essential for providing
services and expanding production.
• To improve the technological potency and productivity of Indian agriculture, companies, and
services, thus enhancing their competitive power while creating fresh employment possibilities, and
to stimulate the accomplishment of globally acknowledged norms of quality.
• To supply consumers with fine condition goods and services at globally competitive rates while
simultaneously generating a level playing range for domestic production.

27. ◤
Overview of Import and Export
https://oec.world/en/profile/country/ind?yearlyTradeFlowSelector=fl
ow1

28. ◤
International Sales Contract
An international sales contract is an agreement between a buyer and a seller
that identifies the parties in the transaction, the goods or services being
sold, the terms and conditions of the sale, and the price to be paid.
International sales fall under the United Nations Convention on Contracts for
the International Sale of Goods (CISG).
A sales contract can be a verbal agreement between two parties, a collection
of documents such as a purchase order and an order acknowledgement
exchanged between two parties, or a formal, written agreement signed by
the buyer and the seller. The type of agreement your company uses may
depend on the value of the sale, the nature of the goods, and the complexity
of the terms of the agreement. We always recommend having a written
contract.

29. ◤
Exporters Should Insist On a Written Sales Contract
A written contract forces both the buyer and seller to think about the details of the
sale up front. Before a contract is written, it is much easier for both parties to
bargain; once a contract is created, it becomes much more difficult. A written
contract also reminds both parties of the terms of the sale.
Finally, a written contract offers legal protection, explaining the details of the
agreed-upon arrangement to a judge, jury or arbitrator. Contracts should be
unambiguous, and written in such a way that even those who are not involved in
the world of commercial exporting would understand the terms of the agreement.

30. ◤ Contd…
PRODUCT
The contract goods should be specified at least to the degree that they can be identified.
Naturally, greater precision describing them reduces the potential for misunderstanding. If the
product is very complex (for example, machinery), a detailed description can be made in an
annex of the contract.
QUANTITY
In most cases, a quantity can be expressed in actual terms (units, kilos, etc.) When this cannot
be done at the time of contract is drafted, a quantity range should be established. Some
industries work with generally accepted commercial tolerances. Also, letters of credit can
structures to provide plus-or-minus 10% tolerances by using the word “about”.
DELIVERY
The time and place of delivery should be established as clearly as possible. Incoterms Rules
published by the International Chamber of Commerce provide an excellent reference point as
they are widely used throughout the world, allocate major tasks between seller and buyer, and
indicate the point where seller responsibility for the condition of contract goods ends.
When delivery takes place on the seller´s side and the seller arranges main carriage transport –
as with the “main carriage paid” – as happens in many Incoterms (CIF, DAP o DDP) – the mode
of transport should be specified as it affects the time and place the goods the goods actually
become physically available to the buyer.

31. ◤
Contd..
PRICE
Depending on the nature of the product and the degree of precision that can be applied to quantity
and delivery, the price may or may not expressed in fixed terms. In situations where the price
depends on other factors, all such factors and their relationship to the price should be clearly recited
so as to leave no doubt. Any applicable currency should be specified.
It is often useful to separately itemize the price charged for the goods and the price of any seller
supplied non product services such as insurance and freight. There are two reasons for this. First,
doing so reinforces the chosen delivery term (Incoterms) by clearly indicating what is and is not
indicated in the total selling price; second, countries differ in their treatment on non-product charges
for ad valorem duty valuation purposes.
PAYMENT TERMS
How, when, where and in what currency is the buyer to pay for the contract goods? If other than
money, as in countertrade, is a separate contract to be referenced?
TRANSFER OF OWNERSHIP
This should be specified in the sales contract, except for vessel shipments made under a negotiable
marine bill of lading where both ownership and possession rights reside in the original shipment
document.

32. ◤

33. ◤
Incoterms 2020
International commercial operations have their origin in a purchase and sale contract between the importer
and the exporter, which stipulates the clauses by which the respective commercial operation will be regulated. The
INCOTERMS (International Commercial Terms) can be considered as a set of international rules of an optional nature
that the International Chamber of Commerce has gathered and defined on the basis of practices more or less
standardized by traders. The INCOTERMS basically define the place where the seller is responsible for the goods and
what are the expenses to be borne by him and which, therefore, will be included in the price.
FEATURES
The functions of the INCOTERMS are essentially the following:
1. They define the transfer of expenses. The seller knows exactly when and where he will have to assume the
expenses relating to his sales contract and thus include them in the price. This procedure allows the buyer to
recognise exactly the expenses he must add to the purchase price in order to compare them with other
national and international offers.
2. They define the transmission of risk. The buyer knows exactly when and where the risks, which the goods
incur during transport, are at his expense. For this reason, the INCOTERMS define the time and place from
which the responsibility of the seller ends and that of the buyer begins. This data is of extreme importance for
securing the goods.
3. They define the place from which the goods will leave. The INCOTERMS mark the exact place where the seller
must deposit the goods and thus the place where the buyer will pick it up.

34. ◤
RULES FOR ANY MODE OF TRANSPORT
The seven rules defined by Incoterms 2020, for any mode(s) of transport are:
EXW – Ex Works (Factory… designated place)
The seller makes the goods available on his premises. This term places the
buyer’s maximum obligation and the seller’s minimum obligation. The Ex Works
term is often used when making an initial quotation for the sale of goods at no
cost included. EXW means that a seller has the goods ready for collection at his
premises (works, factory, warehouse) on the date agreed. The buyer pays all
transport costs and also takes the risks to get the goods to their final destination.
The seller does not load the goods for transport or release them for export. If the
seller loads the goods, he does so at the buyer’s full cost and risk. If the parties
wish the seller to be responsible for loading the goods at the time of departure
and assume the risk and all loading costs this should be made clear by adding
explicit wording to this effect in the contract of sale.
FCA – Free Carrier… designated place

35. ◤
The seller delivers the goods, free for export, at the disposal of the first carrier
(appointed by the buyer), at the named place. The seller pays for the shipment to
the point of departure and the risk is transferred when the goods are delivered to
the first carrier.
CPT – Carriage Paid To (Shipment paid to… named place of destination)
The seller pays the transport costs. The risk is transferred to the buyer after
delivery of the goods to the first carrier.
CIP – Carriage Paid to… designated place of destination
Multimodal transport in containers equivalent to CIF. The seller pays for the
transport and insurance up to the named point of destination, but the risk is
transferred when the goods are delivered to the first carrier.

36. ◤
Contd.
DAT – Delivered at Terminal (Delivered at Terminal… named place of destination)
The seller pays for the transport to the terminal, except for import costs (customs
clearance), and assumes all risks up to the point where the goods are unloaded at the
terminal.
DPU – Delivered at Place Unloaded The seller delivers the goods – and transfers the risk – to
the buyer when the goods, after unloading from the arriving means of transport, are made
available to the buyer at a designated place of destination or an agreed point within that
place, if such point is agreed. The seller bears all the risks associated with bringing the goods
to the place of destination and unloading them. Thus, in this Incoterms rule, delivery and
arrival at destination are the same. DPU is the only Incoterms rule that requires the seller to
unload the goods at destination. The seller must therefore ensure that he is in a position to
arrange unloading at the designated point. If the parties understand that the seller should not
bear the risk and cost of unloading, they should avoid the DPU rule and use DAP.

37. ◤
DDP – Delivered Duty Paid
The seller is responsible for delivering the goods to the named place in
the buyer’s country, and pays all costs for getting the goods to the
destination, including import duties and taxes. This term places the
maximum obligation on the seller and the minimum obligation on the
buyer.

38. ◤
Rules for Sea and Waterway Transport
s

39. ◤
Contd..
CFR – Cost and Freight… designated port of destination
The vendor must pay the costs and freight to take the goods to the port of destination. However, the risk is
transferred to the buyer as soon as the goods are loaded on board the ship (this rule is new!). Shipping and insurance
for the goods are not included. This term is formally known as
CNF (C & F).
CIF – Cost, Insurance and Freight (Cost, Insurance and Freight… designated port of destination)
Exactly the same as CFR, except that the seller must also pay the insurance. Applicable only to maritime transport