International Trade
Practices & Trade
Financing
Provisions in Nepal
By:
• Chhitiz Shrestha
• Mintira Lama
• Samyak Shakya
...
Introduction to Int’l Trade
 Buying and selling of large number of goods
and services between countries
 Any buying and ...
Introduction to Int’l Trade
 International trade is the exchange of
capital, goods, and services across
international bor...
Objectives
 To learn about the
International Trade
practices in Nepal.
 To learn about the
Trade financing
provisions.
...
Limitations
 Making generalization on the basis of the
findings of the project may not be
correct.
 Limitations in the t...
Methods of Payment
 Cash in Advance
 Documentary Credit (Letter of Credit)
 Documentary Collection
 Open Account
Incoterms
 Incoterms are the Trade terms published
by the International Chamber of
Commerce (ICC) that are commonly
used ...
Incoterms
Incoterms
Advantages of Trade
 • Promotes efficiency in production as
countries will try to adopt better methods
of production
 • ...
Disadvantages of Trade
 Import of harmful
goods
 It may exhaust
resources
 Over Specialization
 Danger of Starvation
...
Nepal and its international
trade history
 The Federal Democratic Republic of Nepal has
traditionally maintained a non-al...
Nepal and its international
trade history
 The March 1989 impasse in negotiations for trade and
transit treaties with Ind...
Documents to be submitted in the customs
while goods are to be imported from India
against the payment of convertible fore...
Provisions Regarding the
Imports from India
 Procedures to import goods from India
 L/C
 T.T
 Draft
 Local Purchase (...
The documents to be submitted in
the customs while imports are
under barter system are
 Declaration Form for Import
 Dec...
Provisions Regarding the Imports
from Tibet the Autonomous Region
of China
 L/C
 Draft or convertible foreign currency p...
Trade finance done by
Nepalese commercial banks
 Import Business
 Letter of Credit
 Documentary Collection (DAP or DAA)...
Trade finance done by
Nepalese commercial banks
 Export Business
 Cash against Document (CAD)
 Documents Collection Ser...
Thank you!!!!
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International Trade Practices & Trade Financing Provisions in Nepal

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Assignment, Trade Finance, BBA-BI 7th semester, Ace Institute of Management

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International Trade Practices & Trade Financing Provisions in Nepal

  1. 1. International Trade Practices & Trade Financing Provisions in Nepal By: • Chhitiz Shrestha • Mintira Lama • Samyak Shakya • Sushan Byanjankar Trade Finance Group Project Work
  2. 2. Introduction to Int’l Trade  Buying and selling of large number of goods and services between countries  Any buying and selling of goods that takes, with the return of financial compensation such as money or money’s worth is referred to as trade.  Trade is taken as an effective tool to reduce poverty in the country and to enhance the wellbeing of the marginalized people.
  3. 3. Introduction to Int’l Trade  International trade is the exchange of capital, goods, and services across international borders or territories.  It has high economic, social, and political importance.
  4. 4. Objectives  To learn about the International Trade practices in Nepal.  To learn about the Trade financing provisions.  To learn about the practices in trade prevalent in the country.
  5. 5. Limitations  Making generalization on the basis of the findings of the project may not be correct.  Limitations in the time for preparation have brought major constraints, a more time allotment could have brought greater results.  Limitation in the information availability.
  6. 6. Methods of Payment  Cash in Advance  Documentary Credit (Letter of Credit)  Documentary Collection  Open Account
  7. 7. Incoterms  Incoterms are the Trade terms published by the International Chamber of Commerce (ICC) that are commonly used in both international and domestic trade contracts.  Incoterms, short for "International Commercial Terms," are used to make international trade easier by helping traders in different countries understand one another.
  8. 8. Incoterms
  9. 9. Incoterms
  10. 10. Advantages of Trade  • Promotes efficiency in production as countries will try to adopt better methods of production  • More employment could be generated as the market for the countries’ goods widens through trade.
  11. 11. Disadvantages of Trade  Import of harmful goods  It may exhaust resources  Over Specialization  Danger of Starvation  One country may gain at the expensive of another  It may lead to war
  12. 12. Nepal and its international trade history  The Federal Democratic Republic of Nepal has traditionally maintained a non-aligned policy and enjoys friendly relations with neighbouring countries  Nepal’s most substantive international relations are perhaps with international economic institutions, such as the Asian Development Bank, the International Monetary Fund, the World Bank, and the South Asian Association for Regional Cooperation, a multilateral economic development association  In the 1950s, over 90 precent of its foreign trade was conducted with India  Most of Nepal's basic consumer goods were imported from India, and most of its agricultural exports went to India.
  13. 13. Nepal and its international trade history  The March 1989 impasse in negotiations for trade and transit treaties with India seriously damaged Nepal's economy.  The transit treaty had allowed goods from third countries entering at Calcutta to pass through to Nepal and exempted them from customs and transit duties.  The treaty allowed trade to transit at twenty-one border points, and primary commodities were essentially duty-free in both directions  The dispute was not solved until June 1990 when Kathmandu and New Delhi agreed to restore economic relations to the status quo ante of April 1, 1987.  Trade with India decreased from more than 70 percent in 1975 to about 27 percent of total trade in 1989.
  14. 14. Documents to be submitted in the customs while goods are to be imported from India against the payment of convertible foreign exchange:  Declaration Form  LC/ T.T/ Draft  Document of Insurance  Packing List  Bill of Export  Certificate of VAT Registration  Certificate of Registration of firm or company  Certificate of Industry Registration is case of Industry  In case of requirement of permission of certain institution for importation of particular goods, such permission of the concerned institution  TA and COP documents for the importation of vehicle  Bi. Bi. Ni. Form 4  Appointment letter of customs agent in case of appointed agent
  15. 15. Provisions Regarding the Imports from India  Procedures to import goods from India  L/C  T.T  Draft  Local Purchase (Local Import)
  16. 16. The documents to be submitted in the customs while imports are under barter system are  Declaration Form for Import  Declaration Form of already Exported Goods  Invoice  Document of Insurance  Packing List  Certificate of Registration of Firm or Company  Certificate of Registration of Industry in case of Industry  Certificate of VAT Registration  Appointment Letter of Agent in case of appointed Agent
  17. 17. Provisions Regarding the Imports from Tibet the Autonomous Region of China  L/C  Draft or convertible foreign currency payment as specified by Nepal Rastra Bank  Traditional Barter System  Nepalese resident within 30 km distance of the border are allowed to import the goods up to the amount of NRs.16000 without payments through banking system
  18. 18. Trade finance done by Nepalese commercial banks  Import Business  Letter of Credit  Documentary Collection (DAP or DAA)  Advance Payment  Import Loan  Trust Receipt Loan
  19. 19. Trade finance done by Nepalese commercial banks  Export Business  Cash against Document (CAD)  Documents Collection Service  Export Loan  Pre Shipment Loan / Packing Credit  Post Shipment Loan / Bills Purchase / Bills Discounting  Bank Guarantee
  20. 20. Thank you!!!!

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