This document provides an overview of industrial marketing, foreign trade, and strategies to improve India's exports. It discusses key terms like forex, balance of payments, and factors that facilitate global trade. It analyzes India's current trade situation, issues like inadequate infrastructure and regulatory hurdles. It recommends strategies like export-led growth, integrating into global value chains, and initiatives under the new foreign trade policy to counter slowing exports and the Chinese market slowdown. Specific focus areas suggested include engineering, pharmaceuticals, labor-intensive sectors and developing services exports.

1. - A tool to develop Forex
IndustrialMarketing

2. Giveaways . . .
• Industrial Marketing. What is it?
• Forex & related terminologies
• Trade & related Concept – A global outlook
• Balance of Payments (BoP) of economics
• The Big Picture! The present situation of trade
• How our exports could be improved?
• Countering increasing penetration of Chinese Market.

3. Industrial Marketing
• Marketing of goods & services by one business to another
• A branch of Communication & sales.
• Specializes in providing goods & services to other business.
• In general, comes under the tandem of Business-to-business (B2B)

4. Classification of Industries
Products
• Basic
• Capital Goods
• Intermediate Goods
• Consumer Goods
Ownership
• Public
• Private/Foreign
• Public & Private
Intensity
• Capital Intensive
• Labour Intensive
Investments
• Large (>10 Cr.)
• Medium (1 – 10 Cr.)
• Small (10 Lakh – 1 Cr.)

5. • A term used to denote foreign currency
• Currencies are important around the world, because
- currencies need to be exchanged in order to conduct foreign trade
and business.
Suppose: If you are living in India & want to buy a Car from US.
- You have to pay for car in Dollars instead of Rupee.
- This means that the Indian importer (You) would have
to exchange the equivalent value of
Indian Rupee (INR) into U.S. dollars (USD).
The foreign exchange market is the "place" where currencies are traded.
What is Forex?

6. Foreign Trade Why it is required?
• Every country has a relative deficit.
- Moreover, resources are limited!
• There are 2 kinds of resource endowments i.e.
(1) Labour (2) Capital
There is relative resource endowments
Example: India Labour surplus & Capital deficit
Germany Labour deficit & Capital surplus
Hence, Theory of Comparative Advantage gained relevance.

7. Facilitators of Global Trade
• Global Accessibility
• Telecommunication revolution
• Information Metamorphosis
- from information asymmetrical to
symmetrical information
• Media Transformation
• Redefined living standards
- from hard living to soft living
All above factors have lead to a global village ‘Globalization’

8. • Makes country dependent
• Comparative advantage may not happen with each nation
However, these negative sides can be resolved through openness, firm
determination & belief.
Trade is Inevitable for economics wanting to chalk out new growth paths
The Negative side of TradeNegative

9. How trade is
traced?

10. Balance of Payments (BoP) of economics
- A combination of Current Account and Capital Account
BoT = Balance of Trade
BoI = Balance of Invisibles
Current Account = BoT + BoI
BoP of Country = Current A/c + Capital A/c
This A/c consists:
• Foreign Investments
• Deposits by NRI
• Borrowings from Multilateral Institutes
• External assistance & grant from other country
• Portfolio Investments
India has a Chronic Deficit on BoT since 2013.
Current Account Deficit (CAD) has widen because increased imports as compared to exports!

11. The present Situation
• Since financial Crisis 2008, developed economies facing stagnant
growth.
• However, emerging/developing economies have seen recovery with
divergent growth.
• According to World Economic Outlook,
Global growth rate is projected to be around 3.6% in 2017
It was, 3.4% in 2016
3.1% in 2015

12. Why this Slowdown?
There are many macro reasons for the
same
• Lowering Commodity prices
• Strain in large economies
• The slowdown & rebalancing of
Chinese Economy
Picture is
diverse &
challenging!

13. The Chinese
Dilemma!

14. • Many Asian Counties are the part of Global Value Chains (GVCs)
• These economies acts as a manufacturing units
• Whereas, China acts as a Assembler

15. Nepal
Part 1
Bangladesh
Part 2
China
Part 1 + 2
Export

16. Decade 2000: China was accounting half of
demands for world Commodities.
Decade 2011: Demand Collapsed
This termed as ‘Rebalancing of
Chinese Market’
Many counties Hit hard by this slowdown.

17. India Was resilient of such slowdown!
Since, we were not the part of Such GVC

18. - A critical Analysis
The
Indian
Context

19. India into GVCs
In 4 prominent areas:
• Services
• Chemicals
• Jewellery
• Electric Components.
Toady GVCs are prominent feature of International Trade landscape
Intermediate Goods/Services
from several countries are
combined through
integrated production
networks to produce the
final goods.

20. The Trade Tracker
Last year i.e. 2014 - 15 had registered a negative growth of 1.29%
compared to previous year i.e. 2013 – 14.
Exports Imports
Commodities Share (in %) Commodities Share (in %)
Gems & Jewellery 14.6 Petroleum & Products 23.5
Textile & Allied 13.6 Gems & Jewellery 15.2
Petroleum & Products 12.2 Electronic Goods 10.43
Chemicals & Drugs 12.1
Surgical/Operational Instruments 10.6
Agriculture & Allied
- Meat 1.6
- Processed Produce 0.3
- Dairy Products 0.1
9.1

21. The Problem!
Sectors Contribution to GDP Dependency of Population
Agriculture 18 % 60 % +
Service 55 % 15 %
Secondary
Manufacturing
27 %
14%
25 %
There is a missing link b/w service sector & manufacturing sector.
Ideally, Manufacturing sector should attain maturity then Services.
But this had not happened in India!

22. Some Core Issues
• Inadequate Infrastructure
• Sub-optimal connectivity with Global transport network
• Low transport capabilities
• Complicated Administrative requirements
- long delays @ ports & Customs

23. How present situation can be Countered?
There are 2 strategies
• Export led Growths
• Growth led Exports

24. Export Led Growths
• Good for small Economies
• Adopted by Malaysia, Thailand, South
Korea, Indonesia etc.
• They are called as Butterfly Economies
However, often lead to currency Crises
Example:
The 1997 Asian Financial Crises

25. Growth Led
Exports
- A relevant model for India
- The Trickle Down Theory!

26. To integrate into Value Chains
• Strengthen trade related Physical Infrastructure
• Appropriate regulatory regime for transportation service
• Improve efficiency
• Predictability of Border procedures
• Policy reforms in logistics service markets
• Reduce Coordination failure
• Environment for Industry to scale up & down in response to demand
• Mega regional trading arrangements

27. Mega regional trading arrangements
Potential to bring enormous changes in trade dynamics!
Can go beyond trade into areas such as: Investments
Intellectual Property
Transparency
Disputes settlements
Some negatives
• Erode existing preference in traditional markets &
benefit the partnering countries.
• Develop greater burden on Indian manufacturing &
services standards.

28. Other aspects that needs to be considered
• Devolution of Currency
• Convertibility of Currency

29. The New Foreign Trade Policy
New Schemes
• Merchandise Export from India Scheme
• Services Export from India Scheme
• Export through Courier/ Foreign Post office
Envisaged on Increasing
exports & employment
generation

30. Government Initiatives
• Reduction in Documents
• Complaint Resolution System
• Creating Single window for trade
• Social Media (Mobile application, online redressal)
• Online Interface for Customs
There are 344 ports/ customs points in India
Only 126 are electronic data interchange (EDI) enabled
• Niryat Bandhu Scheme
• Special Economic Zones
MP has 12 SEZs (On Paper) However, only 2 are functional!
• Engagement with Free Trade Agreements (ASEAN, North East Aisa)

31. Specific Strategy
Product Domain
• Engineering Goods in electronics & Pharmaceuticals
• Employment Generation in Leather, Textile & Jewellery Sectors
• Sector wise focus on Natural Resources
Example: Northern States – Focus on Organic Product Exports
Service Domain
• Building Brand India
• Standards in services
www.indiantradeportal.in

32. Discussions are much Welcome