2. CONTENTS:
Definition
Types of export
Role of govt in export
Export/import process
Export/import financing
Exim policy
Comparison of trade policy
India’s Exim policy 2009-14
Objective of india’s Exim policy
Balance of trade
Bibliography
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3. DEFINITION
The term export is derived from the
conceptual meaning as to ship the goods
and services out of the port of a country
The seller of such goods and services is
referred as an "exporter" who is based in
the country of export
Whereas the overseas based buyer is
referred to as an "importer"
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4. CONTD.
In International Trade, "exports" refers to
selling goods and services produced in the
home country to other markets
Exporting is the most popular way for
companies to become international
Exporting is usually the first mode of foreign
entry used by companies 4
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5. CONTD.
Selling to foreign markets involves
numerous high risks, arising from a lack of
knowledge about and unfamiliarity with
foreign environments, which can be
heterogeneous, sophisticated, and turbulent
Manufactured goods accounted for almost
60 percent of the exports of developing
countries 5
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6. TYPES OF EXPORT
Direct export Indirect export
Direct exporting occurs
when a manufacturer
or exporter sells
directly to an importer
or buyer located in a
foreign market
Indirect exporting
involves the use of
independent
middlemen(brokers,
bank) to market the
firm’s products
overseas
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7. DIRECT EXPORT/IMPORT
1. Importer Pays for Goods
indian Importer American Exporter
2. Exporter Ships Goods After Being Paid
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8. A TYPICAL INTERNATIONAL
TRANSACTION
1. Importer Orders Goods 3. Importer
2. Exporter Agrees to Fill Order
American Exporter french Importer
6. Goods Shipped to France
10 and 11
Exporter
7. Exporter
Sells
Presents
Draft to
Draft to Bank
Bank 14. B of NY Presents Matured
Draft and Gets Payment
12. Bank Tells
Importer
Documents
Arrive
13. Importer
Pays Bank
Bank of New York Bank of paris
Arranges for
LOC
8. B of NY Presents Draft to Bank of Paris
9. Bank of Paris Returns Accepted Draft
4. Bank of Paris Sends LOC to B of NY
5. B of NY
Informs
Exporter
of LOC
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9. Composition of India’s Exports
Agricultural &
Allied
Products
Ores &
Minerals
Manufactured
Items
Fuel &
Lubricants
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Composition of India’s Imports
Petroleum
Products
Capital Goods
Pearls &
Precious
Stones
Iron & Steel
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10. ROLE OF THE GOVERNMENT IN
PROMOTING EXPORTS
Export promotion activities generally comprise:
1.export services programs
2.market development program
Export-import bank tariff concessions
1.foreign trade zones
2.foreign sales corporation(FSC)
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11. EXPORT PROCESSES
Evaluate export potential
financial resources
management capability/experience
competitive advantages abroad
Do country analysis (more later)
country receptiveness to imports and investment
trade barriers/requirements
infrastructure
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12. CONTD.
Do market analysis
market size/product potential
distribution channels
Determine entry method
goal of entry
select distribution “partner”
determine channel length
assess risks
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determine costs 12
13. SOURCES OF EXPORTER
FINANCING
Financing exporter credit to the importer:
- Bankers’ acceptance (of the draft)
- Factoring
- Forfeiting
- EXIM bank
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14. PROCEDURES OF EXPORT AND IMPORT
TRANSACTION
General Procedures of Export Transaction：
Preparation for
Exporting
Business
Negotiation
Implementation
of Contract
Settlement of
Disputes
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15. EXPORT/IMPORT FINANCING
Letters of Credit (LOC)
Bank guarantee on behalf of importer to exporter
assuring payment when exporter presents specified
documents
Drafts (Bill of Exchange)
Written order by exporter, telling an importer to pay a
specified amount of money at a specified time.
Bill of Lading
Issued to exporter, by carrier. Serves as receipt,
contract and document of title.
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16. WHAT IS EXPORT IMPORT POLICY
(EXIM POLICY)?
Export Import (Exim) Policy or Foreign Trade Policy (FTP) is a set of
guidelines and instructions in matters related to the import and export of
goods in India.
Established by the Directorate General of Foreign Trade (DGFT)
Regulated by The Foreign Trade Development and Regulation Act 1992
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Exim policy contains various policy decisions with respect to import and
exports of the country.
Prepared and announced by the central government.
Aim
Developing export potential
Improving export performance
Encouraging foreign trade
Creating favorable balance of payment position.
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17. CONTD.
Trade Policy will strongly influence the
direction, trend and growth of foreign trade of
a country
Industrialisation and self-sufficiency in
essential commodities were the important
objectives of India's trade policy
trade policy is an important economic
instrument which can be used by a country,
with suitable modifications from time to time,
to achieve its long-term objectives
Trade Policy can be free trade policy or
protective trade policy
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18. COMPARISON OF TRADE
POLICY
FREE TRADE POLICY PROTECTIVE TRADE POLICY
A free trade is one which
does not impose any
restriction on the exchange
of goods and services
between different countries.
A free trade policy involves
complete absence of tariffs,
quotas, exchange
restrictions, taxes and
subsidies on production,
factor use and consumption.
A protective trade policy
pursued by a country seeks
to maintain a system of
trade restrictions with the
objective of protecting the
domestic economy from the
competition of foreign
products.
Many of the
underdeveloped countries
continue to have protective
trade policies even today.
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19. INDIA'S EXIM POLICY 2009-2014
The Union Commerce Ministry, Government of
India announces the Export Import policy in every
five year. This is also called EXIM policy. This policy
is updated every year with some modifications and
new schemes. New schemes come into effect on
the first day of financial year i.e. April 1, every
year. The Foreign trade Policy which was
announced on August 28, 2009 is an integrated
policy for the period 2009-14. This policy is
updated on every financial year. 19
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20. OBJECTIVES OF EXIM POLICY 2009-
2014
To arrest and reverse declining trend of exports which will be
reviewed after every two years.
To Double India's exports of goods and services by 2014.
To double India's share in global merchandise trade by 2020
(long term aim). India's share in Global merchandise exports
was 1.45% in 2008.
Simplification of the application procedure for availing various
benefits.
To set in motion the strategies and policy measures which
catalyze the growth of exports.
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21. INDIA'S FOREIGN TRADE IN JUNE
2012
Exports:
India’s exports through June 2012 were valued at US$29.21 billion, which
was 46.45 percent superior to the level of US$19.94 billion seen in June
2011. On an expanded timeframe, the growing value of exports for the
period April-June 2011-12 was US$79.00 billion against US$54.22 billion
over the same period a year earlier – good for a 45.71 percent increase.
Imports:
India’s imports for the duration of June 2012 came to US$36.87 billion,
showing a growth of 42.46 percent over the level of imports valued at
US$25.88 billion in June 2011. An increasing value of imports for the
interval of April-June 2011-12 was US$110.61 billion as against US$81.20
billion over the same period in 2010 – good for a 36.22 percent increase.
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23. BALANCE OF TRADE
Balance of trade = Exports - Imports
A positive balance of trade is known as a trade surplus
A negative balance of trade is known as a trade deficit or,
informally, a trade gap.
India reported a trade deficit equivalent to 7659 Millions USD in
June of 2011.
India is poor in oil resources and is currently heavily dependent
on coal and foreign oil imports for its energy needs.
Other imported products are: machinery, gems, fertilizers and
chemicals.
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