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PROJECT REPORTEXPORT MARKETING POLICY

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT

FOR THE AWARD OF DEGREEOFMASTER OF COMMERCE

TO

DEPARTMENT OF COMMERCE2015-16

UNDER THE GUIDANCE OF:SUBMITTED BY:

PROF. MAROOF MIRZA MOHD.FARHAN

HEAD OF DEPARTMENT ROLL NO.-1552006

DEPARTMENT OF COMMERCE ENROLL NO.A-085

EMESTER IIND

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!H"AJA MOINUDDIN CHISHTIURDU# ARABI$FARSI

UNI%ERSITY 2015-16

DECLARATION

I, Mohd. Farhan Student of M.Com. (Hons) studying at Khwaja

Moinuddin Chishti Urdu, Arai!Farsi Uni"ersity , de#$are that the %roje#t

wor& entit$ed 'Ex!"# M$"%'() P!*'+, in u#&now was #arried y

me in the %artia$ fu$fi$$ment of M.Com ( Hons.).

*his %roje#t was underta&en as a %art of a#ademi# #urri#u$um

a##ording to the Uni"ersity ru$es and norms and it has not #ommer#ia$

interest and moti"e, it is my origina$ wor&. It is not sumitted to any other

organi+ation for any other %ur%ose

ate-

/$a#e-UCK012

M1H. FA3HA0

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M.Com (40S5M)

ACKNOWLEDGEMENT

It gi"es me immense %$easure to %resent this %roje#t re%ort of 'Ex!"#

M$"%'() P!*'+, In %artia$ fu$fi$$ment of the degree of Master of

Commer#e. 0o wor& #an e #arried out without the he$% and guidan#e of

"arious %ersons. I am ha%%y to ta&e this o%%ortunity to e6%ress my gratitude

to those who ha"e een he$%fu$ to me in #om%$eting this %roje#t re%ort.

At the outset I wou$d $i&e to than& my Department of Commerce for

their "a$ua$e guidan#e and suggestions during te period!

I wou$d e fai$ing in my duty if I do not e6%ress my dee% sense of

gratitude to my #o$$ege mentor /ro. Maroof Mir+a, without his guidan#e it

wou$dn7t ha"e een %ossi$e for me to #om%$ete this %roje#t wor&.

ast$y I wou$d $i&e to than& my %arents, friends and we$$wishers who

en#ouraged me to do this resear#h wor& and a$$ those who #ontriuted

dire#t$y or indire#t$y in #om%$eting this %roje#t to whom I am o$igated to.

.


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*han& you

M1H FA3HA0

M.#om (4nd S5M)

TA"LE O# CONTENT

8. Introdu#tion 94. 2hat Is 56%ort Mar&eting: 9

;. 0eed And Im%ortan#e 1f 56%ort Mar&et 89uire /ro#eduer (3eg.) *o Start 56%ort


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INTROD$CTION

W%AT I& E'port mar(eting)

Mar&eting is defined as using a$$ of the resour#es of the

organi+ation to satisfy #ustomer needs for a %rofit. *he differen#e

etween e6%ort mar&eting and domesti# mar&eting is sim%$y that it

ta&es %$a#e a#ross nationa$ orders. *his means that you are fa#ed with

arriers to trade that you wi$$ not ha"e en#ountered efore, su#h as

differing $anguages, %o$iti#s, $aws, go"ernments and #u$tures. ou may

need to a##ount for getting the %rodu#t ha$fway a#ross the g$oe to

distant mar&ets and %ay the im%ort duties im%osed on these %rodu#ts y

the im%orting #ountry. ou wi$$ a$so need to dea$ with the $ogisti#a$ and

do#umentation %ro$ems surrounding e6%orts. *hese are just some of

the %ro$ems you wi$$ fa#e.

56%ort mar&eting a$so in"o$"es %re%aring an offering that wi$$ enti#e

the foreign uyer and #ustomer. *his offering #om%rises a %rodu#t that

is offered at a #ertain %ri#e and that is made a"ai$a$e D distriuted D to

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the foreign #ustomer. At the same time, the offering is #ommuni#ated D

or %romoted D to the uyer using #ertain #ommuni#ation or %romotion

#hanne$s. *hese e$ements D the %rodu#t, %ri#e, distriution (a$so

referred to as the %$a#e) and %romotion D are #a$$ed the mar&eting mi6.

Te features of e'port mar(eting inc*udes te fo**o+ing

,- It is a process .

56%ort mar&eting is a %ro#ess of %$anning and

im%$ementing the %rodu#tion, and distriuting of goods and

ser"i#es, it #onsists of "arious a#ti"ities su#h as randing,

%a#&aging, ad"ertising et#.

/- Identification and satisfaction of consumer0s needs 1

+ants.*he heart of mar&eting is the identifi#ation of

#onsumer needs and wants. *he e6%orter must #onstant$y try to

find out the %ro$ems or needs and wants of the foreign uyer, so

e6%ort mar&eting ado%ts a tota$ #onsumer oriented a%%roa#h in

the foreign mar&ets.

2- #*o+ of goods and ser3ices D

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56%ort mar&eting in"o$"es f$ow of goods and ser"i#es

a#ross the nationa$ oundaries.

4- Large sca*e operations 556%ort mar&eting is #arried in u$& >uantities so as to

deri"e the enefits of $arge s#a$e se$$ing su#h as in res%e#t of

trans%ortation, hand$ing et#.

6- 7rominence of mu*tinationa* 5 56%ort mar&eting in dominated y M0C7S. At %resent

M0C7S from USA, 5U31/ and GA/A0 %$ay a dominant ro$e in

foreign trade. *hey are in a %osition of de"e$o% wor$d wide

#ontra#ts through their networ& of ran#hes E offi#es E

susidiaries. *hese #om%anies are in a %osition to #arry on a $arge

s#a$e o%eration in foreign trade more effi#ient$y and

e#onomi#a$$y.

8- Tariff and non 5tariff 9arriers 556%ort trade is suje#t to tariff and non tariff

arriers , these are restri#tions im%osed most$y y im%orting

#ountries , so as to restri#t im%orts e"ery e6%ort firm shou$d

ha"e a #$ose study of "arious trade arriers im%osed y different

#ountries , so as to #arry on its e6%ort trade more effi#ient$y .


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:- 7resence of trading 9*oc0s. Certain nations of %arti#u$ar region #ome together to

farm #ustoms union or trading $o#7s for their mutua$ enefit and

e#onomi# de"e$o%ment the main %ur%ose of su#h $o# is to

e$iminate trade arriers among memer nations and they may

im%ose e6terna$ tariff and nontariff arrier on non memer7s .the

e6%orter shou$d ha"e &now$edge of the regu$ation of su#h trading

$o#s. *he %owerfu$ trading $o#s are 0AF*A (north Ameri#an

free trade area) 5C (5uro%ean #ommunity) and AS5A0

(asso#iation of south east Asian nation)

;- Internationa* mar(eting researc D

Knowing more aout #ustomer, dea$er and #om%etitor

is a must not on$y in the domesti# mar&et ut a$so in the e6%ort

mar&ets.


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o"er the wor$d shou$d ha"e through &now$edge of the ru$es

regu$ation and %rin#i%a$s of su#h forums.

4? ste%s of e6%ort mar&eting

&tep,=

*hose who are interested in e6%ort im%ort usiness need to

a%%$y to the dire#tor genera$ foreign trade regiona$ offi#e for getting

im%ortere6%orter #ode numer. *his is true for any indi"idua$ or

#om%any wi$$ing to underta&e e6%ort or im%ort from India.

&tep/=

1ne has to resister with the #on#erned e6%ort %romotion

#oun#i$ for e6am%$e in the #ase of garments, it is essentia$ to otain

registration #ummemershi% #ertifi#ate (3CMC) from the a%%are$


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e6%ort %romotion #oun#i$, registration is essentia$ for otaining "arious

%ermissi$e enefits gi"en y the go"ernment.

&tep2=

2ith the #om%$etion of these forma$ities. *he e6%orters #an go

in for %ro#uring their e6%ort order.

&tep4=

2ith e6%ort order in hand they start manufa#turing or uy

the goods from manufa#turing

&tep6=

1n#e manufa#turing is o"er , the e6%orter ma&e

arrangements for >ua$ity #ontro$ and otain a #ertifi#ate from the

ins%e#tor of >ua$ity #ontro$ #onfirming their >ua$ity.

&tep8=

56%orta$e are then dis%at#hed to %arts, air%orts for transit.

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&tep:=

2ith dis%at#h of goods, the e6%ort firm has to a%%$y an

insuran#e #om%any for marine $air insuran#e #o"er.

&tep ;=

After #om%$etion of these forma$ities, the #ontra#t the

#$earing and forwarding agent for storing the goods in warehouse,

uses . *he forwarding agent #omes out with a do#ument #a$$ed shi%%ing

i$$, re>uired for a$$owing shi%ment y the #ustom authority.

&tep


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*here after for $oading e6%orts into shi%s or air#raft ,the C and

F agent . %resent the shi%%ing i$$ to the %re"enti"e offi#ers who

o"ersee the transit %ro#edure

&tep.,/=

After $oading goods in to the shi% the #a%tain of the shi% issuer a

re#ei%t &now as mate7s re#ei%t7 to the shi% su%erintendent of the %ort .

*he shed su%erintendent #a$#u$ates %ort #harges and i$$s the C and F

agents for it.

&tep.,2

2hen %ort %ayments are made the C and F agent ta&es

de$i"ery of mates re#ei%t and re>uests %ort or air%ort authority to

%re%are i$$ of $oading or airway i$$.

&tep.,4

After otaining i$$ of $oading, the C and F agent sends these

do#uments to the res%e#ti"e e6%orters.

&tep.,6

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1n re#ei%t of the do#uments, the e6%orter ma&es an

a%%$i#ation to the re$e"ant #hamer for getting #ertifi#ates of origin,

stating that the goods originated from India.

&tep.,8

56%orters a$so send shi%%ing do#uments to the im%orters

stating date of shi%ment, name of "esse$ et#. Moreo"er, it is essentia$ to

send #ertain other do#uments $i&e i$$ of $oading ,#ustom in"oi#e and

%a#&ing $ist, to their foreign #ounter%arts.

&tep.,:

*he e6%orter now %resents a$$ im%ortant do#uments at an&.

*he an& s#rutini+es this do#ument against the origina$ $etter of #redit E

%ur#hase order. *he an& has to fo$$ow UC/CEU3C guide$ines.

&tep.,;

*he e6%orters7 an& sends a$$ im%ortant do#uments to the

foreign im%orters an&. *his %resents the do#uments to the im%orter.

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*hen the im%orter a##e%ts , the i$$ if it is a usan#e i$$ and %ay efore

the due date.

&tep.,<

After re#ei"ing the re>uisite do#ument , the im%orter ma&es

the %ayments through .the an&, the money then gets #redited in the

name of the e6%orter here. Simu$taneous$y, ado#&ment #a$$ed the 3

from is sent to 3eser"e an& of India.

&tep./>

As a $ast ste% e6%orters a%%$y for enefit from "arious duty

drawa#& s#hemes whi#h suse>uent$y get #redited in their a##ount.

Need and Importance of E'port.mar(et

0o #ountry in the wor$d, whether high$y de"e$o%ed or not is se$f

suffi#ient in e"ery res%e#t, more e"er e"ery #ountry want to e more

and more e#onomi#a$$y de"e$o%ed and in order to do so, it has to resort

to foreign trade e.g. e6%ort and im%ort, e6%ort trade ring in "a$ua$e

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foreign e6#hange whi#h #an e uti$i+ed to %ay for im%orts and at the

same time enhan#es. Foreign e6#hange reser"e of the #ountry.

*he need and im%ortan#e of e6%ort mar&eting #an e e6%$ained from

the "iew%oint of the #ountry and that of usiness organi+ation

NEED AND IM7ORTANCE O# E?7ORT MARKET

A)3e"iew %oint of nation )from "iew %oint of usiness

orgnisation

• Foreign e6#hange

• Internationa$ re$ations

• a$an#e of %ayments

• 3e%utation in the wor$d

•

5m%$oyment o%%ortunities• Finan#ing of de"e$o%ment

%$ans

• 3esear#h and de"e$o%ment

• re%utation o%timum

%rodu#tion

• o%timum %rodu#tion

• s%reading of ris&

• e6%ort o$igation

• &ee%ing a $i"e o$d

• im%ro"ement in

organi+ationa$

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effi#ien#y

• 1%timum uti$i+ation of

resour#es• S%read effe#t

• Higher standard of $i"ing

• im%ro"ement in %rodu#t

standards

• $iera$ im%orts• higher %ri#es

• finan#ia$ and non Dfinan#ia$

enefits

A-#rom 3ie+ point of nation 5

,- #oreign e'cange D 56%ort ring "a$ua$e foreign e6#hange to the

e6%orting #ountry whi#h is main$y re>uired to %ay for im%ort of

#a%ita$ goods raw materia$ s%ares and #om%onents , a$so foreign

e6#hange is re>uired to %ay for the im%ort of te#hni>ues how and

ser"i#e e6terna$ dets

/- Internationa* re*ation 5

A$$ #ountries of the wor$d want to %ro%oser in a

%ea#e fu$$ en"ironment, one way to maintain %o$iti#a$ and #u$tura$

.it ma&e re$ation with other #ountries is through internationa$

trade.

2- "a*ance of payment D

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A #ountry e6terna$ e#onomi# strength de%ends u%on

its a$an#e of %ayments %osition .sin#e e6%ort rings foreign

e6#hange, it he$%s a #ountry to so$"e and im%ro"e its a$an#e of

%ayments %osition.

4- Reputation in te +or*d 5

A #ountry whi#h Is fore most in the fie$ds of e6%ort,

#ommands a $ot of res%e#t, goodwi$$ and re%utation from other

#ountries for instan#e, Ga%an #ommands internationa$ re%utation

due to its high >ua$ity %rodu#t and in the e6%ort mar&ets.

6- Emp*oyment Opportunities-56%ort trade #a$$s for more %rodu#tion more

%rodu#tion o%ens the doors for more em%$oyment o%%ortunities

not on$y in the e6%ort se#tors ut a$so in a$$ied se#tors $i&e

an&ing, insuran#e et#.

8- #inancing of de3e*opment p*ans=

56%ort earnings #an e a sour#e of finan#ing

de"e$o%ment %$ans through the im%ort of #a%ita$ goods and

so%histi#ated te#hno$ogy, thus the foreign e6#hange generated

through e6%orts #an e uti$i+ed for %$anned e#onomi#

de"e$o%ment of the #ountry.

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:- Researc and de3e*opment=

*here is a #ontinuous %ressure on the e6%ort

industry to im%ro"e te#hno$ogy and %rodu#tion system to retain

its #om%etiti"e edge in foreign mar&ets. *he fruits of 3s wou$d

enefit the #onsumers not on$y in the o"erseas mar&ets ut a$so in

the domesti# mar&et.

;- Optimum uti*i@ation of resources=

A #ountry whi#h %asses a aundant resour#es in

form of 3aw Materia$ or finished goods in e6%orts of domesti#

re>uirements #an e effe#ti"e$y e6%ort as mu#h as there #an e

o%timum use of resour#es.

B- &pread effect=

e#ause of e6%ort industry , other se#tors a$so

e6%ands su#h as an&ing, trans%ort, insuran#e, #onsu$tan#ies at

the same numer of an#i$$ary industry #ome into e6isten#e to

su%%ort the e6%ort se#tor

,>- %iger &tander of *i3ing=

56%ort trade #a$$s for more %rodu#tion whi#h in turn

in#reases thus em%$oyment o%%ortunities.

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More em%$oyment means more %ower as resu$ts of whi#h %eo%$e

#an enjoy etter goods, whi#h in turn im%ro"e standard of $i"ing

of %eo%$e

"- #rom 3ie+ point of 9usiness organi@ation

,- Reputation=

A usiness organi+ation whi#h under ta&es e6%ort

usiness #an ring from to its name not on$y in the e6%ort mar&et

and ut a$so in the home mar&et i.e Sony , $a6o, *ata et# .

enjoy internationa$ re%utation .

/- Optimum 7roduction=

It may e %ossi$e that the demand for a #om%any s

%rodu#t fa$$s short of its o%timum %rodu#tion #a%a#ity in the

home #ountry howe"er the #om%any #an e6%orted its e6#ess

%rodu#tion there y the %rodu#tion #an e #arried on u% to the

o%timum %rodu#tion #a%a#ity and the #om%any enefited from

the e#onomies of $arge s#a$e %rodu#tion .

2- &preading of ris(=

2hen a usiness organi+ation fa#e de%ression in the

domesti# mar&et ($ow demand) it wi$$ e natura$$y suffer

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$osses .Howe"er the #om%any #an s%read its ris& of $osses y

se$$ing %rodu#ts of good %ri#e in the e6%ort mar&et .

4- E'port O9*igation=

Certain #om%any need to im%ort ma#hinery and other

re>uirement to #om%ensate for im%orts the go"ernment of India,

has im%osed #om%u$sory e6%ort o$igation so as to narrow down

the ga% etween rising im%orts and s$owing mo"ing e6%ort.

*herefore su#h #om%anies need to e6%ort to honor e6%ort

o$igation im%osed on them.

6- Keeping a*i3e o*d 9rand=

A %rodu#t rand may ha"e rea#hed the stage of

de#$ined in the home mar&et ut the same %rodu#t may ha"e good

demand in the foreign mar&et so in that #ase the e6%orters wou$d

enefits y e6%orts.

8- Impro3ement in organi@ation efficiency=

56%ort mar&eting re>uires #onsent im%ro"ement in

s&i$$s and te#hni>ue not on$y in mar&etingas%e#ts, ut a$so %rodu#tion as%e#ts thus resear#h, training and

e6%erien#es in dea$ing with foreign mar&et una$e the e6%ort to

im%ro"e the o"era$$ organi+ation effi#ien#ies .

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:- Impro3ement in product standards=

An e6%ort firm has to maintain and im%ro"e standards

in >ua$ity una$e to internationa$ standards as a resu$t of whi#h

#onsumer in the home mar&et as we$$ as in the internationa$

mar&et #an etter >ua$ity of goods.

;- Li9era* imports=

56%ort organi+ation #an im%ort #a%ita$ goods s%ares

#om%onents and raw materia$s $iera$$y against e6%ort

o$igation .Su#h im%ort not on$y im%ro"e the >ua$ity of goods

%rodu#ed ut a$so $ower down the #ost of %rodu#tion.


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#unctions of e'port mar(eting=*he fun#tions of e6%ort mar&eting omsist of those a#ti"ities,

whi#h are ne#essary for smooth f$ow of goods from the %rodu#ers

or se$$ers to the %ur#hasers or #onsumers.

*he fo$$owing are the fun#tiona$ areas of mar&eting-Internationa* mar(eting researc=

It is one of the im%ortant areas of the mar&eting,

through internationa$ resear#h. *he e6%orter #ome to &now aout

the $i&es, dis$i&es, tastes, and using eha"ior of the foreign

#onsumers mar&eting resear#h is must in e6%ort mar&ets due to

"arious fa#tors su#h as di"ersities in so#ia$, #u$tura$, e#onomi#

and %o$iti#a$ a#&ground of distant mar&ets *hus, mar&eting

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resear#h wi$$ he$% to identify the right e6%ort for the #om%any7s

%rodu#ts.

E'port production=

*he fruits of mar&eting resear#h and 3J #an e %ut

into use y %rodu#ing the goods and ser"i#es as %er the needs and

re>uirements of foreign mar&ets, stri#t a#ti"ity #ontro$ must e

maintained whi$e %rodu#ing e6%ort goods. oods and ser"i#es

shou$d #onfirm to internationa$ standards, and then on$y the

e6%ort firm wi$$ sur"i"e and su##eed in the o"erseas mar&et.

E'port pac(aging- /a#&agings for e6%orts must e gi"en due #onsideration

%ro%er and attra#ti"e %a#&ing not on$y %rote#t the %rodu#ts ut

a$so se$$. *he %rodu#t in the mar&et , this is e#ause attra#ti"e

%a#&aging has ad"ertising "a$"e, if re>uired assistan#e #an e

ta&en from Indian institute of %a#&aging $o#ated at Maro$

Andheri Mumai.E'port pricing=

It is one of the im%ortant as%e#ts of e6%ort

management a %ro%er %ri#ing strategy s%e$$s a firm7s sur"i"a$

and su##ess not on$y in the home mar&et ut a$so in the e6%ort

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mar&et, whi$e fi6ing %ri#es, the e6%orter #ost, demand and

#om%etiti"e en"ironment %re"ai$ing in the e6%ort mar&et.

Ad3ertising= 0ow D A day, ad"ertising is #onsidered to e one of

the most effe#ti"e ways of %romoting goods and ser"i#es. It

ma&es #onsumers aware of the >ua$ities, uses and enefits of the

%rodu#ts that are a"ai$a$e in the mar&et. *he e6%orter #an ma&e

use of "arious media of ad"ertising su#h as news %a%ers

maga+ines trade journa$s, trade dire#tories, te$e"isions et#. for

se$$ing in foreign mar&ets.

&a*es promotion=

A%art from ad"ertising, there are "arious sa$es

%romotion te#hni>ues su#h as sa$e on insta$$ment asis, free gifts,

#ontests, offering dis#ounts et# effe#ti"e se$$ing through sa$es #an

a$so in#reases sa$es in the o"erseas mar&et.

E'port ris( management=

56%ort ris& in"o$"e ris& to the e6%ort #argo in transit,

whi#h #an e insured with marine insurers, A more im%ortant ris&

is that #redit offered to o"erseas uyer , the go"ernment of India

has set u% e6%ort. Credit guarantee #or%oration (5CC) to

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%ro"ide #redit insuran#e to %rote#t e6%orters from #onse>uen#es

of %ayment ris&s.

#inancing=

In order to #arry out "arious mar&eting a#ti"ities su#h

as mar&eting resear#h sa$es %romotion et#, there is a need for

funds, the funds #an e otained as ad"an#es from the #ustomers,

#redit from su%%$iers, $oans from institutions et#.

"randing=

randing is one of the im%ortant mar&eting fun#tion it

refers to gi"e name to the %rodu#t the %ur%ose of randing is to

gi"e a se%arate. Identity to the %rodu#t, whi#h is distin#t from that

of t #om%etitor. At times #at#hy rand name #an se$$ the %rodu#t

in the mar&et. Care must e ta&en to see that the rand name so

se$e#ted not ha"e negati"e meanings in foreign $anguages.

Transporting.

It refers to mo"ing goods from one #ountry to

another norma$$y the e6%orter ma&e of trans%orting e6%ort goods

i.e. sea trans%ort and air trans%ort .the nature of goods ,#ost

trans%ort ,uyers re>uirement and su#h other fa#tors effi#ient

e6%ort mar&eting re>uires the right #hoi#e of trans%ort

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#actors affecting e'port mar(eting .

*he major en"ironment fa#tor effe#ting e6%ort

mar&eting are as fo$$ows

Economic factors.

*he e#onomi# #ondition %re"ai$ing in the e6%ort

mar&ets must e #onsidered the genera$ demands, mar&et

re#ession rate of inf$ation, the $e"e$ of e#onomi# de"e$o%ment

et#. Must e #onsidered whi$e designing a mar&eting mi6 .the

e6%orter must enter in su#h e6%ort mar&et were the e#onomi#

fa#tors are fa"ora$e and #ondu#ti"e to e6%ort trade.

7o*itica* factors D

*he %o$iti#a$ fa#tors a$so %$ay on im%ortant ro$e in the

e6%ort mar&eting system. *he a#tion %o$i#ies of the go"ernments

of the e6%orting #ountry as we$$ as that of the im%orting #ountries

affe#t e6%ort trade.*hese fa#tors in#$ude

• Changes in go"ernment %o$i#ies from time to time

• 3e$ation of im%orting #ountries with India.

• Stai$ity of the go"ernment in the im%orting #ountries et#.

26


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Consumer factors.

Its affe#ts e6%ort mar&eting to great e6tent . those

in#$udes the age grou% , in#ome range , o##u%ation ,uying %artners,

uying eha"ior, tastes , $i&es Ddis$i&es and %referen#es . the e6%orter

shou$d ha"e good &now$edge of this #ustomers #hara#ters a##ording the

right ty%e of %rodu#ts #an e %rodu#e to suit the re>uirements to the

target mar&ets .

Geograpic factors 5

*he e6%orter must a$so #onsider geogra%hi#a$ fa#tor

su#h as area, to geogra%hy, #$imate and seasons. Again the a"ai$ai$ity

of trans%ort and %ort fa#i$ities must e studied.

&ocia* factors=.

*he so#ia$ fa#tors are a$so to e #onsidered. *he attitude of

the uyer and the so#iety are to e ta&en note of, the e6%orter has to

&now aout the so#ia$ "a$ues and $ife sty$es of the target #onsumer7s

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28/101

different $ife sty$es and attitude of the so#iety may re>uire different

mar&eting mi6es and mar&eting %rogrammers.

Tecno*ogica* factors=.

*he $e"e$ of te#hno$ogy in the e6%ort mar&ets a$so affe#ts e6%ort

mar&eting, for instan#e te#hno$ogy ad"an#ed nations enjoy higher

standards of $i"ing. *hey e6%e#t high >ua$ity goods .the e6%orter must

#onsidered the degree of te#hno$ogy ad"an#ement of the im%orting

#ountries and a##ording$y su%%$y the goods that are in tune with the

re>uirement of the #ustomers.

Trade factors=.

*he trade fa#tors a$so must e #onsidered y the

e6%orter .the e6%orter must under stand that it is trade fa#tors that

fina$$y se$$ the %rodu#t in the mar&et .one need to ha"e good

distriutors to se$$ goods in the e6%ort mar&et . *he trade fa#tors

in#$ude

• *he #hanne$ of distriution

• *he a"ai$ai$ity of distriutors.

• *he ser"i#es %ro"ided y the distriutors et#.

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Difficu*ties pro9*ems in e'port mar(eting=

56%ort mar&eting is restri#ted to some e6tent due to #ertain diffi#u$ties

or drawa#& su#h as.

,- Difficu*ties of distance=.

56%ort mar&ets are s%read o"er $ong distan#es

natura$$y, the e6%orter wi$$ find diffi#u$t in #atering to $ong

distan#e mar&ets. onger the distan#e the more wi$$ e the

trans%ort #ost. *here are a$so %ossii$ities de$ays in su%%$y.

/- %ig ris( and uncertainties=

*he ris& may e oth %o$iti#a$ and #ommer#ia$

.*he %o$iti#a$ ris& in"o$"es go"ernment instai$ity, war, #i"i$

disturan#es et#. *he #ommer#ia$ ris& in"o$"es inso$"en#y of the

uyer and so on #ertain %o$iti#a$ and #ommer#ia$ ris& are insured

y e6%ort #redit guarantee #or%oration (5CC).

2- Di3erse *anguagesB customs and traditions=

*he e6%ort mar&ets differ in $anguages #ustoms

and traditions, these di"ersities therefore he has to e

se$e#ti"e, and he shou$d dea$ in on$y su#h mar&ets. 2here he #an

easi$y hand$e or o"er#ome differen#e or di"ersities.

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30/101

4- Different currenciesB +eigts and measures=

ifferent #ountries in the wor$d ha"e there own

system of weights and measures. Some #ountries may measure in

%ounds others in &i$ograms or in some other measures. Again

e"ery, #ountry has its own #urren#y. 5a#h #urren#y has hea"y

f$u#tuation in e6#hange note.

6- Customs forma*ities=

*here are numer of forma$ities in e6%ort of goods

from one #ountry to another, again there are #ustoms forma$ities

for the uyers i.e. #ustoms forma$ities of the im%orting #ountry.

8- Trade "arriers=

56%ort trade is suje#t to a numer of tariff and non

tariff arriers "arious im%orting #ountries do im%ose a"ariets of

ta6es and other forma$ities. *his #reates diffi#u$ty for the smooth

f$ow of goods and ser"i#es among #ountries .Howe"er efforts are

now eing a wor$d trade organi+ation (2*1) to redu#e and

sim%$ify a numer of trade arriers.

:- #oreign e'cange regu*ation. *he e6%orter has to gi"e a de#$aration to the reser"e

an& of India (3I) that they wi$$ rea$i+e the fu$$ "a$ue of e6%orts

within a %eriod of si6 months i.e.8=?days

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31/101

;- Documentation formation.

*here are a numer of do#uments to e %re%ared in

e6%ort trade.

.1


32/101

.2


33/101

ENETR INTO E?7ORT CONTRACT

56%ort #ontra#t is ased on terms J #onditions etween se$$er

and uyer in order to a"oid dis%ute, it is ne#essary to enter in to

an e6%ort #ontra#ts with the o"erseas uyer, for this %ur%ose,

e6%ort #ontra#t shou$d e #arefu$$y drafted in#or%orating

#om%rehensi"e ut in %re#ise terms, a$$ re$e"ant and im%ortant

#ondition of the trade dea$*here shou$d e not e any amiguity regarding the e6a#t

s%e#ifi#ation of goods and terms of sa$e in#$uding e6%ort

%ri#e ,mode of %ayment , storage and distriution ,methods ,ty%e

of %a#&aging %art of shi%ment ,de$i"ery s#hedu$e et# . *he

different as%e#t of an e6%ort #ontra#t are enumerated as under• Lua$ity of %rodu#t .standards ,s%e#ifi# >ua$ity

• /a#&ing ,$ae$ing and mar&ing

• *erms of %ayment In ad"an#e Eat sightEEC

• *erms of de$i"ery Eshi%ment (y sea$EAI3)F1 ECIF

EC0F

• is#ount E#ommission if any

• Statutory re>uirement of im%orting Je6%orting

#ountries.

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34/101

RE$IRE 7ROCED$ER REG!- TO &TART

E?7ORT

*he e6%orter shou$d ha"e an organi+ation to $oo& after the e6%ort of his

goods Eser"i#es .the e6%orter has to register his organi+ation with a

numer of authorities, efore he %ro#eeds to e6%ort. *hese registrations

in#$ude the fo$$owing-

,- To form a company 5

*he first and the foremost >uestion you as a %ros%e#ti"e

e6%orter has to de#ide is aout the &ind of usiness organi+ation needed

for the %ur%ose .you ha"e to ta&e a #ru#ia$ de#ision as to whether a

./


35/101

usiness wi$$ e run as a %ro%rietary #on#ern or a %artnershi% firm or

a #om%any. *he %ro%er se$e#tion of organi+ation wi$$ e de%end u%on

• our ai$ity to raise finan#e

• our #a%a#ity to ear the ris&.

• o?ur desire to e6er#ise #ontro$ o"er the usiness

• 0ature of regu$atory frame wor& a%%$i#a$e to you

/- O7ENING "ANK ACCO$NT 5

*he e6%orter shou$d o%en a #urrent a##ount in a s#hedu$e

#ommer#ia$ an&, whi#h is authori+ed y 3I to dea$ in foreign

e6#hange to o%en a an& a##ount for getting registration in %ort 5I

(e$e#troni# data inter #hanging system).

2- O"TANING INCOME TA? ACCO$NT N$M"ER 7AN-.

*he e6%orter shou$d ma&e an a%%$i#ation to the in#ome ta6

authorities to a$$ot him a %ermanent a##ount numer (/A0) .for time

eing ,for a year or so the in#ome ta6 authorities a$$ots a tem%orary

numer #a$$ed 'genera$ inde6 registration (I3) numer .the /A0 is

suse>uent$y a$$otted to the firm in due #ourse of time.

.5


36/101

4- TO REGI&TER WIT% DG7T #OR IEC N$M"ER.

REGI&TRATION WIT% 7ORT

01 e6%ort or im%ort sha$$ e made y the registered Ehead

offi#e of the #om%$aint to the $i#ensing authority under whose

jurisdi#tion, the registered offi#e in #ase of other fa$$s in the 'Aayat

0iryaat form.

1n$y one I5C wou$d e issued against a sing$e /A0 numer .the

$i#ensing authority #on#erned sha$$ e issue an I5C numer. a #o%y of

su#h I5C numer sha$$ e a%%$i#ation form.

A #onso$idated statement of I5C numers issued y the $i#ensing

authority sha$$ e sent to the offi#es of the e6#hange #ontro$ de%artment

of the 3I .an I5C numer a$$otted to an a%%$i#ant sha$$ e "a$id for a$$

its ran#hes Edi"ision Eunits Efa#tories . 2here an I5C numer is $ost or

miss %$a#ed, the issuing authority may #onsider re>uest for grant of a

.6


37/101

du%$i#ate #o%y of I5C numer, if a##om%anied y an affida"it. If an

I5C ho$der does not wish to o%erate the a$$otted numer, he may

surrender the same y informing the issuing authority sha$$

immediate$y #an#e$ the same and e$e#troni#a$$y transmit is to F* for

transformation to the #ustoms and regiona$ $i#ensing authority (3A).

6- To register +it E7C for RCMC num9er 5

Registration +it port

An e6%orter may register and e#ome a memer of e6%ort

%romotion #oun#i$ (5/C) on eing admitted to memershi%. *he

a%%$i#ant sha$$ e granted with registration .#ummemershi%

#ertifi#ate (3CMC)

1f the 5/C #on#erned, suje#t to su#h terms and #onditions as may e

s%e#ified in this eha$f, in #ase an e6%orter desire to get registration as

manufa#ture e6%orter, he sha$$ furnish e"iden#e to that effe#t.

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38/101

/ros%e#ti"e E %otentia$ e6%orters may a$so, on a%%$i#ation, register and

e#ome an asso#iate memer of an e6%ort %romotion #oun#i$. an

e6%orter desiring to otain a registration #ummemershi% #ertifi#ate

(3CMC) sha$$ de#$ares his main $ine of usiness in the a%%$i#ation

whi#h sha$$ e made to the e6%ort %romotion #oun#i$ (5/C) re$ating to

that $ine of usiness . Howe"er a status ho$der has the o%tion to otain

3CMC from federation of Indian e6%orter7s organi+ation (FI51)

0ot with standing anything stated ao"e e6%orters of drugs J

%harma#euti#a$s sha$$ otain 3CMC

#rom parme'ci* on*y .

In addition ,an e6%orter has the o%tion to otain an 3CMC

from FI51 or any other 5/C .if the %rodu#ts e6%orted y him re$ated to

those 5/C7S , if the e6%ort %rodu#t issue that is not #o"ered y any

5/C ,3CMC in res%e#t thereof may e issued y FI51 .

8- REGI&TRATION WIT% &ALE& TA? A$T%ORITIE& 5

.


39/101

56%orters are e6em%ted from %ayment of sa$es ta6

e6em%tion #an e a"ai$a$e on$y when the e6%orter has sa$es ta6

registration numer.

CENTRAL E?CI&E REGI&TRAION 5

For the administration of the #entra$ e6#ise a#t 8B


40/101

) *he who$e sa$e %ur#hases or sa$e (whether on his own a##ount or

as ro&er or #ommission agent) or the storage of any s%e#ified

goods. *o the #entra$ e6#ise tariff a#t 8B=9(9 of 8B=@) sha$$ get

himse$f registered with the %ro%er offi#e in su#h manner as may

e %res#ried.For a$$ the %ra#ti#a$ %ur%oses, the $ega$ %ro"isions #ontained in

ru$e B of the #entra$ e6#ise ru$es, 4??4 go"ern the s#heme of

registration .*his ru$es is re%rodu#ed the e$ow.

Registration=

8) 5"ery %erson, who %rodu#es, manufa#turers7 #arries on trade,

ho$ds %ri"ate store room or warehouse or otherwise uses

e6#isa$e goods, sha$$ get registered, %ro"ided that a

registration otained under ru$e 8< of the #entra$ e6#ise ru$es,

4??8 sha$$ e deemed to e as "a$id as the registration made

under this su ru$e for the %ur%ose of these ru$es.4) *he oard may y notifi#ation and suje#t to su#h #onditions

or $imitations as may e s%e#ified in su#h notifi#ation, s%e#ify

%ersons who may not re>uire su#h registration.;) 3egistration under su ru$e (8) sha$$ e suje#t to su#h

#onditions safe guards and %ro#edure as may e s%e#ified y

notifi#ation y the oard.

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41/101

ConditionsB &afeguards and procedures for registrations!

*he #entra$ oard of e6#ises #ustoms has s%e#ified #ertain

#onditions, safeguards and %ro#edures for registration of a

%erson y notifi#ation under #entra$ e6#ise ru$e B in the

s%e#ified #ases.,- App*ication for registration.

5"ery %erson s%e#ified under suru$e (8) of

ru$e B, un$ess e6em%ted from doing so y the oard under

su ru$e B sha$$ get him se$f registered with the

(jurisdi#tiona$ de%uty or assistant #ommissioner of #entra$

e6#ise ) y a%%$ying in the form s%e#ified .

4) Registration of different premises of te same registered

person If the %erson has more than one remises re>uiring

registration, se%arate registration #ertifi#ate sha$$ e

otained for ea#h of su#h %remises.

2- Registration certificate and num9er 5

/1


42/101

It sha$$ e granted within days of the re#ei%t of

du$y #om%$ete a%%$i#ation.

4- Transfer of 9usiness 5 2hen a registered %erson transferred his usiness

to another %erson, the transferee sha$$ get himse$f registered

a fresh.

6- Cange in te constitution 5

2here a registered %erson is a firm or

#om%any or asso#iation of %ersons, any #hange in the

#onstitution of firm #om%any or asso#iation sha$$ e

intimated to the jurisdi#tiona$ #entra$ e6#ise offi#er within

;?dayes of su#h #hange.

8- De. registration 5 5"ery registered %erson who #ases to #arry on the

o%eration for whi#h he is registered ,sha$$ deregistered

himse$f y ma&ing a de#$aration in the form and de%ositing

his registration #ertifi#ate with su%er indent of #entra$

e6er#ise

:- REOCATION OR &$&7ENTIO O#

REGI&TRATION 5

/2


43/101

A registration #ertifi#ate granted under this ru$e may

e re"o&ed or sus%ends y the assistant #ommissioner of

#entra$ e6#ise or the de%uty #ommissioner of #entra$ e6#ise,

if the ho$der of su#h #ertifi#ate or any %erson in his

em%$oyment is found to ha"e #ommitted ran#h of any of

the %ro"isions of the a#t or the ru$es made there under or

has een #on"i#ted of an offen#e under se#tion 8@8, read

with se#tion 8?B or with se#tion 88@ of the Indian %ena$

#ode (


44/101

Under this system, the manufa#turer initia$$y

%ays the duty and the #$aims the refund

56%ort /ri#ing and Costing

56%ort %ri#ing shou$d e differen#e ate from e6%ort #osting %ri#e is

what we offer to the #ustomer. Cost is the %ri#e that we %as$in#ur for

the %rodu#t. /rodu#t in#$udes our %rofit margin,7 #ost in#$udes on$y

e6%enses we ha"e in#urred e6%ort %ri#ing is the most im%ortant too$ for

%romoting sa$es and fa#ing internationa$ #om%etition. *he %ri#e has to

e rea$isti#a$$y wor&ed out ta&ing into #onsideration a$$ e6%ort enefits

and e6%enses. Howe"er there is no fi6ed formu$a for su##essfu$ e6%ort

%ri#ing. It wi$$ differ from e6%orter to e6%orter de%ending u%on

whate"er the e6%orter is a mer#hant e6%orter or a manufa#turer.

56%orter or e6%orting through a #ana$i+ing agen#y. ou #an sti$$ e

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45/101

#om%etiti"e with higher %ri#es ut with etter de$i"ery %a#&age or other

ad"antages.

our %ri#es wi$$ e determined y the fo$$owing fa#tors.

• 3ange of %rodu#ts offered

• /rom%t de$i"eries and #ontinuity in su%%$y.

• After sa$es ser"i#es in %rodu#t $i&e ma#hine too$s , #onsumer

dura$es

• /rodu#t differentiation and rand image• Fre>uen#y of %ur#hase.

• /resumed re$ationshi% etween >ua$ity and %ri#e.

• S%e#ia$ist "a$ue.

• oods and gift items

• Credit offered.

• /referen#e or %rejudi#e for %rodu#ts originating from %arti#u$ar

sour#e• Aggressi"e mar&eting and sa$es %romotion

• /rom%t a##e%tan#e and sett$ements of #$aims

• Uni>ue "a$ue goods and gift items

E'port costing 5

Some of the major #ost items of #ost areas as under

• Materia$ #ost

• aour #ost

• ire#t e6%enses

/5


46/101

• Fa#tory o"erheads

• Sa$es and distriution #ost

• /a#&aging #ost

• Cargo hand$ing #harges

• Freight #harges

• Marine insuran#e

• Commission to agent aroad

56%ort #osting is asi#a$$y #ost a##ountants jo .it #onsists of fi6ed #ost

and "aria$e #ost #om%rising "arious e$ements. It is ad"isa$e to

%re%are an e6%ort #osting sheet for e"ery e6%ort %rodu#t

INCO TERM0& 5

*he de#ision for e6%orts de%ends u%on the terms of

de$i"ery. *hese are se"ered su#h trade terms that are used at

internationa$ $e"e$. In#o terms des#rie the most #ommon$y used term

of trade in #ommer#ia$ #ontra#ts and are %u$ished y internationa$

#hamers of #ommer#e (ICC). *hese terms aim to standardi+e the

termino$ogy used internationa$ trade.

*he aim is to e$iminate douts etween uyer and se$$er y-

• efining the method of de$i"ery of the goods y the se$$er

• Stating e6a#t$y what #harges are in#$uded in the se$$er7s %ri#e.

/6


47/101

• efining the res%onsii$ities of the %arties to the #ontra#t of sa$e

for the arrangement of insuran#e, shi%%ing and %a#&ing the use of

In#o terms are a%%$ied toA transa#tion, it must e in#or%orata$ y s%e#ifi# referen#es in the

#ontra#t.In#o terms ("arious #osts in#urred during shi%ment)Maritime and in$and waterway trans%ort on$y-

• Free A$ongside shi%(FAS)

• Free on oard (F1)

• Cost J Freight(CJ3)

• Cost Insuran#e and Freight (CIF)

• e$i"ery 56>uay(5L)

• e$i"ery 56Shi% (5S)

Mu$timoda$ Mode of *rans%ort

• Free #arrier (FC)

• Carriage %aid to (C/*)

• Carriage and Insuran#e %aid to (CI/)

• e$i"ered at frontier (A$$ modes)

• e$i"er uty %aid (A$$ modes)

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48/101

E'port #inance

*he e6%orter may re>uire short term, medium term or $ong term finan#e

de%ending u%on the ty%es of goods to e e6%orted and the terms of

statement offered to o"erseas uyer.

*he shortterm finan#e is re>uired to meet F+or(ing capita* needs.

*he wor&ing #a%ita$ is used to meet regu$ar and re#urring needs of a

usiness firm. *he regu$ar and re#urring needs of a usiness firm refer

to %ur#hase of raw materia$, %ayment of wages and sa$aries, e6%enses

$i&e %ayment of rent, ad"ertising et#.

*he e6%orter may a$so re>uire Fterm finance! *he term finan#e or

term $oans, whi#h is re>uired for medium and $ong term finan#ia$ needs

su#h as %ur#hase of fi6ed assets and $ong term wor&ing #a%ita$.

/


49/101

56%ort finan#e is shortterm wor&ing #a%ita$ finan#e a$$owed to an

e6%orter. Finan#e and #redit are a"ai$a$e not on$y to he$% e6%ort

%rodu#tion ut a$so to se$$ to o"erseas #ustomers on #redit.

7RE.&%I7MENT #INANCE

MEANING=

/reshi%ment is a$so referred as Fpac(ing credit! It is wor&ing #a%ita$

finan#e %ro"ided y #ommer#ia$ an&s to the e6%orter %rior to shi%ment

of goods. *he finan#e re>uired to meet "arious e6%enses efore

shi%ment of goods is #a$$ed %reshi%ment finan#e or %a#&ing #redit.

DE#INITION=

Finan#ia$ assistan#e e6tended to the e6%orter from the date of re#ei%t of

the e6%ort order ti$$ the date of shi%ment is &nown as %reshi%ment

#redit. Su#h finan#e is e6tended to an e6%orter for the %ur%ose of

%ro#uring raw materia$s, %ro#essing, %a#&ing, trans%orting,

warehousing of goods meant for e6%orts.

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50/101

IM7ORTANCE O# #INANCE AT 7RE.&%I7MENT &TAGE=

♦ *o %ur#hase raw materia$, and other in%uts to manufa#ture goods.

♦ *o assem$e the goods in the #ase of mer#hant e6%orters.

♦ *o store the goods in suita$e warehouses ti$$ the goods are shi%%ed.

♦ *o %ay for %a#&ing, mar&ing and $ae$ing of goods.

♦ *o %ay for %reshi%ment ins%e#tion #harges.

♦ *o im%ort or %ur#hase from the domesti# mar&et hea"y ma#hinery

and other #a%ita$ goods to %rodu#e e6%ort goods.

♦ *o %ay for #onsu$tan#y ser"i#es.

♦ *o %ay for e6%ort do#umentation e6%enses.

TH7E& O# 7RE.&%I7MENT #INANCE

• /a#&ing #redit

• Ad"an#e against #he>ues Edraft et# re%resenting ad"an#e

%ayments.

50


51/101

/reshi%ment finan#e is e6%e#ted in the fo$$owing forms-/a#&ing #redit in Indian ru%ees/a#&ing #redit in foreign #urren#y

Reuirement for getting pac(ing credit 5

*his fa#i$ity is %ro"ided to an e6%orter who satisfies the fo$$owing

#riteria

• A ten digit im%ortere6%orter #ode numer a$$otted y

F*.

• 56%orter shou$d not e in the #aution $ist of 3I.

• If the goods to e e6%orted are not under 1 (o%en

genera$ $i#ense).the e6%orter shou$d ha"e the re>uired

$i#ense %ermit to e6%ort the goods.

/a#&ing #redit fa#i$ity #an e %ro"ided to an e6%orter on %rodu#tion of

the fo$$owing e"iden#e to the an&.

8. forma$ a%%$i#ation for re$ease the %a#&ing #redit with underta&ing to

the effe#t that the e6%orter wou$d e shi% the goods within sti%u$ated

51


52/101

due date and sumit the re$e"ant shi%%ing do#uments to the an&s

within %res#ried time $imit .

4. Firm order or irre"o#a$e IEC or against #a$e Efa6 message e6#hange

etween the e6%orter and the uyer.

;. i#ensed issued y F* if the goods to e e6%orted fa$$ under the

restri#ted or #ana$i+ed #ategory. If the item fa$$s under >uota system.

/ro%er >uota a$$otment %roof needs to e sumitted.

E*igi9i*ity .

/re shi%ment #redit is on$y issued to that e6%orter who has the

e6%ort order in his own name .howe"er ,as an e6#e%tion ,finan#ia$

institution #an a$so grant #redit to a third %arty manufa#turer or su%%$ier

of goods who does not ha"e e6%ort orders in their own name .

In this #ase some of the res%onsii$ity of meeting the e6%ort

re>uirements ha"e een out sour#ed to them y the main e6%orter .in

other #ases where the e6%ort order is di"ided etween two or more

than two e6%orters, %reshi%ment #redit #an e shared etween them.

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$ANT$M O# #INANCE .

*he >uantum of finan#e is granted to an e6%orter against the C or an

e6%e#ted order. *he on$y guide$ine %rin#i%$e is the #on#e%t of need

ased finan#e. an&s determine the %er#entage of margin, de%ending

on fa#tors su#h as-

• *he nature of order.

• *he nature of the #ommodity.• *he #a%ai$ity of e6%orter to ring in the re>uisite #ontriution.

Different stages of pre sipment finance

Appraisa* and sanction of *imits.

efore ma&ing any an a$$owan#e for #redit fa#i$ities an&s

need to #he#& the different as%e#ts $i&e %rodu#t %rofi$e ,%o$iti#a$ and

e#onomi# detai$s aout #ountry .a%art from these things , the an& a$so

$oo&s in to the status re%ort of the %ros%e#ti"e uyer , with whom the

e6%orter %ro%oses to do the usiness . *o #he#& a$$ these information,

an&s #an see& the he$% of institution $i&e 5CC or internationa$

#onsu$ting agen#ies $i&e dun and street et#.

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Te 9an( e'tended te pac(ing credit faci*ities after ensuring te

fo**o+ing=

a) *he e6%orter is a regu$ar #ustomer, a ona fide e6%orter and has a

goods standing in the mar&et. ) 2hether the e6%orter has the ne#essary $i#enses and >uota %ermit

(as mentioned ear$ier) or not.#) 2hether the #ountry with whi#h the e6%orter wants to dea$ is

under the $ist of restri#ted #o"er #ountries (3CC) or not.

DI&"$R&EMENT O# 7ACKING CREDIT=

After %ro%er san#tioning of #redit $imits, the disursing

ran#h shou$d ensure-

*o inform 5CC the detai$s of $imit san#tioned in the %res#ried

format within ;? days from the date of san#tion.

a) *o #om%$ete %ro%er do#umentation and #om%$ian#e of the terms of

san#tion i.e. #reation of mortgage et#.

) *here shou$d e an e6%ort order or a $etter of #redit %rodu#ed y the

e6%orter on the asis of whi#h disursements are norma$$y a$$owed.

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7O&T.&%I7MENT #INANCE

MEANING=

/ost shi%ment finan#e is %ro"ided to meet wor&ing #a%ita$ re>uirements

after the a#tua$ shi%ment of goods. It ridges the finan#ia$ ga% etween

the date of shi%ment and a#tua$ re#ei%t of %ayment from o"erseas uyer

thereof. 2hereas the finan#e %ro"ided after shi%ment of goods is #a$$ed

%ostshi%ment finan#e.

DE#ENITION=

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Credit fa#i$ity e6tended to an e6%orter from the date of shi%ment of

goods ti$$ the rea$i+ation of the e6%ort %ro#eeds is #a$$ed /ostshi%ment

Credit.

IM7ORTANCE O# #INANCE AT 7O&T.&%I7MENT &TAGE=

♦ *o %ay to agentsEdistriutors and others for their ser"i#es.

♦ *o %ay for %u$i#ity and ad"ertising in the o"er seas mar&ets.

♦ *o %ay for %ort authorities, #ustoms and shi%%ing agents #harges.

♦ *o %ay towards e6%ort duty or ta6, if any.

♦ *o %ay towards 5CC %remium.

♦ *o %ay for freight and other shi%%ing e6%enses.

♦ *o %ay towards marine insuran#e %remium, under CIF #ontra#ts.

♦ *o meet e6%enses in res%e#t of after sa$e ser"i#e.

♦ *o %ay towards su#h e6%enses regarding %arti#i%ation in e6hiitions

and trade fairs in India and aroad.

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♦ *o %ay for re%resentati"es aroad in #onne#tion with their stay

oard.

#inancing for 3arious types of e'port "uyer0s credit

/ost shi%ment finan#e #an e %ro"ided for tree types of e6%ort-

7ysica* e'ports=

Finan#e is %ro"ided to the a#tua$ e6%orter or to the

e6%orter in whose name the trade do#uments are transferred.

• Deemed e'port -

Finan#e is %ro"ided to the su%%$ier of the goods whi#h

are su%%$ied to the designed agen#ies.

Capita* goods and proJect e'ports=.Finan#e is sometimes e6tended in the name of o"erseas

uyer. *he disursa$ of money is dire#t$y made to the domesti#

e6%orter.

Types of post sipment finance

*he %ost shi%ment finan#e #an e #$assified as-

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8) 56%ort i$$ %ur#hased Edis#ounted.4) 56%ort i$$ negotiated;) Ad"an#e against e6%ort i$$s sent on #o$$e#tion asis.


59/101

8. *he ris& of non%erforman#e y the e6%orter, when he is una$e

to meet his terms and #onditions. In this #ase, the issuing an&s

do not honor the $etter of #redit.4. *he an& a$so fa#es the do#umentary ris& where the issuing

an& refuses to honour its #ommitment .So, it is im%ortant for the

negotiating an& and the $ending an& to %ro%er$y #he#& a$$ the

ne#essary do#uments efore sumission.;. Ad"an#e Against 56%ort i$$s Sent on #o$$e#tion asis

i$$s #an on$y e sent on #o$$e#tion asis, if the i$$s drawn under

C ha"e some dis#re%an#ies. Sometimes e6%orter re>uests the

i$$ to e sent on the #o$$e#tion asis, anti#i%ating the

strengthening of foreign #urren#y. an&s may a$$ow ad"an#e

against these #o$$e#tion i$$s to an e6%orter with a #on#essiona$

rates of interest de%ending u%on the transit %eriod in #ase of /

i$$s and transit %eriod %$us usan#e %eriod in #ase of usan#e

i$$ .*he transit %eriod is from the date of a##e%tan#e of the

e6%ort do#uments at the an&s ran#h for #o$$e#tion and not from

the date of ad"an#e.< .Ad"an#e Against 56%ort on Consignments asis

an& may #hoose to finan#e when the goods are e6%orted on

#onsignment asis at the ris& of the e6%ort for sa$e and e"entua$

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%ayment of sa$e %ro#eeds to him y the #onsignee. Howe"er, in

this #ase an& instru#ts the o"erseas an& to de$i"er the sa$e

%ro#eeds y s%e#ified date, whi#h shou$d e within the %res#ried

date e"en if a##ording to the %ra#ti#e in #ertain trades a i$$ for

%art of the estimated "a$ue is drawn in ad"an#e against the

e6%orts.

#or any amount= 2or&ing rou%.

• $pto Rs! 6> crores= S#hedu$ed Commer#ia$ an&s.

• $pto Rs! />> crores= 56im an&.

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• A9o3e Rs! />> crores= 2or&ing rou%.

&ERICE& "ID& CONTRACT&

On Cas Terms

• $pto Rs! 6 crores= S#hedu$ed Commer#ia$ an&s.

• $pto Rs! ,> crores= 56im an&.

• A9o3e Rs! ,> crores= 2or&ing rou%.

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"ANKING TRAN&ACTION IN E?7ORT&

2hen e"er there is internationa$ trade and inf$ow Eoutf$ow of foreign

e6#hange, there must e some methods of sett$ements for the

transa#tion. *he need for sett$ement $eads to o%ening of a##ounts y

an&s in other #ountries whi#h are #a$$ed 0AS*31 and 1S*31

a##ount as under

NO&TRO.

01S*31 A##ount means '1ur a##ount with you. *he a##ount

that a home an& maintains with a foreign an& is &nown as 01S*31

a##ount.

For e6am%$e, ha&a an&7s US o$$ar a##ount maintained with City

an& 0A 0ew or&, USA is 01S*31 A##ount of ha&a an&

2hen a an& in India issues a draft %aya$e aroad in USA is drawn on

an& of new or& .the draft when %resented for %ayment in new or& is

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deited to the 01S*31 a##ount an& of India and %aid to the

enefi#iary .simi$ar$y a$$ %ayment %ro#eeds are re#ei"ed through this

a##ount and a$$ %ayment of im%ort transa#tion are %aid through this

a##ount. an& in India are %ermitted free$y to o%en one or more su#h

a##ount as %er their re>uirement with their ran#hes or #orres%onden#e

an&s aroad .o%ening of su#h a##ounts must e ad"ised to 3I y a

se%arate $etter.

O&TRO ACCO$NT=

1S*31 A##ount means 'your a##ount with us. *he a##ount

maintained y a foreign an& is &nown as 1S*31 a##ount. 2e #an

term 01S*31 a##ount when referred to its a##ount ho$der (foreign

an&) y home an& as 1S*31 a##ount.

For e6am%$e, State an& of India7s ta&a a##ount maintained with ha&a

an& is a 1S*31 a##ount of ha&a an&.

Any draft issued y an& of 0ew or& and drawn on an& is %aid to

enefi#iary y an& of India to the deit of this a##ount.

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MIRROR.

*he an&s in India maintained the re%$i#a of the 01S*31

a##ount they maintain with an&s aroad and the same are #a$$ed

MI3313 a##ount he$%s in re#on#i$iation of the a##ount.

Foreign e6#hange mar&et D

*here are three ty%es of mar&ets

,- Mercant mar(ets 5

It is the retai$ mar&et with in"o$"es the transa#tion of

#ustomer with authori+ed dea$ers (A7S)/- Inter 9an( mar(et .

*he mar&et where transa#tion ta&es %$a#e etween

authori+ed dea$ers (A7S) within the #ountry.

2- Internationa* mar(et 5

*he mar&et where transa#tion ta&es %$a#e etween

an&s7s in different #ountries

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*he ase for a$$ these ty%e of mar&ets is need to s>uare off the

%osition of authori+ed dea$ers (A7S).authori+ed dea$ers are

%ermitted to retain a$an#es on$y u% to a #ertain $e"e$.

"ANK #ORMALITI&E IN T%E RALI&ATION O# E?7ORT

7ROCEED&

/ayments against e6%ort shou$d e rea$i+ed on$y through

authori+ed dea$ers (#ommer#ia$ an& a$$owed to dea$ in foreign

e6#hange). 0o %ayment #an e re#ei"ed e"en through an& draft

and #he>ues un$ess e6em%ted otherwise y 3I

Fo$$owing are the ste%s in rea$i+ing e6%ort %ro#eeds

8) Approacing 9an( D After dis%at#h of goods either y sea, or y

air, the e6%orter shou$d a%%roa#h his an& (Authori+ed

dea$ers) with a forma$ re>uest to rea$i+e %ro#eed from the

foreign uyer.It is o$igatory to sumit the shi%%ing do#uments to an

authori+ed dea$er within 48 days of the date of shi%ment in

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India the e6%orter ha"e to rea$i+e the fu$$ "a$ue of e6%orts

within 8=? days from the date of shi%ment. 2here it is not

%ossi$e to rea$i+e the sa$e %ro#eeds within the %res#ried

%eriod.

/- &u9mission of documents to te 9an( 5

*he e6%orter shou$d sumit the

fo$$owing do#uments

i) i$$ of e6#hange (first and se#ond )ii) Fu$$ set of i$$ of $eading Eairways i$$ in #ase of air

shi%ment.iii) Commer#ia$ in"oi#e #o%ies

i") /a#&ing $ist") Certifi#ate of origin"i) Insuran#e %o$i#y"ii) Ins%e#tion #ertifi#ate"iii) Shi%%ing i$$ e6#hange #ontro$ #o%yi6) 1ther re$e"ant do#uments

2- Latter of indemnity.

If the e6%orter wants immediate %ayment

from his an&ers then his an&ers may %ro"ide ad"an#e

%ayments on$y when the e6%orter signs an indemnity $etter.

*he im%$i#ations or indemnity $etter is that in the e"ent of

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refusa$ of %ayment y the issuing an& in res%e#t of C. *hen

the negotiating an& #an as& the e6%orter to %ay a#& money

ad"an#ed a$ong with ne#essary #harges.

DI&7ATC% O# DOC$MENT& 5

efore the transa#tion of do#uments for

negotiation E#o$$e#tion the an& e6amine them through with

referen#e to the terms and #onditions of the uyer7s order

.$etter of #redit and the $aws re$ating to foreign e6#hange

#ontro$ .if after s#rutiny , the do#uments are in order the an&

dis%at#hes them to the o"erseas ran#h E#orres%ondent ran#h

as ear$y as %ossi$e . *he o"erseas ran#h of the an& then

sumits the do#uments to the im%orter an& and the im%orters

an& hands it o"er to im%orter.

Metods of rea*i@ation 5

For %ur%ose of re#ei"ing %ayments

against e6%ort #ountries ha"e een di"ided in to grou%s.8) Asian #$earing union (ACU) D

Consisting of ang$adesh, urma, /a&istan, Iran and

Sri$an&a. *he %ayment is a$$owed in ru%ees from the

a##ount of an& situated in any #ountry of this grou%

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4) A$$ other #ountries, where the %ayment is a$$owed in any

%ermitted #urren#y.

7rocessing of e'cange contro* After rea$i+ing the e6%ort %ro#eeds

, the e6%orter s an& ma&es ne#essary entries in the

a##ount of the e6%orter the amount mentioned in the

origina$ e6#hange #ontro$ #o%y of shi%%ing i$$ and the

amount rea$i+ed y the an& must mat#h.

7romotiona* Measures

Assistance to &tates for Infrastructure De3e*opment of E'ports

A&IDE-

*he State o"ernments sha$$ e en#ouraged to %arti#i%ate in

%romoting e6%orts from their res%e#ti"e States. For this %ur%ose,

e%artment of Commer#e has formu$ated a s#heme #a$$ed ASI5.

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Suita$e %ro"ision has een made in the Annua$ /$an of the

e%artment of Commer#e for a$$o#ation of funds to the states on the

twin #riteria of gross e6%orts and the rate of growth of e6%orts.

*he States sha$$ uti$ise this amount for de"e$o%ing infrastru#ture su#h

as roads #onne#ting %rodu#tion #enters with the %orts, setting u% of

In$and Container e%ots and Container Freight Stations, #reation of

new State $e"e$ e6%ort %romotion industria$ %ar&sE+ones, augmenting

#ommon fa#i$ities in the e6isting +ones, e>uity %arti#i%ation in

infrastru#ture %roje#ts, de"e$o%ment of minor %orts and jetties,

assistan#e in setting u% of #ommon eff$uent treatment fa#i$ities,

stai$i+ing %ower su%%$y and any other a#ti"ity as may e notified y

e%artment of Commer#e from time to time.

Mar(et Access Initiati3e MAI-

*he Mar&et A##ess Initiati"e (MAI) s#heme is intended to %ro"ide

finan#ia$ assistan#e for medium term e6%ort %romotion efforts with a

shar% fo#us on a #ountry and %rodu#t.

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*he finan#ia$ assistan#e is a"ai$a$e for 56%ort /romotion Coun#i$s,

Industry and *rade asso#iations, Agen#ies of State o"ernments,

notified from time to time, Indian Commer#ia$ Missions aroad and

other e$igi$e entities as may e

A who$e range of a#ti"ities #an e funded under the MAI s#heme.

*hese in#$ude mar&et studies, setting u% of showroomE warehouse,

sa$es %romotion #am%aigns, internationa$ de%artmenta$ stores, %u$i#ity

#am%aigns, %arti#i%ation in internationa$ trade fairs, , rand %romotion,

registration #harges for %harma#euti#a$s and testing #harges for

engineering %rodu#ts et#. 5a#h of these e6%ort %romotion a#ti"ities #an

re#ei"e finan#ia$ assistan#e from the o"ernment ranging from 49N to

8??N of the tota$ #ost de%ending u%on the a#ti"ity and the

im%$ementing agen#y, as indi#ated in the detai$ed guide$ines.

Mar(eting De3e*opment Assistance MDA-

*he Mar&eting e"e$o%ment Assistan#e (MA) S#heme is intended to

%ro"ide finan#ia$ assistan#e for a range of e6%ort %romotion a#ti"ities

im%$emented y e6%ort %romotion #oun#i$s, industry and trade

asso#iations on a regu$ar asis e"ery year.

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As %er the re"ised MA guide$ines with effe#t from 8st A%ri$,4??<

assistan#e under MA is a"ai$a$e for e6%orters with annua$ e6%ort

turno"er u%to 3s 9 #rores.

*hese in#$ude %arti#i%ation in *rade Fairs and uyer Se$$er meets

aroad or in India, e6%ort %romotion seminars, et#

Further, assistan#e for %arti#i%ation in *rade Fairs aroad and tra"e$

grant is a"ai$a$e to su#h e6%orters if they tra"e$ to #ountries in one of

the four Fo#us Areas, su#h as , atin Ameri#a, Afri#a, CIS 3egion,

AS5A0 #ountries, Austra$ia and 0ew Oea$and.

For %arti#i%ation in trade fairs, et#, in other areas finan#ia$ assistan#e

without tra"e$ grant is a"ai$a$e.

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Meeting Lega* e'penses for Trade re*ated matters

Finan#ia$ assistan#e wou$d e %ro"ided to deser"ing e6%orters on the

re#ommendation of 56%ort /romotion Coun#i$s for meeting the #ost of

$ega$ e6%enses re$ating to trade re$ated matters

To+ns of E'port E'ce**ence

A numer of towns in s%e#ifi# geogra%hi#a$ $o#ations ha"e emerged as

dynami# industria$ #$usters #ontriuting handsome$y to India7s e6%orts.

It is ne#essary to grant re#ognition to these industria$ #$usters with a

"iew to ma6imi+ing their %otentia$ and ena$ing them to mo"e higher in

the "a$ue #hain and ta% new mar&ets.

Se$e#ted towns %rodu#ing goods of 3s. 8??? #rore or more wi$$ e

notified as *owns of 56%orts 56#e$$en#e on the asis of %otentia$ for

growth in e6%orts. Howe"er for the *owns of 56%ort 56#e$$en#e in the

Hand$oom, Handi#raft, Agri#u$ture and Fisheries se#tor, the thresho$d

$imit wou$d e 3s 49? #rores.

Common ser"i#e %ro"iders in these areas sha$$ e entit$ed for the

fa#i$ity of the 5/C s#heme.

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*he re#ogni+ed asso#iations of units wi$$ e a$e to a##ess the funds

under the Mar&et A##ess Initiati"e s#heme for #reating fo#used

te#hno$ogi#a$ ser"i#e.

Further su#h areas wi$$ re#ei"e %riority for assistan#e for re#tifying

identified #riti#a$ infrastru#ture ga%s from the ASI5 s#heme.

*he notified towns of e6%ort e6#e$$en#e are $isted in A%%endi6 ua$ity for their

%rodu#ts. *he Centra$ o"ernment wi$$ e6tend su%%ort and assistan#e

to *rade and Industry to $aun#h a nationwide %rogrammed on >ua$ity

awareness and to %romote the #on#e%t of tota$ >ua$ity management.

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Test %ouses

*he Centra$ o"ernment wi$$ assist in the moderni+ation

and u% gradation of test houses and $aoratories in order to ring them

at %ar with internationa$ standards.

ua*ity Comp*aints Disputes

*he 3egiona$ SuCommittee on Lua$ity Com%$aints (3SCLC)

set u% at the 3egiona$ 1ffi#es of the ire#torate enera$ of Foreign

*rade sha$$ in"estigate >ua$ity #om%$aints re#ei"ed from foreign

uyers.

Trade disputes affecting trade re*ations

If it #omes to the noti#e of the ire#tor enera$ of Foreign *rade or he

has reason to e$ie"e that an e6%ort or im%ort has een made in a

manner that

i) Is gra"e$y %rejudi#ia$ to the trade re$ation India with any

foreign #ountry.

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ii) Is gra"e$y %rejudi#ia$ to the interest of other %ersons engaged in

e6%orts or im%orts

iii) Has rought dis%ute to the #ountry

*he dire#tor genera$ of foreign trade may ta&e a#tion against the

e6%orter or im%orter #on#erned in a##ordan#e with the %ro"ision of

the a#t, the ru$es and orders made there under.

I&%E&% KRI&%I $7A HOANA &7ECIAL

AGRIC$LT$RAL 7ROD$CE &C%EME-

O9Jecti3e .

*he oje#ti"e of the s#heme is to %romote e6%ort of fruits, "egeta$es,

f$owers, minor forest %rodu#e, and their "a$ue added %rodu#ts, y

in#enti"i+ing e6%orters of su#h %rodu#ts

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Entit*ement .

56%orters of su#h %rodu#ts sha$$ e entit$ed for duty #redit s#ri%

e>ui"a$ent to 9N of the F1 "a$ue of e6%orts for ea#h $i#ensing year

#ommen#ing from 8st A%ri$, 4??


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&pecia* 7ro3ision

o"ernment reser"es the right in %u$i# interest, to s%e#ify from time

to time the e6%ort %rodu#ts whi#h sha$$ not e e$igi$e for #a$#u$ation of

entit$ement.

CA&E &T$DH

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, TRADE O# INDIA 5NEWELAND />>,./>>;-

4 ,! "i*atera* TradeB Economic and Cooperation

Re*ations

*his #ha%ter $oo&s at the e6isting India0ew Oea$and i$atera$ trade

re$ationshi% as we$$ as tou#hing on other as%e#ts of the i$atera$

re$ationshi%. It #onsiders the e6tent or strength of #urrent i$atera$ trade

$in&ages and the stai$ity of su#h $in&ages.

i$atera$ trade statisti#s re%orted y any two #ountries #an at times

differ. *hese differen#es arise for two reasons. First, when e6%orts are

re>uired to tra"e$ through an intermediary #ountry en route to their fina$

destination, they may e #ounted as an e6%ort to that intermediary

#ountry instead. Se#ond, the #ountries7 #ustoms authorities may #$assify

s%e#ifi# %rodu#ts different$y whi#h wi$$ #reate statisti#a$ dis#re%an#ies.

*he so$ution to this %ro$em used in this study is to use im%ort statisti#s

from ea#h #ountry, whi#h are genera$$y agreed to e more a##urate.

*herefore in this study, Indian e6%orts are des#ried using 0ew

Oea$and im%ort data and "i#e "ersa.


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8 ,!,! Goods

Histori#a$$y the i$atera$ mer#handise trading re$ationshi% etween

India and 0ew Oea$and has een underde"e$o%ed. *he re#ent trading

%erforman#e is eginning to #hange this %osition. Sin#e 4??4, i$atera$

mer#handise trade has near$y tri%$ed in si+e from USP8@=.4 mi$$ion to

USP


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a$so im%$ies that trade etween the two #ountries is growing at a faster

rate than ea#h #ountry7s tota$ trade.

0ew Oea$and7s sustained e#onomi# growth has fue$$ed demand for

im%orts from India, whi#h ha"e grown at an a"erage rate of 8.? N %er

year etween 4??4 and 4??. rowth in India7s e6%orts to 0ew

Oea$and has een #onsistent$y higher than from 0ew Oea$and7s other

sour#es of im%orts. *his unders#ores the %otentia$ for this %art of the

trading re$ationshi% to e e6%anded further.

8 ,!,!, . India0s E'ports to Ne+ ea*and

India7s e6%ort %rofi$e to 0ew Oea$and is di"erse. *he &ey %rodu#ts at

the HS< $e"e$ are diamonds, $inen, medi#ation, jewe$$ery, and

monument stone. 1n a"erage, ea#h year etween Gune 4??< and Gu$y

4??, these %rodu#ts #o$$e#ti"e$y on$y a##ounted for USP;


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India7s e6%orts to 0ew Oea$and. *his is a good indi#ator of the road

%rofi$e of India7s e6%orts.

Howe"er $e"e$s do not te$$ the who$e story. etween 4??4 and 4??, in

terms of trade weighted growth, a numer of other %rodu#ts a$so

#ontriuted signifi#ant$y to the growth in India7s e6%orts to 0ew

Oea$and. rowth in diamonds and jewe$$ery #ontriuted 84.N of

India7s tota$ e6%ort growth to 0ew Oea$and o"er that %eriod. *he ne6t =

most im%ortant %rodu#ts #ontriuted an additiona$ 4?.8N towards the

tota$ e6%ort growth.

In addition, a numer of other %rodu#ts ha"e a $ower $e"e$ of trade, ut

ha"e shown strong and #onsistent growth etween 4??4 and 4??.

*hese %rodu#ts in#$ude sewing ma#hines, %$asti# %$ates, sheets and

fi$m, ase meta$ fittings and mountings, and semi#ondu#tors. *he

%ersistent growth of these %rodu#ts demonstrates that the growth of

India7s e6%orts to 0ew Oea$and is dri"en y a road range of India7s

e6%ort interests. *his shows great %romise for the i$atera$ trading

re$ationshi% as it #ontinues to de"e$o%.

1


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8 India7s re#ent s%e#ta#u$ar e#onomi# %erforman#e has een we$$

do#umented. *his %erforman#e has $ed to a $arge in#rease in

India7s demand for im%orts. *his in#reased im%ort demand has

generated o%%ortunities for 0ew Oea$and e6%orters. India7s

im%orts from 0ew Oea$and ha"e grown at an a"erage rate of

;8.=N %er year etween Gu$y 4??4 and Gune 4??. *he $argest

year on year gain was etween 4??9 and 4??@, where 0ew

Oea$and7s e6%orts grew =.8N. 2ith India7s e#onomi#

%erforman#e fore#ast to remain roust, there are %ros%e#ts for

further growth for 0ew Oea$and7s e6%orts a$though

a##essEregu$atoryES/S issues wi$$ signifi#ant$y inf$uen#e the

ai$ity for 0ew Oea$and firms to sei+e these o%%ortunities.

4

; ,!,!/ . Ne+ ea*and0s E'ports to India

1"er the $ast fi"e years massi"e growth in the e6%ort of #oa$ and wood

in the rough has #hanged 0ew Oea$and7s e6%ort %rofi$e mar&ed$y. Sin#e

Gu$y 4??4, e6%orts of #oa$ and wood in the rough ha"e grown at an

a"erage rate of =8.=N, and ;B.


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Oea$and is natura$$y aundant in these %rodu#ts, there is s#o%e for this

trend to #ontinue.

/rior to that %eriod of #hange, 0ew Oea$and e6%orted a reasona$y

di"erse range of %rodu#ts to India. *y%i#a$$y, the %rodu#ts whi#h 0ew

Oea$and e6%orts are un%ro#essed goods and ma#hinery whi#h

#ontriute to %rodu#tion %ro#esses within India. 0ew Oea$and7s &ey

e6%orts are in #oa$, wood in the rough, woo$, utter, and s#ra%

a$uminium. 56%orts in these %rodu#ts ha"e a##ounted for ;.=N of

0ew Oea$and7s tota$ e6%orts to India on a"erage sin#e 4??4. As India

#ontinues to grow, there wi$$ e a $arge degree of mutua$ enefit, as

0ew Oea$and wi$$ #ontinue to e a$e to su%%$y "ita$ intermediate and

fina$ %rodu#ts to he$% dri"e India7s e#onomy.

In terms of %rodu#ts7 dire#t share of 0ew Oea$and7s e6%ort growth to

India, energy re$ated %rodu#ts are the dominant #ontriutor. *he growth

in this area has a##ounted for near$y ha$f of 0ew Oea$and7s tota$ e6%ort

growth to India sin#e 4??4. 2ood in the rough, woo$, s#ra% +in# and

s#ra% a$uminium ha"e a$so #ontriuted signifi#ant$y to the growth in

e6%orts.

.


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2hi$e the share of growth has een dominated y #oa$, wood in the

rough and woo$, there are a numer of other %rodu#ts whi#h ha"e

e6hiited "ery strong growth etween 4??4 and 4??. S#ra%

a$uminium, s#ra% iron, and %a%er ha"e on a"erage, dou$ed ea#h year

sin#e 4??4, and are now among 0ew Oea$and7s ten $argest e6%orts.

*here are a numer of %rodu#ts whi#h are not yet dominant in 0ew

Oea$and7s e6%ort %rofi$e, ut ha"e grown strong$y and #onsistent$y

sin#e 4??4. *he e6%orts of these %rodu#ts are now at the $e"e$ whi#h

%rodu#ts $i&e %a%er, s#ra% iron, and s#ra% a$uminium were at in 4??4. A

numer of these are more high$y %ro#essed, te#hni#a$ %rodu#ts su#h as

%arts for e$e#tri#a$ a%%aratuses, $i>uid %um%s, medi#a$ instruments, and

semi#ondu#tors. *his ongoing de"e$o%ment high$ights the di"ersity of

%rodu#ts whi#h 0ew Oea$and has the %otentia$ to e6%ort to India.

*hese numers indi#ate the #onsidera$e %otentia$ for 0ew Oea$and to

#ontriute to India7s ongoing e#onomi# %erforman#e through the e6%ort

of "ita$ intermediate, and fina$ #onsumer %rodu#ts. Continued

de"e$o%ment of the mer#handise trading re$ationshi% #ou$d de$i"er

sustantia$ enefits to oth #ountries.

/


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8 ,!/! &er3ices

Ser"i#es trade re%resents an in#reasing$y im%ortant #hanne$ of i$atera$

e#onomi# engagement etween India and 0ew Oea$and. Howe"er, due

to the inherent #om%$e6ities and #onfidentia$ity issues asso#iated with

measuring i$atera$ ser"i#es trade, it is diffi#u$t to otain a##urate

offi#ia$ statisti#s to >uantify the e6tent of the re$ationshi%.

A##ording$y, we use se#ondary sour#es of data and industry statisti#s as

indi#ators to des#rie the #hanges in the i$atera$ re$ationshi%, su#h as

the numer of student and "isitor arri"a$s re#orded.

As out$ined in #ha%ter 4, se#tion 4.;.4.4, 0ew Oea$and7s g$oa$ ser"i#es

e6%orts are #entred on tourism and edu#ation. 0ew Oea$and7s ser"i#es

e6%ort %rofi$e to India fo$$ows this same %attern.

*he India0ew Oea$and edu#ation re$ationshi% is one that has een

steadi$y growing. Sin#e 4??; the numer of Indian students studying in

0ew Oea$and has in#reased from a%%ro6imate$y =?? students to o"er


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*ourist numers ha"e a$so een growing strong$y in oth dire#tions. In

the year ended Mar#h 4??=, the numer of Indian "isitors to 0ew

Oea$and was near 4;,???. *his was a ;9N in#rease from fi"e years ago

from the year ended Mar#h 4??;. 0ew Oea$anders "isiting India in the

year ended Mar#h 4??= numered 4@,9?? %eo%$e. *his has in#reased

near$y ;??N sin#e the year ending Mar#h 4??;.

2hi$e the tourism and edu#ation se#tors are signifi#ant #ontriutors to

the i$atera$ trade in ser"i#es, and ha"e e6hiited strong growth, trade

in other ser"i#es se#tors is a$so growing. Areas of interest in#$ude,

among others, a wide range of %rofessiona$ and usiness ser"i#es,

en"ironmenta$ ser"i#es and trans%ort ser"i#es.

8 ,!2! In3estment

8 ,!2!,! Indian #DI Inf*o+s

In terms of #ountries in"esting in India, 0ew Oea$and ran&s ;Bth and

a##ounts for aout ?.8;N of FI into India. In the same %eriod, a#tua$

#umu$ati"e FI inf$ows from a$$ #ountries amounted to US P @.;;

6


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i$$ion. 0ew Oea$and ran&s 99th and #umu$ati"e inf$ows (net of

Ameri#an e%ository 3e#ei%ts (A3s) andEor $oa$ e%ository

3e#ei%ts (3s)) from 0ew Oea$and were USP =.9 mi$$ion (?.?8N),

e6#$uding FI inf$ows re#ei"ed for a#>uisition of e6isting shares (u% to

8BBB), sto#& swa%%ed, 3I7s03I s#hemes J ad"an#e %ending for

issue of shares.

*he to% se#tors attra#ting FI a%%ro"a$s (from August 8BB8 to

e#emer 4??) from 0ew Oea$and were- the ser"i#es se#tor (9.@9N),

food %ro#essing industries (4=.;N), te$e#ommuni#ations (84.=;N),

oi$ers and steam generating %$ants (?.94N), and e$e#tri#a$ e>ui%ments

(in#$uding #om%uter software J e$e#troni#s) (?.;@N). *o% se#tors

attra#ting FI inf$ows (from Ganuary 4??? to e#emer 4??) from

0ew Oea$and were- %ower (B?.BN), #om%uter software J hardware

(


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4 India7s outward in"estment to 0ew Oea$and has remained

meagre. Howe"er, in more re#ent years 0ew Oea$and7s FI

inf$ows from India in the forms of Goint entures (Gs) and

2ho$$yowned Susidiaries (21S) ha"e in#reased from a

minis#u$e US P ?.8; mi$$ion (8BB@4??4) to USP 4.ui%ment (in#$uding

#om%uter software J e$e#troni#s) and meta$$urgi#a$ industries.

eading information and #ommuni#ations te#hno$ogy (IC*) so$utions

#om%any CMC imited is %artnering with a 0ew Oea$and uni"ersity to

ta&e 0ew Oea$and7s inno"ati"e IC* te#hno$ogies and #a%ai$ities to the

wor$d. *ata owned CMC $td has signed a Memorandum of

Understanding (MoU) with Massey Uni"ersity7s eCentre in Au#&$and,

0ew Oea$and. *he two ha"e joint$y esta$ished a te#hno$ogy #entre that


89/101

wi$$ gi"e 0ew Oea$and #om%anies a dire#t %i%e$ine into CMC7s

domesti# and internationa$ distriution and sa$es #hanne$s. Known as

the CMC *e#hno$ogy 56%ort Centre (CMC*5C), the 0ew Oea$and

ased "enture ensures %rodu#ts are suited to mar&et needs efore they

are %assed to CMC, with the first offering D %erforman#eased

software de"e$o%ed y Au#&$and #om%any LS D a$ready sent to

CMC. *he #urrent fo#us is on se#uring Indian domesti# sa$es for three

0O #om%anies D the most ad"an#ed of these is Au#&$andased emai$

s%am %re"ention s%e#ia$ist, SMQ td.

8 ,!4! Oter Areas of Cooperation

rawing on a shared history, India and 0ew Oea$and ha"e mu#h in

#ommon the 5ng$ish $anguage, %ar$iamentary demo#ra#y, a road$y

simi$ar $ega$ system with an em%hasis on the ru$e of $aw,

Commonwea$th ties, a fondness for #ri#&et and the strong $in&s

de"e$o%ed y Sir 5dmund Hi$$ary.

*he re$ationshi% etween India and 0ew Oea$and is growing and

e6%anding. Under%inning the i$atera$ trade and e#onomi# %rofi$es

des#ried ao"e sits a wide range of i$atera$ #oo%eration.


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In re#ent years there has een an in#rease in high $e"e$ "isits etween

the two #ountries ref$e#ting the greater im%ortan#e oth sides are now

%$a#ing on the re$ationshi%.

India7s e#onomi# growth has een mat#hed y an e6%ansion in 0ew

Oea$and7s trade and e#onomi# re$ationshi% with India. *here is %otentia$

for growth in tourism, edu#ation, usiness intera#tion, timer e6%orts,

e6%ort of ni#he %rodu#ts and #onsu$tan#y ser"i#es. *here has een so$id

growth in the numer Oea$and has a$so ser"ed to strengthen %eo%$e to

%eo%$e ties.

IndiaRs oo& 5ast %o$i#y and its %arti#i%ation in regiona$ institutions

su#h as the 5ast Asia Summit (5AS) and AS5A0 3egiona$ Forum

mean that India and 0ew Oea$and are in#reasing$y intera#ting in the

regiona$ #onte6t. India7s interest e6tends to the /a#ifi# Is$and states

and, in 4??;, India e#ame a dia$ogue %artner of the /a#ifi# Forum.

1ur #ommon memershi% of the 5AS has a$so %ro"ided a high $e"e$

%$atform for i$atera$ dia$ogue, in#$uding on #$imate #hange. 1ther

areas where out interests #oin#ide in#$ude our interest in United

0


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0ations reform, Commonwea$th matters, human rights, the A$$ian#e of

Ci"i$isations %ro#ess, #ounterterrorism and other transnationa$ issues.

8 ,!4!,! Treaties and Arrangements

*here are a numer of i$atera$ treaties in for#e etween 0ew Oea$and

and India the ear$iest of whi#h date from 8B@;. *hese #o"er a range of

areas in#$uding air ser"i#es, dou$e ta6ation and woo$ %ur#hasing. In

terms of i$atera$ arrangements of $essthantreaty status, there are

arrangements on areas in#$uding agri#u$ture, %$ant >uarantine,

information te#hno$ogy, edu#ation, and the re#ent Goint Understanding

on S#ien#e and *e#hno$ogy Coo%eration signed during the then

Minister Anderton7s "isit to India in Mar#h 4??=.

8 ,!4!/! "usiness Lin(ages

*he IndiaE0ew Oea$and Goint usiness Coun#i$ (GC) was esta$ished

in 8B==. *he GC rings together the usiness se#tors of oth #ountries

for a sto#& ta&ing and a$so $oo&s ahead to future %ossii$ities. In 0ew

Oea$and, the India *rade rou% is a$so a#ti"e$y %romoting the i$atera$

e#onomi# re$ationshi%.

1


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1ffi#ia$s met in 0ew e$hi in Gune 8B= for the first meeting of the

0ew Oea$andEIndia Goint *rade Committee (G*C), whi#h was

esta$ished under the 0ew Oea$andEIndia *rade Agreement signed

during the "isit of /rime Minister 3aji" andhi to 0ew Oea$and in

1#toer 8B=@. *he %ur%ose of the G*C is to dis#uss and negotiate

i$atera$ trade %o$i#y and trade a##ess issues.

*he G*C and the GC $ast met in 2e$$ington in $ate 1#toer 4??. At

that meeting of the G*C, Indian and 0ew Oea$and offi#ia$s agreed on

the *erms of 3eferen#e (*13) for this Goint Study.

It wou$d e a%%ro%riate to re"iew these institutiona$ arrangements

fo$$owing the #on#$usion of a C5CAEF*A or e"en during the #ourse of

a negotiation. Suggestions ha"e een made e$sewhere in this study for

additiona$ me#hanisms to %romote greater understanding, information

e6#hange, dia$ogue and #oo%eration in %arti#u$ar areas of the trade and

e#onomi# re$ationshi%. 1ther %ro%osa$s may arise during the

negotiation in re$ation to how as%e#ts of the agreement are to e

im%$emented. As new me#hanisms and %ro#esses are esta$ished, either

during or fo$$owing a negotiation, the G*C #ou$d o%erate as an umre$$a

2


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institution to monitor, dis#uss and #oordinate these susidiary

me#hanisms and %ro#esses. It might e ne#essary to a$ter the fre>uen#y

and #om%osition of G*C meetings, to ensure it #an %erform these ro$es

ade>uate$y. *he re$ationshi% etween the GC and these new

me#hanisms and %ro#esses might a$so need to e #onsidered. *hese are

matters that shou$d e dis#ussed further at the ne6t meeting of the G*C.

8 ,!4!2! Defence

0ew Oea$and has modest ut warm defen#e $in&s with India. Most

i$atera$ defen#e intera#tion o##urs etween the two na"ies. Most

re#ent$y HM0OS Te Mana "isited Mumai in August 4??=. 5ar$ier,

HM0OS Te Mana and Endeavour "isited /ort $air in the Andaman

Is$ands in May 4?? fo$$owing e6er#ises with Indian na"a$ shi%s

HM0OS Te Mana "isited Ko#hi and Mumai %orts in Gune 4??@ and

the Indian shi% Tabar "isited Au#&$and in 4??@.

0ew Oea$and has usefu$ defen#e intera#tion with India in the AS5A0

3egiona$ Forum, through the defen#e d

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