IMPORT FOR TRADING · 2019-09-16 · 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

IMPORT FOR TRADING

1(c)ashutosh kumar1

Dr.S.Thilaga/EXIM Management/BA5060/Unit III

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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2Dr.S.Thilaga/EXIM Management/BA5060/Unit III

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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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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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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TYPES OF EXPORT

Direct export

Direct exporting occurs

when a manufacturer

or exporter sells

directly to an importer

or buyer located in a

foreign market

Indirect export

Indirect exporting

involves the use of

independent

middlemen(brokers,

bank) to market the

firm’s products

overseas

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DIRECT EXPORT/IMPORT

indian Importer American Exporter

1. Importer Pays for Goods

2. Exporter Ships Goods After Being Paid

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A TYPICAL INTERNATIONAL

TRANSACTION

french ImporterAmerican Exporter

Bank of New York Bank of paris

7. ExporterPresentsDraft to Bank

10 and 11 Exporter Sells Draft to Bank

6. Goods Shipped to France

12. Bank TellsImporterDocuments

14. B of NY Presents MaturedArrive

Draft and Gets Payment

13. Importer Pays Bank

1. Importer Orders Goods

2. Exporter Agrees to Fill Order

3. Importer 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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Composition of India’s Exports

Agricultural & Allied

Products

Ores &Minerals

ManufacturedItems

Fuel &Lubricants

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Composition of India’s Imports

PetroleumProducts

Capital GoodsPearls &PreciousStones

Iron & Steel

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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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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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CONTD.

Do market analysis

market size/product potential

distribution channels

Determine entry method

goal of entry

select distribution “partner”

determine channel length

assess risks

determine costs 12

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SOURCES OF EXPORTER

FINANCING

r:Financing exporter credit to the importe

- Bankers’ acceptance (of the draft)

- Factoring

- Forfeiting

- EXIM bank

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PROCEDURES OF EXPORT AND IMPORT

TRANSACTION

General Procedures of Export Transaction：

Preparation for Exporting

BusinessNegotiation

Implementation of Contract

Settlement ofDisputes

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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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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

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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of Trade Policy will strongly influence the

direction, trend and growth of foreign trade 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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COMPARISON OF TRADE

POLICY

FREE 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.

PROTECTIVE TRADE POLICY

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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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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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. 20

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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.21

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1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

1,600,000

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Foreign Trade Trends in India

Export Import

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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.

BALANCE OF TRADE

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INDIA’S BOT

(January 2009 – July 2011)

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AN

YQ

UE

RY

?

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(c)ashutosh kumar


BIBLIOGRAPHY

Wikipedia

Official website of Indian export-import

portal

Internet

Oxford dictionary

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THANKING

YOU

THANKING

YOU27

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