Export Final 2

SKYLINE BUSINESS SCHOOL
September EXPORT 30 MANAUL 2011

Economics of International Business
Submitted To
Mr. Sashwat
Presented By: Sakshi Sondhi Anul Kapoor
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CONTENTS
Chapters Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Page Nos Introduction 3 National Regulations 5 Barriers in Exports 11 Basic Planning For Export 13 Identifying Products For Export 15 Market selection 27 Export Strategy 30 Registration and Export License 33 Export Procedures 36 Export Sales Leads 38 Exporting Product Samples 39 Export Pricing And Costing 41 Understanding Foreign Exchange Rates 42 Appointing A Sales Agents 44 Export Risks Management 46 Packaging And Labelling Of Goods 49 Inspection Certificates And Quality Control 51 Documents Required for Post Parcel Customs Clearance 53 Custom Procedure For Export 55 Invisible Export 58 Export To SAARC 59 Export To CIS 61 Support from Banks 63 Organisations Supporting Exporters 65 Myths About Exporting 69 Topics
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Chapter 1 Introduction
"Foreign demand for goods produced by home country" Export in itself is a very wide concept and lot of preparations is required by an exporter before starting an export business. As per Section 2 (e) of the India Foreign Trade Act (1992), the term export may be defined as 'an act of taking out of India any goods by land, sea or air and with proper transaction of money A key success factor in starting any export company is clear understanding and detail knowledge of products to be exported. In order to be a successful in exporting one must fully research its foreign market rather than try to tackle every market at once. The exporter should approach a market on a priority basis. Overseas design and product must be studies properly and considered carefully. Because there are specific laws dealing with International trade and foreign business, it is imperative that you familiarize yourself with state, federal, and international laws before starting your export business. Price is also an important factor. So, before starting an export business an exporter must considered the price offered to the buyers. As the selling price depends on sourcing price, try to avoid unnecessary middlemen who only add cost but no value. It helps a lot on cutting the transaction cost and improving the quality of the final products. However, before we go deep into "How to export? lets understand first Why Need to Export? Exporting a product is a profitable method that helps to expand the business and reduces the dependence in the local market. It also provides new ideas, management practices, marketing techniques, and ways of competing, which is not possible in the domestic market. Even as an owner of a domestic market, an individual businessman should think about exporting. Research shows that, on average, exporting companies are more profitable than their nonexporting counterparts. There are many good reasons for exporting: The first and the primary reason for export is to earn foreign exchange. The foreign exchange not only brings profit for the exporter but also improves the economic condition of the country. Secondly, companies that export their goods are believed to be more reliable than their counterpart domestic companies assuming that exporting company has survive the test in meeting international standards. Thirdly, free exchange of ideas and cultural knowledge opens up immense business and trade opportunities for a company. Fourthly, as one starts visiting customers to sell ones goods, he has an opportunity to start exploring for newer customers, state-of-the-art machines and vendors in foreign lands. Fifthly, by exporting goods, an exporter also becomes safe from offset lack of demand for seasonal products. Lastly, international trade keeps an exporter more competitive and less vulnerable to the
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market as the exporter may have a business boom in one sector while simultaneously witnessing a bust in a different sector. No doubt that in the age of globalization and liberalizations, Export has became of the most lucrative business in India. Government of India is also supporting exporters through various incentives and schemes to promote Indian export for meeting the much needed requirements for importing modern technology and adopting new technology from MNCs through Joint ventures and collaboration.
Trend of Contribution in GDP (2006 2010)
% GDP
2010 18% 2006 20%
2009 20% 2008 22%
2007 20%
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Chapter 2 National Regulations

Imports and exports are the two important components of a foreign trade. Foreign trade is the exchange of goods and services between the two countries, across their international borders. 'Imports' imply the physical movement of goods into a country from another country in a legal manner. It refers to the goods that are produced abroad by foreign producers and are used in the domestic economy to cater to the needs of the domestic consumers. Similarly, 'exports' imply the physical movement of goods out of a country in a legal manner. It refers to the goods that are produced domestically in a country and are used to cater to the needs of the consumers in foreign countries. Thus, the imports and exports have made the world a local market. The country which is purchasing the goods is known as the importing country and the country which is selling the goods is known as the exporting country. The traders involved in such transactions are importers and exporters respectively. In India, exports and imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992, which replaced the Imports and Exports (Control) Act, 1947, and gave the Government of India enormous powers to control it. The salient features of the Act are as follows:It has empowered the Central Government to make provisions for development and regulation of foreign trade by facilitating imports into, and augmenting exports from India and for all matters connected therewith or incidental thereto. The Central Government can prohibit, restrict and regulate exports and imports, in all or specified cases as well as subject them to exemptions. It authorizes the Central Government to formulate and announce an Export and Import (EXIM) Policy and also amend the same from time to time, by notification in the Official Gazette. It provides for the appointment of a Director General of Foreign Trade by the Central Government for the purpose of the Act. He shall advise Central Government in formulating export and import policy and implementing the policy Under the Act, every importer and exporter must obtain a 'Importer Exporter Code Number' (IEC) from Director General of Foreign Trade or from the officer so authorised. The Director General or any other officer so authorised can suspend or cancel a licence issued for export or import of goods in accordance with the Act. But he does it after giving the licence holder a reasonable opportunity of being heard. As per the provisions of the Act , the Government of India formulates and announces an Export and Import policy (EXIM policy) and amends it from time to time. EXIM policy refers to the policy measures adopted by a country with reference to its exports and imports. Such a policy become particularly important in a country like India, where the import and
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export of items plays a crucial role not just in balancing budgetary targets, but also in the over all economic development of the country. The principal objectives of the policy are:To facilitate sustained growth in exports of the country so as to achieve larger percentage share in the global merchandise trade. To provide domestic consumers with good quality goods and services at internationally competitive prices as well as creating a level playing field for the domestic producers. To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods required for augmenting production and providing services. To enhance the technological strength and efficiency of Indian agriculture, industry and services, thereby improving their competitiveness to meet the requirements of the global markets. To generate new employment opportunities and to encourage the attainment of internationally accepted standards of quality. Besides this Act, there are some other laws which control the export and import of goods. These include:Tea Act,1953 Coffee Act, 1942 The Rubber Act, 1947 The Marine Products Export Development Authority Act, 1972 The Enemy Property Act, 1968 The Export (Quality Control and Inspection) Act, 1963 The Tobacco Board Act, 1975 At the central level, the Ministry of Commerce and Industry is the most important organ concerned with the promotion and regulation of the foreign trade in India. The Ministry has an elaborate organizational set up to look after the various aspects of trade. Within the Ministry, the Department of Commerce is responsible for formulating and implementing the foreign trade policy. The Department is also entrusted with responsibilities relating to multilateral and bilateral commercial relations, state trading, export promotion measures and development and regulation of certain export oriented industries and commodities. The matters relating to foreign trade are dealt with by the following divisions of the Department:1. Administrative and General Division 2. Finance Division
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3. Economic Division 4. Trade Policy Division 5. Foreign Trade Territorial Division 6. Export Products Division 7. Export Industries Division 8. Export Services Division 9. Supply Division The Department's jurisdiction extends over:(a) Two Attached Offices:Directorate General of Foreign Trade (DGFT):- with its headquarters at New Delhi, is headed by the Director General of Foreign Trade. It is responsible for implementing the Foreign Trade Policy/Exim Policy with the main objective of promoting Indian exports. The DGFT also issues licences to exporters and monitors their corresponding obligations through a network of regional offices. The regional offices are located at 33 places. Directorate General of Supplies and Disposal (DGS&D):- with its headquarters at New Delhi, is headed by the Director General. It functions as the executive arm of the Supply Division of the Department of Commerce for conclusion of Rate Contracts for common user items, procurement of stores, inspection of stores, shipment and clearance of imported stores/cargo. It has three Regional Offices located at Chennai, Mumbai and Kolkata. (b) Five Subordinate Offices:Directorate General of Commercial Intelligence and Statistics (DGCI&S):- with its office located at Kolkata, is headed by the Director General. It is entrusted with the work of collecting, compiling and publishing/ disseminating trade statistics and various types of commercial information required by the policy makers, researchers, importers, exporters, traders as well as overseas buyers. Office of Development Commissioner of Special Economic Zones:- The Special Economic Zones (SEZs) are geographically exclusive enclaves separated from domestic tariff areas. The main objective of SEZs is to provide certain common facilities and a duty free environment for exporters. Each Zone is headed by a Development Commissioner and is administered as per the SEZ scheme announced on 31st March, 2000. Office of the Custodian of Enemy Property (CEP):- is located in Mumbai with a Branch office at Kolkata. The office is functioning under the Enemy Property Act,1968. All immovable (like land, buildings, etc.) and movable properties (like securities, shares, debentures, bank balances, viz. fixed deposits and other amounts lying in the enemy nationals' bank accounts, Provident fund balances etc.) all over India belonging to or held by or managed on behalf of Pakistani nationals between the period 10.9.1965 and 26.9.1977 are vested in the Custodian of Enemy Property for India.
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Pay and Accounts Office (Supply):- The payment and accounting functions of Supply Division, including those of DGS&D, are performed by the Chief Controller of Accounts (CCA) under the Departmentalized Accounting System. Payment to suppliers across the country is made through this organisation. Pay and Accounts Office (Commerce & Textiles):- The Pay and Accounts Office, common to both the Department of Commerce and the Ministry of Textiles, is responsible for the payment of claims, accounting of transactions and other related matters through the four Departmental Pay & Accounts Offices in Delhi, two in Mumbai, two in Kolkata and one in Chennai. (c) Ten Autonomous Bodies:Coffee Board :- The Coffee Board of India is an autonomous body, functioning under the Ministry of Commerce and Industry, Government of India. The Board serves as a guide of the coffee industry in India. The Board focuses on research, development, extension, quality upgradation, market information, and the domestic and external promotion of Indian coffee. Rubber Board :- The board is engaged in the development of the rubber industry. This is done by assisting and encouraging scientific ,technical and economic research; supplying technical advice to rubber growers; and training growers in improved methods of plantation and cultivation. Tea Board :- The primary functions of tea board include rendering financial and technical assistance for cultivation, manufacture, marketing of tea; promoting tea exports ;aiding research and developmental activities for augmentation of tea production and improvement of tea quality as well as encouraging and assisting small growers sector financially and technically. Tobacco Board:- The Government of India established the Tobacco Board, in place of Tobacco Export Promotion Council, under the Tobacco Board Act of 1975 to regulate production, promotion of overseas marketing and to control recurring instances of imbalances in supply and demand, which lead to market problems, The Tobacco Board Act aims at the planned development of Tobacco Industry in the country. The activities of the Board include the regulation of the production and curing of Virginia Tobacco with regard to the demand in India and abroad. Spices Board :- Spices Board was constituted on 26th February 1986 under the Spices Board Act 1986. It is one of the Commodity Boards functioning under the Ministry of Commerce & Industry. It is an autonomous body responsible for the export promotion of the scheduled spices and production or development of some of them such as Cardamom and Vanilla. Export Inspection Council (EIC), New Delhi :- The Export Inspection Council is responsible for the enforcement of quality control and compulsory preshipment inspection of various commodities meant for export and notified under the Export (Quality Control & Inspection) Act, 1963.
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Indian Institute of Foreign Trade (IIFT), New Delhi :It is engaged in the following activities: Training of Personnel in modern techniques of international trade; Organisation of Research in problems of foreign trade; Organisation of marketing research, area surveys, commodity surveys, market surveys; Dissemination of information arising from its activities relating to research and market studies.
Indian Institute of Packaging (IIP), Mumbai :- is registered under the Societies Registration Act. the main aim of this Institute is to undertake research of raw materials for the packaging industry, to organise training programmes on packaging technology and to stimulate consciousness of the need for good packaging etc.
Marine Products Exports Development Authority (MPEDA), Kochi :- functions under the Ministry of Commerce, Government of India and acts as a coordinating agency with different Central and State Government establishments engaged in fishery production and allied activities. The Authority is responsible for development of the marine products industry with special focus on marine exports. The role envisaged for the MPEDA is comprehensive covering fisheries of all kinds, increasing exports, specifying standards, processing, marketing, extension and training in various aspects of the marine industry.
Agricultural and Processed Food Products Export Development Authority (APEDA), New Delhi :- came into existence in 1986 to further develop agricultural commodities and processed foods, and to promote their exports. The aim is to maximize foreign exchange earnings through increased agro exports, to provide better income to the farmers through higher unit value realization and to create employment opportunities in rural areas by encouraging value added exports of farm produce. (d) Export Promotion Councils (EPCs):Presently there are twelve EPCs under the administrative control of the Ministry of Commerce. These councils are registered as non-profit organisations under the Act. the Councils perform both the advisory and executive functions. These councils are also the registering authorities under the Import Policy for Registered Exporters. (e) Other Organisations:Federation of Indian Export Organisations (FIEO):- is an apex body of various export promotion organizations and institutions with its major regional offices at Delhi, Mumbai,
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Chennai and Kolkata. It provides the content, direction and thrust to India's global export effort. Indian Council of Arbitration (ICA), New Delhi :- set up under the Societies Registration Act promotes arbitration as a means of settling commercial disputes and popularises the concepts of arbitration among the traders, particularly those engaged in international trade. Indian Diamond Institute (IDI), Surat :- With the objective of enhancing the quality, design and global competitiveness of the Indian Jewellery, the Indian Diamond Institute (IDI) was established as a pivotal institute for imparting technical skills to the Gems and Jewellery industry in the areas of Gemology and Jewellery manufacture. (f) Advisory Bodies: Board of Trade (BOT):- was set up on May 5, 1989 with a view to providing an effective mechanism to maintain continuous dialogue with trade and industry in respect of major developments in the field of International Trade. Export Promotion Board (EPB):- provide policy and infrastructural support through greater coordination amongst concerned Ministries for boosting the growth of exports. Directorate General of Anti-Dumping & Allied Duties (DGAD):- The Directorate is responsible for carrying out investigations and to recommend, where required, under Customs Tariff Act, the amount of anti-dumping duty/countervailing duty on the identified articles which would be adequate to remove injury to the domestic industry. (g) Public Sector Undertakings:The following trading/service corporations are functioning under the administrative control of the Department of Commerce: State Trading Corporation (STC) of India Ltd. MMTC (Minerals and Metals Trading Corporation of India) Limited, PEC Ltd, Export Credit Guarantee Corporation (ECGC) of India Ltd. India Trade Promotion Organisation (ITPO)
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Chapter 3 Barriers in Exports

Trade barriers are generally defined as government laws, regulations, policy, or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products. While restrictive business practices sometimes have a similar effect, they are not usually regarded as trade barriers. The most common foreign trade barriers are government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services. Strategic International agreements limit trade in, and the transfer of, certain types of goods and information e.g. goods associated with weapons of mass destruction, advanced telecommunications, arms and torture, and also some art and archaeological artefacts. Examples include Nuclear Suppliers Group - limiting trade in nuclear weapons and associated goods (currently only 45 countries participate), The Australia Group - limiting trade in chemical & biological weapons and associated goods (currently only 39 countries), Missile Technology Control Regime - limiting trade in the means of delivering weapons of mass destruction (currently only 34 countries) and The Wassenaar Arrangement limiting trade in conventional arms and technological developments (currently only 40 countries). Tariffs A tariff is a tax placed on a specific good or set of goods exported from or imported to a country, creating an economic barrier to trade. Usually the tactic is used when a country's domestic output of the good is falling and imports from foreign competitors are rising, particularly if there exist strategic reasons for retaining a domestic production capability. Some failing industries receive a protection with an effect similar to a subsidy in that by placing the tariff on the industry, the industry is less enticed to produce goods in a quicker, cheaper, and more productive fashion. The third reason for a tariff involves addressing the issue of dumping. Dumping involves a country producing highly excessive amounts of goods and dumping the goods on another foreign country, producing the effect of prices that are "too low". Too low can refer to either pricing the good from the foreign market at a price lower than charged in the domestic market of the country of origin. The other reference to dumping relates or refers to the producer selling the product at a price in which there is no profit or a loss.[8] The purpose (and expected outcome) of the tariff is to encourage spending on domestic goods and services. Protective tariffs sometimes protect what are known as infant industries that are in the phase of expansive growth. A tariff is used temporarily to allow the industry to succeed in spite of strong competition. Protective tariffs are considered valid if the resources are more productive in their new use than they would be if the industry had not been started. The infant industry eventually must incorporate itself into a market without the protection of government subsidies.[9] Tariffs can create tension between countries. Examples include the United States steel tariff of 2002 and when China placed a 14% tariff on imported auto parts. Such tariffs usually lead to filing a complaint with the World Trade Organization (WTO) and, if that fails, could eventually head toward the country placing a tariff against the other nation in spite, to impress pressure to remove the tariff.
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Subsidies To subsidize an industry or company refers to, in this instance, a governmental providing supplemental financial support to manipulate the price below market value. Subsidies are generally used for failing industries that need a boost in domestic spending. Subsidizing encourages greater demand for a good or service because of the slashed price. The effect of subsidies deters other countries that are able to produce a specific product or service at a faster, cheaper, and more productive rate. With the lowered price, these efficient producers cannot compete. The life of a subsidy is generally short-lived, but sometimes can be implemented on a more permanent basis. The agricultural industry is commonly subsidized, both in the United States, and in other countries including Japan and nations located in the European (EU). Critics argue such subsidies cost developing nations $24 billion annually in lost income according to a study by the International Food Policy Research Institute, a D.C. group funded partly by the World Bank.[11] However, other nations are not the only economic 'losers'. Subsidies in the U.S. heavily depend upon taxpayer dollars. In 2000, the U.S. spent an alltime record $32.3 billion for the agricultural industry. The EU spends about $50 billion annually, nearly half its annual budget on its common agricultural policy and rural development.
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Chapter 4 Basic Planning For Export Introduction

Before starting an export, an individual should evaluate his companys export readiness. Further planning for export should be done only, if the companys assets are good enough for export. There are several methods to evaluate the export potential of a company. The most common method is to examine the success of a product in domestic market. It is believed that if the products has survived in the domestic market, there is a good chance that it will also be successful in international market, at least those where similar needs and conditions exist. One should also evaluate the unique features of a product. If those features are hard to duplicate abroad, then it is likely that you will be successful overseas. A unique product may have little competition and demand for it might be quite high. Once a businessman decides to sell his products, the next step is to developing a proper export plan. While planning an export strategy, it is always better to develop a simple, practical and flexible export plan for profitable and sustainable export business. As the planners learn more about exporting and your company's competitive position, the export plan will become more detailed and complete. Objective of doing Export

Identifies what you want to achieve from exporting. Lists what activities you need to undertake to achieve those objectives. Includes mechanisms for reviewing and measuring progress. Helps you remain focused on your goals.
For a proper export planning following questions need to answered:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Which products are selected for export development? What modifications, if any, must be made to adapt them for overseas markets? Which countries are targeted for sales development? In each country, what is the basic customer profile? What marketing and distribution channels should be used to reach customers? What special challenges pertain to each market (competition, cultural differences, import controls, etc.), and what strategy will be used to address them? How will the product's export sale price be determined? What specific operational steps must be taken and when? What will be the time frame for implementing each element of the plan? What personnel and company resources will be dedicated to exporting? What will be the cost in time and money for each element? How will results be evaluated and used to modify the plan?
From the start, the plan should be viewed and written as a management tool, not as a static document. Objectives in the plan should be compared with actual results to measure the success of different strategies. The company should not hesitate to modify the plan and make it more specific as new information and experience are gained.
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Some "Do's and Don'ts of Export Planning
DOS Seek good advice and test your Export Plan with advisers Review the Export Plan regularly with your staff and advisers Assign responsibility to staff for individual tasks and ensure your key staff members are signed on to the Plan Create scenarios for changed circumstances look at the what ifs for changes in the market environment from minor to major shifts in settings. e.g. changes of government, new import taxes Develop an integrated timeline that draws together the activities that make up the Export Plan Make sure that you have the human and financial resources necessary to execute the Export Plan. Ensure existing customers are not neglected
DONTS
Create a bulky document that remains static.
Use unrealistic timelines. Review them regularly they often slip
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Chapter 5 Identifying Products For Export

A key factor in any export business is clear understanding and detail knowledge of products to be exported. The selected product must be in demand in the countries where it is to be exported. Before making any selection, one should also consider the various government policies associated with the export of a particular product. Key Factors in Product Selection The product should be manufactured or sourced with consistent standard quality, comparable to your competitors. ISO or equivalent certification helps in selling the product in the international market. If possible, avoid products which are monopoly of one or few suppliers. If you are the manufacturer - make sure sufficient capacity is available in-house or you have the wherewithal to outsource it at short notice. Timely supply is a key success factor in export business The price of the exported product should not fluctuate very often - threatening profitability to the export business. Strictly check the government policies related to the export of a particular product. Though there are very few restrictions in export - it is better to check regulatory status of your selected product. Carefully study the various government incentive schemes and tax exemption like duty drawback and DEPB. Import regulation in overseas markets, specially tariff and non-tariff barriers. Though a major non-tariff barrier (textile quota) has been abolished - there are still other tariff and nontariff barriers. If your product attracts higher duty in target country - demand obviously falls. Registration/Special provision for your products in importing country. This is specially applicable for processed food and beverages, drugs and chemicals. Seasonal vagaries of selected products as some products sell in summer, while others in winter. Festive season is also important factor, for example certain products are more sellable only during Christmas. Keep in mind special packaging and labelling requirements of perishable products like processed food and dairy products. Special measures are required for transportation of certain products, which may be bulky or fragile or hazardous or perishable.
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Indian Agro Products Agricultural sector is the mainstay of the rural Indian economy around, which the socioeconomic privileges and deprivations revolve, and any change in its structure is expected to have a corresponding impact on the existing pattern of social equality. The growth of Indias agriculture sector during the 50 years of independence remains impressive at 2.7 % per annum. About two-third of this production growth is aided by gains in crop productivity. The need based strategies adopted since independence and intensified after mid sixties primarily focused on feeding the growing population and making the country self reliant in food production. Indian agriculture has attained an impressive growth in the production of food grains that has increased around four times during the planned area of development from 51 million tons in 1950-51 to 199.1 million tonnes in 1997-98. The growth has been really striking since sixties after the production and wide spread usage of high yielding varieties of seed, fertilization, pesticides, especially in assured irrigated areas.
Exports of Agricultural products
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Major Export Markets Major destinations for export of Indian agricultural products, include Product Floriculture Fruits & Vegetable Seeds Fresh Onions Other Fresh Vegetables Walnuts Fresh Mangoes Fresh Grapes Other Fresh Fruits Dried & Preserved Vegetables Mango Pulp Pickles & Chutneys Other Processed Fruits Buffalo Meat Sheep / Goat Meat Poultry Products Dairy Products Animal Casings Processed Meat Groundnuts Guar Gum Jaggery & Confectionery Cocoa Products Cereal Preparations Alcoholic Beverages Miscellaneous Preparations Milled Products Basmati Rice Non Basmati Rice Wheat Other Cereals Natural Honey Pulses Major Markets USA, Japan, UK, Netherlands & Germany Pakistan, Bangladesh, USA, Japan & Netherlands Bangladesh, Malaysia, Sri Lanka, UAE, Pakistan & Nepal UAE, Bangladesh, Pakistan, Nepal & Sri Lanka Spain, Egypt, Germany, UK & Netherlands UAE, Bangladesh, UK, Saudi Arabia & Nepal Netherlands, UK, UAE, Bangladesh, Belgium Bangladesh, UAE, Netherlands, Nepal, Saudi Arabia Russia, France, USA, Germany & Spain Saudi Arabia, Netherlands, UAE, Yamen, Arab Republic & Kuwait Russia, USA, Belgium, Netherlands & France USA, Netherlands, UK, UAE & Saudi Arabia Malaysia, Philippines, Saudi Arabia, Jordan & Angola Saudi Arabia, UAE, Qatar, Oman & Kuwait UAE, Kuwait, Oman, Germany & Japan Bangladesh, Algeria, UAE, Yamen, Arab Republic & Egypt Germany, Portugal, France, Spain & Italy Seychelles, UAE, Hong Kong, Germany & USA Indonesia, Malaysia, Philippines, UK & Singapore USA, China, Germany, Italy & Netherlands Portugal, USA, Bangladesh, Pakistan & Nepal Nepal, Netherlands, Malaysia, Yamen Arab Republic & UAE USA, UK, Nepal, Sri Lanka & UAE Jamaica, Thailand, UAE, Angola & Bhutan UAE, Iran, USA, UK & Indonesia USA, UK, Indonesia, Maldives & UAE Saudi Arabia, Kuwait, UK, UAE & Yamen Arab Rep. Nigeria, Bangladesh, South Africa, UAE & Ivory Coast Bangladesh, Philippines, UAE, Sudan & Myanmar Bangladesh, Sri Lanka, Sudan, Benin, Thailand USA, Germany, Saudi Arabia, UK & UAE Bangladesh, Sri Lanka, Pakistan, UAE & Nepal
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Future Forecasts According to experts, India has to play a bigger role in the global markets in agriculture products in the future. The country is expected to strengthen its position among the worlds leading exporters of rice. Presently it is the 2nd largest rice producer after China and the 3rd largest net-exporter after Thailand and Vietnam. However, recent reports states that agriculture plays an important, though declining role in Indian economy. Its contribution in overall GDP fell from 30 % in the early nineties, to below 17.5 % in 2006. The country is a world leader in specialist products, such as buffalo milk, spices and bananas, mangoes, chickpeas etc., which are considered as important in the Indian diet and are also exported. India is the 5th largest cultivator of biotech crops across the world, ahead of China. In the year 2006, around 3.8 million hectares of land were cultivated with genetically modified crops, by about 2.3 million farmers. The primary GM crop is Bt Cotton that was introduced in 2002. The future growth in agriculture sector must come from
Advanced technologies that are not only "cost effective" but also "in conformity" with natural climatic regime of the country Technologies applicable to rain-fed areas particularly Continued genetic improvements for improved seeds and yields Improvements in data for superior research, results, and sustainable planning Bridging the gap between knowledge and practice; and
Judicious land use resource surveys, effective management practices and sustainable use of natural resources. Indian Chemical Industry Chemical industry is an integral component of the Indian economy, which contributes around 7 % of the Indian GDP. It touches our lives in several different different ways. Whether it is thermoplastic furniture we use, or a synthetic garment we wear, or a drug we take we are inextricably associated to it. The industry is integral to the development of agricultural and industrial development in India and has key linkages with various other downstream, such as automotive, consumer durables, engineering, food processing and more. Globalization posses many challenges to the industry, which has predominantly developed in a protected environment. With World Trade Organization assuming an increasing role in global economics, there is an inevitable move towards an inter-linked international economy. However, there have been cases where particular segments of the industry, such as pharmaceuticals and biotechnology have performed exceedingly well even at the world level. During 2005-06, the industry contributed 17.6% of the manufacturing sector. However the country continues to be a net importer in 2005-06, with exports of US$ 5.95 billion and imports of US$7.92 billion. The worth of Indian chemicals industry during 2005-06 was US$30.59 billion, which reflected a growth of 10.23% over the previous year and a CAGR of 8.68% during the last 3 years.
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Future Forecasts A decade of economic reforms has resulted in major changes in the way the Indian chemical manufacturers work and operate. Individual enterprises have realized their strengths and weaknesses and are gearing up to face the new challenges. Success stories in dyes and agrochemicals have boosted the confidence of Indian manufacturers to take on global competition squarely. Some of the advantages of Indian chemical industry include
Due to its low cost infrastructure, the country has huge export potential. According to a recent report, India's chemical exports have the potential to rise US$ 300 billion by 2015. This defines an investment of US$ 50 billion in chemical industry alone. The country has the capacity for high value addition being close to Middle East. This is a cheap and ample source for petrochemical feedstock. In some categories of chemicals, India does have the advantage for exports (dyes, pharmaceuticals and agrochemicals) by establishing strategic alliances with countries like Russia. With the expertise and know-how available in the country, there is a tremendous export potential in dyestuff and agrochemical market. Availability and abundance of raw materials for titanium dioxide and agro-based products, such as castor oil provide an opportunity to yield significant value addition. This, however, would require substituting their exports in raw form by producing high value derivatives. The major challenges are pursuit for feedstock and knowledge management. The naphthabased crackers that have been providing feedstock to the industry traditionally, have now been replaced by new gas-based crackers. Along with China, India pose a stiff competition to the Middle East due to the vibrant exports and huge unexplored reserves of oil and gas. The Govt. of India is acting as a facilitator by establishing LNG terminals and acquiring equity interests in overseas proven oil reserves. This will fuel the fast growth in chemical industry. The govt. is also engaged in the development and formulation of a National Policy on Pharmaceuticals and mega-industrial chemical estates.
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Home Furnishings A fast emerging economy in the world of home textiles, India produces a wide range of products, including home furnishings, household linen, curtain tapestry and yardage made with several textures and varying thickness. The home furnishing industry mainly exports fabrics, bed linen, table linen, toilet and kitchen linen, towels, cushions, curtains, pads, tapestries and upholstery's, carpets and floor coverings, etc. The industry has adopted several measures and techniques to offer premium quality and eco-friendly products to the global industry. The home furnishing products can be broadly categorized into five categories, which include - bedding, window dressings, bathroom textiles, cushions and covers, and table linen. Household penetration levels are high, especially in the largest sectors bedding and window dressings. While replacement due to wear and tear is not inevitably frequent, an increased consumer interest in home interior products has stimulated buying in what is now very much a fashion-led industry. The industry also benefits from the growing number of households, a trend, which is expected to continue at an even faster rate. Future Forecast The future prospects for the Indian home furnishing industry are bright, especially in the post-quota regime. The industry is in an expansion mode and is expected to benefit from growing demand both in the domestic and global markets. While exports of Indian home furnishing products have increased, profits are sliding as prices have dropped 8-20 % and the industry is on the verge of a shakeout. With importers favouring suppliers with vertical production systems rather than dispersed manufacturing facilities, Indian exporters need to shore up their mass manufacturing techniques. The major requirement is the development of infrastructure. Labour laws also constitute a stumbling block in the growth of Indian home furnishing companies. Political conditions have prevented successive governments from instituting an exit policy. Because of this, manufacturers cannot employ short duration labour as they cannot lay them off when the world trade cycle turns. Low labour productivity is another major constraint. On the technology front, government has initiated efforts to encourage manufacturers to go in for advanced technology. The grant has been increased for helping manufacturers in the upgradation of technology. While China is clearly the leading exporter in the world of home furnishings, it is not a direct competitor of India. While China mainly uses man-made fibers and caters mass markets, India produces natural fiber and serves niche markets. At present, India is leading producer of man-made fiber and raked 3 in cotton. A garment-driven and export-led strategy is expected to help the Indian market to grow to at $85 billion by 2010, according to a CRISIL report. The strategy should be focus on moving up the value chain instead of exporting intermediate stage products, say industry experts.
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Indian Apparel and Textile Industry The apparel and textile industry occupies a unique and important place in India. One of the earliest industries to come into existence in the country, the sector accounts for 14% of the total Industrial production, conduces to about 30% of the total exports and is the second largest employment creator after agriculture. The apparel and textile industry caters to one of the most basic requirements of people and holds importance; maintaining the prolonged growth for improved quality of life. The sector has a unique position as a self-reliant industry, from the production of raw materials to the delivery of end products, with considerable value-addition at every stage of processing. Over the years, the sector has proved to be a major contributor to the nations' economy. Its immense potential for generation of employment opportunities in the industrial, agricultural, organized and decentralized sectors & rural and urban areas, especially for women and the disadvantaged is noteworthy. Future Outlook At present, the Indian apparel and textile sector is struggling to survive because of increasing costs of raw material, poor off take of yarns coupled with the poor realization from yarn dealers and a sharp rise in interest rate and, the worse, the rising value of the Indian rupee. As the industry is aiming an export turnover of $50 billion by 2012, amounting to more than US$ 100 billion including that for domestic consumption, it is imperative that the country leverages its underlying advantages and builds capabilities to place itself as a complete solution provider rather than only a manufacturer. Indian Jewellery An important emerging sector of Indian economy, gem and jewellery is a leading foreign exchange earner for the country. The country consumes around 800 tonnes of gold that account for 20 % of global gold consumption and nearly 600 tonnes of this goes into jewellery making. The Indian jewellery market, which is estimated to be US$ 13.5 billion in fiscal 2006-07, accounts for 8.3 % of the global jewellery sales, according to a study by KPMG. The increase in purchasing parity of the middle class and surging income levels have resulted in consumption growth of gems and jewelery by about 11 % in the 5 year period preceding 2006-07. It also contributes over 15 % of the total exports of country and provides employment to 1.3 million people directly and indirectly. The two major segments of the gem and jewelry industry in India are gold jewelery and diamonds. The contribution of gold jewelry is about 80 % of the total jewelry market, with the balance comprising fabricated studded jewelry, which includes diamonds as well as gemstone studded jewelry. Indian jewelry sector is well supported by Government policies and the banking sector, with around 50 banks providing about US$ 3 billion credit to the Indian diamond industry. In addition, the country is expected to have a diamond bourse soon.
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Future Forecast The future growth of Indian jewellery industry lies in finding new markets and in adding value. Worldwide, jewellery is a big business, which is extremely lucrative as margins are high compared to diamonds, as branding can demand high premiums. India was a late entrant to the global jewellery market and its industry took off after establishment of the export processing zones in 1990, especially the special economic zone in Mumbai that accounts for 40 % of India's exports. It has taken the country a few years to incorporate international designs, styles and finishes. The outlook for the industry is bright, but how much of this amazing performance will actually translate into improved bottom lines will lie in the capability of individual businesses to harness the potential of new markets and products. With intense competition in market, the stock performance will depend on how efficiently, in terms of both cost and marketing, companies can cut and polish diamonds and also venture into the lucrative but difficult jewellery industry. Indian Leather In view of its immense potential for employment, growth and exports, leather industry occupies an important place in Indian economy. The sector is spread across the formal as well as informal sectors and produces a comprehensive range of products from raw hides to fashionable shoes. The industry consists of firms in all capacities, including small artisans to major global players. Specialized institutions have been setup to promote the overall growth and performance of the industry. There has been an increasing emphasis on the planned development of industry, which is aimed at optimum utilization of available raw materials for maximizing the returns, especially from exports. The country ranked first among major livestock holding nations in the world and thus has a rich endowment of raw materials in terms of the cattle population. It has the capacity to cater 10% of the global leather requirement. Export of leather and leather products during 2004-05 recorded an impressive growth at US$2,380 million, exceeding the target of US$2,284 million set by the Commerce Ministry. Today, the sector is amongst top 8 export earners for the country and employs around 2.5 million people. A major part (about 60-65%) of the production is in the small / cottage sector. Endowed with 10% of the world raw material, the export of country constitutes about 2% of world trade. Indian Leather Exports Some important Facts & Figures

India is the largest livestock holding country - 21% large animals and 11% small animals A source for 10% world leather requirement About 2.50 million workforce (30% women)
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Annual production value is over U$ 4 billion Annual export value is over U$ 2 billion Export growth CAGR 8.20% (2000-04) Promising technology inflow and FDI High priority to occupational safety and work environment Compliance to environmental standards Immense potential for future growth (domestic as well as export)
Some of the important leather products exported by India include
Leather Footwear Footwear Components (Shoe Uppers, Soles etc.) Leather Garments Leather Goods (Including Harness & Saddlery, Leather Gloves etc.) Finished Leather
Future Forecasts With its rich resource base of raw hides, skins and human capital, Indian leather industry has the capability to increase its share in global leather trade. At present, Indian leather exports account for 3% of the global trade with USA, Germany, UK and Spain as major markets. The country has a lot of potential to increase its share in these markets by utilizing its unique advantage of economies of scale and the capability to produce niche products. Several challenges, which hinder the export growth of the Indian leather industry, include effluent management, non-tariff barriers, quality specifications and cost of compliance to various standards. However, there are ample opportunities to realize the export potential of this sector, with the adoption of suitable strategies. The global leather industry is in the process of shifting its manufacturing base from developed to developing nations. This provides an opportunity for increased flow of foreign direct investment into India. In such a scenario, factors like abundance of leather, increasing awareness for quality, manufacturing know-how and designing capabilities, work in favour of India. Increasing presence of big corporate houses in this industry would help improve the investments required, and thereby the competitiveness in the international markets. Indian Handicrafts and Gifts India is one of the major exporter and supplier of handicrafts and gift products to the world market. The Indian handicrafts industry is highly labour intensive and decentralized, being spread all across the country in rural and urban areas. The sector is considered as the second largest employment-generating sector after agriculture with numerous artisans engaged in craft work on a part-time basis. The industry offers employment to over 6 million artisans, including a large number of women and people from the weaker sections of society. The present day handicraft tradition of India is a perfect example of assimilation between the traditional designs and modern techniques. The fast growing demand for Indian handicraft and gifts products have made this sector a full-fledged large scale organized industry that is growing day by day.
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Future Prospects The dynamism of handicrafts industry in India is unparalleled - be it the traditional Indian arts and crafts or a customized version of an overseas art form. Unlike in the past when the industry was battling to carve a niche in the market, there is a great demand for Indian handicrafts today that is being nurtured by different government and non-governmental organizations. The sector is economically important from the point of view of low capital investment, high ratio of value addition, and high potential for export and foreign exchange earnings for the country. The export earnings from Indian handicrafts industry for the period 1998-99 amounted to US$ 1.2 billion. The market is developing due to the huge demand of its products in terms of utility, cost and aesthetics. To centralize and better organize the sector, the government has also initiated the concept of 'Towns of Excellence' that are providing recognition to production areas where the handicrafts have been traditionally developed. Today, there are 35 urban 'Hats' all across the country, that allow for the allotment of built-up stalls to artisans on a fortnightly rotation basis at nominal costs. The industrial revolution and the increasing productivity had slowed down the growth and the quality of arts and crafts, but for some decades now, the scenario has changed and machinemade products no longer attract the people. Presently handicrafts are being considered as vocational media and it is also opted for style statement and the leisure pursuit. Today, the crafts and craftspeople have a vital role to play in modern India not just as part of its cultural and tradition, but as part of its economic future. Indian Plastic Industry The Indian plastic industry has taken great strides. In the last few decades, the industry has grown to the status of a leading sector in the country with a sizable base. The material is gaining notable importance in different spheres of activity and the per capita consumption is increasing at a fast pace. Continuous advancements and developments in polymer technology, processing machineries, expertise, and cost effective manufacturing is fast replacing the typical materials in different segments with plastics. On the basis of value added, share of India's plastic products industry is about 0.5% of India's GDP. The export of plastic products also yield about 1% of the country's exports. The sector has a large presence of small scale companies in the industry, which account for more than 50% turnover of the industry and provides employment to an estimate of about 0.4 million people in the country. Approximately Rs 100 billion are invested in the form of fixed assets in the plastic processing industry.
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The top 10 trading partners for Indian plastic industry are

USA UAE Italy UK Belgium Germany Singapore Saudi Arabia China Hong Kong
Products The major plastic products that India export are Raw Materials - PVC, polypropylene, polyethylene, polystyrene, ABS, polyester chips, urea / phenol formaldehyde, master batches, additives, etc Packaging - PP / HDPE woven sacks / bags / fabrics, poly-lined jute goods, box strapping, BOPP tapes, a range of plastic sheeting / films (of PVC, PP, HDPE, nylon, FRP, PTFE, acrylic, etc.), pouches, crates, bottles, containers, barrels, cans, carboys, shopping / carrier / garbage bags. Films - Polyester film, BOPP film, mesh, metallised / multilayer films and photo films Consumer Goods - Toothbrushes, cleaning brushes, hair brushes, nail / cosmetic brushes, combs, moulded furniture (chairs, tables, etc.) house ware, kitchenware, insulated moulded house ware, microwave re-heatable containers, mats and mattresses, water bottles, gifts and novelties, a range of stationery items like files, folders, mathematical instruments, etc. Writing Instruments - Pens, ball pens, markers, sign pens, refills, etc. Travel ware - Moulded luggage, soft luggage, a range of bags like school bags / ladies handbags, wallets, etc. Leather Cloth / Artificial Leather Floor Coverings - Vinyl floor coverings and linoleums Foam Boards Drip Irrigation Systems / Components Pipes & Pipe Fittings - Made of PVC, HDPE, PP, FRP, nylon Water Storage Tanks Toys and Games Engineering Plastics - Auto components, parts for various machinery / equipment in telecommunications, railways, electronics, etc. Electrical Accessories FRP / GRP Products - Safety helmets / equipment, pipes, storage tanks, etc. Sanitary Fittings - Cisterns, toilet seats, bathroom fittings, etc. Construction - PVC profiles, doors, windows, etc.
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Tarpaulins Laminates Fishnets / Fuhsing Lines Cordage / Ropes / Twins Eyewear - Lenses, spectacle frames, goggles, etc. Laboratory Ware Surgical / Medical - Disposable syringes, blood / urine bags, I.V. sets, etc.
Future Forecast The Indian plastic industry clearly has the potential to continue its fast growth. However, over the next few years, competition in the industry is expected to increase considerably, as a result of global trends, which will become applicable to the liberalizing economy of country. To survive the competition, both polymer manufacturers and processors will need to adopt radically new methods and approaches to reduce costs, improve market and customer service and management of performance. The per capita consumption of plastics in India is well below the world average. However it also reflects the many years of growth ahead, as the country's economy continues to grow and upgrade the usage of products. Translating the expected growth rate into incremental demand, it is obvious that the country will remain one of the largest sources of additional demand for almost all kinds of plastics. Hence, it is clear that plastics will continue to be a growth industry, with boosting prospects for fresh investments in polymerization and downstream processing capacity. This is in contrast to the situation in various other countries, where growth prospects are limited, either because of stagnant demand or due to the historical over building. In such countries, the overall outlook would be far less promising, with the key imperatives being cost cutting and capacity rationalization
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Chapter 6 Market Selection

After evaluation of companys key capabilities, strengths and weaknesses, the next step is to start evaluating opportunities in promising export markets. It involves the screening of large lists of countries in order to arrive at a short list of four to five. The shorting method should be done on the basis of various political, economic and cultural factors that will potentially affect export operations in chosen market. Some factors to consider include: 1. Geographical Factors o Country, state, region, o Time zones, o Urban/rural location logistical considerations e.g. freight and distribution channels 2. Economic, Political, and Legal Environmental Factors Regulations including quarantine, Labelling standards, Standards and consumer protection rules, Duties and taxes
3. Demographic Factors Age and gender, Income and family structure, Occupation, Cultural beliefs, Major competitors, Similar products, Key brands.
4. Market Characteristics Market size, Availability of domestic manufacturers, Agents, distributors and suppliers.
Foreign Market Research Understanding a markets key characteristics requires gathering a broad range of primary and secondary research, much of which you can source without cost from the internet. Primary research, such as population figures, product compliance standards, statistics and other facts can be obtained without any cost from international organizations like United Nations (UN) and World Trade Organizations (WTO). Analysis of export statistics over a period of several years helps an individual to determine whether the market for a particular product is growing or shrinking.
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Secondary research, such as periodicals, studies, market reports and surveys, can be found through government websites, international organisations, and commercial market intelligence firms. Foreign Market Selection Process Step 1: Gather Information on a Broad Range of Markets Market selection process requires a broad range of information depending upon the products or services to be exported, which includes: The demand for product/service. The size of the potential audience. Whether the target audience can affords product. What the regulatory issues are that impact on exports of product. Ease of access to this market proximity/freight. Are there appropriate distribution channels for product/service. The environment for doing business language, culture, politics etc. Is it financially viable to export to selected market.
You can gather much of the first step information yourself from a variety of sources at little or no cost. Sources of information include: Talking to colleagues and other exporters. Trade and Enterprise web site, publications, call centre. The library. The Internet. Step 2: Research a Selection of Markets In-Depth From the results of the first stage, narrow your selection down to three to five markets and undertake some in-depth research relating specifically to your product. While doing so, some of the questions that may arise at this stage are:

What similar products are in the marketplace (including products that may not be similar but are used to achieve the same goal, e.g. the product in our sample matrix at the end of this document is a hair removal cream. As well as undertaking competitor research on other hair removal creams, we would also need to consider other products that are used for hair removal, i.e. razors, electrolysis, wax). What is your point of difference? What makes your product unique? What are the key selling points for your product? How do people obtain/use these products? Who provides them? Are they imported? If so from which countries? Is there a local manufacturer or provider? Who would your major competitors be? What are the key brands or trade names? What is the markets structure and shape? What is the markets size? Are there any niche markets, and if so how big are they? Who are the major importers/ stockists / distributors / agencies or suppliers? What are the other ways to obtain sales/representation?
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What are the prices or fees in different parts of the market? What are the mark-ups at different distribution levels? What are the import regulations, duties or taxes, including compliance and professional registrations if these apply? How will you promote your product or service if there is a lot of competition? Are there any significant trade fairs, professional gathers or other events where you can promote your product or service? Packaging do you need to change metric measures to imperial, do you need to list ingredients? Will you need to translate promotional material and packaging? Is your branding colours, imagery etc., culturally acceptable?
Foreign Market Selection Entry Having completed the market selection process and chosen your target market, the next step is to plan your entry strategy. There are a number of options for entering your chosen market. Most exporters initially choose to work through agents or distributors. In the longer term, however, you may consider other options, such as taking more direct control of your market, more direct selling or promotion, or seeking alliances or agreements 1. Licensing Another less risky market entry method is licensing. Here the Licensor will grant an organisation in the foreign market a license to produce the product, use the brand name etc in return that they will receive a royalty payment. 2. Franchising Franchising is another form of licensing. Here the organisation puts together a package of the successful ingredients that made them a success in their home market and then franchise this package to overseas investors. The Franchise holder may help out by providing training and marketing the services or product. McDonalds is a popular example of a Franchising option for expanding in international markets. 3. Contracting Another of form on market entry in an overseas market which involves the exchange of ideas is contracting. The manufacturer of the product will contract out the production of the product to another organisation to produce the product on their behalf. Clearly contracting out saves the organisation exporting to the foreign market. 4. Manufacturing abroad The ultimate decision to sell abroad is the decision to establish a manufacturing plant in the host country. The government of the host country may give the organisation some form of tax advantage because they wish to attract inward investment to help create employment for their economy. 5. Joint Venture To share the risk of market entry into a foreign market, two organisations may come together to form a company to operate in the host country. The two companies may share knowledge and expertise to assist them in the development of company, of course profits will have to be shared out also.
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Chapter 7 EXPORT STRATEGY

Export strategy is to ship commodities to other places or countries for sale or exchange to make profits out of the transaction. Thus it requires a 360 degree analysis of internal and external factors. The analysis should help develop short and long term business goals and action plans, and help guide your market selection process. Environmental factors internal to the company can be classified as strengths or weaknesses, and those external to the company can be classified as opportunities or threats. Strengths Business strengths are its resources and capabilities that can be used as a basis for developing a competitive-advantage. Examples of such strengths include: Patents Strong brand names. Good reputation among customers. Cost advantages from proprietary know-how. Exclusive access to high grade natural resources. Favourable access to distribution networks. Weaknesses The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses: Lack of patent protection. A weak brand name. Poor reputation among customers. High cost structure. Lack of access to the best natural resources. Lack of access to key distribution channels. Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: An unfulfilled customer need. Arrival of new technologies. Loosening of regulations. Removal of international trade barriers. Threats Changes in the external environmental also may present threats to the firm. Some examples of such threats include: Shifts in consumer tastes away from the firm's products Emergence of substitute products. New regulations. Increased trade barriers
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Management mistakes: The management might tap in some of the organizational pitfalls, like poor selection of overseas agents or distributors or chaotic global organization. Ways of exporting The company can decide to export directly or indirectly to a foreign country. Direct selling in export strategy Direct selling involves sales representatives, distributors, or retailers who are located outside the exporter's home country. Direct exports are goods and services that are sold to an independent party outside of the exporters home country. Mainly the companies are pushed by core competencies and improving their performance of value chain. Direct selling through distributors It is considered to be the most popular option to companies, to develop their own international marketing capability. This is achieved by charging personnel from the company to give them greater control over their operations. Direct selling also gives the company greater control over the marketing function and the opportunity to earn more profits. In other cases where network of sales representative, the company can transfer them exclusive rights to sell in a particular geographic region. A distributor in a foreign country is a merchant who purchases the product from the manufacturer and sells them at profit. Distributors usually carry stock inventory and service the product, and in most cases distributes deals with retailers rather than end users. Evaluating Distributors The size and capabilities of its sales force. Its sales record. An analysis of its territory. Its current product mix. Its facilities and equipment. Its marketing polices. Its customer profit. Its promotional strategy. Direct selling through foreign retailers and end users Exporters can also sell directly to foreign retailers. Usually, products are limited to consumer lines; it can also sell to direct end users. A good way to generate such sales is by printing catalogues or attending trade shows. Direct selling over the Internet Electronic commerce is an important mean to small and big companies all over the world, to trade internationally. We already can see how important E-commerce is for marketing growth among exporters companies in emerging economies, in order to overcome capital and infrastructure barriers. E-commerce eased engagements, provided faster and cheaper delivery of information, generates quick feedback on new products, improves customer service, accesses a global
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audience, levels the field of companies, and support electronics data interchange with suppliers and customers. Indirect selling Indirect exports, is simply selling goods to or through an independent domestic intermediary in their own home county. Then intermediaries export the products to customers foreign markets. Making the export decision Once a company determines it has exportable products, it must still consider other factors, such as the following: What does the company want to gain from exporting? Is exporting consistent with other company goals? What demands will exporting place on the company's key resources - management and personnel, production capacity, and finance - and how will these demands be met? Are the expected benefits worth the costs, or would company resources be better used for developing new domestic business?
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Chapter 8 Registration and Export License

Once all the research and analysis is done its time to get registered with the various government authorities. Registration with Reserve Bank of India (RBI) Prior to 1997, it was necessary for every first time exporter to obtain IEC number from Reserve Bank of India (RBI) before engaging in any kind of export operations. But now this job is being done by DGFT. Registration with Director General of Foreign Trade (DGFT) For every first time exporter, it is necessary to get registered with the DGFT (Director General of Foreign Trade), Ministry of Commerce, Government of India. DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required for the purpose of export as well as import. No exporter is allowed to export his good abroad without IEC number. However, if the goods are exported to Nepal, or to Myanmar through Indo-Myanmar boarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it is not necessary to obtain IEC number provided the CIF value of a single consignment does not exceed Indian amount of Rs. 25, 000 /-. Application for IEC number can be submitted to the nearest regional authority of DGFT. Application form which is known as "Aayaat Niryaat Form - ANF2A" can also be submitted online at the DGFT web-site: http://dgft.gov.in. While submitting an application form for IEC number, an applicant is required to submit his PAN account number. Only one IEC is issued against a single PAN number. Apart from PAN number, an applicant is also required to submit his Current Bank Account number and Bankers Certificate. A amount of Rs 1000/- is required to submit with the application fee. This amount can be submitted in the form of a Demand Draft or payment through EFT (Electronic Fund Transfer by Nominated Bank by DGFT. Registration with Export Promotion Council Registered under the Indian Company Act, Export Promotion Councils or EPC is a non-profit organisation for the promotion of various goods exported from India in international market. EPC works in close association with the Ministry of Commerce and Industry, Government of India and act as a platform for interaction between the exporting community and the government. So, it becomes important for an exporter to obtain a registration cum membership certificate (RCMC) from the EPC. An application for registration should be accompanied by a self certified copy of the IEC number. Membership fee should be paid in the form of cheque or draft after ascertaining the amount from the concerned EPC. The RCMC certificate is valid from 1st April of the licensing year in which it was issued and shall be valid for five years ending 31st March of the licensing year, unless otherwise specified.
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Registration with Commodity Boards Commodity Board is registered agency designated by the Ministry of Commerce, Government of India for purposes of export-promotion and has offices in India and abroad. At present, there are five statutory Commodity Boards under the Department of Commerce. These Boards are responsible for production, development and export of tea, coffee, rubber, spices and tobacco. Registration with Income Tax Authorities Goods exported out of the country are eligible for exemption from both Value Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important for an exporter to get registered with the Tax Authorities. Export Licensing An export license is a document issued by the appropriate licensing agency after which an exporter is allowed to transport his product in a foreign market. The license is only issued after a careful review of the facts surrounding the given export transaction. Export license depends on the nature of goods to be transported as well as the destination port. So, being an exporter it is necessary to determine whether the product or good to be exported requires an export license or not. While making the determination one must consider the following necessary points: What are you exporting? Where are you exporting? Who will receive your item? What will your items will be used? Canalisation Canalisation is an important feature of Export License under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies. Application for an Export License To determine whether a license is needed to export a particular commercial product or service, an exporter must first classify the item by identifying what is called ITC (HS) Classifications. Export license are only issued for the goods mentioned in the Schedule 2 of ITC (HS) Classifications of Export and Import items. A proper application can be submitted to the Director General of Foreign Trade (DGFT). The Export Licensing Committee under the Chairmanship of Export Commissioner considers such applications on merits for issue of export licenses. Exports Free unless regulated The Director General of Foreign Trade (DGFT) from time to time specifies through a public notice according to which any goods, not included in the ITC (HS) Classifications of Export and Import items may be exported without a license. Such terms and conditions may include Minimum Export Price (MEP), registration with specified authorities, quantitative ceilings and compliance with other laws, rules, regulations.
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Chapter 9 Export Procedure

Few step for an enterprise to become an export organisation are:1) REGISTRATION AS A BUSINESS ENTITY:- A new export unit can be started by registering as proprietorship, partnership or imited liability company. 2) IEC NUMBER - Any company wish to export/import need to obtain a Import Export code(IEC) number. IEC is issued by Regional licensing authority of DGFT. For communication with any office in regard to for export and import needs IEC number. 3) RCMC means the certificate of registration and membership granted by an Export Promotion Council/ Commodity Board/ Development Authority or other competent authority as prescribed by Foreign Trade Policy to an exporting unit. Any person, applying for a licence/ authorisation/certificate/permission to import/ export or any other benefit or concession under Foreign Trade Policy is required to furnish (RCMC). It is also required for executing a bond before Central Excise authorities, which exempts exporters to furnish bank guarantees. Export Promotion Councils have been set up by various ministries of the Central Government to promote and develop the exports of particular group of products, projects and services. For certain group of products, which are sensitive from the viewpoint of national consumption, there are commodity boards instead. Thus while we have export promotion councils for apparel, leather, software, chemicals, engineering goods etc., India has commodity boards for tea, coffee, jute etc. 4) REGISTRATION WITH SALES TAX OFFICE :-Exported goods from India are exempt from central & state sales tax. However, for getting exemption of such taxes or claming their refund, wherever permissible under Foreign Trade Policy, the exporting unit should be registered with sales tax authorities. 5) REGISTRATION WITH EXCISE DEPT.:-If an exporting unit is engaged in manufacturing of products, it needs registration with excise department & formalities remain the same as for any domestic unit. This registration is required for claiming refund of excise duties under various schemes of the government.
Documents Required Certain documentation takes place while exporting from India. Special documents may be required depending on the type of product or destination. Certain export products may require a quality control inspection certificate from the Export Inspection Agency. Some food and pharmaceutical product may require a health or sanitary certificate for export. Shipping Bill/ Bill of Export is the main document required by the Customs Authority for
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allowing shipment. Usually the Shipping Bill is of four types and the major distinction lies with regard to the goods being subject to certain conditions which are mentioned below:

Export duty/ cess Free of duty/ cess Entitlement of duty drawback Entitlement of credit of duty under DEPB Scheme Re-export of imported goods
The following are the documents required for the processing of the Shipping Bill:

GR forms (in duplicate) for shipment to all the countries. 4 copies of the packing list mentioning the contents, quantity, gross and net weight of each package. 4 copies of invoices which contains all relevant particulars like number of packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc. Contract, L/C, Purchase Order of the overseas buyer. AR4 (both original and duplicate) and invoice. Inspection/ Examination Certificate.
The formats presented for the Shipping Bill are as given below:

White Shipping Bill in triplicate for export of duty free of goods. Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback. Yellow Shipping Bill in triplicate for the export of dutiable goods. Blue Shipping Bill in 7 copies for exports under the DEPB scheme.
Note :- For the goods which are cleared by Land Customs, Bill of Export (also of 4 types white, green, yellow & pink) is required instead of Shipping Bill. Export credit Export credit is providing pre-shipment and post-shipment credit either in Indian rupees or in foreign currency to an exporter. The credit is given for short term i.e. upto 6 months, medium/ long term which extends more than 6 months according to the eligibility of the products and projects. Usually medium/ long term export credit is given after inspecting the supplier's credits. To promote the export promotion drive, the Government of India established Export Credit Guarantee Corporation of India Limited (ECGC) in 1957 to cover the risk of exporting on credit. This organization offers a range of services to exporters. They are as mentioned below:

It provides credit risk insurance covers to the exporters against there loss in export of goods and services. It offers guarantees to the banks and financial institutions in order to enable the exporters to obtain better facilities from them.
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It provides Overseas Investment Insurance to the Indian companies investing in joint ventures abroad as equity of loan. Export credit insurance Export credit insurance protects the exporter from the consequences of the payment risks due to the far-reaching political and economic changes. Outbreak of war or civil war might block or delay the payment for goods already exported. Coup or an insurrection in the importing country may also bring the same result. Export credit insurance is obtained from the ECGC with the following issued covers:
Standard policies to protect the exporter against the risk of not receiving the payment while trading with overseas buyers on short-term credit. Specific policies which is designed to protect the exporter against the risk of not receiving the payment in respect of Exports on deferred payment terms Services rendered to the foreign parties Construction work which also includes the turnkey projects undertaken abroad. The policies are one of the following: Whole Turnover Policies in the form of 'Open Cover' in respect of shipments made during 24 months period DP, DA and open delivery terms. Shipment details has to be declared on monthly basis. Specific policies for exports of capital goods on medium or long-term credit, turnkey projects, civil construction works and technical services.
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Chapter 10 Export Sales Leads

Export Sales leads are initial contacts a seller or exporter seeks in order to finalize a deal or agreement for export of goods and are considered as the first step in the entire sales process. After getting the first lead, a company should respond to that lead in a very carefully manner in order to convert that opportunity into real export deal. Generating Sales Leads Sales leads can be generated either through a word-of-mouth or internet research or trade show participation. Qualifying sales leads As the buyer is far away and sometimes communication process can be difficult, so its always better to make an extra effort to understand the exact need of the customer. Sending Acknowledgement After receiving a lead it is quite important to acknowledge the enquirer within 48 hours of receiving the enquiry either through e-mail or fax. Acknowledgement also gives an option to provide further detail about the product or to make an enquiry about the buyer. Responding with quality products Quality products strengthen buyer seller relationship, so its always better to provide quality products to the buyers. Follow Ups Always try to be in touch with the buyer or customer. For this purpose one can ask a phone number and a convenient time to call. It is always better to make the call in the presence of an Export Adviser. One should avoid high pressure call during follow up.
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Chapter 11 Exporting Product Samples

The foreign customer may ask for product samples before placing a confirmed order. So, it is essential that the samples are made from good quality raw materials and after getting an order, the subsequent goods are made with the same quality product. Extra care should be taken in order to avoid the risk associated in sending a costly product sample for export. Secrecy is also an important factor while sending a sample, especially if there is a risk of copying the original product during export. Before exporting a product sample an exporter should also know the Government policy and procedures for export of samples. While sending a product sample to an importer, it is always advised to send samples by air mail to avoid undue delay. However, if the time is not an issue then the product sample can also be exported through proper postal channel, which is cheaper as compared to the air mail. Sending Export Samples from India Samples having permanent marking as sample not for sale are allowed freely for export without any limit. However, in such cases where indelible marking is not available, the samples may be allowed for a value not exceeding US $ 10,000, per consignment. For export of sample products which are restricted for export as mentioned in the ITC (HS) Code, an application may be made to the office of Director General of Foreign Trade (DGFT). Export of samples to be sent by post parcel or air freight is further divided into following 3 categories, and under each category an exporter is required to fulfil certain formalities which are mentioned below : 1. Samples of value up to Rs.10, 000- It is necessary for the exporter to file a simple declaration that the sample does not involve foreign exchange and its value is less than Rs. 10,000. 2. Samples of value less than Rs. 25,000- It is necessary for the exporter to obtain a value certificate from the authorised dealer in foreign exchange (i.e. your bank). For this purpose, an exporter should submit a commercial invoice certifying thereon that the parcel does not involve foreign exchange and the aggregate value of the samples exported by you does not exceed Rs. 25,000 in the current calendar year. 3. Samples of value more than Rs. 25,000- It becomes necessary for the exporter to obtain GR/PP waiver from the Reserve Bank of India Export Samples against Payment A sample against which an overseas buyer agrees to make payment is exported in the same manner as the normal goods are exported. Sample can also be carried personally by you while travelling abroad provided these are otherwise permissible or cleared for export as explained earlier. However, in case of precious jewellery or stone the necessary information should be declared to the custom authorities while leaving the country and obtain necessary endorsement on export certificate issued by the Jewellery Appraiser of the Customs.
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Export of Garment Samples As per the special provision made for the export of garment samples, only those exporters are allowed to send samples that are registered with the Apparel export Promotion Council (AEPC). Similarly, for export of wool it is necessary for the exporter to have registration with the Woollen Export Promotion Council. Export of Software All kinds electronic and computer software product samples can only be exported abroad, if the exporter dealing with these products is registered with the Electronics and Computer Software Export Promotion Council (ESC) similarly samples of other export products can be exported abroad under the membership of various Export Promotion Councils (EPC) of India.
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Chapter 12 Export Pricing And Costing

Pricing and costing are two different things and an exporter should not confuse between the two. Price is what an exporter offer to a customer on particular products while cost is what an exporter pay for manufacturing the same product. Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However, there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency. Determining Export Pricing Export Pricing can be determine by the following factors:

Range of products offered. Prompt deliveries and continuity in supply. After-sales service in products like machine tools, consumer durables. Product differentiation and brand image. Frequency of purchase. Presumed relationship between quality and price. Specialty value goods and gift items. Credit offered. Preference or prejudice for products originating from a particular source. Aggressive marketing and sales promotion. Prompt acceptance and settlement of claims. Unique value goods and gift items.
Export Costing Export Costing is basically Cost Accountant's job. It consists of fixed cost and variable cost comprising various elements. It is advisable to prepare an export costing sheet for every export product. As regards quoting the prices to the overseas buyer, the same are quoted in the following internationally accepted terms which are commonly known as Incoterm.
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Chapter 13 Understanding Foreign Exchange Rates

An exporter without any commercial contract is completely exposed of foreign exchange risks that arises due to the probability of an adverse change in exchange rates. Therefore, it becomes important for the exporter to gain some knowledge about the foreign exchange rates, quoting of exchange rates and various factors determining the exchange rates. In this section, we have discussed various topics related to foreign exchange rates in detail. Spot Exchange Rate Also known as "benchmark rates", "straightforward rates" or "outright rates", spot rates represent the price that a buyer expects to pay for a foreign currency in another currency. Settlement in case of spot rate is normally done within one or two working days. Forward Exchange Rate The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date. Method of Quoting Exchange Rates There are two methods of quoting exchange rates:
Direct Quotation: In this system, variable units of home currency equivalent to a fixed unit of foreign currency are quoted. For example: US $ 1= Rs. 42.75 Indirect Quotation: In this system, variable units of foreign currency as equivalent to a fixed unit of home currency are quoted. For example: US $ 2.392= Rs. 100
Before 1993, banks were required to quote all the rates on indirect basis as foreign currency equivalent to RS. 100 but after 1993 banks are quoting rates on direct basis only Exchange Rate Regime The exchange rate regime is a method through which a country manages its currency in respect to foreign currencies and the foreign exchange market.
Fixed Exchange Rate A fixed exchange rate is a type of exchange rate regime in which a currency's value is matched to the value of another single currency or any another measure of value, such as gold. A fixed exchange rate is also known as pegged exchange rate. A currency that uses a fixed exchange rate is known as a fixed currency. The opposite of a fixed exchange rate is a floating exchange rate. Floating Exchange Rate A Floating Exchange Rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. A Floating Exchange Rate or a flexible exchange rate and is opposite to the fixed exchange rate. Linked Exchange Rate A linked exchange rate system is used to equalise the exchange rate of a currency to another. Linked Exchange Rate system is implemented in Hong Kong to stabilise the
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exchange rate between the Hong Kong dollar (HKD) and the United States dollar (USD). Forward Exchange Contracts A Forward Exchange Contract is a contract between two parties (the Bank and the customer). One party contract to sell and the other party contracts to buy, one currency for another, at an agreed future date, at a rate of exchange which is fixed at the time the contract is entered into. Benefits of Forward Exchange Contract

Contracts can be arranged to either buy or sell a foreign currency against your domestic currency, or against another foreign currency. Available in all major currencies. Available for any purpose such as trade, investment or other current commitments. Forward exchange contracts must be completed by the customer. A customer requiring more flexibility may wish to consider Foreign Currency Options.
Foreign Currency Options Foreign Currency Options is a hedging tool that gives the owner the right to buy or sell the indicated amount of foreign currency at a specified price before a specific date. Like forward contracts, foreign currency options also eliminate the spot market risk for future transactions. A currency option is no different from a stock option except that the underlying asset is foreign exchange. The basic premises remain the same: the buyer of option has the right but no obligation to enter into a contract with the seller. Therefore the buyer of a currency option has the right, to his advantage, to enter into the specified contract. Flexible Forwards Flexible Forward is a part of foreign exchange that has been developed as an alternative to forward exchange contracts and currency options. The agreement for flexible forwards is always singed between two parties (the buyer of the flexible forward and the 'seller' of the flexible forward) to exchange a specified amount (the face value) of one currency for another currency at a foreign exchange rate that is determined in accordance with the mechanisms set out in the agreement at an agreed time and an agreed date (the expiry time on the expiry date). The exchange then takes place approximately two clear business days later on the delivery date). Currency Swap A currency swap which is also known as cross currency swap is a foreign exchange agreement between two countries to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped. Foreign Exchange Markets The foreign exchange markets are usually highly liquid as the world's main international banks provide a market around-the-clock. The Bank for International Settlements reported that global foreign exchange market turnover daily averages in April was $650 billion in 1998 (at constant exchange rates) and increased to $1.9 trillion in 2004 [1]. Trade in global currency markets has soared over the past three years and is now worth more than $3.2 trillion a day. The biggest foreign exchange trading centre is London, followed by New York and Tokyo.
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Chapter 14 Appointing A Sales Agent

Selling a product through an overseas agent is a very successful strategy. Sales agents are available on commission basis for any sales they make. The key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market. Sales agent also provides support to an exporter in the matter of transportation, reservation of accommodation, appointment with the government as and when required. It is, therefore, essential that one should very carefully select overseas agent. Merits of Appointing a Sales Agent There are various types of merits associated with appointed a sales agent for export purpose are as follow:

Sales agent avoids the recruitment, training, time and payroll costs of using own employees to enter an overseas market. An agent is a better option to identify and exploit opportunities in overseas export market. An agent already have solid relationships with potential buyers, hence it saves the time of the exporter to build own contacts. An agent allows an exporter to maintain more control over matters such as final price and brand image - compared with the other intermediary option of using a distributor.
Demerits of Appointing a Sales Agent There are also certain disadvantages associated with appointing a sales agent for export purpose which are as follows:

After-sales service can be difficult when selling through an intermediary. There is a risk for exporter to lose some control over marketing and brand image.
Important Points While Appointing a Sales Agent: Appointing right sales agent not only enhance the profit of an exporter but also avoid any of risks associated with a sales agent. So it becomes important for an exporter to take into consideration following important points before selection an appropriate sales agent for his product.

Size of the agent's company. Date of foundation of the agent's company. Company's ownership and control. Company's capital, funds, available and liabilities. Name, age and experience of the company's senior executives. Number, age and experience of the company's salesman. Other agencies that the company holds, including those of competing products and turn-over of each. Length of company's association with other principal. New agencies that the company obtained or lost during the past year. Company's total annual sales and the trends in its sales in recent years.
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Company's sales coverage, overall and by area. Number of sales calls per month and per salesman by company staff. Any major obstacles expected in the company's sales growth. Agent's capability to provide sales promotion and advertising services Agent's transport facilities and warehousing capacity. Agent's rate of commission; payment terms required. References on the agents from banks, trade associations and major buyers.
Some source of Information on Agents is:

Government Departments Trade Associations. Chambers of Commerce. Banks. Independent Consultants. Export Promotion Councils. Advertisement Abroad.
Agent v Distributor There is a fundamental legal difference between agents and distributors and an exporter should not confuse between the two. An agent negotiates on the behalf of an exporter and may be entitled to create a legal relationship between exporter and the importer A distributor buys goods on its own account from exporter and resells those products to customers. It is the distributor which has the sale contract with the customer not the exporter. In the case of distributor, an exporter is free from any kinds of risks associated with the finance.
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Chapter 15 Export Risks Management

Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However, there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency. Like any business transaction, risk is also associated with good to be exported in an overseas market. Export is risk in international trade is quite different from risks involve in domestic trade. So, it becomes important to all the risks related to export in international trade with an extra measure and with a proper risk management. The various types of export risks involve in an international trade are as follow: Credit Risk Sometimes because of large distance, it becomes difficult for an exporter to verify the creditworthiness and reputation of an importer or buyer. Any false buyer can increase the risk of non-payment, late payment or even straightforward fraud. So, it is necessary for an exporter to determine the creditworthiness of the foreign buyer. An exporter can seek the help of commercial firms that can provide assistance in credit-checking of foreign companies.
Poor Quality Risk Exported goods can be rejected by an importer on the basis of poor quality. So it is always recommended to properly check the goods to be exported. Sometimes buyer or importer raises the quality issue just to put pressure on an exporter in order to try and negotiate a lower price. So, it is better to allow an inspection procedure by an independent inspection company before shipment. Such an inspection protects both the importer and the exporter. Inspection is normally done at the request of importer and the costs for the inspection are borne by the importer or it may be negotiated that they be included in the contract price. Alternatively, it may be a good idea to ship one or two samples of the goods being produced to the importer by an international courier company. The final product produced to the same standards is always difficult to reduce. Transportation Risks With the movement of goods from one continent to another, or even within the same continent, goods face many hazards. There is the risk of theft, damage and possibly the goods not even arriving at all. Logistic Risk The exporter must understand all aspects of international logistics, in particular the contract of carriage. This contract is drawn up between a shipper and a carrier (transport operator). For this an exporter may refer to Incoterms 2000, ICC publication. Legal Risks International laws and regulations change frequently. Therefore, it is important for an
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exporter to drafts a contract in conjunction with a legal firm, thereby ensuring that the exporter's interests are taken care of. Political Risk Political risk arises due to the changes in the government policies or instability in the government sector. So it is important for an exporter to be constantly aware of the policies of foreign governments so that they can change their marketing tactics accordingly and take the necessary steps to prevent loss of business and investment.
Unforeseen Risks Unforeseen risk such as terrorist attack or a natural disaster like an earthquake may cause damage to exported products. It is therefore important that an exporter ensures a force majeure clause in the export contract. Exchange Rate Risks Exchange rate risk is occurs due to the uncertainty in the future value of a currency. Exchange risk can be avoided by adopting Hedging scheme. Export Risk Management Plan Risk management is a process of thinking analytically about all potential undesirable outcomes before they happen and setting up measures that will avoid them. There are six basic elements of the risk management process: Establishing the context Identifying the risks Assessing probability and possible consequences of risks Developing strategies to mitigate these risks Monitoring and reviewing the outcomes Communicating and consulting with the parties involved A risk management plan helps an exporter to broaden the risk profile for foreign market. For a small export business, an exporter must keep his risk management analysis clear and simple. Export Risk Mitigation Export risk mitigations are the various strategies that can be adopted by an exporter to avoid the risks associated with the export of goods.
Direct Credit: Export Credit Agencies support exports through the provision of direct credits to either the importer or the exporter. o Importer: a buyer credit is provided to the importer to purchase goods. o Exporter: makes a deferred payment sale; insurance is used to protect the seller or bank. Guarantees o Bid bond (tender guarantee): protects against exporters unrealistic bid or failure to execute the contract after winning the bid. o Performance bond: guarantees exporters performance after a contract is signed. o Advance payment guarantee (letter of indemnity): in the case where an importer advances funds, guarantees a refund if exporter does not perform.
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Standby letter of credit: issuing bank promises to pay exporter on behalf of importer.
Insurance o Transportation insurance: Covers goods during transport; degree of coverage varies. o Credit Insurance: Protects against buyer insolvency or protracted defaults and/or political risks. o Seller non-compliance (credit insurance): Covers advance payment risk. o Foreign exchange risk.
Hedging Instruments used to Hedge Price Risk

o o o o o
Stabilization programs and funds. Timing of purchase/sale. Fixed price long-term contracts. Forward contracts. Swaps
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Chapter 16 Packaging and Labelling Of Goods

An important stage after manufacturing of goods or their procurement is their preparation for shipment which involves packaging and labelling of goods to be exported. Proper packaging and labelling not only makes the final product look attractive but also save a huge amount of money by saving the product from wrong handling the export process. Packaging The primary role of packaging is to contain, protect and preserve a product as well as aid in its handling and final presentation. Packaging also refers to the process of design, evaluation, and production of packages. The packaging can be done within the export company or the job can be assigned to an outside packaging company. Packaging provides following benefits to the goods to be exported:

Physical Protection Packaging provides protection against shock, vibration, temperature, moisture and dust. Containment or agglomeration Packaging provides agglomeration of small objects into one package for reason of efficiency and cost factor. For example it is better to put 1000 pencils in one box rather than putting each pencil in separate 1000 boxes. Marketing: Proper and attractive packaging play an important role in encouraging a potential buyer. Convenience - Packages can have features which add convenience in distribution, handling, display, sale, opening, use, and reuse. Security - Packaging can play an important role in reducing the security risks of shipment. It also provides authentication seals to indicate that the package and contents are not counterfeit. Packages also can include anti-theft devices, such as dyepacks, RFID tags, or electronic article surveillance tags, that can be activated or detected by devices at exit points and require specialized tools to deactivate. Using packaging in this way is a means of loss prevention.
Labelling Like packaging, labelling should also be done with extra care. It is also important for an exporter to be familiar with all kinds of sign and symbols and should also maintain all the nationally and internationally standards while using these symbols. Labelling should be in English, and words indicating country of origin should be as large and as prominent as any other English wording on the package or label. Labelling on product provides the following important information:

Shipper's mark Country of origin Weight marking (in pounds and in kilograms) Number of packages and size of cases (in inches and centimetres) Handling marks (international pictorial symbols) Cautionary markings, such as "This Side Up." Port of entry Labels for hazardous materials
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Labelling of a product also provides information like how to use, transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some types of information are required by governments. It is better to choose a fast dyes for labelling purpose. Only fast dyes should be used for labelling. Essential data should be in black and subsidiary data in a less conspicuous colour; red and orange and so on. For food packed in sacks, only harmless dyes should be employed, and the dye should not come through the packing in such a way as to affect the goods.
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Chapter 17 Inspection Certificates And Quality Control

An important aspect about the goods to be exported is compulsory quality control and preshipment inspection. For this purpose, Export Inspection Council (EIC) was set up by the Government of India under Section 3 of the Export (Quality Control and Inspection) Act, 1963. It includes more than 1000 commodities which are organized into various groups for a compulsory pre-shipment inspection. It includes Food and Agriculture, Fishery, Minerals, Organic and Inorganic Chemicals, Rubber Products, Refractoriness, Ceramic Products, Pesticides, Light Engineering, Steel Products, Jute Products, Coir and Coir Products, Footwear and Footwear Products. An important aspect about the goods to be exported is compulsory quality control and preshipment inspection. For this purpose, Export Inspection Council (EIC) was set up by the Government of India under Section 3 of the Export (Quality Control and Inspection) Act, 1963. It includes more than 1000 commodities which are organized into various groups for a compulsory pre-shipment inspection. It includes Food and Agriculture, Fishery, Minerals, Organic and Inorganic Chemicals, Rubber Products, Refractoriness, Ceramic Products, Pesticides, Light Engineering, Steel Products, Jute Products, Coir and Coir Products, Footwear and Footwear Products. ISI Certification Indian Standards Institute now known as Bureau of Indian Standard (BIS) is a registered society under a Government of India. BIS main functions include the development of technical standards, product quality and management system certifications and consumer affairs. Founded by Professor P.C. Mahalanobis in Kolkata on 17th December, 1931, the institute gained the status of an Institution of National Importance by an act of the Indian Parliament in 1959. AgMark Certification AgMark is an acronym for Agricultural Marketing and is used to certify the food products for quality control. Agmark has been dominated by other quality standards including the non manufacturing standard ISO 9000. Benefits of ISI and Agmark Certification Products having ISI Certification mark or Agmark are not required to be inspected by any agency. These products do not fall within the purview of the export inspection agencies network. The Customs Authorities allow export of such goods even if not accompanied by any pre-shipment inspection certificate, provided they are otherwise satisfied that the goods carry ISI Certification or the Agmark. In-Process Quality Control (IPQC) In-Process Quality Control (IPQC) inspection is mainly done for engineering products and is applied at the various stages of production. Units approved under IPQC system of in-process quality control may themselves issue the certificate of inspection, but only for the products for which they have been granted IPQC facilities. The final certificate of inspection on the end-products is then given without in-depth study at the shipment stage. Self Certification Scheme Under the self Certification Scheme, large exporters and manufacturers are allowed to inspect
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their product without involving any other party. The facility is available to manufacturers of engineering products, chemical and allied products and marine products. Self-Certification is given on the basis that the exporter himself is the best judge of the quality of his products and will not allow his reputation to be spoiled in the international market by compromising on quality. Self-Certification Scheme is granted to the exporter for the period of one year. Exporters with proven reputation can obtain the permission for self certification by submitting an application to the Director (Inspection and Quality Control), Export Inspection Council of India, 11th Floor, Pragati Tower, 26 Rajendra Place, New Delhi. ISO 9000 The discussion on inspection certificate and quality control is incomplete without ISO-9000. Established in 1987, ISO 9000 is a series of international standards that has been accepted worldwide as the norm assuring high quality of goods. The current version of ISO 9000 is ISO 9000:2000.
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Chapter 18 Documents Required for Post Parcel Customs Clearance

An exporter without any commercial contract is completely exposed of foreign exchange risks that arises due to the probability of an adverse change in exchange rates. Therefore, it becomes important for the exporter to gain some knowledge about the foreign exchange rates, quoting of exchange rates and various factors determining the exchange rates. In this section, we have discussed various topics related to foreign exchange rates in detail. Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification. Shipping Bill / Bill of Export Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship's owner, seller, buyer and some other parties. For each one represents a kind of certificate document. Documents Required for Post Parcel Customs Clearance In case of Post Parcel, no Shipping Bill is required. The relevant documents are mentioned below: Customs Declaration Form - It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender. Despatch Note- It is filled by the exporter to specify the action to be taken by the postal department at the destination in case the address is nonbe accepted. Commercial Invoice - Issued by the exporter for the full realisable amount of goods as per trade term. Consular Invoice - Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Ausatralia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format and is signed/ certified by the counsel of the importing country located in the country of export. Customs Invoice - Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate. Legalised / Visaed Invoice - This shows the seller's genuineness before the appropriate consulate or chamber or commerce/ embassy. Certified Invoice - It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in
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accordance with specific contract. Sight Draft and Usance Draft are available for this. Sight Draft is required when the exporter expects immediate payment and Draft is required for credit delivery. Packing List - It shows the details of goods contained in each parcel / shipment.

Certificate of Inspection It is a type of document describing the condition of goods and confirming that they have been inspected. Black List Certificate - It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country(s). Manufacturer's Certificate - It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and is available. Certificate of Chemical Analysis - It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc. Certificate of Shipment - It signifies that a certain lot of goods have been shipped. Health/ Veterinary/ Sanitary Certification - Required for export of foodstuffs, marine products, hides, livestock etc. Certificate of Conditioning - It is issued by the competent office to certify compliance of humidity factor, dry weight, etc. Antiquity Measurement It is issued by Archaeological Survey of India in case of antiques. Shipping Order - Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date. Cart/ Lorry Ticket - It is prepared for admittance of the cargo through the port gate and includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc. Shut Out Advice - It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter. Short Shipment Form - It is an application to the customs authorities at port which advises short shipment of goods and required for claiming the return.
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Chapter 19 Custom Procedure For Export

In India custom clearance is a complex and time taking procedure that every export face in his export business. Physical control is still the basis of custom clearance in India where each consignment is manually examined in order to impose various types of export duties. High import tariffs and multiplicity of exemptions and export promotion schemes also contribute in complicating the documentation and procedures. So, a proper knowledge of the custom rules and regulation becomes important for the exporter. For clearance of export goods, the exporter or export agent has to undertake the following formalities: Registration Any exporter who wants to export his good need to obtain PAN based Business Identification Number (BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export goods. The exporters must also register themselves to the authorised foreign exchange dealer code and open a current account in the designated bank for credit of any drawback incentive. Registration in the case of export under export promotion schemes: All the exporters intending to export under the export promotion scheme need to get their licences / DEEC book etc. Processing of Shipping Bill - Non-EDI: In case of Non-EDI, the shipping bills or bills of export are required to be filled in the format as prescribed in the Shipping Bill and Bill of Export (Form) regulations, 1991. An exporter need to apply different forms of shipping bill/ bill of export for export of duty free goods, export of dutiable goods and export under drawback etc. Processing of Shipping Bill - EDI: Under EDI System, declarations in prescribed format are to be filed through the Service Centers of Customs. A checklist is generated for verification of data by the exporter/CHA. After verification, the data is submitted to the System by the Service Centre operator and the System generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the exporter/CHA. For export items which are subject to export cess, the TR-6 challans for cess is printed and given by the Service Centre to the exporter/CHA immediately after submission of shipping bill. The cess can be paid on the strength of the challan at the designated bank. No copy of shipping bill is made available to exporter/CHA at this stage. Quota Allocation The quota allocation label is required to be pasted on the export invoice. The allocation number of AEPC (Apparel Export Promotion Council) is to be entered in the system at the time of shipping bill entry. The quota certification of export invoice needs to be submitted to Customs along-with other original documents at the time of examination of the export cargo. For determining the validity date of the quota, the relevant date needs to be the date on which the full consignment is presented to the Customs for examination and duly recorded in the Computer System. Arrival of Goods at Docks: On the basis of examination and inspection goods are allowed enter into the Dock. At this stage the port authorities check the quantity of the goods with the documents.
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System Appraisal of Shipping Bills: In most of the cases, a Shipping Bill is processed by the system on the basis of declarations made by the exporters without any human intervention. Sometimes the Shipping Bill is also processed on screen by the Customs Officer. Customs Examination of Export Cargo: Customs Officer may verify the quantity of the goods actually received and enter into the system and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the Dock Appraiser of the Dock who many assign a Customs Officer for the examination and intimate the officers name and the packages to be examined, if any, on the check list and return it to the exporter or his agent. The Customs Officer may inspect/examine the shipment along with the Dock Appraiser. The Customs Officer enters the examination report in the system. He then marks the Electronic Bill along with all original documents and check list to the Dock Appraiser. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents and as seen in the physical examination, he may proceed to allow "let export" for the shipment and inform the exporter or his agent. Stuffing / Loading of Goods in Containers The exporter or export agent hand over the exporters copy of the shipping bill signed by the Appraiser Let Export" to the steamer agent. The agent then approaches the proper officer for allowing the shipment. The Customs Preventive Officer supervising the loading of container and general cargo in to the vessel may give "Shipped on Board" approval on the exporters copy of the shipping bill. Drawl of Samples: Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the ICES/E system. There is no separate register for recording dates of samples drawn. Three copies of the test memo are prepared by the Customs Officer and are signed by the Customs Officer and Appraising Officer on behalf of Customs and the exporter or his agent. The disposal of the three copies of the test memo is as follows:
Original to be sent along with the sample to the test agency. Duplicate Customs copy to be retained with the 2nd sample. Triplicate Exporters copy.
The Assistant Commissioner/Deputy Commissioner if he considers necessary, may also order for sample to be drawn for purpose other than testing such as visual inspection and verification of description, market value inquiry, etc. Amendments: Any correction/amendments in the check list generated after filing of declaration can be made at the service center, if the documents have not yet been submitted in the system and the shipping bill number has not been generated. In situations, where corrections are required to be made after the generation of the shipping bill number or after the goods have been brought into the Export Dock, amendments is carried out in the following manners.
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1. The goods have not yet been allowed "let export" amendments may be permitted by the Assistant Commissioner (Exports). 2. Where the "Let Export" order has already been given, amendments may be permitted only by the Additional/Joint Commissioner, Custom House, in charge of export section. In both the cases, after the permission for amendments has been granted, the Assistant Commissioner / Deputy Commissioner (Export) may approve the amendments on the system on behalf of the Additional /Joint Commissioner. Where the print out of the Shipping Bill has already been generated, the exporter may first surrender all copies of the shipping bill to the Dock Appraiser for cancellation before amendment is approved on the system. Export of Goods under Claim for Drawback: After actual export of the goods, the Drawback claim is processed through EDI system by the officers of Drawback Branch on first come first served basis without feeling any separate form. Generation of Shipping Bills: The Shipping Bill is generated by the system in two copies- one as Custom copy and one as exporter copy. Both the copies are then signed by the Custom officer and the Custom House Agent.
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Chapter 20 Invisible Export

Introduction Invisible export is the part of international trade that does not involve the transfer of goods or tangible objects, which mostly include service sectors like banking, advertising, copyrights, insurance, consultancy etc. invisible export also known as invisible trade is basically associated with the persons own skill and knowledge is what is 'sold' rather than a piece of software or books. Invisible trade is composed of invisible imports and invisible exports. Since nothing tangible is transferred, the importer is defined as the person, group or country that receives the service. The exporter is defined as the supplier of the service. The net total of a country's invisible imports and invisible exports is called the invisible balance of trade and is a part of the country's balance of trade. For countries that rely on service exports or on tourism, the invisible balance is particularly important. Export Performance of the Indian service Industry An analysis of the consultancy contracts secured by Indian project in the foreign market has been carried out by Exim Bank of India. As per the analysis, done during 1995-96 to 2000-01 indicates that consultancy contracts were secured largely in West Asia which accounted for 39% number wise and 46% value wise followed by South East Asia and Pacific & South Asia. South East Asia constituted 22% both by number and by value whereas South Asia was 18% number wise and 16% value wise. According to the 2002 data of the Federation of Indian Export Organizations (FIEO), India's share in global trade in services was about 1.3%. Indias share of consultancy exports is about 0.5% of global trade in services. Government Initiatives In the recent years the Government of India has taken some important step for the improvement of service based export. The Foreign Trade Policy, 2004 09 is one of them, which has announced the setting up of Services Export Promotion Council for promoting the Indian service sector in the foreign market. Government of India has also introduced Market Development Assistance (MDA), Market Access Initiative (MAI) scheme, proactive EXIM Policy and EXIM Bank schemes. Government also provides exemption on service tax for export of consultancy services. However due to lack of clarity in the provisions in the present notification, consultancy export may be affected. Strengths and Weaknesses of Indian Consulting Industry
The major strengths of Indian invisible export or invisible trade include professional competence, low cost structure, diverse capabilities, high adaptability and quick learning capability of Indian consultants. The major weaknesses of Indian invisible trade or invisible export include low quality assurance, low local presence overseas, low equity base, lack of market intelligence and low level of R&D.
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Chapter 21 Export To SAARC

Established in 1985, SAARC or South Asian Association for Regional Cooperation is a group of eight countries including India, Pakistan, Sri Lanka, Afghanistan, Maldives, Bhutan, Bangladesh, and Nepal. They all are neighbour countries that share a lot of similarities in terms of religion and culture. Because of this Indian has adopted a liberal trade policy with these countries. Apart from SAARAC, India is also a member of BIMSTEC (Bangladesh, India, Myanmar, Sri Lanka, and Thailand Economic Co-operation), International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB). India is even a founding member of GATT and the World Trade Organisation (WTO). South Asian Free Trade Area (SAFTA) The Agreement on South Asian Free Trade Area (SAFTA) was signed at Islamabad during the Twelfth SAARC Summit on 6 January 2004. The Agreement on South Asian Free Trade Area (SAFTA) was signed by all the member states of the South Asian Association for Regional Cooperation (SAARC), namely, India, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. India, Pakistan and Sri Lanka are categorized as Non-Least Developed Contracting States (NLDCS) and Bangladesh, Bhutan, Maldives and Nepal are categorized as Least Developed Contracting States (LDCS). Article 7 of the SAFTA Agreement provides for a phased tariff liberalization programme (TLP) under which, in two years, NLDCS would bring down tariffs to 20%, while LDCS will bring them down to 30%. Non-LDCS will then bring down tariffs from 20% to 0-5% in 5 years (Sri Lanka 6 years), while LDCS will do so in 8 years. NLDCs will reduce their tariffs for L.D.C. products to 0-5% in 3 years. This TLP covers all tariff lines except those kept in the sensitive list (negative list) by the member states. Preferential Trade Agreement (PTA) Preferential Trade Agreement (PTA) is a special type of agreement that gives access to only certain goods. Preferential Trade Agreement is done by reducing tariffs, but it does not abolish them completely. PTA is established through trade pact and it is the weakest form of economic integration. Among the SAARC countries, India enjoys PTA with the Afghanistan. Other countries that have PTA with India are Chile and MERCOSUR (a trading bloc in Latin America comprising Brazil, Argentina, Uruguay and Paraguay). Export To Afghanistan India has a signed a Preferential Trade Agreement (PTA) on March 6,2003 with the Afghanistan, according to which preferential tariff is granted by the Government of Afghanistan on eight items exported from India including tea, medicines, sugar, cement. Export to Bangladesh Bangladesh is one of the largest export markets for Indian trade. The bilateral trade between the two nations is carried out as per guidelines given in the Bangladesh Trade Agreement which provides beneficial arrangement for the use of waterways, railways and roadways passage of goods between two places in one country through the territory of the other.
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Major items exported from India to Bangladesh include wheat other cereals, dairy products, oils meals, cotton yarn, fabrics, made ups, petroleum crude and products, plastic and linoleum products rice machinery and instruments and primary and semi finished iron and steel, pulses transport equipments drugs pharmaceuticals and fine chemicals processed mineral manmade yarn, fabrics, made ups manufactures of metal and fresh fruits and vegetables. Export to Bhutan The Free Trade Agreement between India and Bhutan provides for free trade between the two countries. Under this agreement India also provides shipment facilities through Indian Territory for Bhutan's Trade with third countries. All the export transactions are carried out in Indian Rupees and Bhutanese Ngultrum. Major items exported from India to Bangladesh include metals machinery and instruments, machine tools transport equipments, electronics goods rice (other than basmati), spirit and beverages, miscellaneous processed items primary and semi finished iron and steel and cereals. Export to Sri Lanka After Bangladesh, Sri Lanka is the biggest export market for India. Trade between the two countries is carried out as per guidelines mention in the Indo-Sri Lanka Free Trade Agreement (SAFTA). Major items of export from India have been pulses, wheat, other cereal spices, oil meals, fresh vegetables, miscellaneous processed items, drugs pharmaceuticals and fine chemicals inorganic/ organic agro chemicals rubber manufactured goods except footwear, glass , glassware ceramic and allied products paper/wood products plastic and linoleum products non ferrous metals manufactures of metals, machinery and instruments, iron and steel bar/rod etc. primary and semi finished iron and steel, electronic goods, cotton yarn, fabric, made ups, and petroleum crude and products. Export to Nepal India-Nepal Trade Treaty between India and Nepal is signed for the time period of five years. Under this trade agreement major items exported from India include drugs , pharmaceuticals and fine chemicals, petroleum product, pulses, transport equipment, rice other than basmati, tobacco, manufactured, spices, oil meals fresh fruits and vegetables, miscellaneous processed items, ores and minerals glassware/ceramics, manufactures of metals, primary and semi finished iron and steel and cotton yarn fabrics made ups. Export to Maldives Trade between India and Maldives is governed by the rules as mentioned in the IndoMaldives Trade Agreement signed on 31st March 1981. Under this agreement Indian major exports items to Maldives include rice other than basmati, sugar, fresh vegetables, miscellaneous processed item, drugs, pharmaceuticals and fine chemicals plastic and linoleum products, manufactures of metals and machinery equipment. India and Maldives also shares the status of Most Favoured Nation with each other. Export to Pakistan No trade agreement has been signed between India and Pakistan till 2007. Although India has granted the status of Most Favoured Nation to Pakistan since 1996 but Pakistan has yet to reciprocate by granting this status to India. Indian exports to Pakistan are restricted to a list 773 items known as Positive List and include rice other than basmati, spices, oil meals, iron ore, drugs, pharmaceuticals and fine chemicals rubber manufactured products except footwear, plastic and linoleum products, manufactures of metals and petroleum crude and products.
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Chapter 22 Export To CIS

Commonwealth of Independent States (CIS) was founded in 1991 after the dissolution of the Soviet Union. At present the CIS includes Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine. Relations between India and countries of the CIS Region have remained close and cordial since the Soviet era. However, bilateral trade and commercial relations of India have not grown commensurately with these newly formed countries. Due to the factors like distance, language barrier, inadequate transport facility, inadequacy of information about business opportunities CIS only constitutes 1.2% share in India's total exports. Major Trading Partners in the CIS Region Russia, Ukraine, Kazakhstan, Uzbekistan, Kyrgyzstan, and Belarus are India's major trading partners, constituting more than 90% of India's total bilateral trade with the CIS countries. Major Items of Exports India's major items of export to this region are : cotton, drugs, pharmaceuticals coffee, tea tobacco machinery & instrument, processed mineral, plastic and Linoleum products gem & jewellery, transport equipment, etc. India CIS Trade Relations - Armenia Despite a trade agreement being signed, India's trade with Armenia after independence has been not worth mentioning. Indian exports to Armenia in 2002 were worth US$ 5.6 million which mainly includes car batteries, chemical goods, pharmaceuticals, and electrical equipments. India CIS trade relations Georgia Trade relations between India and Georgia were established in 1992, according to which two countries agreed that there would be cooperation within the framework of Indian Council for Cultural Relations and Indian Technical and Economic Cooperation. Trade turnover between India and Georgia in 2006 was US$ 20,521,700. Laws on tariffs have been simplified and so far the trend has been such that India's exports to Georgia have been more than Georgia's exports to India. India CIS Trade Relations Ukraine Ukraine is the second largest trade partner of India in the CIS region, after the Russian Federation. Diplomatic relations between India and Ukraine were established way back in the 1960s. In March, 1992 a treaty on friendship and cooperation was signed to strengthen bilateral trade. More than 17 bilateral Agreements have been signed between India and Ukraine, including agreements on Cooperation in Science and Technology, Foreign Office Consultation, Cooperation in Space Research, Avoidance of Double Taxation and Promotion and Protection of Investments. The amount of bilateral trade that took place between the two countries in 2004 was worth more than $500,000. India mainly exports pharmaceutical products to Ukraine.
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India CIS Trade Relations Latvia In 1991, diplomatic relations between the two countries were formed. Bilateral trade relations between these two countries are not very intense due to inaction on both sides. Import to Latvia amounted to US$ 16,954,219 and the export stood at US$ 2,554,392 in 2005. The major export items from India include pharmaceuticals and healthcare products, telecommunications, IT and software, development; heavy engineering; export of textiles gems and jewellery, chemicals and dyes, vegetables and fruits, leather and leather products and third country exports. India CIS Trade Relations Estonia Diplomatic relations between the two countries were established in December, 1991. In 2005, the total amount of bilateral trade that took place was 19.6 million. India mainly exports vegetables, chemical, and textile products to Estonia. India CIS Trade Relations Lithuania In July, 1993 an Agreement on Trade and Economic Cooperation was signed between India and Lithuania. India mainly exports pharmaceuticals, paper, and textiles items to Lithuania. The major items imported from India include pharmaceuticals, paper, and textiles. Lithuania exports cement, metals, sulphur, and base metals. The total bilateral trade between the two countries stands at US$ 47.06. India CIS Trade Relations Belarus In 2005, India's trade turnover with Belarus amounted to around US$ 118.3 million. The export items from India include pharmaceuticals, tea, rice, pepper, yarn, organic dyes, machine and electrical equipments.
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Chapter 23 Support From Banks

HSBC BANK Exporters can face significant risks when they undertake international trade, not least the fear of delay or non-payment. Whether you are a new or long-established exporter, HSBC Trade Services can help you to reduce risks, allowing you to focus on growing your export business. To benefit from HSBC's export services, you do not need to have special facilities. Simply request your buyers to advise documentary credits through us and benefit immediately from our international network. Whats more, if you are the beneficiary of a documentary credit issued by an HSBC Group office, you are entitled to the same level of service excellence as any of our regular customers. Export Collections We can collect your commercial / shipping documents through our banking network. For exporters, it is a more secure option than trading on open account terms because the shipping document will be delivered to the importer only against payment or an acceptance to pay on due date. We also offer instant email functionality, providing details on the export collection transactions, to a designated person in your office through our EDCA offering. Export Financing We can address funding gaps in your trade cycle and support your business, by providing you export financing options in foreign currency (at LIBOR linked rates) or in Indian Rupees, both at the pre-shipment and post-shipment stage. We can discount your export receivables by negotiating bills drawn under a DC or discounting bills under collection, with the latter available both for D/P (Documents against Payment) and D/A (Documents against Acceptance). We can reduce country and bank risk, exposure to interest and exchange rate fluctuations and turn your receivables into cash. We also provide instant email advice. Advance Remittances Any payments into the country by overseas parties are processed expeditiously and credited to your account promptly. DC Advising A Documentary Credit ("DC") opened by the overseas importer's bank, will be checked for authenticity and couriered across to your doorstep. With a presence in over 83 countries and over 10,000 group offices, and global correspondent banking relationships with over 2,500 banks, we have Swift key arrangements with most of the major banks, to facilitate straight through processing of DC advising. We also offer a real time electronic DC advising
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functionality wherein the DC is sent through an automated email to a designated person in your office. DC Confirmation Reduce bank and country risk effectively by enjoying the security of payment commitments from both the issuing bank and the confirming bank. HSBC is one of the largest institutional banks with global correspondent banking relationships with over 2,500 banks. If HSBC confirms the DC, and your documents are presented in compliance with the DC terms, payment from HSBC will be final. DC Transfer Ideal for buyers working with sourcing agents who require credit cover. If you are a sourcing agent or the first beneficiary, we can provide guidance on the terms and conditions of your DC and assist in either fully or partially transferring your DC to the ultimate supplier. Trade Solutions We have designed a special programme for exporters, supplying to certain large reputed buyers in the US and Europe. As an established supplier to such large reputed overseas buyers, you are entitled to enjoy a range of extra benefits when you present documents to HSBC for negotiation under Documentary Credits (DCs) issued by other HSBC group offices. These extra benefits include: Lower overseas bank charges viz. handling charge, courier, cable charges, discrepancy fee, reimbursement fee; which are to the account of beneficiaries:
Faster communication and quicker turnaround times. As both the import and export legs of the transactions are handled by one bank you should receive funds 6 days earlier on average, saving you interest charges Peace of mind that documents are only checked once and held by the local HSBC office until acceptance; and Opportunities for Pre and Post shipment finance. Forfaiting We can arrange for an offshore financing on your export receivables to countries especially high / medium risk with medium to long credit periods. The schematic below describes the forfaiting transaction flow: Advisory services on any export transaction - Our local experts understand trade thoroughly, and they can provide value to your business by performing advisory on a host of trade issues, including structuring DCs for your export business.
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Chapter 24 Organisations Supporting Exporters

In India there are a number of organisation and agencies that provides various types of support to the exporters from time to time. These export organisations provides market research in the area of foreign trade, dissemination of information arising from its activities relating to research and market studies. So, exporter should contact them for the necessary assistance. EXIM BANK Export-Import Bank of India is the premier export finance institution of the country, set up in 1982 under the Export-Import Bank of India Act 1981. Government of India launched the institution with a mandate, not just to enhance exports from India, but to integrate the countrys foreign trade and investment with the overall economic growth. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Commencing operations as a purveyor of export credit, like other Export Credit Agencies in the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in their globalisation efforts, through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment.[3] Exim Bank is managed by a Board of Directors, which has representatives from the Government, Reserve Bank of India, Export Credit Guarantee Corporation of India, a financial institution, public sector banks, and the business community. The Bank's functions are segmented into several operating groups including: Corporate Banking Group which handles a variety of financing programmes for Export Oriented Units (EOUs), Importers, and overseas investment by Indian companies. Project Finance / Trade Finance Group handles the entire range of export credit services such as supplier's credit, pre-shipment Agri Business Group, to spearhead the initiative to promote and support Agri-exports. The Group handles projects and export transactions in
the agricultural sector for financing. Small and Medium Enterprise: The group handles credit proposals from SMEs under various lending programmes of the Bank. Export Services Group offers variety of advisory and value-added information services aimed at investment promotion.
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Export Marketing Services Bank offers assistance to Indian companies, to enable them establish their products in overseas markets. Besides these, the Support Services groups, which include: Research & Planning, Corporate Finance, Loan Recovery, Internal Audit, Management Information Services, Information Technology, Legal, Human Resources Management and Corporate Affairs.
Export Promotion Councils (EPC) Export Promotion Councils are registered as non -profit organisations under the Indian Companies Act. At present there are eleven Export Promotion Councils under the administrative control of the Department of Commerce and nine export promotion councils related to textile sector under the administrative control of Ministry of Textiles. The Export Promotion Councils perform both advisory and executive functions. These Councils are also the registering authorities under the Export Import Policy, 2002-2007. Commodity Boards Commodity Board is registered agency designated by the Ministry of Commerce, Government of India for purposes of export-promotion and has offices in India and abroad. There are five statutory Commodity Boards, which are responsible for production, development and export of tea, coffee, rubber, spices and tobacco. Federation of Indian Export Organisations (FIEO) FIEO was set up jointly by the Ministry of Commerce, Government of India and private trade and industry in the year 1965. FIEO is thus a partner of the Government of India in promoting Indias exports. Address: Niryaat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital. Research & Referral, New Delhi 110057 Indian Institute of Foreign Trade (IIFT) The Indian Institute of Foreign Trade (IIFT) was set up in 1963 by the Government of India as an autonomous organisation to help Indian exporters in foreign trade management and increase exports by developing human resources, generating, analysing and disseminating data and conducting research. Address: B-21 Kutub Institutional Area, Mehrauli Road, New Delhi-110016 Indian Institution of Packaging (IIP) The Indian Institute of Packaging or IIP in short was established in 1966 under the Societies Registration Act (1860). Headquartered in Mumbai, IIP also has testing and development laboratories at Calcutta, New Delhi and Chennai. The Institute is closely linked with international organisations and is recognized by the UNIDO (United Nations Industrial Development Organisation) and the ITC (International Trading Centre) for consultancy and training. The IIP is a member of the Asian Packaging Federation (APF), the Institute of Packaging Professionals (IOPP) USA, the Insitute of Packaging (IOP) UK, Technical Association of PULP AND Paper Industry (TAPPI), USA and the World Packaging Organisation (WPO). Address: B-2, MIDC Area, P.B. 9432, Andheri (E), Mumbai 400096. Export Inspection Council (EIC) The Export Inspection Council or EIC in short, was set up by the Government of India under
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Section 3 of the Export (Quality Control and Inspection) Act, 1963 in order to ensure sound development of export trade of India through Quality Control and Inspection. Address: 3rd Floor, ND YMCA, Cultural Centre Bldg., 1, Jai Singh Road, New Delhi110001. Indian Council of Arbitration (ICA) The Indian Council for Arbitration (ICA) was established on April 15, 1965. ICA provides arbitration facilities for all types of Indian and international commercial disputes through its international panel of arbitrators with eminent and experienced persons from different lines of trade and professions. Address: Federation House, Tansen Marg, New Delhi-110001 India Trade Promotion Organisation (ITPO) ITPO is a government organisation for promoting the countrys external trade. Its promotional tools include organizing of fairs and exhibitions in India and abroad, BuyerSeller Meets, Contact Promotion Programmes, Product Promotion Programmes, Promotion through Overseas Department Stores, Market Surveys and Information Dissemination. Address: Pragati Bhawan Pragati Maidan, New Delhi-10001 Chamber of Commerce & Industry (CII) CII play an active role in issuing certificate of origin and taking up specific cases of exporters to the Govt. Federation of Indian Chamber of Commerce & Industry (FICCI) Federation of Indian Chambers of Commerce and Industry or FICCI is an association of business organisations in India. FICCI acts as the proactive business solution provider through research, interactions at the highest political level and global networking. Address: Federation House, Tansen Marg, New Delhi-110001 Bureau of Indian Standards (BIS) The Bureau of Indian Standards (BIS), the National Standards Body of India, is a statutory body set up under the Bureau of Indian Standards Act, 1986. BIS is engaged in standard formulation, certification marking and laboratory testing. Address: 9, Manak Bhavan, Bahadur Shah Zafar Marg, New Delhi-110002 Textile Committee Textile Committee carries pre-shipment inspection of textiles and market research for textile yarns, textile machines etc. Address: Textile Centre, second Floor, 34 PD, Mello Road, Wadi Bandar, Bombay-400009 Marine Products Export Development Authority (MPEDA) The Marine Products Export Development Authority (MPEDA) was constituted in 1972 under the Marine Products Export Development Authority Act 1972 and plays an active role in the development of marine products meant for export with special reference to processing, packaging, storage and marketing etc. Address: P.B No.4272 MPEDA House, pannampilly Avenue, Parampily Nagar, Cochin682036
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India Investment Centre (IIC) Indian Investment Center (IIC) was set up in 1960 as an independent organization, which is under the Ministry of Finance, Government of India. The main objective behind the setting up of IIC was to encourage foreign private investment in the country. IIC also assist Indian Businessmen for setting up of Industrial or other Joint ventures abroad. Address: Jeevan Vihar, 4th Floor, Parliament Street, New Delhi-110001 Directorate General of Foreign Trade (DGFT) DGFT or Directorate General of Foreign Trade is a government organisation in India responsible for the formulation of guidelines and principles for importers and exporters of country. Address: Udyog Bhawan, H-Wing, Gate No.2, Maulana Azad Road, New Delhi -110011 Director General of Commercial Intelligence Statistics (DGCIS) DGCIS is the Primary agency for the collection, compilation and the publication of the foreign inland and ancillary trade statistics and dissemination of various types of commercial informations. Address: I, Council House Street Calcutta-700001,
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Chapter 25 Myths About Exporting

Many first time exporters or firm managers believe the myths about exporting that its too difficult or too costly to sell their product in a foreign country. But given below the some of the important facts that will help a first time exporter to clear all his misconceptions. 1. Myth: I Am Too Small to Export Only large firms with name recognition, abundant resources, and formal export departments can export successfully. It is true that large firms typically account for far more total exports but the real fact is that vast majority of exporting firms in most countries are small and medium-sized enterprises (SMEs). 2. Myth: I Cannot Afford to Export I don't have the money for hiring new employees, for marketing abroad, or expanding production for new business. There are various low-cost ways to market and promote abroad, handle new export orders, and finance receivables. This does not require hiring new staff or setting up an export department. At little or no cost for example, you can receive product and country market research, worldwide market exposure, generate trade leads, and find qualified overseas distributors through various Commodity Boards and Export Promotion Councils. 3. Myth: I Cannot Compete With Large Overseas Companies My products are unknown and my prices are too high for foreign markets. If the product is known in the domestic market then its a plus point but even an unknown product can be exported in a foreign market. Low demand of a product doesnt indicates that it will be also not accepted in the international market. Price is also an important, but it is not the only selling point. Other competitive factors play a large role including quality, service, and consumer taste - these may override price. Also prices of a product may not be relatively high in countries with a strong currency, as in the European Union. 4. Myth: Exporting is Too Risky I might not get paid. Selling anywhere has risks even in the domestic market, but it can be reduced with reasonable precautions. To assure you get paid, use Letters of Credit (L/Cs). A L/C is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Proper documentation can minimize the risk associated with the export business.
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5. Myth: Exporting is Too Complicated Exporting is too complicated; I wont understand the laws and documentation requirements. You don't need to be an expert to export. There is an abundance of resources available online that helps the first time exporter about all ins and outs of the export operations. Government of India and its associated agencies like Commodity Boards and Export Promotion Councils also provide guidelines to the exporters.
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SKYLINE BUSINESS SCHOOL

September EXPORT 30 MANAUL 2011

Presented By: Sakshi Sondhi Anul Kapoor

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Trend of Contribution in GDP (2006 2010)

2009 20% 2008 22%

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Chapter 2 National Regulations

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Chapter 3 Barriers in Exports

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Chapter 4 Basic Planning For Export Introduction

For a proper export planning following questions need to answered:

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Some "Do's and Don'ts of Export Planning

Create a bulky document that remains static.

Use unrealistic timelines. Review them regularly they often slip

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Chapter 5 Identifying Products For Export

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Exports of Agricultural products

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Some of the important leather products exported by India include

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The top 10 trading partners for Indian plastic industry are

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Chapter 6 Market Selection

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Chapter 7 EXPORT STRATEGY

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Chapter 8 Registration and Export License

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Chapter 9 Export Procedure

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Chapter 10 Export Sales Leads

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Chapter 11 Exporting Product Samples

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Chapter 12 Export Pricing And Costing