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EXPORT IMPORT AND EXIM POLICY

submitted by: Ashutosh kumar

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CONTENTS:DefinitionTypes of exportRole of govt in exportExport/import processExport/import financingExim policyComparison of trade policyIndia’s Exim policy 2009-14Objective of india’s Exim policyBalance of tradeBibliography

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DEFINITION

The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country The seller of such goods and services is referred as an "exporter" who is based in the country of exportWhereas the overseas based buyer is referred to as an "importer"

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In International Trade, "exports" refers to selling goods and services produced in the home country to other markets

Exporting is the most popular way for companies to become international

Exporting is usually the first mode of foreign entry used by companies

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Selling to foreign markets involves numerous high risks, arising from a lack of knowledge about and unfamiliarity with foreign environments, which can be heterogeneous, sophisticated, and turbulent

Manufactured goods accounted for almost 60 percent of the exports of developing countries

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TYPES OF EXPORT

Direct exporting occurs when a manufacturer or exporter sells directly to an importer or buyer located in a foreign market

Indirect exporting involves the use of independent middlemen(brokers, bank) to market the firm’s products overseas

Direct export Indirect export

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DIRECT EXPORT/IMPORT

indian Importer American Exporter

1. Importer Pays for Goods

2. Exporter Ships Goods After Being Paid

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A TYPICAL INTERNATIONAL TRANSACTION

french ImporterAmerican Exporter

Bank of New York Bank of paris

6. Goods Shipped to France7. Exporter

Presents Draft to Bank

10 and 11 Exporter Sells Draft to Bank

14. B of NY Presents Matured Draft and Gets Payment

12. Bank Tells Importer Documents Arrive

13. Importer Pays Bank

2. Exporter Agrees to Fill Order

1. Importer Orders Goods 3. Importer Arranges for LOC

8. B of NY Presents Draft to Bank of Paris9. Bank of Paris Returns Accepted Draft

4. Bank of Paris Sends LOC to B of NY

5. B of NY Informs Exporter of LOC

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Composition of India’s Exports

Agricultural & Allied Products

Ores & Minerals

Manufactured Items

Fuel & Lubricants

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Composition of India’s ImportsPetroleum Products

Capital Goods

Pearls & Precious Stones Iron & Steel

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ROLE OF THE GOVERNMENT IN PROMOTING EXPORTS

Export promotion activities generally comprise:

1.export services programs 2.market development program Export-import bank tariff concessions 1.foreign trade zones 2.foreign sales corporation(FSC)

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EXPORT PROCESSESEvaluate export potential financial resources management capability/experience competitive advantages abroad

Do country analysis (more later) country receptiveness to imports and investment trade barriers/requirements infrastructure

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Do market analysis

market size/product potential distribution channels

Determine entry method

  goal of entry   select distribution “partner” determine channel length assess risks determine costs

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SOURCES OF EXPORTER FINANCING  Financing exporter credit to the importer:

  - Bankers’ acceptance (of the draft)  - Factoring  - Forfeiting  - EXIM bank

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PROCEDURES OF EXPORT AND IMPORT TRANSACTIONGeneral Procedures of Export Transaction：

Preparation for Exporting

Business Negotiation

Implementation of Contract

Settlement of Disputes14

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EXPORT/IMPORT FINANCING Letters of Credit (LOC)

Bank guarantee on behalf of importer to exporter assuring payment when exporter presents specified documents

Drafts (Bill of Exchange) Written order by exporter, telling an importer to

pay a specified amount of money at a specified time.

Bill of Lading Issued to exporter, by carrier. Serves as receipt,

contract and document of title.

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WHAT IS EXPORT IMPORT POLICY (EXIM POLICY)?

Export Import (Exim) Policy or Foreign Trade Policy (FTP) is a set of guidelines and instructions in matters related to the import and export of goods in India.

Established by the Directorate General of Foreign Trade (DGFT) Regulated by The Foreign Trade Development and Regulation Act 1992 Exim policy contains various policy decisions with respect to import

and exports of the country. Prepared and announced by the central government. Aim

Developing export potential Improving export performance Encouraging foreign trade Creating favorable balance of payment position.

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Trade Policy will strongly influence the direction, trend and growth of foreign trade of a country

Industrialisation and self-sufficiency in essential commodities were the important objectives of India's trade policy

trade policy is an important economic instrument which can be used by a country, with suitable modifications from time to time, to achieve its long-term objectives

Trade Policy can be free trade policy or protective trade policy

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COMPARISON OF TRADE POLICY

A free trade is one which does not impose any restriction on the exchange of goods and services between different countries.

A free trade policy involves complete absence of tariffs, quotas, exchange restrictions, taxes and subsidies on production, factor use and consumption.

A protective trade policy pursued by a country seeks to maintain a system of trade restrictions with the objective of protecting the domestic economy from the competition of foreign products.

Many of the underdeveloped countries continue to have protective trade policies even today.

FREE TRADE POLICY PROTECTIVE TRADE POLICY

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INDIA'S EXIM POLICY 2009-2014

The Union Commerce Ministry, Government of India announces the Export Import policy in every five year. This is also called EXIM policy. This policy is updated every year with some modifications and new schemes. New schemes come into effect on the first day of financial year i.e. April 1, every year. The Foreign trade Policy which was announced on August 28, 2009 is an integrated policy for the period 2009-14. This policy is updated on every financial year. 19

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OBJECTIVES OF EXIM POLICY 2009-2014

To arrest and reverse declining trend of exports which will be reviewed after every two years.

To Double India's exports of goods and services by 2014. To double India's share in global merchandise trade by 2020

(long term aim). India's share in Global merchandise exports was 1.45% in 2008.

Simplification of the application procedure for availing various benefits.

To set in motion the strategies and policy measures which catalyze the growth of exports.

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INDIA'S FOREIGN TRADE IN JUNE 2012 Exports:

India’s exports through June 2012 were valued at US$29.21 billion, which was 46.45 percent superior to the level of US$19.94 billion seen in June 2011. On an expanded timeframe, the growing value of exports for the period April-June 2011-12 was US$79.00 billion against US$54.22 billion over the same period a year earlier – good for a 45.71 percent increase.

Imports:

India’s imports for the duration of June 2012 came to US$36.87 billion, showing a growth of 42.46 percent over the level of imports valued at US$25.88 billion in June 2011. An increasing value of imports for the interval of April-June 2011-12 was US$110.61 billion as against US$81.20 billion over the same period in 2010 – good for a 36.22 percent increase.

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2004-05 2005-06 2006-07 2007-08 2008-09 2009-100

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000Foreign Trade Trends in India

Export Import 22

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Balance of trade = Exports - Imports

A positive balance of trade is known as a trade surplus

A negative balance of trade is known as a trade deficit or, informally, a trade gap.

India reported a trade deficit equivalent to 7659 Millions USD in June of 2011.

India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs.

Other imported products are: machinery, gems, fertilizers and chemicals.

BALANCE OF TRADE

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INDIA’S BOT(January 2009 – July 2011)

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BIBLIOGRAPHYWikipediaOfficial website of Indian export-

import portal InternetOxford dictionary

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THANKING YOUTHANKING YOU