EXPORT IMPORT

MANAGEMENT
Module-1

Dr. Sachin K. Parappagoudar

INTRODUCTION

• Introduction to International Business

and understanding the concepts of
exports and imports, Historical
Review and Current Export-Import
Policy of the Govt. of India and its
Implications. Parties and processes
involved in international trade.
 International or external business can, therefore,
be defined as those business activities that take
place across the national frontiers. It involves not
only the international movements of goods and
services, but also of capital, personnel, technology
and intellectual property like patents, trademarks,
know-how and copyrights.

International Business
 Difference Between Domestic Business and
International Business.

Basis Domestic business International business

Nationality People or organizations from one People or organizations of

of buyers nation different countries participate
and sellers Participate in domestic business in international business
transactions. transactions.

Nationality of other Various other stake- Various other stakeholders

stakeholders holders such as suppliers, such as suppliers, employees,
employees, middlemen, middlemen, shareholders and
shareholders and partners are partners are from different
usually citizens of the same nations.
country.

Mobility of The degree of mobility of The degree of mobility of

factors of factors of production like factors of production like
production labour and capital is relatively labour and capital across
more within a country. nations is relatively less.
 Difference Between Domestic Business and
International Business.

BASIS DOMESTIC BUSINESS INTERNATIONAL BUSINESS

Customer Domestic markets are International markets lack

heterogeneity across relatively more homogeneity due to
markets homogeneous in nature. differences in language,
preferences, customs, etc.,
across markets.
Differences in business Business systems and Business systems and
systems and practices practices are relatively more practices vary considerably
homogeneous within a across countries.
country.
Political Domestic business is Different countries have
system subject to political system and different forms of political
and risks risks of one single country. systems and different degrees
of risks which often become a
2 barrier to international business.
 Difference Between Domestic Business and
International Business.

Basis Domestic business International business

Business Domestic business is International business
Regulations subject transactions are subject
and to rules, laws and to
policies policies, rules, laws and policies,
taxation system, etc., of a tariffs and quotas, etc. of
single country. multiple countries.
Currency Currency of domestic International business
used in country is used. transactions involve use
business of
transactions currencies of more than
one
Benefits of International Business
Benefits to Countries:

Earning of foreign exchange

More efficient use of resources

Improving growth prospects and employment potentials

Increased standard of living

Improved business vision

Benefits of International Business
Benefits to Firm:

Prospects for higher Increased capacity

profits utilization

Way out to intense

Prospects for
competition in
growth
domestic market
IMPORT

An import is a good
brought into a jurisdiction, The purchaser of the An import in the receiving
especially across a exotic good is called an country is an export from
national border, from an importer. the sending country.
external source.

An import of a good occurs

"Imports" consist of when there is a change of
transactions in goods and ownership from a non-resident
services (sales, barter, to a resident; this does not
gifts or grants) from non- necessarily imply that the good
residents to residents. in question physically crosses
the frontier
Types of import

Industrial and consumer Intermediate goods and

goods services
EXPORT

• The term export means shipping the

goods and services out of the port of
a country.
• The seller of such goods and services
is referred to as an "exporter" who is
based in the country of export
whereas the overseas based buyer is
referred to as an "importer".
Balance of trade
• Balance of trade represents a difference in value
for import and export for a country.
• A country has demand for an import when
domestic quantity demanded exceeds domestic
quantity supplied, or when the price of the good
(or service) on the world market is less than the
price on the domestic market.
Balance of trade
• The balance of trade, usually denoted NX, is the difference
between the value of the goods (and services) a country exports
and the value of the goods the country imports:
• NX = X - I, or equivalently I = X - NX
Trade Barriers

• Trade barriers are the government laws,

regulations, policy, or practices that either
protect domestic products from foreign
competition or artificially stimulate exports of
particular domestic products.
The trade barriers are of two
categories

• Tariff Barriers
• 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.
• Non- Tariff barriers
Tariff Barriers
• AD VALOREM TARIFFS: These are taxes levied as a
percentage of the declared value of a product. For example,
a 10% ad valorem tariff on cars means that a 10% tax is
applied to the value of the imported cars.
• SPECIFIC TARIFFS: These are fixed charges per unit of
imported goods. For instance, a specific tariff of $1 per
kilogram on imported steel means that $1 is charged for
every kilogram of imported steel.
• COMPOUND TARIFFS: These tariffs combine both ad
valorem and specific tariff structures.
Non-Tariff Barriers:

LICENSING AND IMPORT

RESTRICTIONS:
QUOTAS: Quantitative
EMBARGOES: Complete Governments may require
restrictions on the amount
bans on the import or import licenses or impose
or value of specific goods
export of certain goods or restrictions on certain
that can be imported during
services. products to control the
a specified time period.
inflow of goods into the
country.
Non-Tariff Barriers:

STANDARDS AND
TECHNICAL BARRIERS: Non-
tariff barriers can also take the SUBSIDIES: Governments
form of stringent product may provide subsidies to
standards and technical domestic industries, giving
regulations that may make it them a competitive advantage
difficult for foreign products to over foreign competitors.
meet the requirements for
entry into a particular market.
Non-Tariff Barriers:

ADMINISTRATIVE AND
BUREAUCRATIC
VOLUNTARY EXPORT
HURDLES:Cumbersome
RESTRAINTS (VERS): CURRENCY MANIPULATION:
administrative procedures,
Agreements between exporting Altering the value of a country's
excessive paperwork, and delays
and importing countries where currency to gain a trade
in customs clearance can act as
the exporting country voluntarily advantage.
non-tariff barriers, making it
limits the quantity of its exports.
difficult for foreign businesses to
engage in trade.
EXIM POLICY

• Exim Policy or Foreign Trade Policy is a set of

guidelines, terms and instructions, established by the
Directorate General of Foreign Trade in/for matters
related to the import and export of goods in/from
India’.
History of EXIM Policy in India
• 1952-53
• Liberal exports and import policies
• 1956-57
• Restrictive trade policies
• Focus on measures to curb imports to further economic development
• 1975-76
• Liberal trade policies
• Liberal import policies for import of raw materials, capital goods,
technology etc. for EOU’s (Export Oriented Unit)
• 1985
• Joint EXIM policy introduced for the first time.
• 1990-91
• ‘Watershed’ for the trade sector.
• Trade liberalization and departure from restrictions on trade.
History of EXIM Policy in India
• 1992-97
• First five years trade poicy (earlier trade policies had three years time
horizon)
• Focus on stability of Indian exports.
• 1997-2002
• Second five years EXIM Policy.
• Focus on reducing export and import documents.
• To make available best technology and raw materials to reach
international quality standards.
• 2001-02
• Removal of Quantitative restrictions.
• 300 sensitive items kept under ‘war room’ watch.
• Important agro and petro products to be import through state agencies
• Major focus on agro exports.
• FDI permitted in Special Economic Zone.
 History of EXIM Policy in India
• 2002-07
• Third five year trade policy.
• Shift from import liberalization to export promotion.
• Focus on increasing international competitiveness of exporters.
• 2004-09
• The policy of 2002 is replaced by the new foreign trade policy of 2004-09.
• Focus on foreign trade instrumental to growth.
• To encourage imports items essential for the EOUs and SEZ’s.
• 2009-14
• To arrest and reverse declining trend in India’s exports.
• To double the exports of goods by 2014.
• 2015-2020
• To make India a significant participant in World Trade by 2020.
• To increase the export of goods and services.
With this backdrop, the trade policies of the country
have been divided into the following
phases:

• Phase I: Import Restriction and Import Substitution

• (From 1950’s to 1970s)
• Phase II: Export Promotion & Import Liberalization
• (From 1970s to 1990s)
• Phase III: Outward Orientation –
• (From 1990 onwards).
FTPs in the Pre-Reform Period
(Phases I and II)

• Import Substitution
• Simplification of Import Licensing
• Export Promotion
• Focus on Exports as Catalysts for Growth
• Other Features of the pre reform FTPs included the following
• (i) Financial assistance to exporters
• (ii) Simplification of procedural formalities
• (iii) Minimization of the role of quantitative restrictions and reducing the tariff
rates substantially.
• (iv) Import Liberalization
• (v) Setting up of Export Processing Zones to push up exports ( now SEZ )
Trade Policies in the Reform Period
(Phase III: Post 1990s)

• Freer Imports and Exports

• Rationalization of Tariff Structure
• Decanalization
• Devaluation and Convertibility of Rupee on Current
Account
• Trading Houses
• Special Economic Zones
Trade Policies in the Reform Period
(Phase III: Post 1990s)

• EOU Scheme
• Agriculture Export Zones
• Market Access Initiative Scheme
• Focus on Service Exports
• Concessions and Exemptions
Foreign Trade Policy
2023
The FTP 2023 encourages recognition of new towns
through “Towns of Export Excellence Scheme” and
exporters through “Status Holder Scheme”.

• Process Re-Engineering and Automation

• Duty exemption schemes
• Towns of Export Excellence (Faridabad, Mirzapur, Moradabad, and
Varanasi)
• Recognition of Exporters
• Promoting export from the districts
• Streamlining SCOMET (Special Chemicals, Organisms, Materials,
Equipment and Technologies) Policy
• Facilitating E-Commerce Exports
The FTP 2023 encourages recognition of new towns
through “Towns of Export Excellence Scheme” and
exporters through “Status Holder Scheme”.

• Facilitation under Export Promotion of Capital Goods (EPCG) Scheme

• Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme has
been added as an additional scheme eligible to claim benefits under CSP(Common Service
Provider) Scheme of Export Promotion capital Goods Scheme(EPCG).

• Dairy sector to be exempted from maintaining Average Export Obligation – to support dairy
sector to upgrade the technology.

• Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater
Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and Green
Hydrogen are added to Green Technology products will now be eligible for reduced Export
Obligation requirement under EPCG Scheme
The FTP 2023 encourages recognition of new towns
through “Towns of Export Excellence Scheme” and
exporters through “Status Holder Scheme”.

• Facilitation under Advance authorization Scheme

• Amnesty Scheme ("Vivaad se Vishwaas" initiative)
Questions

• Why Did Google issue the statement on January 12?

• Can Google take comfort from the reactions of
stakeholders so far?
• Do you expect google to exit china?