MBA_531_Export Import Documentation

● What compensation is the representative eligible for on dismissal? Depending upon the relationship's duration, the value as the representative has provided the exporter if the termination is based on a 'just cause' as defined by the foreign country's rules, the exporter will have to compensate the representative losses. ● What must the representative give up on dismissal? The contract should state clearly the return policy of patents, trademarks, registrations, customer records, etc. ● Should the representative be called an agent? Since the word agent implies power of attorney in some countries, the contract may need to specify whether the representative is a legal agent with power of attorney. ● In which language should the contract be written? Generally, contracts are drafted in English. The exporter should know the laws that govern contracts. For example, a Company in the U.S. should avoid provisions that are contrary to U.S. antitrust laws. The Export Trading Company Act provides antitrust protection when two or more companies join together for exporting. However, the U.S. firm should get legal advice when preparing and signing into any foreign agreement. Indirect Exporting Figure 3.1: Indirect Marketing The main positive of indirect marketing for a comparatively smaller entity is entering foreign markets while saving itself from direct exporting risks and complexities. Many different intermediaries provide various export-related services. Each type of firm offers specific advantages of the firm. There will be at least one middleman in indirect marketing. The middleman does some marketing functions on behalf of the exporter. Indirect exports are equal to in-country sales. Commission Agents Commission agents or buying agents help foreign firms to find imported products that they want to deal with. They procure the desired products at the lowest possible price and, in turn, earn a commission from their overseas clients. The importer or the foreign buyer could be foreign government bodies or government firms who have the right to find and buy the required goods through import. For example, a government purchasing agency. Export Management Companies 51 CU IDOL SELF LEARNING MATERIAL (SLM)

An Export Management Company or EMC acts like an export division for one or many producers who want to export their goods or services. The EMC represents the exporter when marketing and dealing with exports either for commissions, or salary or at a retainer and commission. Few EMCs provide upfront payment for the company's products by directly purchasing the products or arranging to finance the payments. This is true in the case of large EMCs. EMCs have expertise in a particular product, a foreign market, or a combination of both. Due to this, an EMC is well placed regarding their distribution networks in the unfamiliar territory and the target market and market nitty-gritty. The readily available network and knowledge of the foreign domain is the main reason why a firm may choose an EMC since building such a network on its own is both time and money consuming. One of the disadvantages of engaging an EMC for a manufacturer is that it may lose some foreign sales grasps. Most manufacturers are concerned about their products and company reputation being maintained in overseas markets. An effective way for a manufacturer to establish some control is by carefully choosing an EMC that can adhere to its needs and communicate effectively. For example, suppose a company wants regular reports on marketing efforts for its products and may have an approval structure for certain types of actions, such as advertising or service-related arrangements. In that case, it must find an EMC capable of maintaining such a relationship and should negotiate all such points before entering an agreement with an EMC. Export Trading Companies An Export Trading Company or ETC facilitates the export of goods and services. Like an EMC, an ETC works as an export department for the manufacturer or sells the products as its own. Hence, the terms ETC and EMC are used interchangeably. A group of producers may also form an ETC. Such ETCs can work as a single industry or across multiple industries and can represent competing products. Export Trading Company Act, 1982 The Export Trading Company Act, 1982 was drafted to help U.S. exports by: Promoting and encouraging the formation of export management and export trading companies. 1. Enhancing the options available for export financing allows bank holding companies to invest in ETCs and reduce restrictions on trade finance provided by various financial institutions. 2. Decreasing uncertainty about applying U.S. antitrust law to export operations. For the first time in history, this legislation allowed banks to make equity investments in commercial ventures that are ETCs. For the first time, the Export-Import Bank (Exim Bank) of the U.S was allowed to make working capital guarantees to U.S. exporters. The U.S. Department of Commerce, through its Office of Export Trading Company Affairs (OETCA) within the ITA, aids the formation and use of U.S. export intermediaries and issues export trade certificates of review, providing limited immunity from U.S. antitrust laws. 52 CU IDOL SELF LEARNING MATERIAL (SLM)

OETCA tells the U.S business community about the advantages of export intermediaries. It does this through conferences, presentations before trade associations or civic organizations, and through publications. The primary publication on this subject is the 'Export Trading Company Guidebook,' which can be purchased through the U.S. Government Printing Office. OETCA also gives counselling to businesses who want to take advantage of the Act. OETCA maintains the Contact Facilitation Service (CFS) database listing U.S. producers of goods and services and organizations that provide trade facilitation services. The Department of Commerce district office publishes CFS database every year in a directory called 'The Export Yellow Pages, which is available for free. The directory gives users information regarding names and addresses of banks, EMCs, ETCs, freight forwarders, manufacturers, service organizations and names the export products or export-related services that these companies supply. By getting a CFS registration form from the Department of Commerce district offices, any company can register in the database free-of-cost and be listed in subsequent editions of 'The Export Yellow Pages.' The Secretary of Commerce issues the certificates of review with the concurrence of the U.S. Department of Justice. Any U.S. company or partnership, any resident individual, or any state entity or local entity can apply for a certificate of review. A certificate can be issued to the applicant if it is determined that the proposed \"export trade activities and methods of operation\" will not substantially lessen domestic competition or restraint of trade within the U.S. The U.S. federal and state antitrust laws provide immunity for the conduct covered by the certificate, its holder, and any other individuals or firms named as members in the contract. In private party actions, liability is reduced from treble to single damages, significantly reducing the possibility of undesirable suits. Also, in the event of personal litigation referring to any conduct covered by the certificate of review, any certificate holder can recover the costs of defending the suit, including a reasonable amount of the attorney's fees. The certificate of review program gives exporters an antitrust \"insurance policy\" intended to help joint activities to achieve economies of scale and risk diversification. The Act also amends the 'Sherman Antitrust Act' and the 'Federal Trade Commission Act' to clarify these statutes' jurisdictional reach to export trade. Both acts now apply to export business only if there is a \"direct substantial and reasonably foreseeable\" effect on domestic or import commerce of the U.S. or the export commerce of a U.S. competitor. Firms and individuals interested in getting additional information should get in touch with the Office of Export Trading Company Affairs in Washington, DC. A copy of The Export Yellow Pages can be got from the nearest Department of Commerce district office. Piggyback Marketing The arrangement in which a manufacturer or service firm distributes another company's products or services is known as Piggyback marketing. The most common piggyback marketing is observed when a firm has a contract with a foreign buyer to provide a wide variety of products or services. In many cases, this first company may not produce all the 53 CU IDOL SELF LEARNING MATERIAL (SLM)

products and maybe marketing other companies products. Thus, the second company 'piggybacks' its products to the international market without having to incur the marketing and distribution costs associated with exporting. Successful arrangements like these usually necessitate that the products complement each other and appeal to similar customers. There are two indirect exporting methods: 1. Selling to a merchant exporter or export house in India and 2. Selling to visiting or resident buyers. 1. Selling to An Export House in India Merchant exporters often buy products from Indian manufacturers and sell them abroad. Although they operate on their own, they take up all risks that come up while exporting. They decide on what goods need to be purchased. They decide on the course of action, products to be sold, and the price to sell. They have branches in port towns and foreign countries. They carefully monitor the market trends and assess a given product or industry's prospects in the export market. Mostly, export houses specialize in certain types of commodities. The companies that can start export departments of their own sell to these export houses that are operating in the country. 2. Selling to Visiting Buyers In India, some local representatives buy on behalf of big foreign companies. Such representatives are assigned the task of buying products from Indian manufacturers. Alternatively, some foreign companies may send teams to India regularly to buy products. The volume of purchases made by such buyers is huge. Selling to local buyers relieves the manufacturer from having to deal with cumbersome exporting formalities. The Import houses operating in few countries allow entry into foreign markets. For example, venturing into a Japanese market through its trading houses is much easier and less expensive. Japan has trading houses that handle imports and export through its branches established worldwide. Manufacturers sell in Japan through these trading houses. Since Japan's distribution system is somewhat complicated, exporters prefer doing their business only through trading houses. Advantages of Indirect exporting On average, small companies lack the adequate financial and managerial resources required to enter an overseas market successfully. For these companies, indirect exporting is a better option. Some of the critical advantages of indirect exporting are: 1. Indirect Exporting Is Free from Risks A significant advantage of indirect exporting is that the exporter handles all sales and credit risks and takes care of all documentation, shipping, financial, political, and credit risks, getting licenses from different Government departments, etc. 2. No Financial Burden in Indirect Exporting Indirect exporting is growing rapidly to facilitate foreign market entry as it includes fewer financial expenses on the part of the manufacturer. The manufacturer need not build an overseas marketing infrastructure. So, the financial resources required are minimum, which a significant advantage. Small firms cannot afford to invest huge 54 CU IDOL SELF LEARNING MATERIAL (SLM)

capital in developing their global marketing structure. Besides, export merchants mostly pay the manufacturers upfront for the purchase of their goods. So, the manufacturer's money is not tied up. 3. No Need for Own Market Research by The Exporter in Indirect Exporting The indirect exporting method is more popular with companies that have just begun their export activities. In the initial stages, a company's export business may not be considerable. So, the money spent on market research is not much. Merchant exporters, on the other hand, are good at studying and analysing market conditions. 4. Concentration on Production in Indirect Exporting Resident or visiting buyers frequently approach merchant exporters. Hence, they can provide sales opportunities in overseas markets. This ensures that the manufacturers can concentrate on production, leaving the sales to the export houses. 5. The High Volume of Business in Indirect Exporting A manufacturer may increase the volume of foreign market sales considerably over some time. Generally, intermediaries in the distribution channel enjoy a good rapport in the market. So, they can quickly get large orders from importers of different countries. Thus, the manufacturer gets the benefits of an increased volume of sales. 6. Services of Intermediaries in Indirect Exporting In indirect exporting, the manufacturer uses various types of independent international marketing intermediaries or cooperative organizations. For example, the \"export drop shipper\" places an order with a manufacturer, who directly ships the product to the foreign buyer. An export shipper's services are of great importance in the international marketing of bulky products of low unit value like coal and construction materials. 7. Commission Agents Commission agents or buying agents find products for foreign firms who want to buy. They try to get the desired items at the lowest price and get a commission from their foreign clients. In some cases, they are foreign government agencies or quasi- governmental firms empowered to find as well as buy the products. An example is Foreign government purchasing missions. ● Export Management Companies An EMC acts as the export department for one or more producers of goods and services. It solicits and transacts business in the producers' names. The EMC gets a commission, salary, or retainer plus commission. Some EMCs give immediate payment for the manufacturer's products through financing or directly buying products for resale. Generally, only large EMCs can afford to buy or finance exports. ● Export Trading Companies An ETC helps the export of U.S. goods and services. Like an EMC, an ETC can act as the export department for manufacturers or sell the product and export it under its name. Hence, the terms ETC and EMC are often used interchangeably. A particular type of ETC 55 CU IDOL SELF LEARNING MATERIAL (SLM)

is a group organized and operated by producers. These ETCs can be arranged along multiple or single industry bases and can represent manufacturers of competing products. ● Export Trading Company Act of 1982 The goal of the Export Trading Company Act of 1982 is to spur U.S. exports by: Assisting and developing the forming of export management and export trading companies. 1. Enhancing the options available for export financing allows bank holding companies to invest in ETCs and reduce trade finance restrictions provided by financial institutions. 2. Decreasing uncertainty about applying U.S. antitrust law to export operations. For the first time in recent history, this legislation allows banks to make equity investments in commercial ventures that qualify as ETCs. For the first time, the Export- Import Bank (Exim bank) of the United States can make working capital guarantees to U.S. exporters. The Office of Export Trading Company Affairs (OETCA) within the ITA, in the U.S. Department of Commerce, helps the formation and use of U.S. export representatives and issues export trade certificates of review, thereby providing limited immunity from the U.S. antitrust laws. OETCA tells the companies about export intermediaries' benefits through presentations before trade associations, conferences, civic organizations, and publications. The primary publication on this subject is the Export Trading Company Guidebook. This book can be purchased from the U.S. Government Printing Office. OETCA gives counselling to firms who wish to take advantage of the act. ● Export Agents, Merchants, or Remarketers Export agents, merchants, or re-sellers buy products directly from the manufacturer and pack and market them according to their own specifications. The intermediaries then sell the products overseas using their contacts in their own names and take up all accounts' risks. In transactions with export agents, merchants, or re-sellers, a U.S. firm relinquishes control over its product's marketing and promotion, which could harm future sales efforts abroad. For example, the product could be low-priced or inappropriately positioned in the market, or the post-sales service could be neglected. On the other hand, the manufacturer's effort to market the product overseas is minimal and may lead to sales that otherwise would take a great deal of effort to obtain. ● Negotiating an Agreement with a Foreign Representative The potential intermediary is interested in the firm's pricing structure and profit potential. They are also interested in knowing the terms of payment, competitors, product regulation, market shares, the extent of support provided by the U.S. firm (promotional material, advertising, sales aids, etc.), training for sales and service staff, and the company's ability to deliver on time. 56 CU IDOL SELF LEARNING MATERIAL (SLM)

The agreement may contain clauses such as the foreign representative: 1. should not have business dealings with competitor companies (this clause can cause problems in some European countries and in the under U.S. antitrust laws). 2. should not share any confidential information in a way that would prove harmful, damaging, or competitive to the U.S. company; should not enter into contracts binding to the U.S. firm; and 3. send all inquiries received from outside the specified sales territory to the U.S. firm for action. In the drafting of the agreement, special attention must be paid to safeguarding the exporter's interests in cases where the representative is less than satisfactory. It is important to specify an escape clause in the contract that allows the exporter to terminate the relationship safely if things do not work out. The agreement may also state what constitutes \"just cause\" for terminating the agreement (e.g., failure to meet specified performance levels). Other contracts specify a particular period for the deal (usually one year) but arrange for automatic annual renewal unless either party sends notice in writing its intention not to renew. 3.4 PRICING QUOTATIONS Pricing the product correctly, providing complete and accurate quotes, selecting the terms of the sale, and choosing the payment method are vital elements in making a profit on export sales. Pricing of the product is very challenging due to different market forces and pricing structures globally. What factors determine a profitable export pricing strategy? The key elements would be assessing the firm's foreign market objectives, product costs, market demand, and competition. Other factors to consider would be taxes and duties, transportation, insurance, sales commissions, and financing. 57 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 3.2: Sample of Price Quotation ● Key Pricing Considerations While developing the export pricing strategy, the below factors will help in arriving at the best price for the product in the overseas market: 1. The market positioning (i.e., customer perception) conveyed from its pricing structure? 2. Does the export price include the product's quality? 3. Is the product price competitive? 4. Discounts (e.g., trade, cash, quantity) and allowances (e.g., advertising, trade-offs) offered by the company to its foreign customers? 58 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Should prices change by market segment? 6. Actions initiated related to product pricing. 7. Changes in pricing if the company's costs increase or decrease? ● Critical Elements of Pricing Analysis An essential aspect of the company's pricing analysis is defining the market objectives. For example, is the company seeking to venture into a new market, seek long-term market growth, or look for an outlet for surplus production or outmoded products? Marketing and pricing objectives may be general or customized to specific foreign markets. For example, in a developing nation with per capita income, one- tenth of the U.S., marketing objectives for sales will have to differ compared to marketing objectives for sales to Europe or Japan. 1. Costs The actual cost of manufacturing a product and selling it is critical for deciding if exporting is profitable. The cost-plus method is when the exporter begins with the domestic production cost and adds research and development, overhead, administration, distributor margins, customs charges, freight forwarding, and profit. However, this approach's effect may be that the export price escalates into an uncompetitive range once exporting costs have been included. Marginal cost pricing is a competitive method of pricing a product at the entry level. This method considers the direct out-of-pocket expenses of manufacturing and selling products for export as a base below which prices cannot be set without incurring a loss. For example, additional costs may occur due to product changes for the export market. However, costs may decrease if the export products are stripped-down versions or made without increasing the fixed costs of domestic production. 2. Market Demand For most consumer goods, the per capita income is a good measure of a market's ability to buy and pay. Few products (for example, popular U.S. fashion labels) have a strong demand that even a low per capita income will not change their selling price. Simplifying the product to reduce its selling price may the solution for the companies operating in markets with low per capita income. The company must also remember that currency fluctuations will change the affordability of its goods. 3. Competition In the local market, U.S. companies carefully study their competitors' pricing policies. If there are several competitors in the overseas market, matching the market price or even under-pricing the product or service may be necessary to get market share. If the product or service is new to a particular foreign market, it may be possible to set a higher price than feasible in the domestic market. ● Pricing Summary It's essential to keep in mind some important points when fixing the product's price: 59 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Finalize the objective in the foreign market. 2. Calculate the cost of the export product. 3. Calculate the final consumer price. 4. Study market demand and competition. 5. Consider changing the product to lower the export price. ● A Checklist for Preparing a Quote A quote is very important. It will benefit the company and the potential customer if there is a standard checklist to identify the critical details and items that are negotiation points. The details also give the buyer the information required to decide what they might have to pay as duties, fees (including banking fees), and taxes. The following checklist has few facts about your firm, the products, and the transaction that the buyer (export) and the seller should agree upon (export) and the seller (importer). 3.5 PAYMENT TERMS Regardless of the industry or size, businesses require regular cash flow from their clients and the customer to pay their expenses, such as their employees' salaries and the utilities. Without such bills, the compensation for services rendered or products sold means that handling expenses are impossible. However, the invoice should include all \"payment terms and conditions.\" Without that, communication on payment expected and other conditions like your preferred payment method, incentives for early fees, and consequences of late payments. Figure 3.3: Payment Terms- Sample Additionally, payment terms help firms receive payments on a specific date. When such a fixed payment schedule is available, creating a budget and making financial forecasts to prevent cash flow problems is possible. In other words, your business's success may depend 60 CU IDOL SELF LEARNING MATERIAL (SLM)

on the invoice payment terms that you create when sending out invoices. Below are ten relevant invoicing and payment terms: Terms of Sale It is the payment terms that the buyer and producer have agreed on. Terms such as amount, delivery, payment method, cost, and payment due are included in Sale's Terms. These are also the essential points of any invoice. It's the buyer and seller's expectations so that there won't be any potential misunderstandings or disagreements because both parties know what is expected and are satisfied with the requirements. Terms of sale are critical in international trade since it covers when shipping occurs, responsible for international duties and taxes, and any other factors that the international chamber of commerce regulations has established. ● Payment in Advance Payment in advance, or PIA, is a payment that is made ahead of schedule. It's not uncommon for businesses to request advance payments for their products or services. For example, a freelance graphic designer may ask for a 50% down payment before starting a project. Advances protect sellers against non-payments and also cover any miscellaneous expenses. ● Immediate Payment This term means \"Cash on Delivery\" (COD) or \"Payable on Receipt.\" This means that a payment is due when the product or service is delivered. If the customer doesn't make the payment immediately — either by credit card, wire transfer, or online service payment — the seller has the right to take back intellectual property goods. While this term is beneficial for the firm, it's unpopular among some customers since they fear that they won't have the cash to cover the bill. ● Line of Credit Pay This payment option allows the client to settle their bills over time, typically on a monthly or quarterly basis. This is more commonly used in more prominent companies and not small-to-medium-sized companies due to the risk involved and its ability to decrease the cash flow. ● Quotes & Estimates This is the purposed price for the goods or services. While this isn't the final amount that will be billed on the client, it should still have invoicing essentials such as the product or service price, itemized breakdown of how the price was determined, and a time limit of when the final goods or services will be delivered. Most invoicing platforms allow you to convert your quote or estimate into an invoice painlessly. ● Recurring Invoice As explained earlier, recurring invoices are for ongoing services. These are typically for the same amount each month, like for a membership or subscription for your business. This makes forecasting easy and saves time. The monthly payment removes some of the uncertainty and makes life easier. ● Interest Invoice 61 CU IDOL SELF LEARNING MATERIAL (SLM)

If the client doesn't pay the invoice on-time, the consequence would be to charge interest or fees. Remember, when calculating the interest on a late payment, charging will be done only for the number of days that the payment is past due. ● Invoice Factoring If a client hasn't paid the invoice and the firm needs immediate cash, to avoid this, consider invoice factoring. This is when the invoice to an invoice factoring company. An 85% advance upfront payment can be received within one day. These companies will charge a fee. A company like BlueVine charges a fare 0.5 % fee per week. 3.6 LETTER OF CREDIT Letter of credit is a payment instrument used= in international trade in which a bank provides a monetary guarantee to enterprises that deal in the import and export of goods. Letter of credit is applicable for both import and export purposes. Organisations doing business abroad have to deal with unknown suppliers, and they require a guarantee of payment before performing any transaction. Hence, a letter of credit is essential to provide payment assurance to the suppliers or exporters. The bank issues letter of credit to the buyer to secure the buyer's timely payment to the seller. It acts as an assurance on behalf of the buyer that he/she pays the full amount to the seller on time. If the buyer cannot repay the amount to the seller on time, the bank will pay on the buyer's behalf to the seller. Figure 3.4: Letter of Credit Features of Letter of Credit 1. Letter of credit is given against some collateral submitted as security, such as the buyer's fixed deposit and bank deposit. 2. Specific fees are charged by the bank depending on the type of letter of credit. 3. Guidelines are issued by the International Chambers of Commerce (ICC) for any Letter of Credit form. 62 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Letter of Credit's Correctness: As only documents are exchanged, no goods and services are involved in this process. Therefore, the letter's mentioned details should be correct: name of the seller, date, amount, product name and quantity, etc. 5. Banks will stop the payment if they find any slight error in the buyer's name, product name, shipping date, etc. 6. As all parties' deals in documents and not goods and services, the payment will not depend on the defects in goods and services. 7. Types of Letter of Credit in India: 8. Credit on Sight: In this type of credit, a businessperson can present a bill of exchange to the lender with a sight letter and take the funds instantly based on the letter of sight. Sight letter of credit is considered the most instant letter of credit that can be available immediately. 9. Time Credit: Bill of exchange paid after the agreed duration between the lender and the borrower is called time credit. Sometime duration is involved in this type of credit. Letter of credit defining time credit allows a borrower to repay the amount only after receiving the goods. 10. Standby Letter of Credit (SBLC): Standby Letter of Credit (SBLC) is a credit method in which importer can receive foreign currency funds globally by submitting the issuance of SBLC from the domestic bank that guarantees payment to the international bank in case the borrower fails to repay the amount before on the due date. 11. Revocable Credit: Revocable credit is a letter of credit where the terms and conditions of LC can be amended or cancelled by the issuing bank. The issuing bank doesn't have to tell beneficiaries regarding any change in the letter of credit. 12. Irrevocable Credit: Irrevocable Credit is a LC where the terms and conditions cannot be amended or cancelled by the issuing bank. The bank has to obey the directions of the letter of credit. 13. Transferable Credit: This is a type of LC where the beneficiary can transfer their rights to third parties. The terms and conditions may change as per the trade and industry. 14. Process of Letter of Credit Step 1: The buyer approaches the bank for the issuance of a letter of credit. This bank is known as an opening or issuing bank. Step 2: There will be an advising bank (mostly international bank) for the beneficiary or seller that will receive the Letter of Credit issued by the buyer's issuing bank. Further, the advising bank will check the letter of credit's authenticity by checking the name, product details, etc. Step 3: Advising bank will give the letter of credit to the seller, thereby assuring that the money shall be received since the banks are now part of the process. Step 4: After seller assurance, the goods will be shipped based on the buyer or applicant's details. The seller will now get the bill of lading after the seller has exported the goods. 63 CU IDOL SELF LEARNING MATERIAL (SLM)

Step 5: The buyer will present the Bill of Lading to the Nominated or the Negotiating bank (International bank). The bank will check all the shipping documents and whether all goods were shipped as per the instructions. Finally, the nominating bank will make the payment to the seller or exporter. Step 6: Next, the nominating bank will share the shipping documents with the issuing bank and demand payment. Step 7: Issuing bank will share the documents with the buyer, seeking approval whether all forms the correct, as per the buyer's information, and all the products are shipped or not. Step 8: The buyer now makes the payment to the issuing bank, and further, the issuing bank sends the payment to the nominated or negotiating bank. 3.7 SUMMARY  Export methods are vital for business. Tapping markets is the key to success in today's competitive world. The main exporting methods required for any business's sustainable development include the Direct method and Indirect method.  The methods of exporting are Pricing quotations, Payment terms, and letter of credit. Apart from this, it is crucial to promptly follow the standard formats, guidelines, and norms of the respective country to follow the legal requirements promptly.  Several factors affect segmentation in the business market. Demography is one such factor: the industry type, size of the company, and company's geographical location. Operational segmentation is based on the technology class, customer requirements, and customer consumption.  Purchasing methodology includes segmentation based on purchase policy, purchase department structure, relation with companies, and companies' market positioning. The order Requirements lets segmentation be found on the nature of the requirement and size of the order. Personality trait segmentation includes loyalty and risk profile.  The advantages of separating international from domestic business are the centralization of specialized skills needed to handle international markets and get the benefits of focused marketing effort that will increase export sales. One disadvantage of such a separation is the less efficient use of company resources because of segmentation.  Letter of credit is a payment instrument used mainly in international trade. In this, a bank provides a monetary guarantee to enterprises that deal with import and export goods. We can use the letter of credit for both import and export purposes.  Enterprises doing business abroad have to deal with unknown vendors, and they need assurance of payment before any transaction. Hence, a letter of credit is essential to give payment assurance to the suppliers or exporters. 64 CU IDOL SELF LEARNING MATERIAL (SLM)

3.8 KEYWORDS  Export Methods: The ways used to export the goods or services by the exporters.  Credit letter: a payment instrument used majorly in international trade in which a bank provides monetary guarantee to enterprises.  Standby Letter of Credit (SBLC): A guarantee given by the bank to the potential buyer  Pricing Analysis: The method / formula through which the pricing factors are analysed from competition management perspective.  Payment Terms: The clauses or conditions on which basis the payment or transactions take place in international trade. 3.9 LEARNING ACTIVITY 1. Prepare the checklist for a quotation. ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- 2. Complete the table of top 5 companies in India. Sr. No. Export Trading Export Marketing 1] 2] 3] 4] 5] ---------------------------------------------------------------------------------------------------------------- 3.10 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is a letter of credit? Explain with example. 2. What are the types of letter of credit? Explain. 3. What is meant by pricing analysis? What are its important elements? 4. Explain direct exporting with examples. 65 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Discuss the concept of ‘Indirect Exporting.’ Long Questions 1. Imagine that you are a regular grape exporter to European countries. Which payment terms and methods would you select based on the points you studied? 2. “Selecting the export product is very important”, Justify your answer with the help of criteria and benefits. 3. Compare and contrast the export marketing guidelines between WTO and Indian government for the IT sector. 4. Prepare the product plan for exporting the IT services to the United States of America along with examples. 5. State the relationship between the customer centricity, distribution and legal compliances of exporting the products. B. Multiple Choice Questions 1. Export of goods help with __________________. a) Production on large scale b) Facilitates economic growth c) Cope up with adverse balance of payment position d) All of these 2. One of the following criteria is not relevant for export marketing. Identify the criteria. a) Study of foreign markets b) Understanding needs and requirements of foreign buyers c) Product planning and development d) Current weather in other country 3. Which one of the following is not related to product planning? a) Product design and its packing b) Product life cycle c) Pricing of the product d) Duty structure 4. Which one of the following statements is not true? a) Export marketing involves large scale distribution b) Export increases manufacturing scale of operation c) Higher scale of operation results in higher cost of production d) Large scale of operation results in enjoying economies of large-scale 5. The focus of export marketing is _______________________. a) Customer b) Politician c) Governments d) Banks 66 CU IDOL SELF LEARNING MATERIAL (SLM)

Answers: 1-(a); 2-(d), 3-(d); 4-(d); 5-(a). 3.11 REFERENCES Textbooks ● Bade, D. (2015). Export/Import procedures and documentation. AMACOM. ● JOHNSON, T. E., & Bade, D. (2010). Export/Import procedures and documentation. AMACOM. ● RATHOR, D. B. (2015). Export marketing. ● Seyoum, B. (2009). Export-Import Theory, Practices, and Procedures. Taylor & Francis. ● Singh, M. (2016). Export Import Business Guide: Learn export import business and become a leader. Create space Independent Publishing Platform. ● Singh, M. (2016). Modern Global Export Marketing Methods: Web, digital & social media. Create space Independent Publishing Platform. ● United States. Bureau of Foreign and Domestic Commerce, & Pratt, E. E. (1918). The export lumber trade of the United States. References Books  Ford, D., (1997). Understanding Business Markets: Interactions, Relationships and Networks, The International Marketing and Purchasing Group (IMP), The Dryden Press.  Helpman, Elhanan. (2011). Understanding Global Trade, Belknap Press, New York.  Andrews, D.C. and Andrews, W.D, (1993), Business Communication, Macmillan Publication.  Panagariya, Arvind (2008). India: The Emerging Giant. Oxford University Press. Websites ● www.indiantradeportal.in ● www.shippingsolutions.com ● www.vskills.in ● www.enterpreneur.com ● www.morethanshipping.com ● www.indiantradeportal.com 67 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 4: FOREIGN TRADE POLICY Structure 4.0 Learning Objectives 4.1 Introduction 4.2 Duty Drawback 4.3 ASIDE, MAI & MDA 4.4 Star Export Houses 4.5 EPCG Scheme 4.6 Incentives for Exporters 4.7 Summary 4.8 Keywords 4.9 Learning Activity 4.10 Unit End Questions 4.11 References 4.0 LEARNING OBJECTIVES After studying the unit, student will be able to:  Describe the 'Foreign Trade Policy'.  Evaluate the idea of 'Duty Drawback'.  Distinguish among ASIDE, MAI, and MDA.  Discuss Start Export Houses and EPCG Scheme.  Compile the impetuses offered for the exporters. 4.1 INTRODUCTION India is known as quite possibly the most significant and arising major part of the worldwide economy. Its foreign exchange approaches and government changes have made it a huge objective for foreign ventures around the planet. Likewise, innovative and infrastructural advancements being done everywhere in the nation empower proficient exchange and financial practices. For the effective monetary improvement of a country, an overwhelming foreign exchange strategy is critical. Accordingly, India embraced a foreign exchange strategy known as the EXIM Policy or the Export-Import strategy. The global exchange has been becoming quicker than world yield demonstrates that the worldwide market is extending 68 CU IDOL SELF LEARNING MATERIAL (SLM)

quicker than the home-grown business sectors. There are without a doubt numerous Indian firms too whose foreign business is becoming quicker than the home-grown business. Business, truth be told, is progressively getting worldwide or worldwide in its serious climate, direction, content, and key aim. This is showed/required/encouraged by the accompanying realities: (a) The competitive business environment (b) globalisation of the board (c) The general progression policy by part nations. Verifiably, exchange development reliably dominated in general financial development for in any event 250 years, except for a nearly short period from 1913 to 1950 described by weighty protectionism which was just about a side-effect of the two world wars. Somewhere in the range of 1720 and 1913, exchange development was around one-and-a-half times the GDP development. Moderate GDP development somewhere in the range of 1913 and 1950 - the time frame with the least normal financial development rate since 1820 – was joined by even more slow exchange development, as war and protectionism sabotaged global exchange. This period was likewise tormented by the incredible sadness. India in 1991, after progression, completely lifted a wide range of limitations from the exchange with the end goal of progress yet to be determined of instalment position. A solid need was felt for Indian business sectors to work around the world, and the economy was liberated. Yet, in a creating economy, it is absurd to expect to create businesses without the security of approaches. Along these lines, later, it was vital for India to force a limitation on its economy through exchange strategies to manage imports and export. Foreign exchange India incorporates all imports and exports to and from India. At the degree of central government, it is controlled by the Ministry of Commerce and Industry. Foreign exchange represented 48.8% of India's GDP in 2018. As a result of the quicker exchange development, by the start of the 1990s, the non-industrial nations overwhelmed the created nations in the exchange GDP proportion and today it is considerably high for non-industrial nations over the created ones. In 2001, the exchange GDP proportion was 38% for big-league salary economies and 49 percent for the non- industrial nations. The non-industrial nations, in this way, are significantly more coordinated than the created ones with the worldwide economy by profession. Among the agricultural nations, it was 51% for centre pay economies and 39 percent for low pay economies.  The New Foreign Trade Policy in India The current Foreign Trade Policy is for the time frame 2015 – 2020 declared by the Government of India, Ministry of Commerce and Industry on 01st April 2015. Foreign exchange strategy needs alterations like clockwork and targets creating send- out capacity, improving export execution and design, empowering foreign exchange, and making an appropriate equilibrium of instalments position. It is refreshed each 69 CU IDOL SELF LEARNING MATERIAL (SLM)

year on the 31st of March, and the adjustments, enhancements, and new plans become successful from the first of April every year. India in 1991, after advancement, completely lifted a wide range of limitations from an exchange with the end goal of progress yet to be determined of instalment position. A solid need was felt for Indian business sectors to work around the world, and the economy was liberated. Yet, in a creating economy, it is absurd to expect to create enterprises without the insurance of arrangements. In this way, later, it was vital for India to force a limitation on its economy through exchange arrangements to direct import and export.  Objectives of the Foreign Trade Policy in India i. To empower generous development in trades from India and import to India to support the economy. ii. To at any rate twofold the rate portion of worldwide product exchange led inside the following five years. iii. To improve the equilibrium of instalment and exchange. iv. To go about as a powerful instrument of monetary development by setting out business open doors for the residents; the bigger the extension of exchange exercises, the more the labour force required. v. To accommodate practical development by offering admittance to fundamental crude materials for creation and different segments, consumables, and capital merchandise needed for expanding creation and offering effective types of assistance. vi. To raise the innovative limit with regards to creation and cost-adequacy of industry and administrations, in this way improving their serious strength in contrast with different nations, and to support the achievement of globally acknowledged principles of value. vii. To furnish purchasers or customers with top-notch products and enterprises at around the world serious rates and quality. 'Canalization'- a significant component of Foreign Trade Policy under which explicit class of products can be imported simply by assigned organizations. viii. Creation of chances by participating in great and moral practices. ix. Accelerating the economy from low-level monetary exercises to undeniable level financial exercises by making it a universally situated and lively economy. x. To get the greatest advantages from extending the worldwide market and taking advantage of the best lucky breaks accessible. With the assistance of foreign exchange approaches, a nation can prompt correspondence of estimating to guarantee a steady interest and supply circumstance inside the economy. Foreign exchange strategy likewise empowers a country to import certain items at the hour of 70 CU IDOL SELF LEARNING MATERIAL (SLM)

a characteristic disaster and along these lines oversee shortage when a request is high by demonstrating better quality and number of products. It additionally helps with increasing the expectation of living and making products accessible at a lower cost. Subsequently, the Foreign Trade Policy in India is a finished strategy to upgrade the situation of India in the global market and make benefits for all.  Difference Among Domestic and Foreign Trade Similitude and Differences among Internal and International Trade: In this segment likenesses and contrasts between the home-grown and foreign exchange are engaged. The overall system, component, and activities are like both inward exchange and global exchange. Coming up next are the essential likenesses between the two. i. Satisfaction of Consumer: Both in home-grown exchange and global exchange, achievement relies on adequately fulfilling the fundamental prerequisites of the customers. ii. Goodwill Creation: It is important to construct altruism in the home-grown market just as in the global market. If a firm can create the altruism of the shoppers, its assignment will be a lot easier than the one, which can't develop its standing. In both cases, the dealer should take all sure measures to acquire the certainty of the shoppers in his item. iii. Market Research: The promoting project ought to be detailed after cautious statistical surveying and study. This recommendation will hold well in both cases. Inability to survey the objective market will eventually get disappointment with the undertaking of showcasing. iv. Product Planning and Development: Research and advancement with a view to item improvement and variation are important in both interior and global exchange. Especially. The advertiser should oversee the market circumstance and the progressions happening in the shopper's preferences and the inclinations and create or alter his item to suit the necessities of his clients. Be that as it may, there are sure exceptional highlights, which separate inner exchange from the worldwide exchange. They are clarified as following way: i. Demand and Supply: Demand and supply can't work out their full impacts where a foreign exchange is concerned. Though such factors can work out their full endeavours on account of the interior exchange. ii. Physical Obstacle to Commerce: Where a foreign exchange is continued, a far more prominent level of imbalance between states of creation in various nations is important to invigorate exchange when the nations are generally isolated than when they are abutting. 71 CU IDOL SELF LEARNING MATERIAL (SLM)

iii. Artificial Barriers to Trade: The normal troubles might be expanded by fake boundaries to exchange, either through restrictive laws as in war season or through traditional duties or defensive duties with regards to worldwide exchange. iv. Obstacles to Migration of Labour: Serious obstructions to the relocation of work from one country to another, for example, language contrasts are frequently restrictive, while sensations of enthusiasm help to keep men in their own country. As indicated by Briggs ―For each man who will so change his propensities as to go to work abroad, there are 100 who will move from one area to another inside a country. Indeed, however, a generally little movement is important to balance the conditions in two nations adjoining states may persevere for ages are norms of life which are particularly unique. v. Obstacles of Mobility of Capital: Men who will not leave their territory may contribute capital abroad, yet home speculation is normally liked to a foreign. A foreign advance should offer a lot higher pace of interest than a home advance. Not exclusively is there a genuine danger of loss of premium and even capital, however, a financial backer feels a feeling of uncertainty when cash is contributed abroad. vi. Differences in Economic Environment from One Country to Another: Different nations have various offices in doing their beneficial exercises. Contrasts in the arrangement of public and nearby tax collection, guidelines for wellbeing, sterilization, plant association, instruction and protection, strategy in regard to the vehicle and public utilities, laws identifying with modern blends and exchange, and so forth, do exist as between nations. These distinctions achieve a distinction in the expenses of creation between them. vii. Currency contrasts are even more significant in light of the way that trade is in this way hampered. For example, if an Indian maker wishes to sell products in the U.S.A or English, he should know the estimation of the U.S.A or England cash units as far as Indian cash. Aside from this, every nation is heavily influenced by a different national bank, each after a different money-related approach which may incredibly influence the foreign exchange of the country. viii. The geological and climatic conditions may offer ascent to the regional division of work and limitation of businesses. A few nations may have normal assets in wealth like iron metal, coal, and so forth, while in some different nations climatic conditions offer benefits to them. ix. Long-Distance: International exchange is a transcendently significant distance. This may influence the vehicle costs and the portability of the various elements of creation. x. Preference: Preference for home and the bias against outsiders stay as one of the central points that would disclose concerning why the paces of acquiring of the diverse of equivalent productivity would not be evened out between various nations.  Competitive Advantages of Foreign Trade for India 72 CU IDOL SELF LEARNING MATERIAL (SLM)

Gains from Foreign Trade: In this section the various gains of foreign trade can be listed as follows: i. International Specialization: International trade enables to specialize in the production of those goods in which each country has special advantages. Each country or region is endowed with certain special facilities in the form of natural resources, capital and equipment and efficiency of human powder. Some countries are rich in minerals and in hydroelectric power. Some are blessed with extensive land but have very little population. Some others possess advanced techniques of manufacturing, a very efficient and hardworking population and plenty of capital equipment. ii. Availability of Scarce Materials: International trade is the only method by which a country can supplement its storage of resources or certain essential materials. There is no country in the world including the U.S.A and the U.K, which has all the resources it requires. At the same time, there are some countries like Indonesia, which have been blessed by nature with some rare materials like rubber and tin. International trade ensures equal access to raw materials for all countries. iii. Equalization of Prices Between Countries: An important gain of international trade or the effect of it is the tendency of internationally traded goods to have the same price everywhere. A commodity is cheap or costly depending upon its supply. It will be cheap in a country where it is produced with excessive supply of some essential factors. iv. Evolution of Modern Industrial Society: The modern industrial society is based on extensive specialization and large-scale production. Both are based on the size of the market. The larger and more extensive the market for the products, the greater is the degree of specialization and large-scale production. It is for this reason Adam smith started that the division of the labour is limited by the extent of the market. 4.2 DUTY DRAWBACK The Duty Drawback plot was presented by the Ministry of Finance as a discount for duty chargeable on any imported materials or excisable materials utilized in production or preparing of merchandise, made in India and sent out. The sent-out items are income regular. The Central Government is enabled to concede Duty Drawback under segments 74 and 75 of the Customs Act, 1962. Under area 74 of the Customs Act, 1962 duty downside to the degree of 98% of the duty paid on imported merchandise can be guaranteed for re-trade, given the products are re-sent out inside two years of instalment of import duty. Area 75 of the Act engages duty disadvantage on the export of fabricated articles. The term downside is applied to a specific measure of duties of Customs and Central Excise, now and then the entire, now and again just a section transmitted or paid by Government on 73 CU IDOL SELF LEARNING MATERIAL (SLM)

the exportation of the items on which they were exacted. To qualify products for the downside, they should be sent out to a foreign port, the object of the alleviation managed by the disadvantage being to empower the merchandise to be discarded in the foreign market as though they had never been charged. For Customs reason downside implies the discount of the duty of customs and duty of focal extract that are chargeable on imported and native materials utilized in the assembling of traded merchandise. Products qualified for disadvantage applies to  Export products brought into India all things considered.  Export products brought into India in the wake of having been taken for use.  Export merchandise fabricated/delivered out of imported material.  Export merchandise fabricated/delivered out of native material.  Export merchandise fabricated/delivered out of imported or and native materials. The Duty Drawback is of two kinds: (I) All Industry Rate (AIR) and (ii) Brand Rate. The All-Industry Rate (AIR) is a normal rate dependent on the normal amount and estimation of information sources and duties (both Excise and Customs) borne by them and Service Tax endured by a specific export item. The Brand Rate of Duty Drawback is permitted in situations where the export item doesn't have any AIR of Duty Drawback or the equivalent kills under 4/fifth of the duties paid on materials utilized in the production of export merchandise. This work is dealt with by the jurisdictional Commissioners of Customs and Central Excise. The Duty Drawback Office on The Export of a Duty Paid Imported Products is accessible as far as Sec. 74 (It is talked about in more detail in under notice Para) of the Customs Act, 1962. Under this plan part of the Customs duty paid at the hour of import is dispatched on the export of the imported merchandise, subject to their ID and adherence to the recommended methodology. All Industry Rate (AIR) of Duty Drawback: The All-Industry Rate (AIR) of Duty Drawback is informed for countless export items consistently by the Government after an appraisal of the normal frequency of Customs, Central Excise duties, and Service Tax endured by the export items. The All-Industry Rate (AIR) is fixed after broad conversations with all partners viz. Export Promotion Councils, Trade Associations, and individual exporters to request significant information, which remembers the information for obtainment costs of data sources, native just as imported, pertinent duty rates, utilization proportions, and FOB estimations of export items. The exporter needs to make an application to the Commissioner having purview over the assembling unit, within 3 months from the date of the 'Let Export' request. The application ought to incorporate subtleties of materials/segments/input administrations utilized in the production of merchandise and the duties/charges paid on such materials/parts/input 74 CU IDOL SELF LEARNING MATERIAL (SLM)

administrations. The time of 3 months can be stretched out up to a year subject to conditions and instalment of essential charge as given in the Drawback Rules, 1995.  Salient Features of AIR Duty Drawback Of 2013 Are as Per the Following i. As in earlier years, the downside rates have been resolved based on certain expansive normal boundaries including, winning costs of information sources, standard info yield standards, a portion of imports in input utilization, the applied paces of focal extract and customs duties, the figuring of the frequency of administration charge paid on available administrations which are utilized as information administrations in the assembling or handling of export merchandise, calculating the occurrence of duty on HSD/Furnace Oil, estimation of export products, etc. ii. The residuary All Industry Rate (AIR) of 1% (composite) and 0.3% (traditions) is being given to until now \"Nil\" appraised things under sections 4, 15, 22, not many things in part 24 and Casein and its subsidiaries in part 35 iii. The higher residuary rates are being decreased from 1.5% to 1.3% (traditions) or from 2% to 1.7% (traditions), by and large. iv. Most tax things with promotion Valorem all industry rates above 2%, the rates are being enhanced with disadvantage covers (Drawback Caps implies the roof of the pace of duty downside of an item to that level). 4.3 ASIDE, MAI & MDA 4.3.1 ASIDE Exports have come to be viewed as a motor of financial development in the wake of advancement and underlying changes in the economy. A supported development in trades is, be that as it may, unrealistic without legitimate and sufficient foundation as a satisfactory and solid framework is fundamental to encourage unhindered creation, cut down the expense of creation, and make our exports universally serious. While the duty regarding the advancement of exports and making the vital particular foundation has generally been attempted by the Central Government up until now, it is progressively felt that the States need to assume a similarly significant part in this undertaking. The job of the State Governments is basic according to the perspective of boosting the creation of exportable excess, giving the infrastructural offices like land, power, water, streets, network, contamination control measures, and a helpful administrative climate for the creation of products and enterprises. It is, along these lines; felt that planned endeavours by the Central Government in collaboration with the State Governments are important for the improvement of the foundation for sends out advancement. Branch of Commerce right now actualizes, through its organizations, plans for advancement and help of export items and the making of foundation chaperon thereto. The Export 75 CU IDOL SELF LEARNING MATERIAL (SLM)

Promotion Industrial Parks Scheme (EPIP), Export Promotion Zones plot (EPZ), and the Critical Infrastructure Balancing Scheme (CIB) are likewise actualized to help make a framework for sends out in explicit areas and to meet explicit destinations. Notwithstanding, the overall necessities of foundation improvement for trades are not met by such plans. With a view, along these lines, to improving the use of assets and to accomplish the destinations of export development through an organized exertion of the Central Government and the States this plan has been drawn up. The highlights of the Scheme and the Guidelines for the thought of recommendations concerning the Scheme are given below. The plan will give an expense to the advancement of export framework which will be dispersed to the States as indicated by a pre-characterized measure. The current EPIP, EPZ, and CIB plans will be converged with the new plan. The plan for Export Development Fund (EDF) for the North East and Sikkim (actualized since 2000-2001) will likewise stand converged with the new plan. After the consolidation of the plans concerning EPIP, EPZ, CIB, and EDF for NER and Sikkim with the new plan, the progressing projects under the plans will be financed by the States from the assets given under the new plan. Assignment of Assets The expense of the plan will have two parts. 80% of the assets (State segment) will be reserved for distribution to the States based on the affirmed measures as shown in Para 6 to be used for the endorsed purposes (Para 4). The equilibrium 20% (focal segment) and sums comparable to un-used part of the assets dispensed to the States in the past year(s), assuming any, will be held at the focal level for meeting the prerequisites of highway projects, capital expenses of EPZs, exercises identifying with the advancement of exports from the NER according to the current rules of EDF and some other action thought about significant by the Central Government from the provincial or the public point of view. Measures for State-wise Assignment The State Component will be dispensed to the States in two tranches of half each. The between allotment of the primary tranche of the half to the States will be made based on trade execution. This will be determined based on the portion of the State in the absolute exports. The second tranche of the excess half will be designated based on a portion of the States in the normal of the development pace of exports over the earlier year. The portions will be founded on the information of exports of products alone and the export of administrations won't be considered.  As full and solid information about the exports from the States isn't probably going to be accessible during the year 2001-2002, the State-wise assignments will be made based on the venture recommendations got from the State Governments.  A least 10% of the Scheme expense will be held for consumption in the NER and Sikkim. The subsidizing of Export Development Fund for NER and Sikkim will be made out of this reserved cost and the equilibrium sum will be dispersed among the States based on the export execution rules as set down. 76 CU IDOL SELF LEARNING MATERIAL (SLM)

The send-out execution and development of exports from the State will be surveyed based on the data accessible from the workplace of the Director-General of Commercial Intelligence and Statistics (DGCIS). Topping off of this section is required with an impact from 15.6.2001 under the FT (D&R) Act. Each State/UT Government would intermittently cooperate with the exporters to control and inspire them to make legitimate sections in the Shipping Bills so that the State of Origin of the traded merchandise is entered accurately. The States may set up fitting components at the field level in participation with the exchange and industry related to disperse this data among exporters. Approval of Projects and Implementation  There will be a b headed by the Chief Secretary of the State and comprising of the Secretaries of concerned Departments at the State level, and a delegate of the States cell of the Department of Commerce (DoC) and the Joint Director General of Foreign Trade posted in that State/area and the Development Commissioners of the SEZ/EPZ in the State according to Annexure – IV as Members. SLEPC will investigate and favour explicit undertakings and direct the usage of the Scheme.  Each State/UT will name/assign one of its officials as Export Commissioner who will be the convener of SLEPC and with whom DoC will associate on the issues relating to ASIDE. He will draw up long-term and yearly export plans for the State/UT in an interview with the exchange and industry, the Export Promotion Councils, and the DoC. He will likewise draw up a rack of area explicit activities, for the endorsement of the SLEPC, which are proposed to be taken up under this plan. He will likewise go about as a solitary point interface with the exporters from the State/UT.  Before authorizing new ventures, the SLEPC will apportion assets for the presumable consumption of the progressing projects. The SLEPC will guarantee that besides in excellent cases no new task has a growth time of over 2 years.  For costs under the Central part, there will be an Empowered Committee in the Department of Commerce, headed by the Commerce Secretary and comprising of delegates from the Planning Commission and the individual services to consider and endorse the proposition got according to the methodology recommended in Para 9. On the off chance that any venture has any bearing on the outer area, a delegate of the Ministry of External Affairs would be welcomed for the gathering of the Empowered Committee.  The 20% Central segment would be endorsed according to the assignment of forces under Financial Rules of Government of India. The 80% State segment would be affirmed by the State Government according to the Rules of Business of the State Government 4.3.2 MAI 77 CU IDOL SELF LEARNING MATERIAL (SLM)

Market Access Initiative (MAI) Scheme is an Export Promotion Scheme imagined going about as an impetus to advance India's exports on a supported premise, during the tenth long- term Plan. The plan is detailed on centre item centre nation way to deal with developing an explicit methodology for explicit market and explicit item through market examines/study. Help would be given to Export Promotion Organizations/Trade Promotion Organizations/Exporters and so on for upgrade of export through getting to new business sectors or through expanding the offer in the current business sectors. Under the Scheme, the degree of help for each qualified action has been fixed. The Extent of the MAI Scheme The accompanying exercises will be qualified for monetary help under the Scheme:  To recognize the needs of examination applicable to the Department of Commerce and to support research considers predictable with the needs.  WTO Studies for developing WTO viable system.  To uphold EPCs/Trade Promotion Organizations in endeavour market considers/review for developing appropriate techniques.  To uphold showcasing projects abroad dependent on centre item - centre nation approach. Under advertising projects, the accompanying exercises will be financed. (a) Opening of Showrooms; (b) Opening of Warehouses; (c) Display in worldwide departmental stores; (d) Publicity Campaign and Brand Promotion; (e) Participation in Trade Exports, and so forth, abroad; (f) Research and Product Development (g) Reverse visits of the noticeable purchasers and so on from the undertaking centre nations. Export Potential Survey of the States. Qualified Agencies: Under the Scheme, monetary help might be given to Departments of Central Government and association of Central/State Governments, Export Promotion Councils; Registered Trade Promotion Organizations; Commodity Boards; Apex Trade Bodies perceived under EXIM-Policy of Government of India Market Access Initiative (MAI) Scheme; Recognized Industrial bunches; Individual exporters ( just for testing charges of designing items abroad and enrolment charges of drugs, bio-innovation and agro- synthetics) Standards for Sanction: Market Access Initiative (MAI) Scheme depends on Focus country-item approach and the qualified organizations ought to detail a far-reaching project for market access based on Focus-Country and Focus - Product approach. The venture ought to be for a specific item for a specific market for the time of 2-3 years to get the greatest outcome. Subtleties of endorsed purposes for the plan and level of help  Market Study: Professional specialists will be utilized to attempt showcasing studies and Indian; Level of help; Opening of Showrooms and Warehouses; Showrooms/Warehouses would be an arrangement in rented or rental convenience; Display in International Departmental Stores; Tie up with local wholesalers and significant stores will be utilized as a device for advancing specific item (s). Global 78 CU IDOL SELF LEARNING MATERIAL (SLM)

Departmental Store chains would be distinguished based on advertising examines/reviews.  Publicity Campaign: Venue Cost; Publicity cost for the occasion; Cost of the inventories and other material; Translation and Interpreters' charges; any other segment affirmed by the Engaged Committee: 100% of the air travel cost of the foreign guests in the economy/trip class just would be financed. The foreign guests would meet their own boarding/dwelling costs. The EC would choose a fixed designation for the exercises every year. 4.3.3 MDA India's absolute exports in the year 2012 were $443 bn and imports were $617 bn. India's financial development eased back to 4.7% for the 2013–14 monetary year. The drawn-out arrangement objective for the Indian Government is to twofold India's offer in worldwide exchange by 2020. To meet these goals, the Government would follow a blend of strategy measures including monetary motivations, institutional changes, procedural legitimization, and upgraded market access across the world, and enhancement of export markets. Improvement in framework identified with sends out; cutting down exchange costs and giving a full discount of all roundabout duties and tolls, would be the three columns, which will uphold the exports and accomplish the set target. The Government of India has planned the Market Development Assistance (MDA) plan to create and elevate exports to different nations recorded under the EXIM strategy. This is to animate and differentiate the nation's export exchange. The examination is proposed to comprehend and investigate the export recipient's insight towards the Market Development Assistance plot. The Department of Commerce is liable for the MDA plan to help different exercises as referenced underneath:  Assist exporters with more global exchange exercises abroad.  Assist Export Promotion Councils (EPCs) to embrace send out advancement exercises for their items and wares.  Assist endorsed associations/exchange bodies undertaking elite nonrecurring inventive exercises associated with sending out advancement endeavours for their individuals.  Assist Focus trade advancement programs in explicit locales abroad like Focus (LAC), Focus (Africa), Focus (CIS), and Focus (ASEAN+2). Perceived Export Promotion Councils (EPCs) on item gathering premise, Commodity Boards and Export Development Authorities are qualified for MDA help for improvement and limited time exercises to advance exports of their items and products from India. The proposition of individual exporters for qualified MDA upheld exercises like an investment in EPC drove Trade Delegations/BSMs/Trade Exports/Exhibitions for repayment of MDA help will be thought of and endorsed by the Chief Executive Officer of the Export Promotion Councils/FIEO and so forth. 79 CU IDOL SELF LEARNING MATERIAL (SLM)

Organization of the Scheme The usage of the plan is regulated by the E&MDA Division in the Department of Commerce, Government of India, Udyog Bhavan, New Delhi – 110 011. Perceived EPCs on item gathering premise, Commodity Boards and Export Development Authorities are qualified for MDA help for advancement and limited time exercises to advance exports of their items and products from India. (ii) MDA spending allotment to perceived EPCs and other export advancement associations for sending out advancement exercises including explicit turn of events and limited-time projects are settled in yearly gathering with the individual EPCs, which is led, by the Additional Secretary and Financial Advisor (AS&FA), Department of Commerce. Proposition for Adhoc awards for select imaginative export special exercises, which are viewed as supportive to advance exports of Indian items and products are analysed by the E&MDA Division and chose with the endorsement of the AS&FA. Sl.No. Area/ Sector Maximum Financial 1. Ceiling per event 2. Focus LAC Rs. 2,50,000 3. 4. FOCUS AFRICA including West Asia Rs. 2,00,000 5. & North Africa (WANA) Countries FOCUS CIS Rs. 2,00,000 FOCUS ASEAN + Australia & New Rs. 2,00,000 Zealand General Areas Rs. 2,00,000 Table 4.1: Amount of Grant under MDA The List of Documents to Claim the MDA Benefits The accompanying archives are needed to be submitted with the MDA guarantee:- i. Prescribed Claim Form (Annexure – VI) appropriately finished and confirmed on the organization letterhead. ii. Bill for instalment and pre-receipt appropriately marked, stepped with Rs. 1 Revenue stamp. iii. Undertakings and Declaration on organization letterhead appropriately marked and stepped. iv. Legible copy of identification featuring the sections about take-off from and appearance in India and the nations visited. If identification doesn't have the appearance/flight dates in regard to the country visited, some narrative proof, for example, in Bills, Boarding Pass, Lodging pass, and so forth. v. Self-insured FOB esteem sends out figures during the last three monetary years, year shrewd. vi. Details of past exercises for the same occasion with MDA help. vii. Brief report on the action embraced and accomplishments. 80 CU IDOL SELF LEARNING MATERIAL (SLM)

viii. Certificate from the travel planner ensuring the class of movement in Economy Excursion class. ix. Evidence of instalment made for the slow down lease as Receipt from the reasonable power or bank counsel appropriately self-guaranteed. x. Original air ticket/coat utilized during the excursion. 4.4 STAR EXPORT HOUSES Export Houses were first introduced in 1958, were begun in 1960, and the approach was evaluated now and again in the underlying years. The underlying goal of September 1, 1962, establishing Export Houses specified that they ought to be exceptionally comprised public restricted organizations with no investor holding over 10% offers. Organizations were needed to advance the exports of non-customary produces to new business sectors. They were to have Government evaluators and Government chosen people. The plan was amended in 1965. A yearly export execution of Rs 10 lakhs for non-customary items was important for acknowledgment. The object of the plan of export houses was to permit a few impetuses and offices to qualified perceived export houses. The endeavour was to fortify export houses to have the option to haggle with purchasers abroad, to empower them to develop a suffering connection among them and their supporting producers. It was additionally felt that they ought to be assisted with satisfying the need to keep their supporting producers provided with imported crude materials, and to create solid linkages with their partners in abroad business sectors. Qualification Criteria for Star Export Houses Benefits: There are the accompanying qualification standards to perceive an exporter as a \"status holder exporter\":  The candidate for the award of Star Export House should have the Import – Export Code (IEC).  The declaration is given relying on the specific degree of export execution accomplished by the exporters.  The candidate can get status holder acknowledgment in any of the five classes from One Star Export House to Five Star Export House. Your export execution FOB/FOR esteem for them ought to be $3 million, $25 million, $100 million, $500 million, and $2000 million, individually. The Legitimacy of Status Holder Certificate  Status Holder Certificate or Export House Certificate will be legitimate for 5 Years from the date of issue of endorsement.  Certificate recharging will be recorded before the expiry of the existing legitimacy period. Reports needed for Star Export House Certificate There are the accompanying reports needed for Star Export House Certificate.  Application Form – ANF 3C 81 CU IDOL SELF LEARNING MATERIAL (SLM)

 Submitting hard duplicate of ANF3C  CA Certificate according to Annexure to ANF 3C  Statement of Export, Certified by Chartered Accountant (CA)  Self-insured duplicate of IEC  Self-insured duplicate of substantial RCMC  Self-insured duplicate of PAN 4.5 EPCG SCHEME Export Promotion Capital Goods (EPCG) Scheme is a plan dispatched by DGFT in the Foreign Trade Policy 2015-2020 under section 4. The target of the EPCG Scheme is to encourage the import of capital merchandise for creating quality products and ventures and upgrading India's assembling seriousness. EPCG Scheme permits the import of capital merchandise for pre-creation, creation, and after creation at 0% traditions duty. Capital merchandise with the end goal of the EPCG schemes will include: Capital Goods as characterized in Chapter 9 of FTP 2015-2020 remembering for Completely Knocked Down/Semi Knocked Down condition thereof: Computer frameworks and programming which are a piece of the Capital Goods being imported; Spares, moulds, passes on, dances, apparatuses, instruments, and refractoriness’; and catalysts for an introductory charge in addition to one ensuing charge. The import of capital merchandise for Project Imports advised by the Central Board of Excise and Customs is additionally allowed under EPCG Scheme. 4.6 INCENTIVES FOR EXPORTERS The act of giving export motivators is closing widespread, and India is no special case. In any case, the degree and the type of export impetuses shift from one country to another contingent upon the country's financial construction (counting its monetary design), its general asset accessibility, its export potential, and the adequacy of export motivating forces in understanding its export potential. Inside its general spending requirement, every WTO Member country should choose how best to structure its export motivations that are steady with the WTO rules and simultaneously accomplish the goal of export advancement. Export motivating forces are given to exporters as an affirmation for getting foreign trade, and to make up for the infrastructural obstructions and costs that they face. India's Foreign Trade Policy (FTP) 2015-20 features different export motivators made accessible by the public authority through the Directorate General of Foreign Trade (DGFT), as refreshed till mid-2019. How do Export Incentives work in India? 82 CU IDOL SELF LEARNING MATERIAL (SLM)

The public authority gathers less assessment for the sent-out products, to build the intensity in the worldwide market. The motivators gave; guarantee a higher reach of the local item and the development of the Indian Export Businesses. In any case, the motivations are given remembering the accessibility of the specific item/material. These motivating forces are changed and altered by the shortage and plenitude of the item. Figure 4.1: Types of Export Incentives These motivations incorporate the exports from India plot, duty exclusion/reduction plan, and export advancement capital products scheme. How about we investigate them: Exports from India Scheme  Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS).  This trade motivator plan can be partitioned into the product and administrations area  Under MEIS, the export of advised products to informed business sectors is remunerated on acknowledged FOB estimation of exports in free foreign trade or on FOB estimation of exports as given in the delivery charges in uninhibitedly convertible foreign trade, whichever is lower.  MEIS rewards are accessible on the export of merchandise through dispatch or global post on transfers of FOB estimation of up to Rs. 5 lakh.  Under SEIS, specialist organizations of qualified administrations are qualified for duty credit scrip at advised rates on the net foreign trade procured. Free foreign trade settlement got through worldwide MasterCard and different instruments are likewise considered while registering the estimation of exports. Here are a few impetuses ordinarily accessible under MEIS and SEIS 83 CU IDOL SELF LEARNING MATERIAL (SLM)

Twofold weight age is given to the accompanying IEC holders in send out execution estimation for conceding status:  Micro, Small, and Medium Enterprises (MSMEs).  Manufacturing units with ISO/BIS certificate.  Units situated in J&K and the north-eastern states.  Units situated in Agri trade zones. Duty Exception/Abatement Schemes: These permit duty free import of contributions for trade creation and incorporate the accompanying duty exclusion plans. Advance Authorisation Scheme: Advance authorization permits duty-free import of sources of info that get genuinely joined into the export item. This may incorporate oil, fuel, and impetuses. The worth expansion of the data sources is estimated according to standard information yield standards, given which the exception is given. Advance License for Annual Requirement: It is given based on the yearly prerequisite of an exporter for actual exports, middle supplies, or considered exports. Advance License for yearly necessity is qualified uniquely for one for Five Star Export Houses. Duty-Free Import Authorization: without duty import authorization permits the duty-free import of contributions on the fundamental traditions duty bit of duty. Extra traditions/extract duties will be changed as CENVAT credit. Duty Downside Schemes: Duty Drawback Scheme expects to give a discount to exporters on the traditions and extract duties paid on information sources and crude materials or administrations for use in the creation of export items. The re-export of the imported products ought to occur inside a specified chance to be qualified for the downside. The disadvantage is switched if the deal continues are not gotten inside a specified time. Figure 4.2: Export Schemes 84 CU IDOL SELF LEARNING MATERIAL (SLM)

4.7 SUMMARY  Foreign exchange is a significant component of key arranging and execution from the reasonable improvement of a country.  The solidness, foreign cash, request supply, work age, global relations, legitimate ramifications, cultural wellbeing, social value, monetary access, and high expectations for everyday comforts are conceivable through a successful foreign exchange strategy.  India is known as quite possibly the most significant and arising major part of the worldwide economy. Its foreign exchange approaches and government changes have made it a critical objective for foreign speculations around the planet. Likewise, innovative and infrastructural advancements being done everywhere in the nation empower effective exchange and monetary practices.  Foreign exchange strategy needs revisions at regular intervals and targets creating send-out capacity, improving export execution and design, empowering foreign exchange, and making a reasonable equilibrium of instalments position.  There are different plans started by the focal and state governments to support the exchange and trade exercises to build the export. Some of them are Duty Drawback, ASIDE. MAI, EPCG Scheme. What's more, there are additionally different motivating forces offered for the exporters occasionally.  Export impetuses are given to exporters as an affirmation for getting foreign trade, and to make up for the infrastructural impediments and costs that they face.  India's Foreign Trade Policy (FTP) 2015-20 features different export motivators made accessible by the public authority through the Directorate General of Foreign Trade (DGFT). 4.8 KEYWORDS  ASIDE: Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE) is figured to include the States in the export exertion by giving help to the States Governments for making fitting foundation for the turn of events and development of exports.  MAI: Marketing Access Assistance (MAI) is an administration award/sponsorship gave to part exporters to their export advancement exercises like cooperation in EPC drove worldwide Trade Exports/Exhibitions/Buyer Seller Meets (BSM) abroad to investigate new business sectors for the export of their painstaking work or explicit product(s) and Services.  MDA: Marketing Development Assistance (MDA) is an administration award accessible to exporters for their export advancement exercises like cooperation in EPC drove global Trade Exports/Exhibitions/exchange assignments/BSMs abroad to 85 CU IDOL SELF LEARNING MATERIAL (SLM)

investigate new business sectors for the export of their particular product(s) and items from India.  Export Promotion Councils: Export Promotion Councils are government-started specialists that advance and backing send out firms in building up their abroad exchange. 4.9 LEARNING ACTIVITY 1. Compose any best five motivating forces offered for the Indian exporters in the beneath outline. ___________________________________________________________________________ ___________________________________________________________________________ 2. Make a list of criteria for fund allocation of ASIDE Scheme. Central Component _________________________ ______________________ State Component _________________________ ______________________ If Unutilized... _________________________ _____________________. ………………………………………………………………………………………………. ………………………………………………………………………………………………. 4.10 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Explain the term 'Foreign Trade Policy' with models. 2. Discuss the idea of Duty Drawback. 3. Explain the advantages of the MAI Scheme with models. 4. State the destinations of Trade Export Policy in India. 5. Enlist the qualified offices for MAI Scheme. 6. Explain the State Level Export Promotion Committee (SLEPC). Long Questions 86 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Analyse the adequacy of ASIDE, MAI, and MDA in the most recent decade. 2. Illustrate the upper hands offered by EPCG Scheme to the Indian Exporters. 3. Examine the current motivators given to the Agriculture, IT, and FMCG area-based exporters. 4. Describe the effect of COVID-19 flare-up on home-grown and foreign exchange from an Indian point of view. 5. Are the motivators offered for the exporters adequate in India? Is there a need to survey; adjust them remembering the developing business sector patterns? Set up your ground- breaking strategy to manage the business vulnerabilities. B. Multiple Choice-based Questions 1. India acknowledged the progression strategy after _____________________. a) 1991 b) 1995 c) 1990 d) 2000 2. In 2018, the commitment of foreign exchange to the Indian GDP was ___________________. a) 25% b) 27% c) 42% d) 45% 3. The foreign exchange strategy is refreshed on __________________________ of consistently. a) 1st April b) 31st March c) Either of the two d) Both of the two 4. Which of coming up next are the vital targets of Foreign Trade Policy of India? a) To empowers financial development and public turn of events b) To raise the mechanical limit with regards to creation and cost-viability of industry and administrations c) To improve the equilibrium of instalment and exchange d) All of these 87 CU IDOL SELF LEARNING MATERIAL (SLM)

5. The term downside is applied to a specific measure of duties pertinent to _____________. a) Customs duties b) Central Excise c) Both of the abovementioned d) None of these Answers: 1-(a); 2-(d); 3-(b); 4-(d); 5-(c). 4.11 REFERENCES Textbooks  Singh, M. (2016). Modern Global Export Marketing Methods: Web, Digital & Social Media. Create space Independent Publishing Platform.  Sudalaimuthu, S.; Raj, S.A. (2009). Logistics Management for International Business: Text and Cases. PHI Learning, Delhi.  Das, Gurcharan (2002). India Unbound. Anchor Books, Noida.  Indira, R. B. (2015). Handbook of Statistics on Indian Economy, New Delhi: Reserve Bank of India. Reference Books  Athukorala, P-C. (2009). Production Networks and Trade Patterns: East Asia in a Global Context, Kuala Lumpur, Malaysia.  John, K. C.; Kevin, S (2004). Traditional Exports of India: Performance and Prospects. Delhi: New Century Publications. p. 59. ISBN 81-7708-062-8.  Bhagwati, J. (1978). Foreign Trade Regimes and Economic Development: Anatomy and Consequences of Exchange Contrast Regimes. MA, Ballinger Publishing Company.  Seyoum, B. (2009). Export-Import Theory, Practices, and Procedures. Taylor & Francis. Websites  https://www.clearias.com/foreign-trade-of-india/  https://www.dgft.gov.in/CP/?opt=itchs-import-export  http://www.bizeurope.com/  https://www.eximbankindia.in/ 88 CU IDOL SELF LEARNING MATERIAL (SLM)

89 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 5: EXPORT PROMOTION COUNCILS Structure 5.0 Learning Objectives 5.1 Introduction 5.2 SEZs 5.3 Duty Free Zones 5.4 FIEO 5.5 IIFT 5.6 EOUs 5.7 TPO 5.8 ECGC 5.9 EXIM Bank 5.10 Summary 5.11 Keywords 5.12 Learning Activity 5.13 Unit End Questions 5.14 References 5.0 LEARNING OBJECTIVES After studying this unit, student will be able to:  Explain export promotion councils in India.  Describe the concept and nature of SEZs.  Differentiate between special economic and free trade zones.  Explain the elements of IIFT, ITPO, and other EPCs.  Explain the commitment of EXIM Bank. 5.1 INTRODUCTION Export Promotion Councils are government-started specialists that advance and backing send out firms in building up their abroad exchange and presence by giving specialized and industry bits of knowledge. Moreover, EPCs likewise advance government plans, go about as an information store and direct abroad visits and studies. They additionally go about as a go- 90 CU IDOL SELF LEARNING MATERIAL (SLM)

between the public authority and the export business and are basic in detailing the international strategies of the country. Export limited time Councils (EPC) are specialists which are essentially advancing, supporting, and helping firms in entering the International business sectors and understanding their ideal potential from given assets. They likewise give direction and help to the exporters. In legitimate terms, send out special committees are non- benefit associations enrolled as an organization or society. Each Export special chamber is answerable for his specific gathering of items. These Councils are enlisted as non-benefit associations under the Companies Act/Societies Registration Act. EPCs perform both warnings just as chief capacities. Export Promotion Councils are liable for the nation's picture abroad as a committee of dependable providers of excellent products and enterprises. The EPCs energize and screen the recognition of global principles and determinations by exporters. Every item has its own Export Promotion Council; subsequently, the advertiser should enlist under a specific EPC according to their line of item. According to the Foreign exchange strategy of India, any individual who either needs to obtain any permit to import trade confined or other comparable classes of merchandise or to profit from any export related advantage or plan is responsible to enlist for Registration Cum Membership Certificate (RCMC). The export special boards give different advantages to the enlisted exporters. What's more, consequently, assumes a critical part for any exporter in India. 5.2 SEZS India was one of the first in Asia to perceive the viability of the Export Processing Zone (EPZ) model in advancing exports, with Asia's first EPZ set up in Kandla in 1965. To defeat the deficiencies experienced by the assortment of controls and clearances; the nonappearance of a top-notch framework, and an unsteady monetary system, and to draw in bigger foreign interests in India, the Special Economic Zones (SEZs) Policy was declared in April 2000. The Special Economic Zone (SEZ) strategy in India previously came into commencement on April 1, 2000. The great goal was to upgrade foreign ventures and give a globally serious and bother-free climate for trades. This arrangement planned to make SEZs a motor for financial development upheld by quality foundation supplemented by an appealing monetary bundle, both at the Centre and the State level, with the base potential guidelines. SEZs in India worked from 1.11.2000 to 09.02.2006 under the arrangements of the Foreign Trade Policy and monetary impetuses were made compelling through the arrangements of pertinent statutes. The thought was to advance exports from the country and understanding the need that level battleground should be made accessible to the home-grown endeavours and makers to be serious all around the world. Exceptional Economic Zone (SEZ) is an explicitly portrayed duty-free area and will be considered to be a foreign area for the motivations behind exchange activities and duties and duties. All other words, SEZ are a geological district that has financial laws not quite the 91 CU IDOL SELF LEARNING MATERIAL (SLM)

same as a country's run-of-the-mill monetary laws. Typically, the objective is to increment foreign ventures. SEZs have been set up in a few nations, including China, India, Jordan, Poland, Kazakhstan, the Philippines, and Russia. The SEZs assume a critical part in the fast monetary advancement of a country. In the mid-1990s, it helped China and there were trusts (maybe never extremely high ones, truly) that the foundation in India of comparable export preparing zones could offer comparative advantages - gave, notwithstanding, that the zones offered appealing enough concessions. 92 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.1: The List of Major SEZs in India 5.3 DUTY FREE ZONES The Duty-Free zone is a region where items are sold without the import, deals, esteem added, or other duties. These items are offered to the global explorers with an agreement that they will take these items outside of the nation to utilize. The items are charge excluded to tempt the global clients in purchasing the products. A streamlined commerce zone (FTZ) is a class of uncommon financial zone. It is a geographic territory where merchandise might be landed, put away, took care of, produced, or reconfigured and re-sent out under explicit traditions guidelines and for the most part does not expose to customs duty. Deregulation zones are by and large coordinated around significant seaports, worldwide air terminals, and public boondocks—territories with numerous geographic benefits for trade. The World Bank characterizes streamlined commerce zones as \"in, duty-free zones, offering to the warehouse, stockpiling, and appropriation offices for exchange, trans-shipment, and re-send out tasks.\" Free-exchange zones can likewise be characterized as work concentrated assembling communities that include the import of crude materials or segments and the export of plant items, yet this is a dating definition as increasingly more streamlined commerce zones centre on administration ventures like programming, back-office activities, research, and monetary administrations. The stores selling duty-free items are ordinarily arranged at global air terminals, ocean terminals, and worldwide train stations. Duty-free items are likewise accessible onboard voyage boats and global flights. A few nations force an expense on great brought to the country from a duty-free zone. Additionally, there is a furthest cut-off forced on the volume of the item you can bring into a country from a duty-free zone. The duty-free shops offer marked upmarket extravagance products at a low cost as you don't need to pay the duties connected to in the home-grown market. In European Union, you need to pay the duties for the merchandise while going between EU nations, yet the products are sans duty when you go outdoors Europe. Duty-free shops are not by and large accessible on the streets or prepares but rather there are a few duties-free shops at U.S. - Canada, and U.S. - Mexico line. The pertinent duty-free guideline relies upon the nation of home, objective country, and length of stay. It likewise relies upon the thing, cost of the thing, and the nation of its assembling. Rundown of Duty-Free Zones in India There are 8 affirmed Free Trade and Warehousing Zones (FTWZs) in India. Out of eight FTWZs, four have been advised. Out of 4 advised FTWZs, 3 are operational. There is no venture made by the Central Government in these FTWZs. The aggregate sum of Rs.3, 315.81 crores has been contributed by the private Developers/Co-designers in these FTWZs during the most recent five years. Further, the income of Rs. 13,051.19 crores have been produced by these FTEZs during the most recent five years. Setting up of New FTWZs (SEZs) is fundamentally private speculation driven. An assertion showing subtleties of these FTWZs in India is given underneath: 93 CU IDOL SELF LEARNING MATERIAL (SLM)

Details Free Trade and Warehousing Zones (FTWZs) SEZs in India Sr. No. Name of the Location Area SEZ status developer Hectares 1 Arshiya Taluka Panvel, 57.898 Notified/Operati International District Raigad, onal Limited Maharashtra 2 J. Matadee Free Sriperumbudur Taluk, 40 Notified/Operati onal Trade Zone Kancheepuram Private Limited District, Tamil Nadu 3 Arshiya Northern Moujpur, Bulandshar, 51.4394 Notified/Operati FTWZ Limited Uttar Pradesh onal 4 Arshiya Taluka & District 43.26 Notified International Ltd. Nagpur, Maharashtra 5 Lepakshi Chillamaturu Mandal, 40 Formal Approval Knowledge Hub Ananthapur District, Private Limited Andhra Pradesh 6 ISPRL FTWZ Padur, Karnataka 41.20 Formal Padur (Indian Approval Strategic Petroleum Reserves Ltd.) 7 Cochin Port Trust ThoppumpadyRamesa 40.85 Formal ram Village, Cochin, Approval Kerala 8 Venkatesh Coke & Ponneri Taluk, 46.71 Formal Power Ltd. Thiruvalur District, Approval Tamil Nadu Table 5.1: List of Duty-Free Zones in India 94 CU IDOL SELF LEARNING MATERIAL (SLM)

5.4 FIEO About FIEO: It is a peak body of the export advancement chambers, product sheets, and export improvement experts in India; Set up in 1965; Provides the critical interface between global exchanging local area of India and the Central and State Governments, monetary establishments, ports, railroads, surface vehicle and all occupied with sending out exchange assistance; Directly and by implication serves the interests of more than 200,000 exporters from each great and administrations area in the country; ISO 9001:2015 guaranteed association and guarantees uniform and excellent support of its individuals and partners. Figure 5.2: FIEO Program and Activities of FIEO A Close Partner of the International Trading Community:  Facilitates Redressal of exporters' issues by taking them up with the concerned specialists.  Through the FIEO site (www.fieo.org) gives freedom to the exporters to talk about online with FIEO specialists their issues on the global exchange, look for an explanation on approach matters, and so on.  Through the FIEO site gives admittance to refreshed exchange arrangements, connections to worldwide exchange advancement associations, and some more.  Organizes open house meets with the most noteworthy specialists to draw the consideration of the Government on significant exchange issues and help expedient goal. FIEO'S MOBILE APP – NIRYAT MITRA  Launched by then Honourable Commerce and Industry Minister Shri. Suresh Prabhu in the long stretch of August 2018. Finishing administrations are accessible the application.  Daily update/alert on the business opportunity, strategy, SPS/TBT measures, MFN/Preferential levy, FIEO's occasions, and so on.  Access to FIEO's occasion schedule and alternative to enrolling online in FIEO's occasions.  Option for individuals to transfer item photos, organization logo and friends profile on FIEO site. 95 CU IDOL SELF LEARNING MATERIAL (SLM)

 Access to FIEO's month to month and week by week distributions, reports, articles, official statements, and so forth.  Tool to Identify send out/import strategy at tax line, GST rate, trade motivations, MFN/special levy for 87 nations, rules of inception, SPS/TBT measures, and so on. Global Marketing Initiatives  Provides stage to the exporters to make their free online store and stretch out their scope to new and existing clients universally.  Exchanges business assignments build up MoUs with partner associations abroad, and mastermind displays, the index shows abroad.  FIEO is the India accomplice of the Enterprise Europe Network and helps MSMEs in internationalization.  Provides 24x7 openness to FIEO individuals across the globe through the FIEO site.  The site gives a special stage to purchasers abroad to look, recognize and speak with FIEO individuals at no expense.  Helps individuals with online acknowledgment by giving them an alternative to download the FIEO logo (with \"Enlisted Member\" message), from the FIEO site, and spot it on their site. Guests after tapping the FIEO logo part's site can see the part's points of interest under FIEO standard in this manner enhancing a part's site.  Organizes purchaser merchant meets both with approaching designations and by supporting assignments abroad and so on. As indicated by the Ministry of Statistics and Program Implementation (MoSPI), India has held its situation as the third-biggest economy on the planet as far as buying power equality (PPP), behind the US and China. India represents 6.7% or $8,051 billion, out of the worlds all out of $119,547 billion of worldwide Gross Domestic Product (GDP) as far as PPP contrasted with 16.4 % in the event of China and 16.3 % for the US, according to World Bank information for the reference year 2017. In the Asia-Pacific Region, India held its territorial situation, as the second-biggest economy, represented 20.83 % regarding PPPs where China was first at 50.76% and Indonesia at 7.49% was third. India is additionally the second biggest economy regarding its PPP-based offer in local Actual Individual Consumption and territorial Gross Capital Formation. In 2019, India remained as the eighteenth biggest sending-out country on the planet with a 1.72 percent share in worldwide exports. 96 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure5.3: India’s Export-Import (2015-2020) In 2019-20, India recorded export esteem worth US$ 313.22 billion against import esteem worth US$ 473.99 billion. During 2015-16 to 2019-20, India's exports recorded a positive accumulated yearly development pace of 4.54 percent alongside a positive development of 5.61 percent in India's Imports in a similar period. India, seeing a hop of 14 positions, was set at 63rd position among 190 economies in World Bank's Doing Business Report 2020, making it the one of world's main 10 most improved nations for the third sequential time. India saw the greatest hop in positioning in \"settling indebtedness\" class, to 52nd position from 108th, on the rear of execution of the Insolvency and Bankruptcy Code, while its positioning improved significantly in Dealing with Construction Permits (to 27th from 52nd) and \"Exchanging across Borders\" (to 68th from 80th). The World Bank said India directed four changes in the year time frame to May 1. Among different enhancements, India made the way toward getting a structured grant more effective. Getting all grants and approvals to fabricate a distribution centre currently costs 4% of the stockroom esteem, down from 5.7% the earlier year. Moreover, specialists upgraded constructing quality control in Delhi by reinforcing proficient affirmation prerequisites. Bringing in and sending out likewise got simpler for organizations with the making of a solitary electronic stage for exchange partners, moves up to the port foundation, and upgrades to electronic accommodation of reports. 5.5 IIFT The Indian Institute of Foreign Trade (IIFT) was set up in 1963 by the Government of India as a self-governing association to help professionalize the country's foreign exchange the executives and increment send out by creating HR, dissecting and spreading information, and directing exploration. The Institute pictures its future job as an impetus for novel thoughts, ideas, and abilities for the internationalization of the Indian economy. The essential supplier of preparing and exploration-based consultancy in the zones of global business, both for the corporate area, Government, and the understudies' local area. An organization with demonstrated ability to consistently update its information base with the end goal of adjusting the prerequisites of the Government, exchange, and industry through both supported and non- supported examination and consultancy tasks. The Institute's arrangement of long-haul 97 CU IDOL SELF LEARNING MATERIAL (SLM)

programs is assorted, considering the necessities of hopeful International Business chiefs and mid-vocation experts the same. These are:  Two-year MBA (International Business), New Delhi, Kolkata, and Dar-es-Salaam.  Three-year MBA (International Business) (Part-Time), New Delhi and Kolkata.  Executive master’s in international business, New Delhi.  Certificate Program in Export Management, New Delhi. 5.6 EOUS The Export Oriented Units (EOUs) plot, presented in mid-1981, is corresponding to the SEZ scheme. It embraces a similar creation system however offers a wide alternative in areas concerning factors like a wellspring of crude materials, ports of export, hinterland offices, accessibility of mechanical abilities, presence of a modern base, and the requirement for a bigger territory of land for the venture. As of 31st December 2005, 1924 units are inactivity under the EOU plot.  Objectives of the Export Oriented Unit The principal destinations of the EOU scheme are to build trades, procure foreign trade to the nation, a move of most recent advances invigorate direct foreign speculation, and to create extra work.  Major Sectors in EOUs  Granite; Textiles/Garments; Food Processing; Chemicals; Computer Software; Coffee; Pharmaceuticals; Gem and Jewellery; Engineering Goods; Electrical and Electronics; Aqua and Pearl Culture. i. Export from EOU: Exports from EOUs during 2004-2005 were of the request for Rs.36806.17 crores when contrasted with the export of Rs.28827.58 crores accomplished during 2003-2004, enlisting a development of 27.68%. ii. EOU Activities: Initially, EOUs were principally packed in Textiles and Yarn, Food Processing, Electronics, Chemicals, Plastics, Granites, and Minerals/Ores. Be that as it may, presently a day, EOU has broadened its zone of work which incorporates capacities like assembling, overhauling, the advancement of programming, exchanging, fix, revamping, reconditioning, re- designing including making of Gold/Silver/platinum, Jewellery and Articles thereof, farming including agro-preparing, hydroponics, animal cultivation, bio-innovation, gardening, agriculture, pisciculture, viticulture, poultry, sericulture, and rocks. iii. Need for Special License: To set up an EOU for the accompanying areas, an EOU proprietor needs an exceptional permit. a. Arms and ammo. 98 CU IDOL SELF LEARNING MATERIAL (SLM)

b. Explosives and associated things of safeguard hardware. synthetic c. Defence airplane and warships. d. Atomic substances. e. Narcotics and psychotropic substances and unsafe compounds. f. Distillation and preparing of mixed beverages. g. Cigarettes/stogie’s and produced tobacco substitutes. In the above notice cases, EOU proprietors are needed to present the application structure to the Development Commissioner who will at that point put them up to the Board of Approvals (BOA).  Choosing the Location for EOU EOUs can be set up anyplace in the country and might be occupied with the assembling and creation of programming, gardening, cultivation, farming, hydroponics, animal cultivation, pisciculture, poultry, and sericulture, or other comparative activities. However, it ought to be noticed that in the event of enormous urban areas where the populace is more than 1,000,000, like Bangalore and Cochin, the proposed area ought to be at any rate 25 km away from the Standard Urban Area cut-off points of that city except if, it is to be situated in a zone assigned as a \"modern region\" before the 25th of July 1991. Non-dirtying EOUs like hardware, PC programming, and printing are excluded from such limitations while picking the area. Apart from the nearby zone office and state government, setting up of an EOU is additionally carefully guided by the ecological standards and guidelines. Consequently, regardless of whether the EOU unit has satisfied all location strategies yet not appropriate according to natural perspective than the Ministry of Environment, the Government of India has the option to drop the proposition. In such circumstances, industrialists would be needed to comply with that choice.  EOU Unit Duties The EOUs are needed to accomplish the base NFEP (Net Foreign Exchange Earning as a Percentage of Exports) and the base EP (Export Performance) according to the arrangements of EXIM Policy which change from one area to another. Concerning case, the units with interest in plant and hardware of Rs.5 crores or more are needed to accomplish positive NFEP and export US$ 3.5 million or multiple times the CIF estimation of imported capital products, whichever is higher, for a very long time. For gadgets equipment area, least NFEP must be 'positive' and least EP for a very long time is US$ 1 million or multiple times the CIF estimation of imported capital products, whichever is higher. NFEP is determined in total for a time of a long time from the initiation of business creation as per an endorsed recipe. 99 CU IDOL SELF LEARNING MATERIAL (SLM)

 Bonding Period of EOU: The EOUs are authorized to make products inside the fortified timeframe with the end goal of export. According to the Exim Policy, the time of holding is at first for a very long time, which is extendable to an additional five years by the Development Commissioner. Anyway, on a solicitation of EOU Unit, timeframe can likewise be stretched out for an additional long term by the Commissioner/Chief Commissioner of Customs.  EOU in EXIM Policy: Currently EOU scheme is referenced in Chapter 9 of the Foreign Trade Policy (1997-2002) and Chapter 9 of the Handbook of Procedures, Volume-I (HOP). The EOUs can send out all items aside from disallowed things of exports in ITC (HS).  Recent Policy Changes in the EOUs Scheme (w.e.f. seventh April 2006) i. The export of merchandise up to one and a half percent of the FOB esteem. ii. In request to encourage the smooth working of the EOU units, the Development Commissioners will fix time limits for concluding the removal of issues identifying with EOUs. iii. New units occupied with the export of Agriculture/Horticulture/Aqua-Culture items have been currently permitted to eliminate capital merchandise contributions to the DTA on delivering bank ensure comparable to the duty predestined on the capital products/input proposed to be taken out. iv. The EOU units in Textile Sector are permitted to discard the leftover material/textures up to 2 percent of Cost Insurance Freight (CIF) estimation of imports, on credit premise. Perceiving that settling the records for each transfer is mind-boggling and tedious it has been chosen to permit the removal of leftover material based on earlier year's imports. 5.7 ITPO India Trade Promotion Organization (ITPO) is the nodal office of the Government of India under the aegis of the Ministry of Commerce and Industry (India) for advancing the countries outside exchange. It's settled at Pragati Maidan, Delhi. ITPO is a Mini-Ratna Category-1 Central Public Sector Enterprise (CPSE) with 100% shareholding of the Government of India. In January 2016, ITPO selected NBCC as Project Management Consultant (PMC) for Integrated Exhibition-cum-Convention Centre (IECC) project as a feature of the Redevelopment of Pragati Maidan. The task earned much media consideration because of the destruction of the Hall of Nations and Nehru Pavilion by ITPO in April 2017, after endorsement from Delhi High Court. ITPO has granted the IECC development work to Shapoorji Pallonji Group for INR 2150 crores, making the undertaking cost go over walloping INR 2600 crores. On 22 December 2017, Vice-President of India Venkaiah Naidu established the framework stone of the IECC project and Integrated Transit Corridor Development project at Pragati Maidan. 100 CU IDOL SELF LEARNING MATERIAL (SLM)