EXPORT

IMPORT
AND EXIM
POLICY

(c)ashutosh kumar 1
CONTENTS:
Definition
Types of export
Role of govt in export
Export/import process
Export/import financing
Exim policy
Comparison of trade policy
India’s Exim policy 2009-14
2 Objective of india’s Exim policy
Balance of trade
Bibliography
 DEFINITION

The term export is derived from the

conceptual meaning as to ship the goods
and services out of the port of a country
 The seller of such goods and services is
referred as an "exporter" who is based in
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the country of export
Whereas the overseas based buyer is
referred to as an "importer"
CONTD.

 In International Trade, "exports" refers to

selling goods and services produced in the
home country to other markets
 Exporting is the most popular way for
companies to become international
 Exporting is usually the first mode of foreign
entry used by companies 4
CONTD.

 Selling to foreign markets involves

numerous high risks, arising from a lack of
knowledge about and unfamiliarity with
foreign environments, which can be
heterogeneous, sophisticated, and turbulent
 Manufactured goods accounted for almost
60 percent of the exports of developing
countries 5
TYPES OF EXPORT
Direct export Indirect export
Direct exporting occurs Indirect exporting
when a manufacturer involves the use of
or exporter sells independent
directly to an importer middlemen(brokers,
or buyer located in a bank) to market the
foreign market firm’s products
overseas

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DIRECT EXPORT/IMPORT

1. Importer Pays for Goods

indian Importer American Exporter

2. Exporter Ships Goods After Being Paid

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A TYPICAL INTERNATIONAL
TRANSACTION
1. Importer Orders Goods 3. Importer
Arranges for
2. Exporter Agrees to Fill Order
LOC

American Exporter french Importer

6. Goods Shipped to France
10 and 11
Exporter 7. Exporter 12. Bank Tells 13. Importer
Sells Presents Importer Pays Bank
Draft to Draft to Bank Documents
Bank 14. B of NY Presents Matured Arrive
Draft and Gets Payment
Bank of New York Bank of paris
5. B of NY 8. B of NY Presents Draft to Bank of Paris
Informs
9. Bank of Paris Returns Accepted Draft
Exporter
of LOC 4. Bank of Paris Sends LOC to B of NY
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 Composition of India’s Exports

Agricultural &
Ores & Manufactured Fuel &
Allied
Minerals Items Lubricants
Products

Composition of India’s Imports

Pearls &
Petroleum
Capital Goods Precious Iron & Steel
Products
Stones
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ROLE OF THE GOVERNMENT IN
PROMOTING EXPORTS

 Export promotion activities generally comprise:

1.export services programs
2.market development program
 Export-import bank tariff concessions
1.foreign trade zones
2.foreign sales corporation(FSC)
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EXPORT PROCESSES
Evaluate export potential
 financial resources
 management capability/experience
 competitive advantages abroad

Do country analysis (more later)

 country receptiveness to imports and investment
 trade barriers/requirements
 infrastructure
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CONTD.

Do market analysis

 market size/product potential

 distribution channels

Determine entry method

 goal of entry
 select distribution “partner”
 determine channel length
 assess risks
 determine costs 12
SOURCES OF EXPORTER
FINANCING
Financing exporter credit to the importer:

- Bankers’ acceptance (of the draft)

- Factoring
- Forfeiting
- EXIM bank

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PROCEDURES OF EXPORT AND IMPORT
TRANSACTION
General Procedures of Export Transaction：

Preparation for
Exporting

Business
Negotiation

Implementation
of Contract

Settlement of 14
Disputes
EXPORT/IMPORT FINANCING
 Letters of Credit (LOC)
 Bank guarantee on behalf of importer to exporter
assuring payment when exporter presents specified
documents
 Drafts (Bill of Exchange)
 Written order by exporter, telling an importer to pay a
specified amount of money at a specified time.
 Bill of Lading
 Issued to exporter, by carrier. Serves as receipt,
contract and document of title.

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WHAT IS EXPORT IMPORT POLICY
(EXIM POLICY)?
 Export Import (Exim) Policy or Foreign Trade Policy (FTP) is a set of
guidelines and instructions in matters related to the import and export of
goods in India.

 Established by the Directorate General of Foreign Trade (DGFT)

 Regulated by The Foreign Trade Development and Regulation Act 1992

 Exim policy contains various policy decisions with respect to import and
exports of the country.

 Prepared and announced by the central government.

 Aim

 Developing export potential

 Improving export performance

 Encouraging foreign trade 16

 Creating favorable balance of payment position.

CONTD.

 Trade Policy will strongly influence the

direction, trend and growth of foreign trade of
a country
 Industrialisation and self-sufficiency in
essential commodities were the important
objectives of India's trade policy
 trade policy is an important economic
instrument which can be used by a country,
with suitable modifications from time to time,
to achieve its long-term objectives
 Trade Policy can be free trade policy or
protective trade policy
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COMPARISON OF TRADE
POLICY
FREE TRADE POLICY
 A free trade is one which
does not impose any
restriction on the exchange
of goods and services
between different countries.
 A free trade policy involves
complete absence of tariffs,
quotas, exchange
restrictions, taxes and
subsidies on production,
factor use and consumption.
PROTECTIVE TRADE POLICY
 A protective trade policy
pursued by a country seeks
to maintain a system of
trade restrictions with the
objective of protecting the
domestic economy from the
competition of foreign
products.
 Many of the
underdeveloped countries
continue to have protective
trade policies even today.
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 INDIA'S EXIM POLICY 2009-2014
The Union Commerce Ministry, Government of
India announces the Export Import policy in every
five year. This is also called EXIM policy. This policy
is updated every year with some modifications and
new schemes. New schemes come into effect on
the first day of financial year i.e. April 1, every
year. The Foreign trade Policy which was
announced on August 28, 2009 is an integrated
policy for the period 2009-14. This policy is
updated on every financial year.
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 OBJECTIVES OF EXIM POLICY 2009-
2014
 To arrest and reverse declining trend of exports which will be
reviewed after every two years.

 To Double India's exports of goods and services by 2014.

 To double India's share in global merchandise trade by 2020

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

 Simplification of the application procedure for availing various

benefits.

 To set in motion the strategies and policy measures which

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catalyze the growth of exports.
INDIA'S FOREIGN TRADE IN JUNE
2012
 Exports:

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

 Imports:

India’s imports for the duration of June 2012 came to US$36.87 billion,
showing a growth of 42.46 percent over the level of imports valued at
US$25.88 billion in June 2011. An increasing value of imports for the
interval of April-June 2011-12 was US$110.61 billion as against US$81.20
billion over the same period in 2010 – good for a 36.22 percent increase.
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1,600,000
Foreign Trade Trends in India
1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Export Import
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 BALANCE OF TRADE
 Balance of trade = Exports - Imports

 A positive balance of trade is known as a trade surplus

 A negative balance of trade is known as a trade deficit or,

informally, a trade gap.

 India reported a trade deficit equivalent to 7659 Millions USD in

June of 2011.

 India is poor in oil resources and is currently heavily dependent

on coal and foreign oil imports for its energy needs.

 Other imported products are: machinery, gems, fertilizers and

chemicals.
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INDIA’S BOT
(January 2009 – July 2011)

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ANY QUERY?

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BIBLIOGRAPHY
 Wikipedia
 Official website of Indian export-import
portal
 Internet
 Oxford dictionary

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THANKING
YOU
THANKING 27

YOU