CHAPTER-1

1.1 INTRODUCTION OF EXPORT

Export in itself is a very wide concept and lot of preparations is required by an exporter before starting an export business. A key success factor in starting any export company is clear understanding and detail knowledge of products to be exported. In order to be a successful in exporting one must fully research its foreign market rather than try to tackle every market at once. The exporter should approach a market on a priority basis. Overseas design and product must be studies properly and considered carefully. Because there are specific laws dealing with International trade and foreign business, it is imperative that you familiarize yourself with state, federal, and international laws before starting your export business. Price is also an important factor. So, before starting an export business an exporter must considered the price offered to the buyers. As the selling price depends on sourcing price, try to avoid unnecessary middlemen who only add cost but no value. It helps a lot on cutting the transaction cost and improving the quality of the final products. However, before we go deep into "How to export ? let us discuss what an export is and how the Government of Indian has defined it. In very simple terms, export may be defined as the selling of goods to a foreign country. However, As per Section 2 (e) of the India Foreign Trade Act (1992), the term export may be defined as 'an act of taking out of India any goods by land, sea or air and with proper transaction of money. Exporting a product is a profitable method that helps to expand the business and reduces the dependence in the local market. It also provides new ideas, management practices, marketing techniques, and ways of competing, which is not possible in the domestic market. Even as an owner of a domestic market, an individual businessman should think about exporting. Research shows that, on
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average, exporting companies are more profitable than their non-exporting counterparts.

Definition of 'Export'
A function of international trade whereby goods produced in one country are shipped to another country for future sale or trade. The sale of such goods adds to the producing nation's gross output. If used for trade, exports are exchanged for other products or services. Exports are one of the oldest forms of economic transfer, and occur on a large scale between nations that have fewer restrictions on trade, such as tariffs or subsidies. Most of the largest companies operating in advanced economies will derive a substantial portion of their annual revenues from exports to other countries. The ability to export goods helps an economy to grow by selling more overall goods and services. One of the core functions of diplomacy and foreign policy within governments is to foster economic trade in ways that benefit both parties involved.

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1.2 OBJECTIVES

Undertaking market studies in individual foreign countries on regular as well as an ad-hoc basis. Organizing visits of delegations of members to explore opportunities for Services Organizing, participation in seminars, conferences and meets in India and abroad, trade fairs/exhibitions/buyer-seller meets. Disseminating information regularly and continuously in foreign countries regarding the potential image of Indian Services sector and informing the public in foreign countries the advantages of availing Services from India. Compiling statistics and other relevant information regarding international trade in Services. Providing commercially useful information and assistance to members in developing and increasing export of Services. Disseminating information useful to members by literatures, discussions, books, correspondence or otherwise. Offering professional advice to members in areas such as technology upgradation, quality and design improving, standards and specifications of the products and Services; Maintaining liaison with agencies dealing in international trade and Services so as to promote export of Services from India. Communicating with the chambers of commerce and other mercantile chambers of commerce, professional bodies, other mercantile and public bodies in India and abroad for promoting measures for the advancement of exports of Services from India.

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1.3 Methodology
The methodology used for the implementation of the assigned project is based on secondary data. Research design for the descriptive study is of explanatory type and the forms is given to discover the possible measure by detailed analysis this report also based on descriptive research because it provide the detailed knowledge about the INDIA EXPORT TRADE. Secondary data is to be used in the research, have been collected from various magazines, news paper, websites and other source.

1.4 Sources of Data

Secondary data collect method is used for this project and have been collected from various magazines, news paper, websites, etc.

1.5 Scope of Study

The study is limited to INDIA EXPORT TRADE as it is a very vast topic, to study.

1.6 Chapter wise Scheme

The present study is an endeavor to evaluate the study of INDIA EXPORT TRADE. The analysis and evaluation is based on secondary data. The present study has been divided into five chapters. Chapter one is introductory in nature and discusses the origin of INDIA EXPORT TRADE. It further provides the overview of primary market in India. And also explains the scope of the study, data collection and statistical tools for analysis. The reviews of the selected studies in India covering various aspects of EXPORT TRADE has been covered in the second chapter. Chapter three evaluates the various aspects of the INDIA EXPORT TRADE. Chapter four gives the detailed analysis at different points of time in the chapter. Chapter five entitled Findings and Suggestions summarizes the findings of the study. An attempt has been made to draw the conclusions from the present study.

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CHAPTER-2
STUDY OF EXPORT TRADE

INTRODUCTION Trade & Export:

A member of the World Trade Organization since 1996, the UAE supports open trade and has stable trade relations with countries throughout the world. Thanks to its open economy, attractive business environment and continued economic growth, the UAE has emerged as a key international trade hub between East and West. The UAEs main export commodities are crude oil, natural gas, re -exports, dried fish and dates. Its main import commodities are machinery and transport equipment, chemicals and food. The UAEs top 5 import partners are: Rank 1. Country India 17.50% China 14.00% United States 7.70% Germany 4. 5.60% Primary Products Primary products: cotton, accessories, gems and jewelry, man-made yarn, fabrics, manufacturers of metals, cotton yarn, marine products, machinery and instruments, plastic and linoleum products, tea. Primary products: textile products, clothes, light industrial products, handicrafts, machinery and products made from gold, silver, copper, iron, tin. Primary products: transport equipment, machinery, computer & electronic products, primary metal manufacturing, chemicals. Primary products: machineries, electronics, chemical products, measurement and control technology, iron, steel.

2.

3.

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Japan 5. 4.82%

Primary products: transport equipment, electrical machinery, general machinery, foodstuff, raw materials, mineral fuels.

Perspective on International Trade

International trades between countries and across continents have existed for centuries including previous civilizations. Traditionally international trade consisted of traded goods like textile, food items, spices, precious metals, precious stones, and objects of art and various items across the borders. Everybody has heard of the silk route as well as amber road and other famous routes that existed and the ports and settlements that flourished due to the trade, which was carried on through land route as well as sea routes. We have come a long way since the earlier times and International trade today has taken on new dimension. It was a fact earlier that impact of trade between two countries was not limited to economics alone, but fuelled political, social ambitions too. Today with the advancement of technology and impact of globalization has made it necessary for all countries to engage necessarily in international trade for their survival. Various factors including but not limited to industrialization, development of transportation, globalization, technology that enables trade and communication has contributed to change in the format of business organizations as well as trade practices. Companies and Organizations today are no longer entities with a local identity. Multinational organizations have emerged through the previous century with footprints all over the globe. They have in fact shrunk the earth and changed the way businesses are conducted. Companies no longer limit themselves to local markets. They no longer depend upon local resources. These companies setup manufacturing wherever it is conducive in terms of cheaper resource availability as well as support from local government and in terms of markets, geographical boundaries do not bother them. They are present everywhere.

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Technology in terms of communication as well as software technology has changed the way business organizations manage activities be it manufacturing, procurement, finance or sales. Today software applications drive the processes and work at the speed of thought. In present scenario, no country can afford to remain isolated from and not participate in globalization. While countries do open their economies to global competition, they need to tread very carefully not to upset their domestic economy and protected industries. This balancing act is often managed through individual countries trade and tariff policy, which forms a part of each countries foreign trade policy that governs its approach to international trade and commerce. Post Second World War, World Trade Organization has been playing major role in facilitating and attempting to streamline the global trade and tariff structures with an aim to move towards free trade. However in reality, free trade may just be a dream as long as there is no parity between developed and developing economies. Today most of the countries are party to several bi-lateral as well as multi lateral tariff and trade agreements like GATT General Agreement on Tariffs and Trade though which they regulate imports and exports to and from specific countries.

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EXPORT DOCUMENTATION
Introduction The export process is made more complex by the wide variety of documents that the exporter needs to complete to ensure that the order reaches its destination quickly, safetly and without problems. These documents range include those required by the South African authorities (such as bills of entry, foreign exchange documents, export permits, etc.), those required by the importer (such as the proforma and commercial invoices, certifcates of origin and health, and preshipment inspection documents), those required for payment (such as the South African Reserve Bank forms, the letter of credit and the bill of lading) and finally, those required for transportation (such as the bill of lading, the airwaybill or the freight transit order). Documentation requirements for export shipments also vary widely according to the country of destination and the type of product being shipped. Most exporters rely on an international freight forwarder to handle the export documentation because of the multitude of documentary requirements involved in physically exporting goods and it is strongly recommended that you also make use of a freight forwarder to help you work your way through the maze of documentation. Click here for a list of freight forwarders that you can approach to help you. The benefits of documentation Documentation is a key means of conveying information from one person or company to another, and also serves as permanent proof of tasks and actions undertaken throughout the export process. Documentation is not only required for your own business purposes and that of your business partner, but also to satisfy the customs authorities in both countries and to facilite the transportation of and payment for goods sold. One value of documentation is that copies can be made and shared with the parties involved in the export process (although you should always ensure that you make identical copies from an agreed-upon master - it is no use making changes without the other party's agreement and then presenting these as the "latest" copies). If the documentation is complete, accurate, agreed upon by the parties involved and signed by each of these of these parties (or their representatives), the document will represent a legally binding document.

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Function of export documentation

Export documentation may serve any or all of the following functions:

An attestation of facts, such as a certificate of origin Evidence of the terms and conditions of a contract if carriage, such as in the case of an airway bill Evidence of ownership or title to goods, such as in the case of a bill of lading A promissory note; that is, a promise to pay A demand for payment, as with a bill of exchange A declaration of liability, such as with a customs bill of entry A receipt for goods received.

India Export Trade Intelligence India exports are growing everyday and you can access this vast market with India Export data. Indian Export data is based on actual import bill of entries filed with Indian Customs. This data can help you locate Indian Sellers and Exporters with their products. India Export Data is the best tool to access new emerging India export Market. Info drive India provides India Export market Research based on your requirements, we can compile a highly customized, accurate Directory of Active Indian Seller with product and shipment data and contact details. Data Fields:

Indian Exporter Name, Address, Tel, Fax, Email Contact Person ( Wherever available - as per Customs Notification no 128/ 2004 ) Data of Shipment Harmonized Codes Product Description Actual Product Description as entered in Shipping Documents Export Value in INR and US $ Quantity and Unit of Quantity Country of Destination Port of Destination Country of Origin
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CHAPTER-3 STUDY OF INDIA EXPORT TRADE

INTRODUCTION:
Export means the transferring of any good from one country to another country in a legal way for the purpose of trade. Export goods are provided to the foreign consumers by the domestic producers.

Indian Exports:
The history of Indian exports is very old. During ancient times India exported spices to the other parts of the world. India was also famous for its textiles which were a chief item for export in the 16th century. Textiles and cotton were exported to the Arab countries from Gujarat. During the Mughal era India exported various precious stones such as ivory, pearls, tortoise stones etc. But during the British era, Indian exports declined as the East India Company took control of foreign trade. Markets Though India has seen some product diversification in its export basket, it has not expanded significantly in the two big markets-Africa and Latin America. Indias business with South Asian countries is also negligible. This region has not been integrated with the global economy, though political and economic initiatives have been taken in the recent past in this direction. Leading Export Items of India In the past ten years, Indian exports have grown at a rate of nearly 22%. Some commodities have enjoyed faster export growth than others. Some of India's main export items are cotton, textiles, jute goods, tea, coffee, cocoa products, rice,
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wheat, pickles, mango pulp, juices, jams, preserved vegetables etc. India exports its goods to some of the leading countries of the world such as UK, Belgium, USA, China, Russia etc. Restriction on the Exports of Items However there are some restrictions on the export of goods. Under sub section (d) of section 111 and sub section (d) of section 113, any good exported or attempted to be exported, contrary to any prohibition imposed by or under the customs act or any other law is liable for confiscation. Export Trends If the Indian economy grows at the same pace, India would most definitely export goods worth US $500 billion by 2013 and may supersede the exports of other large developing countries like Brazil. The Way Ahead India needs the right mix of policy formulation sector focus and industry led initiatives to move up the value chain in the global export basket The Opportunity It is very clear that Indian exports have still not achieved their true potential and there exists immense opportunities for expanding the basket of Indias exports. With a strategic attention on the new markets that are evolving due to free trade, India is witnessing a boom in both manufacturing and services. Problems of the Indian Export Sector There are few problems which need to be solved before India makes a mark for itself in the export sector. The Indian goods have to be of superior quality. The packaging and branding should be such that countries are interested to export from India. At the same time India must look for potential market to sell their goods. The government should frame policies which gives boost to the exports.

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Directional Change in Exports India has seen massive directional change in the context of origin of demand for Indian products. Till 2001-02 North America and the EU markets shared nearly 21% and 23.2 % respectively of total exports and the remaining to the rest of the.

Export License in India

To export in India, you must first obtain an export license. Before submitting your application, you should consult the latest import and export procedures and policies, which list all the regulations for obtaining an export license in India. Before you receive a license, a careful review will be conducted of the factors surrounding the your intended export transactions. Licensing is determined by the goods to be exported and the port of export. Setting up an appropriate business organization The first and the foremost question you as a prospective exporter has to decide are about the kind of business organisation needed for the purpose. You have to take a crucial decision as to whether a business will be run as a sole proprietary concern or a partnership firm or a company. The proper selection of organisation will depend upon Your ability to raise finance Your capacity to bear the risk Your desire to exercise control over the business Nature of regulatory framework applicable to you

If the size of the business is small, it would be advantageous to form a sole proprietary business organisation. It can be set up easily without much expenses and legal formalities. It is subject to only a few governmental regulations. However, the biggest disadvantage of #138;sole proprietary business is limited liability to raise funds which restricts its growth. Besides, the owner has unlimited personal liability. In order to avoid this disadvantage, it is advisable to form a partnership firm. The partnership firm can also be set up with ease and economy. Business can take benefit of the varied experiences and expertise of the partners. The liability of the partner though joint and several, is practically distributed
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amongst the various partners, despite the fact that the personal liability of the partner is unlimited. The major disadvantage of partnership form of business organisation is that conflict amongst the partners is a potential threat to the business. It will not be out of place to mention here that partnership firms are governed by the Indian Partnership Act, 1932 and, therefore they should be form within the parameters laid down by the Act. Exporters Manual and Documentation Company is another form of business organisation, which has the advantage of distinct legal identity and limited liability to the shareholders. It can be a private limited company or a public limited company. A private limited company can be formed by just two persons subscribing to its share capital. However, the number of its shareholders cannot exceed fifty, public cannot be invited to subscribe to its capital and the member's right to transfer shares is restricted. On the other hand, a public limited company has a minimum of seven members. There is no limit to maximum number of its members. It can invite the public to subscribe to its capital and permit the transfer of shares. A public limited company offers enormous potential for growth because of access to substantial funds. The liquidity of investment is high because of easiness of transfer of shares. However, its formation can be recommended only when the size of the business is large. For small business, a sole proprietary concern or a partnership firm will be the most suitable form of business organisation. In case it is decided to incorporate a private limited company, the same is to be registered with the Registrar of Companies.

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India Exim Policy - Foreign Trade Policy

Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT in matters related to the import and export of goods in India. The Foreign Trade Policy of India is guided by the Export Import in known as in short EXIM Policy of the Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992. DGFT (Directorate General of Foreign Trade) is the main governing body in matters related to Exim Policy. The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India.

EXIM Policy
Indian EXIM Policy contains various policy related decisions taken by the government in the sphere of Foreign Trade, i.e., with respect to imports and exports from the country and more especially export promotion measures, policies and procedures related thereto. Trade Policy is prepared and announced by the Central Government (Ministry of Commerce). India's Export Import Policy also know as Foreign Trade Policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position.

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Market Entry India, Exporting to India

Entering the Indian market by exporting to India (directly or indirectly) requires only a small investment from the producer (e.g. market research, trade fair participation, B2B Meetings, eventual travel expenses etc.) Direct Export means the producers sells directly to the importer / distributor in India. Whereas in the case of indirect export, a European broker / trading company or the importers subsidiary in Europe will buy from the producer and sell to the importer in India. Indirect Export is the easiest way to sell in the Indian market. The producer does not even have to deal with international billing, shipping documents or payment methods. Investments and risks are very low. The drawback of the indirect export is that the producer cannot really control where his products end up and he most probably will never be able to build his own brand in the Indian market.

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Since exporting to India involves minimal costs and risks producers can offer a lower product price. Moreover many European trade and government associations subsidies export promotion activities. The disadvantage, which come along with exporting, are the rather high transportation costs to India, high import duties and other tariff and nontariff barriers. Also the producer will have no or little understanding of the Indian market and will not be able to anticipate changes in consumer demands. Being a pure exporter will also create some image problems, since the European company will never be considered as an Indian player, which means no local and fast after sales service. Another risk factor when exporting to India are the currency fluctuations. The Indian Rupee / Euro exchange rate keeps on fluctuating +/- 15%, making it difficult for Indian importers to work out their long term pricing strategy. If the Rupee looses too much against the Euro, this could mean the importer will stop buying from Europe and procure from other countries. Still, exporting to India remains the most favorite market entry strategy . At least for the beginning. Many European companies decide to start with export and once a certain trade volume is reached and they are sure that their products are well accepted by the Indian consumer, a foreign direct investment to set up their own subsidiary in India can be made. Many global beer brands (like Fosters, Tiger or Carlsberg) initially used to export to India and only after reaching a certain threshold volume, started to produce locally in India.

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EXPORT PROCEDURE IN INDIA

Documents Required Export procedure describes the documents required for exporting from India. Special documents may be required depending on the type of product or destination. Certain export products may require a quality control inspection certificate from the Export Inspection Agency. Some food and pharmaceutical product may require a health or sanitary certificate for export. Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. Usually the Shipping Bill is of four types and the major distinction lies with regard to the goods being subject to certain conditions which are mentioned below:

Export duty/ cess Free of duty/ cess Entitlement of duty drawback Entitlement of credit of duty under DEPB Scheme Re-export of imported goods

The following are the export documents required for the processing of the Shipping Bill:

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

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The formats presented for the Shipping Bill are as given below

White Shipping Bill in triplicate for export of duty free of goods. Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback.

Note: - For the goods which are cleared by Land Customs, Bill of Export (also of 4 types - white, green, yellow & pink) is required instead of Shipping Bill.

Documents Required for Post Parcel Customs Clearance

In case of Post Parcel, no Shipping Bill is required. The relevant documents are mentioned below:

Customs Declaration Form - It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender. Dispatch Note, also known as CP2. It is filled by the sender to specify the action to be taken by the postal department at the destination in case the address is non-traceable or the parcel is refused to be accepted. Prescriptions regarding the minimum and maximum sizes of the parcel with its maximum weight : Minimum size: Total surface area not less than 140 mm X 90 mm. Maximum size: Lengthwise not over 1.05 m. Measurement of any other side of circumference 0.9 m./ 2.00 m. Maximum weight: 10 kg usually, 20 kg for some destinations. Commercial invoice - Issued by the seller for the full realizable amount of goods as per trade term. Consular Invoice - Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format and is signed/ certified by the counsel of the importing country located in the country of export. Customs Invoice - Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate. Legalized/Visaed Invoice - This shows the seller's genuineness before the appropriate consulate/ chamber of commerce/ embassy. It do not have any prescribed form.
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Certified Invoice - It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in accordance with specific contract. Packing List - It shows the details of goods contained in each parcel/ shipment. Certificate of Inspection - It shows that goods have been inspected before shipment. Black List Certificate - It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country(s). Weight Note - Required to confirm the packets or bales or other form are of a stipulated weight. Manufacturers/ Supplier's Quality/ Inspection Certificate. Manufacturer's Certificate - It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and are available. Certificate of Chemical Analysis - It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc. Certificate of Shipment - It signifies that a certain lot of goods have been shipped. Health/ Veterinary/ Sanitary Certification - Required for export of foodstuffs, marine products, hides, livestock etc. Certificate of Conditioning - It is issued by the competent office to certify compliance of humidity factor, dry weight, etc. Antiquity Measurement - Issued by Archaeological Survey of India in case of antiques. Transshipment Bill - It is used for goods imported into a customs port/ airport intended for transshipment. Shipping Order - Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date. Cart/ Lorry Ticket - It is prepared for admittance of the cargo through the port gate and includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc. Shut Out Advice - It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter.

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FEDRATION OF INDIAN EXPORT ORGANISATION

FIEO-India's Premier Institution for International Trade The Federation of Indian Export Organizations represents the Indian entrepreneurs spirit of enterprise in the global market. set up in October, 1965, the Federation, known popularly as "FIEO", has kept pace with the country's evolving economic and trade policies, and provided the content, direction and thrust to India's expanding international trade. As the apex body of all Indian export promotion organizations, FIEO works as a partner of the Government of the India to promote Indian exports. Today, FIEO expresses all the dynamism and resurgence that are the hallmark of India's open, liberal and progressively market-friendly economic and trade regime, representing the Indian export promotion effort in its entirely. Its membership, largely comprising professional exporting films or long experience called Government recognised Export Houses, Trading Houses, Star Trading Houses and Super Star Trading Houses and Consultancy exporting firms, contributes 72 % of the total exports of India. In essence, FIEO represents directly or indirectly, over 100,000 exporters across India. Exports by FIEO members comprise a wide spectrum of products including Gems & Jewellery, Textiles, Garments, Engineering Goods, Leather and Leather Products, Handicrafts, Chemicals and allied products, Cosmetics, Drugs and Pharmaceuticals, etc. as well as a wide range of Consultancy Services covering Infrastructure, Engineering, Industries, Cement, Leather, Paper & Rubber Industries. Agro-based Industries, Small Scale Industries etc. The activities of our members also include manufacturing, international trading, investment and joint ventures etc. To any foreign investor, user or seller, FIEO is the one-stop organisation which will put him in touch with a trade partner or high repute, backed by its own credentials as an organisation of excellence in India. FIEO has forged strong links with counterpart organisations in several countries as well as international agencies to enable direct communication and interaction
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between India and world businessmen. It is registered with UNCTAD as a national non-Government organisation, and has direct access to information/data originating from UN bodies and world agencies like the IMF, ADB, ESCAP, WORLD BANK, FAO, UNIDO and others. In addition, it has bilateral arrangements for exchange of information as well as for liasioning with several How FIEO has developed: Today the Federation is proud of the fact that its members accounts for an estimated exports of US$ 24.3 billion out of the total India's export of US$ 33.0 billion. It shows for itself an achievement which notes that approximately 73.6 % of the total exports from India emanate from FIEO members. This enviable position has been reached rapidly in a very short span, albeit with a long legacy behind it. It was in the year 1965 that this Federation came into being with the support of Ministry of Commerce. Government of India and private trade and Industry. It has now graduated to a level of organisation providing global link to exporters and working as a 'nerve centre' of Indian exports. FIEO ACTIVITIES What FIEO Specifically achieves The Federation keeps its members posted with the latest developments in the field of Export / Import by organising Seminars and Workshops, Inviting delegations, organising Buyer-Sellermeets in India and abroad. Trade Fairs, providing advisory and consultative services and bringing about constant interaction between member exporters and various Government departments. The end result of such activity is discussion of issues in depth, evolving of suitable action plans to promote Indian exports, formulation and dissemination of government policies pertaining to all sectors in manufacturing and merchant exporting and apprising Government on problems and suggesting remedial measures. What FIEO does When Federation was constituted in 1965, certain economic realities had taken shape in India. There was greater industrialisation, centralised planning and

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Government controls. Side by side, there existed a buoyant and thriving private sector. Thus there was an urgent need for :

Wider exchange of views between allied industies in public as well as the private sectors. Apprising all concerned bodies of Status of exports. Monitoring the effects of Government policies on Exports - Imports. Interacting with the Government on behalf of the exporting community. Basically, the Federation fulfills the above needs in these three ways : o Sending representations on policy matters to Central and State (Regional)

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India's Rupee Keeps Falling and the Trade Deficit Keeps Widening:-

Its standard macroeconomics: When a countrys currency declines, its exporters should soon get a boost as the lower currency makes their goods more competitive. By that rule, India should be enjoying an export boom. Since the start of May, the currency has dropped 23 percent, making it one of the worlds worst performers. Sure enough, exports did go up in July, rising 11.6 percent year-on-year, the best increase in more than 12 months.

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PROBLEMS OF RICE EXPORT FROM INDIA

India is facing stiff competition in the world markets for export of rice. Besides, there are many domestic problems for rice exporters. If these internal problems are relaxed to the extent possible, the exporters may find easy way to boost rice export and such measures will go a long way to sustain the exports. Some of the major problems are discussed in this chapter below: 1. As per the state Govt. policy, various taxes are imposed on rice exports, such as the states are imposing Purchase Tax (on indirect export), Market Fees, Rural Development Fund, Administrative Charges etc. These taxes are rendering the pricing of rice internationally in competitive. Thus, Indian rice becomes costlier in the international market as compared to other competing countries in the world and Indian rice exports get setback many times. In fact, in Pakistan rice meant for exports specially the branded ones; duties are extremely low or duty free. 2. There is lack of proper infrastructural facilities. Many times exporters, when they carry their stock to sea port and if the stock is not loaded due to some reason or the other, exporters do not find godown or proper place to store their stocks properly and safely at sea port, exporters have to face lot of difficulties, besides, it adds additional expenditure to the exporters. 3. Due to increase in the cost of inputs used for paddy cultivation the production cost goes up and the Minimum Support Price (MSP) for paddy is enhanced every year by the govt. of India to safeguard the interest of the growers. When paddy is converted to rice, it becomes costlier and thus makes it internationally uncompetitive. 4. Rice production meant for export purpose is having subsidy in other countries, which reduces the cost of production and thereby reducing the cost of rice. Therefore, the export price of rice of such countries is more competitive in the international markets compared to Indian rice. 5. The major rice producing nations have decreased the price to capture the international markets but Indian rice prices are inelastic due to relatively high cost of production and become uncompetitive in the international markets. Much of basmati rice export prospects have been lost in the recent part to other competing countries like Pakistan etc because of high prices.

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6. Rice mills have not been fully modernized to ensure high milling recovery and reduce the percentage of broken rice. The conventional rice mills are having Rubber Roll Sheller in which percentage of broken rice is more than the modern rice mills that are having under Runner Sheller. Hence, head rice obtained from milling of conventional mills becomes costly due to recovery of higher percentage of broken rice. Therefore, conventional mills are required to be modernized to get recovery of higher percentage of head rice suitable for export. 7. Lack of proper arrangements for production of sufficient quantity of quality seeds needed for cultivation of rice for export purposes. 8. The export is also suffering much due to the competition from other exporting countries like Thailand, Vietnam and Pakistan because the cost of production in these competing countries is low as compared to the cost of production in India. Infact, trade segment believes that Indian rice can face the global competition if subsidy is provided. 9. In these days basmati rice is facing aroma problem, because intensity of aroma in traditional basmati varieties is not so high as it used to be. Infact, basmati varieties are highly prone to lodging and lodging affects the natural grain development. In such situation both aroma and linear kernel elongation are affected. 10.Post harvest handling of produce is another important aspect. Generally, farmers are harvesting the crop at different moisture levels and keeping the produce at higher moisture level for a longer period will impair the intensity of aroma. 11.In absence of genetically pure seed of basmati varieties, in majority of basmati rice fields, a variation in plant height, grain size and maturity of the crop is found. This is one of the major reasons for poor quality of basmati rice. Infact, at the time of rice processing the grain size can be taken care of, but it is a waste. However, using good quality seed the loss can be converted into profit.

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Trade Barriers in India

Any restriction imposed on the free flow of trade is a trade barrier. Trade barriers can either be tariff barriers (the levy of ordinary negotiated customs duties in accordance with Article II of the GATT) or non-tariff barriers, which are any trade barriers other than tariff barriers.

Import Licensing: One of the most common non-tariff barriers is the prohibition or restrictions on imports maintained through import licensing requirements. Though India has eliminated its import licensing requirements for most consumer goods, certain products face licensing related trade barriers. For example, the Indian government requires a special import license for motorcycles and vehicles that is very restrictive. Import licenses for motorcycles are provided to only foreign nationals permanently residing in India, working in India for foreign firms that hold greater than 30 percent equity or to foreign nations working at embassies and foreign missions. Some domestic importers are allowed to import vehicles without a license provided the imports are counterbalanced by exports attributable to the same importer.

Standards, testing, labeling & certification: The Indian government has identified 109 commodities that must be certified by its National Standards body, the Bureau of Indian Standards (BIS). The idea behind these certifications is to ensure the quality of goods seeking access into the market, but many countries use them as protectionist measures. For more on how this relates to labeling requirements, please see the section on Labeling and Marking Requirements in this chapter.

Anti-dumping and countervailing measures: Anti-dumping and countervailing measures are permitted by the WTO Agreements in specified situations to protect the domestic industry from serious injury arising from dumped or subsidized imports. India imposes these from time-to-time to protect domestic manufacturers
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from dumping. India's implementation of its antidumping policy has, in some cases, raised concerns regarding transparency and due process. In recent years, India seems to have aggressively increased its application of the antidumping law. In the first half of the calendar year 2006 India topped the list of countries initiating new anti-dumping investigations with 20 new initiations.

Export subsidies and domestic support: Several export subsidies and other domestic support is provided to several industries to make them competitive internationally. Export earnings are exempt from taxes and exporters are not subject to local manufacturing tax. While export subsidies tend to displace exports from other countries into third country markets, the domestic support acts as a direct barrier against access to the domestic market.

Procurement: The Indian government allows a price preference for local suppliers in government contracts and generally discriminates against foreign suppliers. In international purchases and International Competitive Bids (ICB's) domestic companies gets a price preference in government contract and purchases.

Service barriers: Services in which there are restrictions include: insurance, banking, securities, motion pictures, accounting, construction, architecture and engineering, retailing, legal services, express delivery services and telecommunication.

Other barriers: Equity restrictions and other trade-related investment measures are in place to give an unfair advantage to domestic companies. The GOI continues to limit or prohibit FDI in sensitive sectors such as retail trade and agriculture. Additionally there is an unpublished policy that favors counter trade. Several Indian companies, both government-owned and private, conduct a small amount of counter trade.
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Non-tariff barriers to trade

Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff. Some common examples of NTB's are antidumping measures and countervailing duties, which, although called non-tariff barriers, have the effect of tariffs once they are enacted. Their use has risen sharply after the WTO rules led to a very significant reduction in tariff use. Some non-tariff trade barriers are expressly permitted in very limited circumstances, when they are deemed necessary to protect health, safety, sanitation, or depletable natural resources. In other forms, they are criticized as a means to evade free trade rules such as those of the World Trade Organization (WTO), the European Union (EU), or North American Free Trade Agreement (NAFTA) that restrict the use of tariffs. Some of non-tariff barriers are not directly related to foreign economic regulations but nevertheless have a significant impact on foreign-economic activity and foreign trade between countries. Trade between countries is referred to trade in goods, services and factors of production. Non-tariff barriers to trade include import quotas, special licenses, unreasonable standards for the quality of goods, bureaucratic delays at customs, export restrictions, limiting the activities of state trading, export subsidies, countervailing duties, technical barriers to trade, sanitary and phyto-sanitary measures, rules of origin, etc. Sometimes in this list they include macroeconomic measures affecting trade.

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Six Types of Non-Tariff Barriers to Trade

1. Specific Limitations on Trade: 1. Import Licensing requirements 2. Proportion restrictions of foreign to domestic goods (local content requirements) 3. Minimum import price limits 4. Free 5. Embargoes 2. Customs and Administrative Entry Procedures: 1. Valuation systems 2. Anti-dumping practices 3. Tariff classifications 4. Documentation requirements 5. Fees 3. Standards: 1. Standard disparities 2. Intergovernmental acceptances of testing methods and standards 3. Packaging, labeling, and marking 4. Government Participation in Trade: 1. Government procurement policies 2. Export subsidies 3. Countervailing duties 4. Domestic assistance programs 5. Charges on imports: 1. Prior import deposit subsidies 2. Administrative fees 3. Special supplementary duties 4. Import credit discrimination 5. Variable levies 6. Border taxes 6. Others: 1. Voluntary export restraints 2. Orderly marketing agreements

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Different methods of international payment settlement

INTRODUCTION

The central bank of any country is usually the driving force in the development of the national payment system. The Reserve Bank of India (RBI) as the central bank of the country has been playing this developmental role and has taken several initiatives for a safe, secure, sound and efficient payment system. The buyer and the seller incorporate the details in the contract of sale itself that how payments for goods to be send. Depending upon the bargaining power of the buyer and seller, provisions of Exchange Contracts in the countries concerned, the duration of trade relationship between the buyer and seller and also the credit worthiness of the parties concerned, terms of payment are arrived at. It can also be said in general that, terms of payment reflects the extent to which the seller requires a guarantee of payment before he loses control over the goods. There are four main methods using by the exporters and importers to fulfill the contract value. These are Advance payment, open Account System, Consignment Sale and Documentary Collection. ADVANCE PAYMENT 1) Meaning: - An amount paid before it is earned or incurred, for example, a prepayment by an importer to an exporter before goods are shipped, or a cash advance for travel expenses. 2) This method is the most desirable for the Exporter; the Importer has to rely on the integrity of the Exporter and his capacity to execute the order in time. More than that, the entire transaction is financed by the Importer in this method thereby making the transaction more costly for him; besides exposing the Importer to credit risks. On account of the above factors some countries have imposed Exchange Control restriction regarding imports. 3) In India advance payment is allowed only in respect of import of books, periodicals, life saving payment apparatus, capital goods, machinery and a few other items.

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4) Advance payment of USD 2500/- or equal to this amount can be made for commercial purposes. If the following condition are followed by the contract party. a) Documents produced by the parties must be evidence showing the demand of the overseas supplier. b) Payment must be given to the overseas supplier. c) Endorsement in the import license if any. d) Import is permitted either by a license covered under OGL. As regards exports, depending on the nature of goods exported and the competitiveness of the product, advance payments are insisted. For example in the case of export of vegetables and fruits, it is customary to demand 100% advance payment. e) Application in F.A.I. in duplicate. f) Importer will submit evidence of import in the Exchange Control Copy of Bill of Entry/Postal wrapper within a period of 3 months.

OPEN ACCOUNT SYTEM 1) It is just opposite to the Advance payment. 2) Meaning: When an Exporter agrees to sell the commodity on open account system to the Importer, he dispatches the goods to the buyer directly followed by the transport documents and an invoice requesting payment. 3) The Exporter loses control over the goods completely and leaves everything on the integrity of the buyer. 4) It is beneficiary to the Importer; the Exporter bears the entire financial and commercial risks. This system is normally resorted to when the goods command buyer's market. 5) The commercial risk is, to some extent minimized by taking a policy of ECGC. To take care of the interest of the Indian Exporters, there are Exchange Control restrictions imposed by RBI on open account export Sales.

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CONSIGNMENT SALE If you sell goods sold on consignment, you have agreed to sell the goods without first buying those goods from the owner. Typically, your agreement specifies one of the following: 1) you agree to sell the goods on behalf of the owner as an agent 2) you agree to purchase the goods for an agreed price when you find a buyer. There are no restrictions on what goods can be sold on consignment. Goods regularly sold on consignment include: motor vehicles, boats, wedding and formal dresses, cameras, farm machinery and artworks. For Example: Selling on consignment means giving your car to someone else, usually a motor dealer, to sell on your behalf. Generally you set the minimum price you will accept and the dealer will add a commission to it. While the ownership and possession passes to the buyer in the case of open account system, the ownership remains with the seller in the case of consignment sale. In the case of goods exported on consignment basis, freight and marine insurance must be arranged in India. DOCUMENTARY COLLECTION The Exporter prepares the proper financial and commercial document including the transport document and hands over to his Banker requesting in clear terms as to how the documents are to be delivered to the Importer at the other end. Four main parties to a documentary collection are The Principal i.e.. the Exporter, The Remitting Bank - The Exporter's Bank , The Collecting Bank - The Bank in the Importer's country and The Importer, the consignee. When the Exporter wants the Bank to hand over the export documents to the Importer only against payment immediately, the Bill of Exchange is called a Sight Draft. In case the Exporter wishes to give some time (30 days, 60 days, 90 days etc.)

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CHAPTER-4 ANALYSIS OF DATA

Major Export Products of India, Export from India
Exports have boosted the growth of Indian economy substantially and Indian exports in the current year has earned nearly US $ 125 billion and is expected to earn US $ 160 billion for the next fiscal year. The major export products of India include leather, medical appliances, equipments, textiles and so on. Leather Goods among Major Export Products of India: India has developed over the years to become a key player in the export of leather goods and accessories among the major export products of India. India exports numerous leather products for daily use like leather wallets, belts, key holders, folders, pouches, leather toys, handbags etc. Gift items made of leather such as Leather notebooks, decorated leather journals, key rings, rugs are quite popular in foreign countries. A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of leather goods, the list of such companies include:

Sharie International Islam International Indobest Falcon International Z.N.T International Balaji Impex Private Limited Paradise Noble Creations Asian adores The Lotus Handicrafts

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Medical Appliances among Major Export Products of India:

Indian medical appliances have made their mark in the foreign countries on account of superior quality and variety. Common medical appliances exported from India include absorbent gauze, sterile gloves, crepe bandages, gauze sponge, surgical face masks, surgical caps, surgical disposables. Export of specialized medical appliances have also gained importance among major export products of India and appliances such as baby incubator, automatic vertical autoclave, air ionisers, nelaton catheter, digital video colposcopes, digital imaging softwares. A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of medical appliances goods, the list of such companies include:

Nidhi Meditech Systems Coral Marketing Narang Scientific Works Private Limited Relique Technologies Surya Surgical Industries Chatterjee Surgical United Surgical Industries B. L. Lifesciences Private Limited Paramount Surgical Emporium, Delhi Magnum Medicare Pvt. Ltd.

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Textile goods among Major Export Products of India:

Textile goods have gained prominence among the export products of India, designer garments for ladies as well as gents manufactured by the big houses in India have created huge demand in the International garment industry. The popular ladies garment include knitted tops, embroidered salwar, sequin work blouses, sarongs, floral t-shirts, beaded garments, poplin embroidered kurta, viscose crape printed skirt. A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of textile goods, the list of such companies include:

Kshethra Exports Mirza Fabric Private Limited Kanha Designs Pvt. Ltd. Knitco Fashionns Boom Buying Private Limited Revolution Exports Flying Fashions Subasri Textile Vipro Garments Kewal Impex Sudharshanaa Tex Macsam

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Equipments among Major Export Products of India:

India caters to the need of varied equipments of the foreign countries, therefore the Indian equipment industry have grown in leaps and bounds and ranks high among the major export products of India like conveyor systems, hand pallet trucks, magnetic coolent cleaners, vibrating screens, EOT cranes, industrial magnetic conveyors, cantilever racks, steel rolling mill plants, hydraulic stackers, heavy duty pallet rack, pin pulveriser, agitator vessel, rotary vane feeders. A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of equipments, the list of such companies include:

Orton Engineering Private Limited A.S. Precision Machines Pvt. Ltd. Dewas Techno Products P Ltd. Metal Storage Systems Private Limited Yagnam Pulverizer Private Limited Elegant Engineers Metro Engineering Industries Jai Gopal Engineering Works Private Limited

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CHAPTER-5
CONCLUSION,FINDINGS & SUGGESTIONS

While India has gradually opened up its economy, its tariffs continue to be high when compared with other countries, and its speculation norms are still restrictive. This leads some to see India as a rapid globalizer while others still see it as a highly protectionist economy. The main focus of this page is the foreign trade policy of India. Foreign trade concerning main legislation in India is the Foreign Trade (Development and Regulation) Act, 1992. The Act endow with the expansion and regulation of foreign trade by assisting imports into, and supplementing exports from, India and for matters associated therewith or incidental thereto. As per the requirements of the Act, the government:i. ii. iii. may make necessities for assisting and controlling foreign trade; may proscribe, confine and regulate exports and imports, in all or particular cases as well as subject them to exclusion; is endorsed to formulate and proclaim an export and import policy and also modify the same from time to time, by notification in the Official Gazette; Is also authoritative to appoint a 'Director General of Foreign Trade' for the purpose of the Act, including formulation and accomplishment of the export-import policy.

iv.

Nevertheless, in modern years, the governments stand on trade and investment policy has demonstrated a marked shift from protecting producers to benefiting consumers. This is revealed in its foreign trade policy of India for 2004/09 according to which, "For India to become a major player in world trade we have also to make possible those imports which are required to stimulate our economy." Along with economic transformations, globalization of the Indian economy has been the leading factor in devising the trade policies. The reform procedures
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pioneered in the subsequent policies have focused on liberalization, ingenuousness and lucidity. They have given export friendly surroundings by simplifying the procedures for trade facilitation. The declaration of a new Foreign Trade Policy of India for a five year period of 2004-09, substituting the till now nomenclature of EXIM Policy by Foreign Trade Policy (FTP) is another step in this course. It takes an incorporated view of the overall development of Indias foreign trade and provides a roadmap for the development of this sector. A dynamic export-led growth strategy of doubling Indias share in global commodities trade (in the next five years), with a spotli ght on the sectors having prospects for export expansion and prospective for employment generation, constitute the main lath of the policy. All such events are expected to enhance India's international competitiveness and aid in auxiliary increasing the acceptability of Indian exports. The policy sets out the core intentions, identifies key strategies, spells out focus initiatives, delineates export incentives, and also addresses issues relating to institutional support including simplification of procedures relating to export activities. The coming years are sure to witness a vigorous export-led growth strategy of doubling Indias share in global merchandise trade with a focus on the sectors having prospects for export expansion. The rising potential for employment generation will constitute the main backbone for the Indian foreign trade policy.

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