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EXPORT AND IMPORT MANAGEMENT INDIA’S EXPORT PERFORMANCE DONE BY- S.SASIREKHA (DIB9027) 1

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Page 1: Export and Import Management

EXPORT AND IMPORT MANAGEMENT

INDIA’S EXPORT PERFORMANCE

DONE BY- S.SASIREKHA (DIB9027)

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TABLE OF CONTENTS

TITLE

INTERNATIONAL TRADE

INTRODUCTION

ADVANTAGES OF EXPORTING

DISADVANTAGES OF EXPORTING

INDIAN ECONOMY OVERVIEW

EXPORT POLICIES OF INDIA

Objectives of export policy

Export promotion schemes

Exports as in exim policy

INDIA AND EXPORTS

Major export industries of India

Major destinations of export

Major commodities of export

INDIA’S CURRENT EXPORT PERFORMANCE

Exports by principle commodities

Direction of India’s exports

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TREND AND VOLUME OF INDIN EXPORTS

India’s rank in the World Merchandise Trade

EXPORT INCENTIVES

Export credits

EXPORT PROMOTION COUNCIL

FEDERATION OF INDIAN EXPORTS ORGANISATION

All India membership base of FIEO

IMPACT OF GLOBAL SLOWDOWN ON INDIAN EXPORTS

EXPORT ANALYSIS AND IMPERATIVES

Export analysis

Export imperatives

CONCLUSION

BIBLIOGRAPHY

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INTERNATIONAL TRADE

International trade is exchange of capital, goods, and services across international

borders or territories.[1] In most countries, it represents a significant share of gross

domestic product (GDP). While international trade has been present throughout much of

history, it’s economic, social, and political importance has been on the rise in recent

centuries. Industrialization, advanced transportation, globalization, multinational

corporations, and outsourcing are all having a major impact on the international trade

system. Increasing international trade is crucial to the continuance of globalization.

International trade is a major source of economic revenue for any nation that is

considered a world power. Without international trade, nations would be limited to the

goods and services produced within their own borders.

International trade is in principle not different from domestic trade as the motivation and

the behavior of parties involved in a trade does not change fundamentally depending on

whether trade is across a border or not. The main difference is that international trade is

typically more costly than domestic trade. The reason is that a border typically imposes

additional costs such as tariffs, time costs due to border delays and costs associated with

country differences such as language, the legal system or a different culture.

International trade uses a variety of currencies, the most important of which are held as

foreign reserves by governments and central banks. Here the percentage of global

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cumulative reserves held for each currency between 1995 and 2005 are shown: the US

dollar is the most sought-after currency, with the Euro in strong demand as well.

Another difference between domestic and international trade is that factors of production

such as capital and labor are typically more mobile within a country than across

countries. Thus international trade is mostly restricted to trade in goods and services, and

only to a lesser extent to trade in capital, labor or other factors of production. Then trade

in good and services can serve as a substitute for trade in factors of production. Instead of

importing the factor of production a country can import goods that make intensive use of

the factor of production and are thus embodying the respective factor.

INTRODUCTION

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In economics, an export is any good or commodity, transported from one country to

another country in a legitimate fashion, typically for use in trade. Export goods or

services are provided to foreign consumers by domestic producers.[1] Export is an

important part of international trade. Export of commercial quantities of goods normally

requires involvement of the customs authorities in both the country of export and the

country of import. The advent of small trades over the internet such as through Amazon

and e-Bay have largely bypassed the involvement of Customs in many countries due to

the low individual values of these trades. Nonetheless, these small exports are still subject

to legal restrictions applied by the country of export. An export's counterpart is an import.

WHY WE NEED TO EXPORTS:

There are many good reasons for exporting:

The first and the primary reason for export are to earn foreign exchange. The

foreign exchange not only brings profit for the exporter but also improves the

economic condition of the country.

Secondly, companies that export their goods are believed to be more reliable than

their counterpart domestic companies assuming that exporting company has

survive the test in meeting international standards.

Thirdly, free exchange of ideas and cultural knowledge opens up immense

business and trade opportunities for a company.

Fourthly, as one starts visiting customers to sell one’s goods, he has an

opportunity to start exploring for newer customers, state-of-the-art machines and

vendors in foreign lands.

Fifthly, by exporting goods, an exporter also becomes safe from offset lack of demand for seasonal products.

Lastly, international trade keeps an exporter more competitive and less vulnerable

to the market as the exporter may have a business boom in one sector while

simultaneously witnessing a bust in a different sector.

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No doubt that in the age of globalization and liberalizations, Export has became of the

most lucrative business in India. Government of India is also supporting exporters

through various incentives and schemes to promote Indian export for meeting the much

needed requirements for importing modern technology and adopting new technology

from MNCs through Joint ventures and collaboration.

ADVANTAGES OF EXPORTING

Increased market size.

Market suitability.

Currency benefits

Protection against a downturn in the domestic market.

Economies of scale from manufacturing in larger batches.

DISADVANTAGES OF EXPORTING

Sometimes higher costs of traveling abroad to obtain orders. High management

fees, shipping charges, agent's fees, etc., can sometimes increase the exporter's

prices to a level which makes goods and services uncompetitive in overseas

markets.

Market unsuitability. Different cultures, customs and languages can all present

problems to the exporter and can mean that a product and service suitable in the

UK has virtually no market abroad.

Import rules and regulations vary between countries, sometimes rules change

rapidly and dramatically.

Shipping rules and regulations can prove complicated

Collecting long-standing payments and debts can prove a very serious problem

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INDIAN ECONOMY OVERVIEW

1. The economy of India is the fourth largest in the world, with a GDP of $3.63

trillion at PPP, and is the tenth largest in the world with a $691.9 billion at 2004

USD exchange rates and has a real GDP growth rate of 6.2% at PPP.

2. Growth in the Indian economy has steadily increased since 1979, averaging

5.7% per year in the 23-year growth record.

3. Indian economy has posted an excellent average GDP growth of 6.8% since

1994 India, the fastest growing free-market democracy in the world, registered a

growth rate of 8.2 percent in FY 2004.

4. India has emerged the global leader in software and business process

outsourcing services, raking in revenues of US$12.5 billion in the year that ended

March 2004.

5. Agriculture has fall to a drop because of a bad monsoon in 2005. There is a

paramount need to bring more area under irrigation.

6. Export revenues from the sector are expected to grow from $8 billion in 2003

to $46 billion in 2007.

7. India’s foreign exchange reserves are over US$ 102 billion and exceed the

forex reserves of USA, France, Russia and Germany. This has strengthened the

Rupee and boosted investor confidence greatly.

8. A strong BOP position in recent years has resulted in a steady accumulation of

foreign exchange reserves. The level of foreign exchange reserves crossed the US

$100 billion mark on Dec 19, 2003 and was $142.13 billion on March 18, 2005.

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9. Reserve money growth had doubled to 18.3% in 2003-04 from 9.2 in 2002-03,

driven entirely by the increase in the net foreign exchange assets of the RBI.

10. Reserve money growth declined to 6.4% in the current year to January 28,

2005.

11. During the current financial year 2004-05, broad money stock (M3) (up to

December 10, 2004) increased by 7.4 per cent (exclusive of conversion of non-

banking entity into banking entity, 7.3 per cent)

12. Economics experts and various studies conducted across the globe envisage

India and China to rule the world in the 21st century.

EXPORT PROCEDURE

OPEN A CURRENT ACCOUNT WHICH DEALS WITH FOREIGN EXCHANGE Obtain an importer-exporter code number from regional licencing authority

Get registered wit EPC or FIEO

Obtain RCMC

THE PROCEDURE TO BE FOLLOWED BY THE EXPORTER

Examine the export contract or L/C

Instructions to factory/supplier

Preshipment inspection and excise clearance

Dispatch of consignment to the port of shipment

Dispatch of documents by the factory to port department

Arrange insurance coverage

Instructions to clearing and forwarding agent

Port shipment and customs formalities

Loading on board

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Dispatch of documents to C&F agent

Certificate of origin to be obtained by the exporter from authorities like

export inspection agency

Shipment advise to importer

Presentation of documents to the bank for negotiation

Dispatch of documents by the exporters bank to the importers bank after

scrutiny

Receipt of payment by the exporter against the documents submitted

Rebate of central excise duty, duty drawback and export benefits

Documents Required

Certain documentation takes place while 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 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.

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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.

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.

Yellow Shipping Bill in triplicate for the export of dutiable goods.

Blue Shipping Bill in 7 copies for exports under the DEPB scheme.

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

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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 realisable amount of goods

as per trade term.

Consular Invoice - Mainly needed for the countries like Kenya, Uganda,

Tanzania, Mauritius, New Zealand, Burma, Iraq, Ausatralia, 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.

Legalised/ Visaed Invoice - This shows the seller's genuineness before the

appropriate consulate/ chamber of commerce/ embassy. It do not have any

prescribed form.

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. Sight Draft and Usance Draft are

available for this. Sight Draft is required when the exporter expects immediate

payment and Usance Draft is required for credit delivery.

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.

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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 is 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.

Transhipment Bill - It is used for goods imported into a customs port/ airport

intended for transhipment.

Shipping Order - Issued by the Shipping (Conference) Line wh 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.

Short Shipment Form - It is an application to the customs authorities at port

which advises short shipment of goods and required for claiming the return.

Shipping Advice - It is prepared in aligned document to be used to inform the

overseas customer about the shipment of goods.

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EXPORT POLICIES OF INDIA

The foreign trade of India is guided by the Export Import (EXIM) Policy of The

Government of India and is regulated by the Foreign Trade (Development and

Regulation) Act, 1992.

OBJECTIVES OF EXPORT POLICY

To establish the framework for globalization.

To promote the productivity competitiveness of Indian Industry.

To encourage the attainment of high and internationally accepted standards of

quality.

To augment export by facilitating access to raw material, intermediate,

components, consumables and capital goods from the international market.

To promote internationally competitive export substitution and self-reliance.

There is an Export Promotion Capital Goods (EPCG) Scheme under which exporters are

allowed to import capital goods (including computer systems) at concessionary customs

duty, subject to fulfillment of specified export obligations. Service industries enjoy the

facility of zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo,

hotels and other tourism-related industries. Software units can use data communication

network to export their products.

Export Promotion Schemes Assistance to States for Infrastructure Development of

Exports [ASIDE]

Market Access Initiative [MAI]

Marketing Development Assistance [MDA]

Towns of Export Excellence

Target plus Scheme.

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Served from India Scheme

Service Export Promotion Council

EXPORTS AS IN, EXIM POLICY FALL UNDER THE FOUR CATEGORIES

1. Prohibited Items: Which items completely banned from the exports.

All forms of wild animals including their parts and products.

Special Chemicals as notified by the DGFT.

Exotic birds as notified by the DGFT.

Beef.

Sea Shells, as specified

Human Skeleton.

Peacock Tail

Red sanders wood in any form.

2. Restricted Items: Items allowed for exports under special license issued

by the DGFT.

Dress materials, ready-made garments, fabrics or textile items with

Imprints of excerpts or verses of the Holy Quran.

Horses – Kathiawadi, Marwari, and Manipuri breeds.

Fresh and frozen silver prom frets of weight less than 300gm.

Paddy (Rice in husk).

Seaweeds of all types.

Chemical Fertilizer all types

3. Canalized Items : can be exported without an export license through designated State

Trading Enterprise

Onions (except Bangalore rose onion and krishanapuram onion)

Niger seeds

Gum karaya

Iron ore, manganese ore and chrome ore

Crude oil

4. Freely Exportable Items: can be exported without an export license from DGFT.

Military stones as notified by DGFT

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Exotic birds such as, bangali, finches, white finches and zebra

Bones and bones product

Basmati rice

INDIA AND EXPORTS

Major Export Industries of India

Indian exporting industries are growing rapidly. The sectors mentioned are improving

day by day and they are more focused towards the export part.

Agriculture

Leather & leather products

Paper & paper products

Handicrafts

Apparels and textiles

Plastics & plastic products

Chemicals

Engineering goods

Gems & jewelry

Major Destinations of Export

Export (Value US$ Million)

Countries 2000-01 2001-02 2002-03 2003-04

USA 9251.55 8542.34 10924.05 11490.30

UAE 2586.26 2500.28 3336.12 5093.42

Hong Kong 2635.60 2374.42 2620.11 3258.92

UK 2275.73 2168.23 2502.89 3041.27

China 830.03 955.19 1980.61 2967.05

Germany 1887.42 1794.45 2112.15 2529.07

Singapore 862.41 975.62 1425.27 2122.14

Belgium 1456.00 1395.36 1666.15 1810.62

Japan 1782.20 1515.58 1868.86 1718.88

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Italy 1299.51 1210.64 1360.60 17.08.33

Bangladesh 874.41 1005.59 1179.05 1650.43

Sri Lanka 630.48 633.04 923.37 1323.88

France 1016.88 948.22 1076.88 1293.22

Netherlands 875.80 866.82 1050.63 1281.11

Indonesia 394.87 535.53 828.20 1126.19

Saudi Arabia 809.61 829.25 943.19 1122.93

Spain 663.03 679.51 812.59 994.10

Iran 221.96 253.89 656.43 920.02

Malaysia 601.10 776.33 751.32 891.32

Thailand 528.69 635.29 713.04 829.62

Total (incl. others) 44147.44 43976.01 52856.28 63622.50

Major Commodities of Export

PRODUCTS US$ MILLION %

CHANGE% SHARE IN

TOTAL

2007-08 2008-09 2008-09

All Commodities 52856.2

863622.5

020.37 100

Gems & Jewellery 9053.3810537.6

116.39 16.56

Textiles 5942.47 6469.28 8.87 10.17

Readymade garments 5704.68 6104.53 7.01 9.59

Drugs, Pharma & fine chemicals

2567.16 3124.83 17.60 4.91

Machinery & Instruments 2013.65 2778.88 38.00 4.37

Manufacturer of Metals 1852.42 2414.37 30.34 3.79

Ores & minerals 2001.23 2346.88 17.27 3.69

Prim. & semi fin iron & steel

1625.69 2146.13 32.01 3.37

Leather & leather manufactures

1853.12 2030.69 9.58 3.19

Transport equipment 1337.36 1897.49 41.88 2.98

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Plastic & linoleum products 1224.84 1743.74 42.36 2.74

Electronic goods 1255.99 1690.88 34.63 2.66

Marine Products 1435.27 1323.99 -7.75 2.08

Dyes & Intermediates 712.69 1024.89 43.81 1.61

Rubber manufactured products

485.08 587.30 21.07 0.92

INDIA’S CURRENT EXPORT PERFORMANCE

During the last five year period i.e. 2004-2008, Indian exports have done very well in

comparison to the performance recorded by some of the major exporting nations both

developed as well as emerging markets. In fact, India’s average annual growth rate of

merchandise exports at 25.0 percent was the third fastest after Russia (28.5 percent) and

China (26.8 percent). In the face of global slowdown and financial crisis, Indian exports

have shown a good measure of resilience during 2008 as the deceleration in the exports

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growth was less marked in case of India as compared to a sharp decline in exports growth

recorded by other leading exporting countries like USA, Germany, Japan, China etc. In

fact, India recorded a marginally higher growth rate of 21.8 percent during 2008 as

compared to 21.5 percent during 2007. As compared to this, export growth of China, the

fastest growing economy in the world, in 2008 dropped sharply to 17.2 percent as

compared to 25.8 percent in 2007 reflecting a greater effect of the global slowdown on its

exports.

EXPORTS BY PRINCIPLE COMMODITIES

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DIRECTION OF INDIA’S EXPORTS

During the period 2008-09 (April-February), the share of Asia and ASEAN region

comprising South Asia, East Asia, Mid-Eastern and Gulf countries accounted for 51.4 per

cent of India’s total exports. The share of Europe and America in India’s exports stood at

23.8 per cent and 16.5 per cent respectively of which EU countries (27) comprises 22.3

per cent. During the period, USA (12.0 per cent), has been the most important country of

export destination followed by United Arab Emirates (10.8 per cent), China (5.1 per

cent), Singapore (4.7 per cent), Netherland (3.7 per cent), Hong Kong (3.7 per cent), U.K.

(3.6 per cent), Germany (3.4 per cent), Saudi Arabia (3.0 per cent), Belgium (2.6 per

cent) and Italy (2.2 per cent). 

TREND AND VOLUME OF INDIAN EXPORTS

(Value in Rs. Crore)

Year Exports Growth Rate (%)Trade Deficit

2003-04 293367 15.0 -65741

2004-05 375340 27.9 -125725

2005-06 456418 21.6 -203991

2006-07 571779 25.3 -268727

2006-07(Apr –Dec.) 416176 - -195346

2007-08 (Apr –Dec.) -P

448377 7.7 -233711

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India’s Rank in the World Merchandise Trade

YEAR EXPORT IMPORT2004 30 232005 29 172006 28 172007 26 182008 26 17

Source: International Trade Statistics (WTO)

An export target of US $ 200 billion was set for the year 2008-09. As against this, exports

reached a level of US $ 168.7 billion during the year registering a growth of 3.5 percent.

The set back was primarily on account of global recession which resulted, as per WTO,

in shrinkage of world trade, in volume terms, to 2 percent in 2008 from a growth of 6

percent in 2007.

five years during the

Despite the recent setback faced

by India’s export sector, our merchandise exports recorded a Compound Annual Growth

Rate (CAGR) of 21.5 percent during the five year period from 2004-05 to 2008-09.

Performance of export during these five year Policy period clearly reflects a significantly

higher trend of growth of exports as compared to the preceding five years when the

exports increased by a lower CAGR of 14.0 percent.

EXPORT INCENTIVES

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The Government of India has framed several schemes to promote exports and to obtain

foreign exchange. These schemes grants incentive and other benefits. The few important

export incentives, from the point of view of indirect taxes are briefed below:

Free trade zones

Electronic hardware technology park/software technology park

Advanced license/duty exemption entitlement scheme

Export promotion capital goods scheme

Deemed exports

Manufacture under bond

Duty drawback

EXPORT CREDITS

Export credit is providing pre-shipment and post-shipment credit either in Indian rupees

or in foreign currency to an exporter. The credit is given for short term i.e. up to 6

months, medium/ long term which extends more than 6 months according to the

eligibility of the products and projects. Usually medium/ long term export credit is given

after inspecting the supplier's credits.

To promote the export promotion drive, the Government of India established Export

Credit Guarantee Corporation of India Limited (ECGC) in 1957 to cover the risk of

exporting on credit. This organization offers a range of services to exporters. They are as

mentioned below:

It provides credit risk insurance covers to the exporters against there loss in export

of goods and services.

It offers guarantees to the banks and financial institutions in order to enable the

exporters to obtain better facilities from them.

It provides Overseas Investment Insurance to the Indian companies investing in

joint ventures abroad as equity of loan.

.

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EXPORT PROMOTION COUNCIL

The Export Promotion Councils are non-profit organizations registered under the

Indian Companies Act or the Societies Registration Act, as the case may be. They are

supported by financial assistance from the Government of India.

ROLE : The main role of the EPCs is to project India's image abroad as a reliable

supplier of high quality goods and services. In particular, the EPCs encourage and

monitor the observance of international standards and specifications by exporters.

The EPCs keep abreast of the trends and opportunities in international markets for

goods and services and assist their members in taking advantage of such opportunities

in order to expand and diversify exports.

FUNCTIONS: The major functions of the EPCs are as follows:

1. To provide commercially useful information and assistance to their members in developing and increasing their exports

2. To offer professional advice to their members in areas such as technology up gradation, quality and design improvement, standards and specifications, product development and innovation etc.

3. To organize visits of delegations of its members abroad to explore overseas market opportunities.

4. To organize participation in trade fairs, exhibitions and buyer-seller meets in India and abroad.

5. To promote interaction between the exporting community and the Government both at the Central and State levels

6. To build a statistical base and provide data on the exports and imports of the country, exports and imports of their members, as well as other relevant international trade data.

FEDERATION OF INDIAN EXPORTS ORGANIZATION

FIEO-India's Premier Institution for International Trade

The Federation of Indian Export Organizations (FIEO), non profit organizations set up by

the Ministry of Commerce, Govt. of India in 1965 to co-ordinate and focus the efforts of

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all organizations in the country engaged in export promotion. The Federation has evolved

into a key player in the promotion of trade, investment and collaboration. FIEO provides

the content, direction and thrust to India’s expanding international trade. FIEO represents

the interest of professional government recognized exporting firms, consultancy firms,

service exporters, banks, export management training institutes etc. FIEO members

representing large, medium & small scale exporting units contribute more around 70%

global exports of our country. Its membership comprises of exporting firms with strong

credentials, called Government-recognized Export House, Star Export House, Trading

House, Star Trading House and Premier Trading House besides Consultancy firms.

Representation from wide spectrum of industry:

FIEO provides a unique platform to the businessmen dealing in Multi Products. FIEO

membership is offered to exporters dealing in various goods and services and nearly all

the products fall under its gamut. It is the only body authorized in India to register

exporters not covered under any other Export Promotion Council of India. With customer

oriented approach, the confidence and satisfaction of the business community on FIEO

has grown which has reflect in the continuous rise in membership.

 

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The scope of the Federation reaches out throughout India. It has a well established

network throughout India and has offices at all major business centers of India.

All India Membership Base of FIEO

FIEO works as a partner of the Government of India in providing inputs on various trade

policy issues and also acts a strong linkage between the Government and the Industry. It

takes up problems /issues of its members, organizes capacity building courses to provide

a conducive domestic atmosphere and to increase their competitive edge on one hand and

organizes international activities to give its members a global reach. FIEO is the one stop

organization for any foreign investor, buyer or seller looking for a trade partner in India.

 

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IMPACT OF GLOBAL SLOWDOWN ON INDIAN EXPORTS

The global slowdown has affected India’s exports by way of 

default in payment or delayed realization for exports resulting in cash flow

difficulties for the exporters;

difficulty in executing orders in hand owing to lack of additional credit limit;

difficulty in providing covers for high risk countries/ buyers by Export Credit

Guarantee Corporation (ECGC);

 reluctance of exporters to execute orders for fear of defaults; and

 Tougher ‘due diligence’ by Banks in extending Pre and Post-shipment credit and

insurance cover by ECGC

EXPORT ANALYSIS AND IMPERATIVES

Export analysis:

Strengths Cost competitiveness in terms of labor and raw material. Established manufacturing base. Economics of scale due to domestic market. Potential to harness global brand image of the parent company. Global hub policy for small cars

Weakness

Perception about quality. Infrastructure bottlenecks.

Opportunities Huge export markets such as Europe, America, Africa, and others for Indian cars

Threats

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China, Malaysia, Thailand, etc. Many other countries also have strategies for export promotion

Export Imperatives:

Internal Factors: Attaining high quality for global standards. Continuous cost reduction for global competitiveness. Supply chain management (logistics). Attaining economies of scale & scope.

External Factors: Improve infrastructure (ports, roads, etc). Improve EXIM regulations.

CONCLUSION

If there is any sector in India’s economy that has suffered the most in the current global

economic downturn it is the export sector. It has been recording consistent fall for the last

10 months now. In July, it registered a 28% fall. The overall growth in exports in 2008-

09 has been just 3.4 % against over 20 % in the preceding 4 years. In volume terms it was

$168 billion in 2008-09. The persistent fall in exports is due to contraction of world

demand in countries which import goods and services from India. Protectionist measures

adopted by the western countries have complicated the situation.

MEASURES ADOPTED BY THE GOVERNMENT TO TACKLE THE ISSUES

THAT CONFRONT OUR EXPORTS

Increasing the level of exports by providing as many incentives as possible to the

exporters.

Extension of Income Tax holiday for exporters for one more year and continuance

of duty refund scheme till December 2010.

The incentives available under the Focus Market Scheme have been raised from

2.5 to 3 % and their validity periods have also been extended

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The exporters will now be able to import machinery and technology that they

need to improve their competitiveness in the manufacturing sector, in certain

cases duty free.

Exporters will also be provided with adequate finances in dollars for this purpose

by cutting down transaction costs

With these measures the Government hopes to achieve the annual export growth rate of

15% in 2010 and 2011 against just 3.4 % recorded in 2008. In volume terms it will be

raised from last years $ 168.7 billion to $ 200 billion by March 2011. In the next three

years this growth is targeted to rise to about 25 percent per annum. By 2014 India’s

exports of goods and services is expected to be doubled.

BIBLOGRAPHY

Indiamart.com

Indianindustry.com

Surfindia.com

Commerce.nic.in

 

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