Dr.

Vijesh Jain

ii
 Establishing Exports & Imports Business in India

Establishing Exports
& Imports Business in
India

Dr. Vijesh Jain

iii
Copyright © 2015 Vijesh Jain

All rights reserved.

ISBN:
ISBN-13: 978-1517701567
 DEDICATION

I wish to dedicate this book to my distinguished professors at IIFT, New

Delhi, who so passionately taught me theoretical aspects of doing external
trade from India way back in 1980s. I dedicate this book to my young
management students and corporate students too, who attended my various
lectures and workshops on areas related to international trade procedures
and documentation in last 10 years and provided me with important
practical inputs in the form of queries and questions. I also wish to dedicate
this book to my wife and children who supported me wholeheartedly to
write this book.
 CONTENTS

Acknowledgments i

Introduction 3

1 Why get involved with international markets? 5

2 Have you got a big idea? 26

3 Ok, I want to go international. Where to go for help? 33

4 How does foreign trade policy affect me? 49

5 Signing my first contract. Help me. 65

6 How to pay or get paid? 84

7 What about documentation? 106

8 How do I manage transportation risks? 149

9 Now tell me the procedure. 172

10 What if I wish to import something? 191

 ACKNOWLEDGMENTS

This book is a result of inputs provided by several experts in the field of

exports and imports, from industry as well as from academic world. I
specially thank Shri S.Ravichandran, Manager-Purchase at Daurala Sugars Ltd.
and Shri Amit Kumar Rajvanshi, Manager-Global Supply Chain, at Akzo Nobel
for showing the correct path for contents formation for this book. I am
also thankful to one of my students, Vikash Kumar for arranging the text in
correct order and seeing that layout is correct. Finally I wish to
acknowledge the frequent support of Shri Anil Kumar, Dr. B.S. Hothi,
Dr. B.P. Pethiya, Dr. Raghvendra Dwivedi and Prof. Deepak Tandon for their
support and constantly supplying facts and figures to fine tune the
information provided in this book.

i
 INTRODUCTION

My own long experience with exporting and importing gave me an

interesting insight into a most practical way of doing international business.
I always found it important to seek professional help every now and then,
while managing critical steps of international business. The crux of my long
experience with international business management is that in order to
establish an export – import business in India, a thorough knowledge of the
subject and support of expert knowledge is of utmost importance.

The matter of this book aims to provide an in-depth understanding and

knowledge of how to establish an export – import business in India, in most
simplistic language. Things like functions and roles of various foreign trade
bodies, shipping documents, import/export procedures, shipping terms,
institutional framework for exports and imports, contract terms, delivery
and payment terms, letter of credit, insurance policy, foreign trade policies
of India, C & F agents, transport documents, customs and excise clearance,
import clearance etc. have been explained with examples and through
graphics and pictures, wherever possible.

The book has also attempted to provide logic and common theory of
international trade so that many of the things which are related to
international trade but could not be covered in this book can be handled
with common logic by the readers. The focus of this book is also to share
the practical experiences of the author, learned through dealing with several
overseas buyers and countries.

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 Dr. Vijesh Jain

The book is more suitable for new entrants into the world of international
business but can still be informative and resourceful for many experienced
practitioners of international trade. There is no doubt that this book is an
essential reading for anyone wishing to start his own business or want to
start an international department of his existing domestic business.

The accounts of this book does not require any specialized knowledge on
the part of the readers but does require some experience with business and
entrepreneurship. Wherever possible, useful physical and virtual addresses
have been shared of the most important organizations which can provide
useful information and resources for new entrants into exports and imports
from India.

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 Establishing Exports & Imports Business in India

1. WHY GET INVOLVED WITH

INTERNATIONAL MARKETS?

Why do companies exports? Why do they expand globally? Why do they get
involved in overseas business? Are there any reactive reasons and proactive
reasons for doing international business?

When I started my career in international trade, I joined a large international

trading house in New Delhi. I found the company which I worked for, had
known every tiny detail of international trade and made huge revenues and
profits largely due their expert knowledge of foreign trading.

In spite of a very large turnover this company interestingly did not

manufacture anything of its own but just bought goods from the
manufacturers located in India and abroad and sold to their regular and new
clients all over the world. The company also had its own overseas liaison
offices. That was a big operation.

However I know of many small players of that time who made a killing in
the foreign trade. An interesting example is Mr. Ramanjeet Singh, a young
man from Delhi. This 24 year young Sikh teen I met in the year 1989 during
a month long trade fair in Budapest in Hungary where I was managing one of
the biggest stalls of my employer displaying a range of goods which my
company traded.

Ramanjeet had a small stall adjacent to our stall and had almost nothing to

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 Dr. Vijesh Jain

show to the trade visitors except some gray cotton samples and some other
fabric swatches. To my surprise he knew very little about foreign trading
and export - import procedures. He even did not know how to do the
costing of the fabrics from India the samples of which he was carrying to
show to the trade fair visitors.

However on his request, I decided to help him and refine my own

knowledge and skills of foreign trade which I had learnt in my post
graduation course. Some of the visitors did talk to him about his offerings
from India and showed willingness to have little trade relations. I helped
him in the cost analysis of the fabrics, terms of trade, deliveries and
payments issues.

Interestingly father of Ramanjeet had a transport business in Delhi and he

was particularly not interested to encourage Ramanjeet in his falling business.
There were too many partners and little profit in transport business. Also
there were too many headaches in that kind of business. Ramanjeet probably
also did not like transport business.

His father gave him just INR 50,000 to start some business and Ramanjeet
booked a small highly subsidized trade stall through ITPO (Indian Trade
Promotion Organization) for the Budapest fair and bought a Jordanian Airlines
air ticket for Budapest, since the airfare of this airline was really very cheap at
that time, and he only had a small budget to start his business.

After the trade fair was over Ramanjeet stayed in Budapest and I came back to
Delhi along with all the trade enquiries I had gathered from my employer’s
big trade booth. A few months later Ramanjeet came to Delhi and invited me
to his house in Shalimar Bagh where we had a talk regarding his progress in
international trading. I was surprised to know that his decision to stay back
in Budapest after the trade fair gave very successful results for his future
business.

He was able to enter into long term purchase contracts with some of the
traders in Budapest for some of his fabrics offerings. Later I came to know
that he became really successful in his business and had his large offices in
Delhi and Budapest and later to certain other countries. That is happy story.
There are others which may not be so happy stories.

Why does one enter into international trading?

For one international trading provides a vast global market with unlimited
potential.

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 Establishing Exports & Imports Business in India

Secondly this business can be started with very limited resources and some
contacts overseas. Later the same business can be scaled up into much
larger size. I have known many other Indian business persons in those years
making a killing with European markets making for example Budapest as
well as Czech Republic as a base. Hungary and Czech that time had just entered
into European Union and have landed up as serious international trading
companies of Europe. India had a lot to offer to these countries those times.
These countries also offered a cheaper gateway to Europe where one could
run their European operations at much lesser costs.

I remember in my own trade booth in the above referred Budapest trade fair
I had displayed samples of woman costume and artificial Jewellery and this
product was an instant success. Reason, the women in Hungary had not seen
those kinds of designs and material ever and prices were quite affordable to
young Hungarian women, during those days. Such market opportunities in
the international markets have always existed and still exist. It is for you to
dig out the information (visit ITPO, New Delhi to get information on focus
markets these days)

International trading also offers an action packed and glamorous life to the
exporters and importers. I know of one of my friend whose only reason to
be in international trading was to travel to exotic locations in the world on
official expenses. He spent 15 days a month in places like Austria, Germany,
Italy, US and UK and accounting these trips expenses as official expenses
and paid taxes on the profits he made in the foreign trade after squaring off
these expenses into his company accounts.

He is now retired and still has a schedule to spend at least a week abroad
the same way. During these visit he does indeed do some official work but
stays in best hotels with his family members. He now plans to settle in an
exotic location in New Zealand for his retired life, his company still bearing
his expenses as he will manage the New Zealand office of his Indian company
which is now planned to be managed by his eldest son from New Delhi as
Head Quarters.

Another reason people prefer to enter into international business is to

involve a number of their family members into profitable overseas
businesses, as profitable international operations now need ventures to be
run by several family members running family foreign trade operation from
several places around the world. Many business families who are into
foreign trade from India are also encouraging their siblings to settle in
Singapore and run their business operations from there due to high level of

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personal security, very low and transparent tax system, highly efficient
international transport facilities and infrastructure in this small but highly
advanced country.

Moreover flight to Singapore from Delhi is around four hours which is not
too much. Singapore also provides world class living and a very sound and
liberal global financial system. Eventually it is not difficult for successful
Indians to obtain permanent residency in Singapore. For some other, even
Dubai and now Qatar also offer similar opportunities.

Several Indians have their relatives and friends well settled in US and Canada
who are also willing to be part of any new business venture related to India
especially in the export – import domain, since it offers them a second
source of income as well as free trips and opportunities to visit India. It
should be noted that US and Canada are still the best foreign trading
partners for India especially for new exports businesses.

And there is no dearth of new business opportunities and new product

ideas for exports to these countries from India. In the case of US the
quantum of exports order values can also be pretty high, offering good
earning potential. However it is a good idea to start small in any new export
business.

For the import business China and South Asian countries still remain best
source of cheap and sellable products. China today has everything to offer
for import into India and looking for suppliers of raw material from India in
almost every industry for example in automobiles, steel and textiles
industry.

However it must be remembered that a number of people are engaged into

imports from China and to start any new business with China one should
have ready local buyers of the selected Chinese goods in India. Other
countries like Malaysia, South Korea, Singapore, and Hong Kong also offer great
business opportunities in Import business for selling their products in India.

I know one person who import a lot of scrap items from South Korea which
include used sewing machines, industrial machines, printing machines and
other scrap items. Another friend of mine imports scrapped metal stamping
used in manufacturing transformers from the same country. There are a
number of ‘near zero’ value items which can be imported from South Korea
which have handsome value added in the Indian market.

What is important is that you have good relations with a Korean supplier and

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 Establishing Exports & Imports Business in India

you have a ready market in India for these used items which can be sold
after refurbishing here in India. One of my friend has his brother who
spend his maximum time living in Seoul and keeps track of many
opportunities to buy scrapped items and surpluses which my friend here in
India receives and sells to wholesalers and retailers at hefty profits.

Once I visited to South Korea on invitation of one of the agents there who
showed me around in Seoul and nearby towns. I saw great opportunities for
doing both exports and imports businesses there. There are several
wholesalers and importers who are looking for specific items from India like
handmade papers, handicrafts, gift items, costume and artificial jewellery,
wooden items, fresh flowers, certain forest and agriculture/horticulture
produce (specially for their world famous traditional and ancient medicine
system) etc. One important thing about South Korean market is that they can
give you good price for exported goods from India if you can give good
service and quality products.

There is no dearth of foreign trade opportunities in other markets of the

world too. In fact India has a lot to offer to almost any country and region
of the world. Today, there are a number of goods and services which are in
great demand in many African countries and which can be exported from
India.

North African countries like Morocco and others have a lot to buy from India.
I know one friend of mine doing great business of selling wax paper to
countries like Kenya, Uganda, Nigeria, Zimbabwe and even South Africa. Indian
prices and acceptable quality are a great attraction to African markets.
Moreover a sizable India population in these countries, offer great support
for initial setup.

Japan and many West European markets too offer great potential for high
value custom made readymade and fashion garments from India. Indian
garments score better than China when it comes to small quantity - high
value orders which China is unable to offer.

Most Chinese garment manufacturers are large businesses who look for large
ticket orders. For example it is very difficult to compete with Chinese
manufacturers of Basic Cotton Hosiery items like T-Shirts, undergarments
even when the raw cotton price for Chinese manufacturers is almost 10%
higher than Indian prices.

However their large production makes it cheaper to produce these items

and they sell large quantities of these products at lower margins than Indian

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exporters. However off late labor costs in China are rising, also their
country’s financial difficulties are making it difficult for them to offer
lucrative terms of trade to the overseas buyers as they had been doing for a
long time. It looks to be the best time for Indian exporters to enter the
world markets with new offerings.

Also when it comes to communicating with the foreign buyers Indian

exporters have a language advantage over Chinese exporters who are unable
to communicate so well in English language which is now the business
language of the world. Due to language advantage, the kind of relationships
Indian exporters can forge with overseas buyers it may not be easy for
Chinese exporters to do the same.

I remember during a trade fair in one of the European locations, there was
an exporter from China as well as India both offering stationery items in
bulk quantity to a European distributor. During the negotiations an
overseas trade visitor wanted clarification on ‘exclusivity’ clause in the
distributor contract. He asked about it to the Chinese exporter for more
clarifications, the answer from the Chinese exporter was a combination of
few English words like – ‘Can Can, Yes Yes, No No, Ok Ok. On the other
hand, when the same question was put up by the potential distributor to the
Indian exporter, he clarified their company’s policy on ‘exclusivity’ in a most
professional English language which made the European visitor extremely
comfortable with the Indian supplier and placed a long term buying cum
distribution contract in spite of the fact that the price and other terms were
not very dissimilar to the Chinese manufacturer.

However in many other products, Chinese exporters win the contracts

simply on lower prices and their ability to supply very large quantities in
lesser time. With Modi government’s ‘Make in India’, ‘Ease of Doing Business’
and other initiatives picking up it is a matter of time that Indian
manufacturers will be able to offer better and more competitive terms than
Chinese manufacturers.

Modi government’s new foreign trade policy announced in April 2015 has
several new initiatives which are likely to make exporting from India very
lucrative in near to medium term future.

It is not always necessary that already successful domestic companies get

involved with international markets of their own willingness. Many a time
companies are forced to expand overseas to counter the competitive
environment. Due to globalization, some competitors take a plunge into the

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international market even while competing domestically. It makes the

company size bigger, resulting into many customers moving to bigger
entities to meet their needs at more competitive prices. To match their
growing size all competitors are forced to look into international market
since further growth in the domestic markets may not be there due to
market saturation.

Other alternative to the competitors is to maintain the same size and focus
on quality. It may work in certain industries and products but generally it
does not help. So if you do not grow you lose customers.

Reasons to expand globally

One of the most important purposes of businesses is to provide good

returns to its shareholders while satisfying customer needs. It is the essential
part of a capitalistic economy. Another important aspect of this objective is
also to sustain the business and its profits. In order to sustain business and
to pay long term profits to its shareholders companies are increasingly
becoming dependent on:

1. Foreign sales

2. Foreign resources

3. Foreign knowledge

4. Identify more efficient supply overseas sources

So if your business does not grow the business of your competitors will
grow who will eventually eat into your market share. International sales
ensure ever expanding international market resulting from the ever
increasing population and life expectancy in the world. In such expansion
companies acquire new international assets, resources, talent, supply
sources and knowledge which your competitors might not have access to.
This is how you counter your competition.

General reasons of growth in International Business

International Business has been growing at a fast pace in the last few
decades. There are several reasons for this growth. However there are

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generally four reasons which have really helped international business to

grow all over the world.

1. Technology

2. Favorable government policies

3. Growing institutional framework to support global business operations

and

4. Increasing global competition

Technology: In the past several decades, there is no other single factor which
has transformed human life than technological advancement. Technological
advancements have greatly influenced out day to day life, health, life
expectancy, population growth, consumer behavior, education,
transportation, overall security and way we communicate with each other
(globally too). In businesses sense, technology has greatly affected the scale
of manufacturing goods, way goods are consumed, way goods are packed
and delivered and speed, cost and security of their transportation. Today it
is not unheard of global companies dispatching to individual customer,
their ordered products in retail packs directly to customers abroad in a
reasonable time period and at affordable price.

These technological changes along with cheap and reliable communication

technology and easy global financial regime, have made it possible for
domestic businesses to think and at global at a faster pace than ever before.

Government Policies: More and more governments are realizing the short term
and long term benefits of liberalization of their foreign trade policies in
order to facilitate their countries getting their share in the global village and
get connected with a globalized world. More and more countries are willing
to get into the so called golden strait jacket (one of the economic thesis of
Thomas Freidman) which these countries feel is essential for the economic
future of their countries. Therefore they are willing to adapt to the golden
strait jacket conditions of lower taxes, integration to global economy,
sharing of the economic sovereignty of their nations with multinational
corporations, allowing overseas investments in all business sectors in their
countries, facilitating both exports and imports in line with the core
objective of WTO i.e. a more freer world for doing international trading.

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 Establishing Exports & Imports Business in India

Institutional support framework: Increasing membership of WTO is a testimony

of the faith of the people of this world in the multilateral trade
organizations like WTO to help humanity to achieve a better and secure life
on this planet. Apart from WTO, an increasing number of institutions both
global as well as regional or even national level have been growing to help
international business. Regional economic free trade agreements, bilateral
free trade agreements and global agreements to help economic
development of poor countries have all created a very conducive
environment and support to carry out international business. Global
organizations like IMF, UNCTAD and others have continuous plans and
programs to help developing countries trade more in the international
markets. Tariff concessions to poor countries are also part of the same
framework to increase economic conditions of economically weaker
nations. National trade promotion organizations, chambers of commerce in
different parts of the world, trade associations, EXIM banks, credit
guarantee corporations and many private trade initiatives have really made
doing international business much easier than before.

Increasing global competition: As already discussed in this chapter, increasing

competition has led to an exponential growth of international business
activities around the world in last few decades. Competition among
countries and among global companies is too fierce today almost in all
sectors of business. This increasing competition coupled with mass
production made possible by high levels of mechanization and robotization
have made many products within reach of the middle class which forms the
biggest consuming section of all societies in this world. Increasing level of
awareness, income levels and education has accelerated consumer
expectations and corporations are working overtime to produce newer
products with newer features to satisfy demand. In the bargain corporations
are expanding their operations globally like never before.

Common trade and economic theories explaining international trade

International Trade has been happening since time immemorial. India was
one of the major players in the international trade in ancient times although
ancient seaborne trade was dominated by Phoenicians (an ancient Semitic
Thalassocratic civilization situated on the western, coastal part of the Fertile
Crescent, centered on the coastline of modern Lebanon). There have been a

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number of trade theories which tried to explain the logic behind a long
history of goods and services being traded across national borders. The first
theory which gained academic attention was called – Theory of Mercantilism.

According to this economic theory and practice, dominant in Europe

between 16th and 18th century, international trade happens for the sole
reason of increasing the state power by exporting more and importing less.
Therefore the state’s economy is thus regulated to increase its own power at
the expense of the rival state power. The dominant logic behind this theory
was that world resources and wealth are limited and state power must be
increased by saving own resources and using overseas resources to increase
own wealth.

Adam Smith later propounded the theory of Absolute Cost Advantage. While
countering and contesting the theory of Mercantilism, he stated that
countries will gain from trading if they specialize in production of goods in
which they have absolute advantages (ability to produce more quantity of
products and services than the competitors, with the same amount of
resources being used). For example India has an absolute cost advantage in
producing computer software Vis a vis other competitors due to cheaper
employees cost and easy availability of skilled workers. Therefore it is futile
for the western developed countries to compete with India in this domain,
In other words, it makes more sense for these countries to outsource
computer software development in India rather than produce at home.

In 1817, Ricardo propounded another theory called, Comparative Cost

Advantage theory also popularly known as classical theory of international
trade. According to this theory all nations must export those goods in
which they have comparative cost advantage and import those goods in
which they have comparative cost disadvantage. In other words, a country
will produce such goods where they have easy availability of raw material
and resources like – natural endowment, climate, right quality of soil, means
of transport, human resources, capital and space to produce and will export
any surplus they will have in such favored production. For example India
produces and exports a large quantity of ‘readymade garments’ which
require large number of human resources, natural fibers like cotton, less
capital and import aero planes, production of which requires specialized
knowledge, huge amount of capital and state of the art machinery.

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 Establishing Exports & Imports Business in India

Most of the above theories explained country level ‘inter – industry’ trade.
In order to explain the ‘intra-industry’ trade, Linder developed ‘country
similarity theory’. According to this theory, due to the possible similarity of
customer preferences in several countries that are generally at the same
stage of economic development and have similarity of culture, intra industry
trade will take place among these countries. For example due to many
similarity of economic development in India and China, a number of cheap
goods from China are now popular in India and widely preferred by Indian
consumers.

In 1966, Raymond Vernon, propounded the theory of International

Product Life Cycle. According to this theory the product life cycle of a
product can be elongated through foreign trade by introducing domestic
products in foreign markets at the time when it becomes inevitable to
elongate the maturity stage of the product in the domestic market. By
exporting these products to foreign markets where it may be at a different
stage of the product life cycle, overall product life cycle of the product can
be made longer and also reap the extra benefits of lowering production
costs in the domestic production at the later home market maturity stage of
a particular product.

Figure 1: International Product Life Cycle Theory Explained

Later another theory called global strategic rivalry theory was propounded.
According to this theory, global corporations develop sustainable

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competitive advantages though strategic decisions like patenting

innovations, deriving first mover advantage (being first in the branded
market), developing large economies of scale or by exploiting the learning
curve successfully i.e. achieving strategic advantage by using rare experience
and skills. By deriving strategic advantages, companies force customers
overseas to demand their goods and export these goods worldwide.

By far the most popular trade theory in modern times is the Porter’s
National Competitive Advantage Theory also called diamond model.
According to this theory nations develop competitive advantages vis a vis
other countries due to a number of material and market conditions (factor
conditions, demand conditions, nature of rivalry, structure of industry,
availability of support industry and influenced by the role of national
government and chance factor. This model also called single diamond
model is given in figure 2 below.

Figure 2: Porter’s Diamond Model of International Trade

There is another theory called ‘pull and push forces theory’, which defines
different types of domestic forces (like smallness of the market, closeness
of the domestic business environment and adverse location of the domestic
market) which pushes domestic companies to venture overseas and there
are several pull (like vast and open international market) forces which pulls

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 Establishing Exports & Imports Business in India

the domestic companies to international markets. At the same time there

can be some firm specific favorable factors which steers the firm to
overseas markets (like long experience, special skills, cost effective
availability of raw material). Figure 3 below describes these forces.

Figure 3: Forces of Internationalization

Common approaches one can use to expand globally

Global corporations primarily follow two types of approach to expand

globally – Proactive approach and reactive approach. While proactive
approach makes corporations actively seeking international expansion to
derive competitive advantages, a reactive approach to international
expansion is just a reaction to micro or macro environment these
corporations face, for example rapidly shrinking domestic markets for
certain products.

Proactive approach

Some of the important benefits corporations see in a proactive approach to

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expand globally are:

Strategically seeking out competitive advantages:

Some of the common strategic advantages which corporations seek by

expanding internationally are:

Access to international resources and free trade policy environment: Which may reduce
their processing or transportation costs. For example Tata Steel bought
many iron ore mining companies in Brazil to ensure cheaper supply of
inputs for their international manufacturing of steel. Similarly in last several
decades, a number of companies from all over the world, expanded their
operations to China, to benefit from the cheaper production costs and
favorable Chinese policies for encouraging manufacturing operations in that
country in free trade zones, special zones. Sometimes overseas governments
offer attractive incentives to invest in special zones, like tax breaks, cheaper
land etc. For example a few decades earlier UAE government offered 20
years of tax breaks and almost free land in Jebel Ali Special industrial zone
near Dubai to anyone from across the world interested in investing there.

Sometimes overseas acquisitions also bring along international patent and

intellectual property along with acquired overseas companies for example in
case of pharmaceutical patents of drugs and medicines.

Access to strategic markets: Which may help the company to grab newly created
market opportunity in new countries due to the political or demographic
changes. For example after the collapse of former USSR (Soviet Union), new
markets like Ukraine, Kazakhstan, Azerbaijan, Georgia and other central Asian
markets suddenly came into global fold to establish international businesses
in almost every sector for many global corporations. Near India, Sri Lanka
became a good opportunity after end of civil war there recently.

Access to regional free trade groupings: Many a times global corporations establish
foreign operations in overseas markets into friendly nations or nations with
bilateral free trade agreements to establish sales and supply lines in regional
economic cooperation and regional free trade zones where the overseas
country is also one of the members. For example India has a bilateral free
trade agreement with Thailand which in turn is member of one of the
important regional economic cooperation i.e. ASEAN. Therefore Indian

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large corporations will find it very strategic to establish shops in Thailand in

order to establish sales and supply lines into whole of ASEAN, offering
unmatched opportunities to Indian corporations.

Launch of offensive for early entry into an emerging market

Several times large corporations find it proactively very motivating to enter

new markets to grab the market share before the competitors enter the
market, in spite of the fact that the host countries are still not ready to take
the products offered by these corporations. Major reasons for such a
proactive move is to grab the larger market share even at no profits in
operations than potential competitors and also such moves may be
motivated by the possible capture of market pulse during the early entry
period before the actual launch of the full products lines of the company.
For example, WALMART has been camping in India in one way or the
other even while Indian trade policies do not allow foreign investments in
multi-brand retailing in India which is the mainstay of WALMART and real
reason to enter Indian market. They have been waiting for years in the hope
that Indian Policies will change for good. Till that time they are operating in
back end operations of multi-brand retailing which is allowed in India.
WALMART may not have made any profits in last so many years in the
Indian market but they have long term plans to capture highly lucrative and
large retail markets in India. And they are not willing to allow competitors to
capture a larger share of the pie. In the meantime they are happy to have
learnt Indian ways of doing business in these areas.

Power and prestige

A lot of companies go global and expand in size to show off. These

maneuvers at times help companies gather attention of the targeted
customers in certain sectors. Sometimes such show offs can be to put their
weights on government for favors in tenders and auctions of national
resources. A very large oil and gas company in India recently bought highly
unprofitable shale gas companies in US at exorbitantly higher prices to get
favors of Indian government in the allotment of large oil and gas block
within the country.

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Less stringent laws for manufacturing polluting products

Although not now too common, sometimes corporations move to overseas

locations for manufacturing to benefit from less stringent laws governing
polluting and hazardous manufacturing plants. Bhopal gas leak is a classic
example of why Union Carbide was interested to invest in India on such an
expensive manufacturing facility that too in a backward state that was
Madhya Pradesh that time, and which plant and gas leak of most hazardous
gas later became a great killer of thousands of people in India but without
suitable penalties to Union Carbide and its top management. These things
still happen somewhere in this world although laws are now more stringent
in most countries.

Reactive approaches

Reactive approach comprise of international strategic move in reaction to a

change in external and / or internal environment. Sometimes this reaction
may also be based on certain market information which corporations find
authentic and reliable and they are forced to enter overseas markets based
on such information. Some of the common triggers for a reactive approach
in overseas expansion are:

Response to changing market demand

This change can be worldwide or in a specific market. Sometimes change in

demand in the domestic market may also force companies to think global.
The information related to market demand can be obtained accidentally or
through an overseas associate or some other means which corporations
might not have actually planned in the first instance.

Reaction to changing competition

When competitor move suddenly to new overseas markets, corporations

are forced to act and find the prospects in those markets which are being
tapped by the competitors. For example when Indian Sweets and Snacks
giant Haldiram Products from India set up a snacks manufacturing unit in
London recently, it forced domestic competitors like Bikanerwala to explore
similar moves and European expansion.

20
 Establishing Exports & Imports Business in India

Reaction to political environment change

Political environment in individual countries may change very frequently.

With such changes come major and minor changes in the foreign trade
policies of those countries. For example, in last one year after Modi
Government came to power in India, a lot has changed in the policy
environment and ‘Ease of Doing Business’ in India. Corporations from across
the world are looking at India to react to such a situation.

Sometimes government also raises tariff and non tariff barriers as also
resort to ‘buy local’ policies at the cost of goods coming into the country
from across the border, which forces corporations to look into the possible
surge in demand in such countries and possibly set up manufacturing to
avoid border controls.

Sometimes regulatory environment also changes due to political reasons

forcing corporations to deal with new regulations and study the reasons of
changing regulations and their impact on local demand. For example many
overseas corporations have moved their manufacturing operations to
Mexico from US in order to deal with the hardening pollution control and
environmental laws for manufacturing in US.

Reaction to economic environment change

Many a times domestic cost of production increases due to increased inputs

costs, inflation, increasing labor costs or other economic changes taking
place domestically. Such changes forces corporations to move their
manufacturing and other operations to cheaper places. In the later part of
the last century, a number of corporations moved their businesses and
manufacturing to China due to the same reasons. India is now expecting
similar influx of overseas corporations to set up shops in India. In the IT
industry, already there are major overseas investments in India.

Chance entry to overseas locations

Though highly debated, chance does play an important role in corporations

moving overseas to specific locations for part or whole of their operations.
This chance movement may be as simple as the CEO or founder of a
company visiting certain overseas locations on vacation or business and
suddenly decides or commits to make major investment in that country.

21
 Dr. Vijesh Jain

Types of exports

Exporting can be either done directly by you or you may do it indirectly.

Direct Exports

When you export your products directly to an overseas client and get paid
directly from him, it is called direct exports.

Indirect Exports

There are 4 ways to do indirect exports

1. Through an Exports merchant

2. Through an Exports agent
3. Through a resident foreign buying agent and
4. Through a resident foreign buyer

Through an export merchant

Export Merchant is a trading company that will buy the local firm's goods
outright and assumes the risk of being able to resell them profitably abroad.

The export merchant usually specializes in a particular line of products

and/or in a particular geographical market area. Sometime it sells the goods
with the original supplier's labels or on other occasions may put its own
label.

Through an export agent

An export agent is a trading company that acts for local manufacturers,

usually representing a number of manufacturers. In return for obtaining
export orders from abroad, the export agent receives commission on every
sale.

22
 Establishing Exports & Imports Business in India

Unlike the export merchant, the agent does not become the owner of the
goods and therefore does not assume the risk of not being able to sell them
abroad. An export agent is usually retained for a specific period, on a
renewable basis according to an ‘export agency agreement’.

The function of the export agent is to appraise the export potential of the
local manufacturer's products, advertise them abroad, look for foreign
buyers, obtain export orders, and advise on, or arrange for, the
documentation, shipping and insurance once a sale has been made.

Through a resident foreign buying agent

This is a firm that acts as the purchasing agent (also called ‘buying house’ or
‘buying agent’) for foreign companies, receiving a commission on the goods
purchased

Through a resident foreign buyer

Sometimes large foreign firm (e.g. food chains or super market store chains)
will have its own employee stationed in the local manufacturer's country or
within a geographic region. This Resident foreign buyer will act on his
employer's behalf, seeking to buy goods for his company.

Conclusion

During the different phases of growth of an organization, a time comes

when organization must think of expanding globally. There are several
benefits and issues related to expansion of the organizations to foreign
shores. International markets provide tremendous opportunities and
learning to an organization which also help them strengthen their position
in the home market. Overall there are several theories and concepts which
explain the internationalization of business and organizations chooses
different approaches to expand globally. These choices and reasons differ
from one organization to another depending upon the macro, micro,
industry and firm specific environment in which an organization thrives.

23
 Dr. Vijesh Jain

Frequently asked questions:

1. Are there any non economic reasons too due to which an

organization may like to expand globally?

A. Yes, many a times, organizations expand globally due to non

economic or indirect reasons also like – to secure prestige and
power or a chance overseas expansion as already explained in
above chapter. Some of the smaller ventures in export domain
are established for the sake of glamour of international trade
and a fanciful life style.

2. What is the meaning of absolute advantage of a country?

A. A country enjoys absolute advantage in manufacturing of a

product, if it can produce more quantity of output using same
amount of resources, n comparison to any other country.

3. What is indirect exporting?

A. An indirect usually can be done in four ways. You can export

your product indirectly through an of these four market players
– 1) A Merchant Exporter, 2) An export agent, 3) A buying
house, 4) A resident representative of foreign company in the
home country.

4. What is an international product life cycle of a product?

A. When a product reaches its maturity stage or near to the

decline, the product life cycle of item can be extended by
introducing the same product in overseas market where it may
be a new introduction or is starting to enter growth cycle. By
doing so an organization can reap the benefits of an extended
profit cycle of the product. This process give rise to an
international product cycle of the item in question which if
managed properly among several countries can bring huge
profits to the particular product division of a global company.

Useful sources of information and help

1. Five steps to expand globally (Forbes article) -

http://www.forbes.com/sites/theyec/2013/10/08/five-steps-to-
expand-your-business-globally/

24
 Establishing Exports & Imports Business in India

2. Business Case Studies on international expansion -

http://businesscasestudies.co.uk/davis-service-group/growing-a-
company-by-international-aquisition/international-
expansion.html#axzz3mjn1xj8h

3. How to implement a global expansion: A case study -

http://www.europeanceo.com/business-and-management/how-
to-implement-a-successful-global-expansion-strategy-a-case-study/

4. Eyeron Group- Helping businesses expand globally – visit their

website at http://eyerongroup.com/how-we-can-
help/international-business-expansion

25
Dr. Vijesh Jain

26
 Clearing & Forwarding 178
Customs House 178, 193, 199
Exports 22
Foreign 133, 196
Purchasing 23

INDEX Agmark 129

agreement
Export agency 23
A Free Trade 13, 128
Act 107, 173 SAPTA 128
Carriage of Goods by Sea SPS 129
107, 109, 140, 167, 173
Carriers 110, 111, 112, 113, Agricultural Marketing Advisor
146 (see: Agmark)
Central excise
Customs 107, 173, 192 APEDA 45, 55
Customs tariff 198
Export (Quality Control and Applicant 88, 89, 90, 94, 96, 97,
Inspection) 173 103
FEMA 60, 61, 62, 133
FERA 60 Application for
Foreign Trade (Development Certificate of Origin 148
and Regulation) 50, 107, 173 Export Inspection Agency
Import and Export (Control) 186
50 Removal of Excisable Goods
Indian Carriage by Air 167 (see: ARE-l)
Insurance 168, 173
International Arbitration 82 approach
Marine Insurance 87 Proactive 17
Merchant Shipping 146, 167 Reactive 17, 20
Multi-Modal Transportation
167 ARE-l 134
The Railways 111, 113, 146,
167 Arrival notices 142

ADS 114, 115 ASEAN 18, 19

Advantage ASIDE 53, 54

Absolute 14, 24
Assessed value 133, 169, 202
AEPC 35, 185
Association 13, 53, 54, 141
agent FEDAI 144
Buying 22, 23 IATA 141
Carrier 143

27
 Dr. Vijesh Jain

Assured 27, 86, 136, 155, 156, Passed out 201

157, 159, 160, 161, 163, 166, Warehouse 201
168, 169
Bill of Exchange 87, 109, 116,
Austrade 37 117, 121, 131, 182

Authority bill of lading

Airport Authority of India Bearer 140
184 Charter party 101, 109, 110,
Central excise 106, 113, 114, 137, 140
132, 177, 182 Claused 138, 139
Exports Development 35 Clean 79, 80, 99, 117, 138,
Immigration 196 139, 182
Port 130, 187, 188 Dirty 139
Regional Licensing 176 Freight forwarders 140
House 140
AWB 109, 137, 141, 142, 148 Ocean 99, 137, 144
On Board or Shipped 139
B Received for Shipment 81,
Bailee 113 139
Short Forms 140
Bangkok Agreement 128 Stale 102, 139
Through 139
bank Trans-shipment 139
Advising 90, 93, 96
Confirming 91, 94, 95, 96, Bill of Lading 108, 110, 130,
156 139, 141, 144, 145, 147
EXIM 13, 40
Export – Import Data 42 board
Issuing 94, 102 Coffee 33, 35, 46, 129
Negotiating 91, 93, 101, 102, Commodity 35, 38, 46, 63
182 Maritime 188
Nominated 91 Rubber 46
Paying 91, 93, 101, 102 Spices 46
Reserve Bank of India 41 Tea 33, 35, 46, 129
Tobacco 35, 46
barriers
Non-tariff 39, 120, 128, 160, BOE 87
195
Tariff 21, 39 bond
LUT 134
Bill discounting 37 Warehouse receipt 97

bill of entry Bureau of Indian Standard (BIS)

Bond 201 129
Ex-bond 201
Home consumption 201

28
 Establishing Exports & Imports Business in India

C
CAB (Capital Account Deficit) CCIE - Chief Controller of
58, 141 Exports and Imports 50

Canalized goods 193, 202 Central excise clearance 134

CAPEXIL 47 Central excise rebate 182

Captain of the ship 81, 187 Central excise superintendent

134
cargo
arrival 196, 199 Central excise waiver 177
Bulk 152, 153, 154, 165, 179
clauses 99, 150, 163, 164, 165, certificate
166 Blacklist 135
clearance 200
Containerized 122, 124, 144, CFR - Cost Ins. Freight 68, 69,
152, 153, 154, 161, 164 71, 72, 74, 78, 80, 121
General 153
Inbound 123 CFS - Container Freight Station
insurance 130, 149, 150, 151, 53
155, 157, 158, 159, 169, 170,
171, 174, 179, 182 CHA (see: Agent - Customs
Irregular shaped 126 House)
Liquid 154
Marine 150, 155, 157, 158,
159, 170, 171 Chambers
Outbound 123 FICCI 33, 34, 35
Oversized 154 ICC 66, 79, 82, 88, 93, 103,
Perishable 107, 111, 136, 140, 104, 105, 143, 144, 150, 163,
151, 157 164, 169, 170
receipt 136 Indo – German Chamber of
risks 162 Commerce 34
tracking 204 Swiss Indian Chamber of
Transit 155 Commerce 37
types 153
vessels 154 Chartered Ship 82, 110

carrier Charterer 109, 110, 137, 168

First 139
Free 69, 71 CII - Conf. of Indian Industries
Gas 153 34, 35
Non-vessel 140
CISG- UN Conv. on Contracts
CBI - Center for Promotion of for International Sales of Goods
Exports From Developing 82
Countries 28, 32

29
 Dr. Vijesh Jain

CKD - Complete Knocked Common warehousing 53

Down 56
Company underwriters 156
clause
Arbitration 66 Company warehouse 136
Attorney 66
Choice of law 66 Compulsory pre-shipment
Indemnify 66, 156 quality inspection 129
indemnity 66, 156, 157, 163,
170 CONCOR 185
Institute cargo 99, 150, 163,
164, 165, 166, 171 Conditional undertaking 87, 89
Institute strike 150, 162
Institute trade 163, 166 Consignee 86, 111, 121, 137,
Institute war 99, 150, 162, 138, 140
163, 165
Legal jurisdiction 66
Liquidation 66 Consignor 109, 111, 112, 113,
Performance 66 137, 142, 143, 145, 146, 149,
Specialized 166 195
Statute of limitation 66
Transit 163 Consolidation 107, 179

Claused' Mate's Receipt 130 Consolidator 140

clearance Container freight depot 185

Central excise
Customs Containerized vessels 153
Electronic 184
Green channel 193, 200 Contract of
Import Affreightment 73, 109, 110,
Income tax 62 137, 140
Bailment 145
Commercial
documents 113, 114, 116, credit
118, 183 Anticipatory 96
intelligence 33, 35, 42, 44, 185 bank 36
law 65 Export 38
terms 66, 107, 173 Letter of 3, 52, 66, 81, 87, 88,
transaction 84 89, 90, 91, 92, 93, 94, 97, 100,
vessels 153 101, 102, 103, 104, 116, 118,
119, 120, 121, 124, 131, 138,
Common carrier 111, 112, 113 141, 142, 144, 151, 169, 199

Common defects 101 Customs

broker 195
Common law 111, 112, 146, 157 charges 202

30
 Establishing Exports & Imports Business in India

classification 195 FOB 68, 69, 71, 72, 73, 74,

control 180 75, 77, 78, 80, 82, 121, 132,
documents 190 133, 139, 179
duties 56, 59, 158, 194, 197,
201 Demurrage 136, 140, 147, 199,
entry 195 200
formalities 173, 180
inspection 200 Demurrage charges 136
procedure 178, 187, 202
software 200 Departure terms 69
tariff 198 DEPB 52
warehouse 195
Detainment of carrier 162
Customs Bonded Warehouse
57, 97, 195, 201 DGAD 40

D DGCIS Kolkotta 42, 44

Dead weight tonnage 153
DGFT 39, 41, 42, 44, 50, 52, 53,
declaration 63, 106, 114, 132, 148, 172, 176,
Exchange control 109, 116, 185, 193, 203
132
GATT 193, 198, 199 Diamond model 16
Import 195, 202
Insurance 116, 158 Directorate General of Anti-
Dumping and Alied Duties 40
delivery
conditions 67 Directorate General of
malicious 165 Commercial Intelligence and
obligations 75 Statistics 44
order 199
point 74 DOC - Department of
Commerce 38, 39, 40, 50
Delivery terms
CIF 56, 68, 69, 71, 72, 74, 78, Dock Challan 116
80, 81, 99, 121, 179, 195
CIP 68, 69, 72, 80 Document
CNF 72 eBRC 203
CPT 68, 69, 71, 72, 80
DAP 68, 69, 72 Documentary
DAT 68, 69, 72 conditions 85
DDP 65, 68, 69, 72 credit 79, 80, 85, 86, 87, 88,
EXW 68, 69, 70, 72, 74, 76, 89, 90, 92, 93, 96, 97, 99, 100,
77, 78 104, 107, 122, 138, 140, 156,
FAS 68, 69, 71, 72, 74, 75, 81, 173
82, 139 evidence 168
FCA 68, 69, 71, 72, 80 requirements 114

31
 Dr. Vijesh Jain

documentation Exemption schemes 56

Aligned 114 Free 52, 56, 57, 135
Export 116 Free import 56
Framework of 106 Imposed 197
In india 114 Insurance 158
Pre-shipment 118 Neutralization 52
Proper export 106 Rates 197
Shipping 23 Scrips 59
Special additional 197
documents
Against Acceptance (DA) 87 DWT 153
Against Payment (DP) 87
Auxiliary 116, 118, 183, 187 E
Carriage 108, 135, 136, 137, e-Commerce 60
145
Compliant 88, 91, 94, 102 e-Governance 60
Customs 3
Discrepant 135 ECGC 41, 46
Discrepant 101
Import 3 Economic
Import/export 3 Development 13
Principal 116 Sovereignty 12
Processing of 184 Theories 13
Regulatory 116 Thesis 12
Shipment 117 Zone 44, 45
Shipment advice 117
EDI - Electoric Data Interface
Domestic Tariff Area (DTA) 57 44, 132, 148, 184, 185

Drawback EHTP 56, 57, 60

Claim 117, 183 EIA 114, 129, 186
Department 182
Rules 187 EIDB - Export Import Data
Bank 42
duty
Anti-dumping 40, 121, 198 Electronic
Basic 59, 197, 198 commerce 78, 79
Calculation 197 data 132
Concessions 148 documentation 147
Countervailing 197 filing 199
Credit scrips 59 presentation 103
Drawback 117, 133, 182, 183,
187, 198 Endorsed
Brand Rate 198 ss being negotiable 138
Dumping 198 bill of lading 138, 140
Excise 59 freight paid' or 'freight to pay'
Exemption 56 140

32
 Establishing Exports & Imports Business in India

Endorsee 130 Export

application 116
Ennore Port 188 certification 129
clusters 60
Entry contracts 73, 108, 119, 129,
for imports 195 139, 158, 173, 182
Mate's receipt 109 declaration 132
of dangerous items 194 Direct 22, 182
of imported goods 192 documentation 114, 116, 118,
Online, customs software 200 174, 184
houses 60
EOU 48, 56, 57, 60, 198 incentives 33, 174, 180, 182
inspection 38, 45, 128, 129,
EPCG 132, 186
License 56 master 123
Participants 60 Merchant 22, 23
Scheme 54, 56, 60 obligations 49, 56, 60
order 117, 131, 182
EPCs 33, 35, 38, 53, 63, 114, performance 51, 54
132, 175, 176, 185, 186, 199 policies 196
procedures 3, 108, 174, 185
EPM - Export Promotion promotion 33, 47, 53
Mission 59 value 132, 133

EPZ 56, 57 Export Import

policy 50, 52, 63
ESCAP 39 prohibition 52
statistics 33
ESCAP 39, 128
Export Inspection agency 114
eUCP 102, 103, 104
Export Promotion Councils
Examination (EPCs)
of goods 200 EEPC 47
procedure 193 GJEPC 47

Excise exports
department 175 Deemed 57, 182
documents 199
duties 203 F
rebate 117, 182 FALTA 44
superintendent 134
waiver 177 FEMA 60, 61, 62, 133

Exclusions 70, 163, 165, 166, FERA 60

170
FIEO 36, 45, 148

33
 Dr. Vijesh Jain

collect 140
Financial costs 101
assistance 53 insurance 132
difficulties 10 paid 140
guarantee 97 payment 116
loss 156 prepaid 99
security 97 receipts 79
standing 84 stations 53, 185
support 40 subsidies 54
system 8 tariff 142

Foreign FTA 128

buying agent 22, 23
cultures 205 FTP 38, 39, 51, 54, 192
delegations 35
direct investment 184 FTZ 198
L/Cs 93
tourists 31 G
General
Foreign exchange average 164, 167
declaration 132 insurance 156
earned 59 license 192
investments 19 ship 137
management 60, 107, 132,
173 Global
regulation 85 advantage 57
agreements 13
Foreign Exchange Dealers expansion 25
Association (see: Association -
FEDAI) goods
Claiming 133
Foreign Trade 50 Cleared 140
advice 36 Examination 193, 200
bodies 3 movement 147
magazines 43 owner 149
opportunities 9 Readying 178
research 36 Registration 200
Shipped 130, 132
formalities valuation 142
Customs 173
Insurance 179 GSP 127, 128, 147, 148
Port 175, 183, 201
GSTP 128
Freight
bill 143 Guaranteed Remittance (GR)
certificate 199 132
charges 143, 160

34
 Establishing Exports & Imports Business in India

H
Hague rules 140, 146 Importer - Exporter code no
176
Haldia port 188
Incentives
Harmonized system 42, 186, excise 182
196 handbook 33
refunds 174
Homogeneous bulk 152 schemes 186

Horticulture produce 9 INCOTERMS 66, 67, 68, 69,

70, 72, 73, 74, 75, 76, 77, 80, 81,
I 82, 83, 107, 139, 145, 156
IAA 82
Indent 196
ICD 144
India's 129
Icegate 203 economy 54
exports 50, 54, 58
IEC 41, 175, 176, 193, 203 share 63
trade 43, 58
IGM 195, 199, 200

IIFT 33, 36, 41, 42, 45, 205 Industrial

cluster 54
IMF 13 machines 8
Import parks 53
categories 192 sectors 30
contract 66 zones 53
control 129
data 42, 180 Inland
duties 72, 191, 194, 195, 197, cargo 171
201 container 53, 144, 185
framework 114 freight 54
information 41 transit 163
license 99, 194 transportation 106
policy 42, 50, 52, 63 waterway 71
procedure 202
procedures 6, 52 Input – output norms 52
prohibition 52
quotas 194 Inspection
regulations 74 agencies 106, 114, 132
restrictions 194 certificate 109, 129, 186
statistics 33 council 45
statistics 33 letter 116
tariff 194 physical 183
value 195 quality 182

35
 Dr. Vijesh Jain

recognitions 129
Institutional standards 129
framework 3, 12, 38, 39 transportation 150, 170
support 13
Internationalization 17, 23
Insurance
against 71 Inventory 123
agencies 172
arrangement 159 Invoice
broker 155 Commercial
certificate 158 Consular 117, 120, 182
charges 97 Legalized 120
claims 167, 168, 170 value 98
companies 156
contracts 163 ISBP 103, 104
corporations 156
costs 173 ISC - International Strike Clause
cover 161 150, 170
coverage 149, 163
experts 151 ISLFTA 128
paid 69
policy 166 ITC - HS classification 33, 42,
premium 116, 155 52, 57, 196, 203
protection 151
shipping 174 ITPO 6, 7, 33, 34, 41, 46
terminology 155
underwriters 149 Ivory 112

Insured value 167, 168 IWC - Institute War Clause 150,

170
Insurer 91, 112, 155, 156, 157,
160, 161, 163, 164, 170 J
Jettisoning 164, 167
Interest
cover 159 JNPT 71
insurance 86
rates 51 K
subsidy 51 Kandla SEZ 44, 189

International Kolkata Port Trust 189

contract 65, 81, 83, 85
conventions 145 KPCL 189
customs 150
exhibitions 57 KSPL 189
law 146
logistics 143 L
patent 18 L/Cs 95, 97

36
 Establishing Exports & Imports Business in India

chamber 120, 129

Labor costs 10, 21 cultures 205
demand 21
Landed cost 191
Loss
Latest UCP 91, 104 Constructive 167

LCL Shipment 179 M

MAI 55
Lead time 86
Main
Legal carriage 68
commentators 93 carrier 139
compliance 175 CFR 69
costs 66 FAS 69
fees 162
framework 106, 107 Major
guidance 83 disputes 81
legal systems 145 Exclusions 163
options 145 risk 104
proceeding 197
provisions 60 Malicious damage 165, 166, 167
rules 65
stipulations 163 Mandatory
undertaking 134 provisions 85
rules 78
Legal jurisdiction 66
marine
Let export 187
Maritime board 188
Letter of credit 3, 52, 66, 81, 87,
88, 89, 90, 91, 92, 93, 94, 97, Maritime commissioner 182
100, 101, 102, 103, 104, 118,
119, 120, 124, 131, 138, 141, Maritime peril 162
142, 144, 151, 199
Maritime risks 162
Licensed surveyor 169
Marked ‘freight prepaid' 99
Licensing authority 176
Market 60
Lloyd's
brokers 155 Marks 119, 122, 123, 124, 133
committee 150
underwriters 155 Master
cartons 124, 127
Local circular 60
buyers 8 documents 114

37
 Dr. Vijesh Jain

Mate’s receipt 116, 141, 187 Nautical miles 197

MDA 186 NCTI- India 45

MDA-Market Development Negotiable

Assistance 36, 186 copy 117, 131, 182, 183
documents 79, 80, 140
MEIS 58, 59, 60 instrument 144, 145, 147

MEPZ 44 Negotiating bank 91, 101, 102,

182
Mercantilism 14
Negotiation docs 117
Merchandize exports 58
Neo-bulk 152, 154
Merchant exporter 24
NEPZ 44
MMTC 40, 46
New India Assurance Company
MPEDA 35, 45 170

MPSEZ 190 Non

negotiable copy 183
MPTGOA 190 negotiable documents 79, 80,
140
MSME 27, 34, 36 payment risk 41
scheduled articles 113
MTD 143
Non-tariff barriers 39, 128, 195
MTO 144
Notified
Multilateral agency 129
agreement 148 place 71
document 148
trade 13 Notify party 196

N NSIC 32, 36, 37

Named
beneficiary 90 NVC 140
consignee 138, 141
destination 71, 72 O
place 69, 70, 71, 72, 144 OGL 192, 193, 199
port 71
Open
Natural account 85
calamities 130, 150, 162 cover 158
endowment 14 insurance 158

38
 Establishing Exports & Imports Business in India

policy 151, 158, 159 133, 198

of disembarkation 196
Opening bank 90 of distress 164
of embarkation 196
Originating carrier 143 of export 71
of loading 119, 122, 133, 186,
Over valuation 197 198
of origin 74, 179, 180
P of shipment 133
Package number 124, 125 Procedures 200

Packing port of shipment 71, 74

costs 195
credit 52 Port trust copy 116
list 99, 108, 116, 117, 120,
123, 124, 125, 126, 181, 182, Post shipment documents 117,
193, 199 174, 183, 184

Panamax 153 Pre-shipment

credit 183
Paradip Port 190 documents 116, 118, 183
finance 96
Part shipment 120 inspection 75, 78, 183
quality inspection 129
Partial
loss 167 Preferential certificate of origin
shipment 99 127, 129

Particular average loss 168 Principal commercial

documents 118, 183
PEC 46
Prohibited goods 193
Performa invoice 116
Promotional measures 53
Performance obligation 97
PSU 36
Personal ledger account 134
Purchase
Pisciculture 56 contracts 6
order 99, 173, 199
PLA 134
Purveyor 40
Port
of destination 71, 136, 137, Q
138, 140, 147, 156, 158, 178, Quantitative restrictions 50
179, 180, 181 Quasi-negotiable instrument
of discharge 119, 122, 131, 145

39
 Dr. Vijesh Jain

R proceeds 81, 88, 94, 104, 118,

RBI 50, 132, 133, 172, 177, 182, 147
183, 184, 185, 193 tax 197
terms 85
RCMC - Reg. cum membership
certificate 63, 176, 199 Salvage charges 164

Re-export 195 Sample receipt 85

Real terms 145 Sanitary

Reduced rates 187 authorities 135
certificate 135
Regulatory documents 108, 114,
116, 118, 131, 183 Scheduled
articles 112, 113
Resident foreign buying agent banks 185
22, 23 goods 112

Restricted goods 193 Scheme

Liberalized remittance 62
Revocable letter of credit 93 MEIS 58
Niryat Bandhu 203
Revolving credit 95 SEIS 59
Served from india 59
Ricardo 14 STP 56, 57
SDDA 65
Risks
Cargo 179 SDF 132
Default 85, 93, 97, 103, 110,
179 Sea
Extraneous 162 carriage 80, 137
Foreign exchange fluctuations vessel 200
179 waybills 79, 80
Inputs 179
Payment 179 Seaworthy packing 93, 157
political 179
Supplementary 165 SEEPZ 44
Transit 162
SEIS 58, 59
RLA 176
Seller's
S bank 94, 101
SAARC 128, 152 bill 120
contingency policy 159
Sales credit 96
contracts 80, 81, 90, 118, 169, obligations 77, 78
183

40
 Establishing Exports & Imports Business in India

Sericulture 56 T
Tariff
Service tax 59 barriers 21, 39, 120, 128, 195
benefits 129
Services exports 35, 58 calculations 129, 142
concessions 13, 127, 128
SEZ 48, 57, 190, 198 notification 198
rules 198
SFIS 59
Tata 18, 171
Ship's hold 168
Time draft 87, 94, 95
Shipment
advice 116, 117, 131, 181 Time policies 158
bill 139
clause 142 Total
credit 177, 183 gross 127
documents 113, 116, 117, loss 158, 165, 167
118, 174, 183, 184
finance 96 TQM 55

Shipper's order 138 Trade disputes 60, 66, 81, 181

Shrink-wrap 152
Trademarks 52
Sight
Bill 130 Transferable credits 95
Draft 65, 87
Transferable duty 59
SOFTEX 132
Transport documents 3, 79, 80,
Sovereign law 146 101, 109, 116, 136, 139, 143,
144, 145, 148, 186, 195
Special
additional duty 197, 198 Transportation risks 91, 149,
brand rate 198 172
declaration policy 159
economic zone (SEZ) 39, 44, Twin-deck vessels 153
45, 57, 198
U
Standby credits 97 UCP 79, 91, 93, 94, 100, 103,
104
STC of India 46
UCPDC 88, 93, 107, 173
Stipulated documents 87, 88
UNCTAD 13, 39, 143
SWIFT 103

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 Dr. Vijesh Jain

Underwriter 149, 150, 155, 156,

157, 163, 166, 170

Usance
Bill 130
Document 108
Draft 87

V
Value
Assessed 133, 169, 202
Customs 195
Declared 133, 197
Invoice 98, 102

Vehicle ticket 116

VKGUY 59

W
War clauses 150, 162, 163, 165

War perils 162

WTO 12, 13, 39, 50, 51, 52, 129

Underwriter 149, 150, 155, 156,
157, 163, 166, 170

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 ABOUT THE AUTHOR

Dr. Vijesh Jain is Associate Professor of International Business. Having

Masters in International Business from IIFT, New Delhi and engineering
graduation from BITS, Pilani, his PhD dissertation was related to the study
of level of comfort of local cultures with foreign cultures in a global
context. Apart from teaching IB students at I.T.S, Dr. Vijesh Jain regularly
conducts training programs and workshops for industry persons and faculty
members. He regularly publishes research papers in peer reviewed
international journals and have attended international conferences on
international business and trade in different countries including Turkey and
Holland. He has worked in corporate sector in the area of international
trading for more than 17 years and is involved with academics and research
for more than last 10 years. During his career in corporate and academics
he has interacted, visited and dealt with numerous global companies,
brokers, agents, distributors, advertisers and faculty members in several
countries. He is also spearheading a manor global research project having
several foreign collaborators. He regularly contributes articles and videos on
his blog at www.vijeshjain.com

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