CHAPTER-1

1.1 INTRODUCTION OF EXPORT

Export in itself is a very wide concept and lot of preparations is required by a
n exporter before starting an export business. A key success factor in starting
any export company is clear understanding and detail knowledge of products to be
exported. In order to be a successful in exporting one must fully research its
foreign market rather than try to tackle every market at once. The exporter shou
ld approach a market on a priority basis. Overseas design and product must be st
udies properly and considered carefully. Because there are specific laws dealing
with International trade and foreign business, it is imperative that you famili
arize yourself with state, federal, and international laws before starting your
export business. Price is also an important factor. So, before starting an expor
t business an exporter must considered the price offered to the buyers. As the s
elling price depends on sourcing price, try to avoid unnecessary middlemen who o
nly add cost but no value. It helps a lot on cutting the transaction cost and im
proving the quality of the final products. However, before we go deep into "How
to export ? let us discuss what an export is and how the Government of Indian has
defined it. In very simple terms, export may be defined as the selling of goods
to a foreign country. However, As per Section 2 (e) of the India Foreign Trade
Act (1992), the term export may be defined as 'an act of taking out of India any
goods by land, sea or air and with proper transaction of money. Exporting a prod
uct is a profitable method that helps to expand the business and reduces the dep
endence in the local market. It also provides new ideas, management practices, m
arketing techniques, and ways of competing, which is not possible in the domesti
c market. Even as an owner of a domestic market, an individual businessman shoul
d think about exporting. Research shows that, on
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average, exporting companies are more profitable than their non-exporting counte
rparts.
Definition of 'Export'
A function of international trade whereby goods produced in one country are ship
ped to another country for future sale or trade. The sale of such goods adds to
the producing nation's gross output. If used for trade, exports are exchanged fo
r other products or services. Exports are one of the oldest forms of economic tr
ansfer, and occur on a large scale between nations that have fewer restrictions
on trade, such as tariffs or subsidies. Most of the largest companies operating
in advanced economies will derive a substantial portion of their annual revenues
from exports to other countries. The ability to export goods helps an economy t
o grow by selling more overall goods and services. One of the core functions of
diplomacy and foreign policy within governments is to foster economic trade in w
ays that benefit both parties involved.
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1.2 OBJECTIVES
Undertaking market studies in individual foreign countries on regular as well as
an ad-hoc basis. Organizing visits of delegations of members to explore opportu
nities for Services Organizing, participation in seminars, conferences and meets
in India and abroad, trade fairs/exhibitions/buyer-seller meets. Disseminating
information regularly and continuously in foreign countries regarding the potent
ial image of Indian Services sector and informing the public in foreign countrie
s the advantages of availing Services from India. Compiling statistics and other
relevant information regarding international trade in Services. Providing comme
rcially useful information and assistance to members in developing and increasin
g export of Services. Disseminating information useful to members by literatures
, discussions, books, correspondence or otherwise. Offering professional advice
to members in areas such as technology upgradation, quality and design improving
, standards and specifications of the products and Services; Maintaining liaison
with agencies dealing in international trade and Services so as to promote expo
rt of Services from India. Communicating with the chambers of commerce and other
mercantile chambers of commerce, professional bodies, other mercantile and publ
ic bodies in India and abroad for promoting measures for the advancement of expo
rts of Services from India.

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1.3 Methodology
The methodology used for the implementation of the assigned project is based on
secondary data. Research design for the descriptive study is of explanatory type
and the forms is given to discover the possible measure by detailed analysis th
is report also based on descriptive research because it provide the detailed kno
wledge about the INDIA EXPORT TRADE. Secondary data is to be used in the researc
h, have been collected from various magazines, news paper, websites and other so
urce.
1.4 Sources of Data
Secondary data collect method is used for this project and have been collected f
rom various magazines, news paper, websites, etc.
1.5 Scope of Study
The study is limited to INDIA EXPORT TRADE as it is a very vast topic, to study.
1.6 Chapter wise Scheme
The present study is an endeavor to evaluate the study of INDIA EXPORT TRADE. Th
e analysis and evaluation is based on secondary data. The present study has been
divided into five chapters. Chapter one is introductory in nature and discusses
the origin of INDIA EXPORT TRADE. It further provides the overview of primary m
arket in India. And also explains the scope of the study, data collection and st
atistical tools for analysis. The reviews of the selected studies in India cover
ing various aspects of EXPORT TRADE has been covered in the second chapter. Chap
ter three evaluates the various aspects of the INDIA EXPORT TRADE. Chapter four
gives the detailed analysis at different points of time in the chapter. Chapter
five entitled Findings and Suggestions summarizes the findings of the study. An at
tempt has been made to draw the conclusions from the present study.
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CHAPTER-2
STUDY OF EXPORT TRADE
INTRODUCTION Trade & Export:
A member of the World Trade Organization since 1996, the UAE supports open trade
and has stable trade relations with countries throughout the world. Thanks to i
ts open economy, attractive business environment and continued economic growth,
the UAE has emerged as a key international trade hub between East and West. The
UAEs main export commodities are crude oil, natural gas, re -exports, dried fish
and dates. Its main import commodities are machinery and transport equipment, ch
emicals and food. The UAEs top 5 import partners are: Rank 1. Country India 17.50
% China 14.00% United States 7.70% Germany 4. 5.60% Primary Products Primary pro
ducts: cotton, accessories, gems and jewelry, man-made yarn, fabrics, manufactur
ers of metals, cotton yarn, marine products, machinery and instruments, plastic
and linoleum products, tea. Primary products: textile products, clothes, light i
ndustrial products, handicrafts, machinery and products made from gold, silver,
copper, iron, tin. Primary products: transport equipment, machinery, computer &
electronic products, primary metal manufacturing, chemicals. Primary products: m
achineries, electronics, chemical products, measurement and control technology,
iron, steel.
2.
3.
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Japan 5. 4.82%
Primary products: transport equipment, electrical machinery, general machinery,
foodstuff, raw materials, mineral fuels.
Perspective on International Trade
International trades between countries and across continents have existed for ce
nturies including previous civilizations. Traditionally international trade cons
isted of traded goods like textile, food items, spices, precious metals, preciou
s stones, and objects of art and various items across the borders. Everybody has
heard of the silk route as well as amber road and other famous routes that exis
ted and the ports and settlements that flourished due to the trade, which was ca
rried on through land route as well as sea routes. We have come a long way since
the earlier times and International trade today has taken on new dimension. It
was a fact earlier that impact of trade between two countries was not limited to
economics alone, but fuelled political, social ambitions too. Today with the ad
vancement of technology and impact of globalization has made it necessary for al
l countries to engage necessarily in international trade for their survival. Var
ious factors including but not limited to industrialization, development of tran
sportation, globalization, technology that enables trade and communication has c
ontributed to change in the format of business organizations as well as trade pr
actices. Companies and Organizations today are no longer entities with a local i
dentity. Multinational organizations have emerged through the previous century w
ith footprints all over the globe. They have in fact shrunk the earth and change
d the way businesses are conducted. Companies no longer limit themselves to loca
l markets. They no longer depend upon local resources. These companies setup man
ufacturing wherever it is conducive in terms of cheaper resource availability as
well as support from local government and in terms of markets, geographical bou
ndaries do not bother them. They are present everywhere.
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Technology in terms of communication as well as software technology has changed

the way business organizations manage activities be it manufacturing, procuremen
t, finance or sales. Today software applications drive the processes and work at
the speed of thought. In present scenario, no country can afford to remain isol
ated from and not participate in globalization. While countries do open their ec
onomies to global competition, they need to tread very carefully not to upset th
eir domestic economy and protected industries. This balancing act is often manag
ed through individual countries trade and tariff policy, which forms a part of e
ach countries foreign trade policy that governs its approach to international tr
ade and commerce. Post Second World War, World Trade Organization has been playi
ng major role in facilitating and attempting to streamline the global trade and
tariff structures with an aim to move towards free trade. However in reality, fr
ee trade may just be a dream as long as there is no parity between developed and
developing economies. Today most of the countries are party to several bi-later
al as well as multi lateral tariff and trade agreements like GATT General Agreem
ent on Tariffs and Trade though which they regulate imports and exports to and f
rom specific countries.
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EXPORT DOCUMENTATION
Introduction The export process is made more complex by the wide variety of docu
ments that the exporter needs to complete to ensure that the order reaches its d
estination quickly, safetly and without problems. These documents range include
those required by the South African authorities (such as bills of entry, foreign
exchange documents, export permits, etc.), those required by the importer (such
as the proforma and commercial invoices, certifcates of origin and health, and
preshipment inspection documents), those required for payment (such as the South
African Reserve Bank forms, the letter of credit and the bill of lading) and fi
nally, those required for transportation (such as the bill of lading, the airway
bill or the freight transit order). Documentation requirements for export shipme
nts also vary widely according to the country of destination and the type of pro
duct being shipped. Most exporters rely on an international freight forwarder to
handle the export documentation because of the multitude of documentary require
ments involved in physically exporting goods and it is strongly recommended that
you also make use of a freight forwarder to help you work your way through the
maze of documentation. Click here for a list of freight forwarders that you can
approach to help you. The benefits of documentation Documentation is a key means
of conveying information from one person or company to another, and also serves
as permanent proof of tasks and actions undertaken throughout the export proces
s. Documentation is not only required for your own business purposes and that of
your business partner, but also to satisfy the customs authorities in both coun
tries and to facilite the transportation of and payment for goods sold. One valu
e of documentation is that copies can be made and shared with the parties involv
ed in the export process (although you should always ensure that you make identi
cal copies from an agreed-upon master - it is no use making changes without the
other party s agreement and then presenting these as the "latest" copies). If th
e documentation is complete, accurate, agreed upon by the parties involved and s
igned by each of these of these parties (or their representatives), the document
will represent a legally binding document.
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Function of export documentation

Export documentation may serve any or all of the following functions:
An attestation of facts, such as a certificate of origin Evidence of the terms a
nd conditions of a contract if carriage, such as in the case of an airway bill E
vidence of ownership or title to goods, such as in the case of a bill of lading
A promissory note; that is, a promise to pay A demand for payment, as with a bil
l of exchange A declaration of liability, such as with a customs bill of entry A
receipt for goods received.
India Export Trade Intelligence India exports are growing everyday and you can a
ccess this vast market with India Export data. Indian Export data is based on ac
tual import bill of entries filed with Indian Customs. This data can help you lo
cate Indian Sellers and Exporters with their products. India Export Data is the
best tool to access new emerging India export Market. Info drive India provides
India Export market Research based on your requirements, we can compile a highly
customized, accurate Directory of Active Indian Seller with product and shipmen
t data and contact details. Data Fields:
Indian Exporter Name, Address, Tel, Fax, Email Contact Person ( Wherever availab
le - as per Customs Notification no 128/ 2004 ) Data of Shipment Harmonized Codes
Product Description Actual Product Description as entered in Shipping Documents
Export Value in INR and US $ Quantity and Unit of Quantity Country of Destinati
on Port of Destination Country of Origin
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CHAPTER-3 STUDY OF INDIA EXPORT TRADE

INTRODUCTION:
Export means the transferring of any good from one country to another country in
a legal way for the purpose of trade. Export goods are provided to the foreign
consumers by the domestic producers.
Indian Exports:
The history of Indian exports is very old. During ancient times India exported s
pices to the other parts of the world. India was also famous for its textiles wh
ich were a chief item for export in the 16th century. Textiles and cotton were e
xported to the Arab countries from Gujarat. During the Mughal era India exported
various precious stones such as ivory, pearls, tortoise stones etc. But during
the British era, Indian exports declined as the East India Company took control
of foreign trade. Markets Though India has seen some product diversification in
its export basket, it has not expanded significantly in the two big markets-Afri
ca and Latin America. Indias business with South Asian countries is also negligib
le. This region has not been integrated with the global economy, though politica
l and economic initiatives have been taken in the recent past in this direction.
Leading Export Items of India In the past ten years, Indian exports have grown
at a rate of nearly 22%. Some commodities have enjoyed faster export growth than
others. Some of India s main export items are cotton, textiles, jute goods, tea
, coffee, cocoa products, rice,
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wheat, pickles, mango pulp, juices, jams, preserved vegetables etc. India export
s its goods to some of the leading countries of the world such as UK, Belgium, U
SA, China, Russia etc. Restriction on the Exports of Items However there are som
e restrictions on the export of goods. Under sub section (d) of section 111 and
sub section (d) of section 113, any good exported or attempted to be exported, c
ontrary to any prohibition imposed by or under the customs act or any other law
is liable for confiscation. Export Trends If the Indian economy grows at the sam
e pace, India would most definitely export goods worth US $500 billion by 2013 a
nd may supersede the exports of other large developing countries like Brazil. Th
e Way Ahead India needs the right mix of policy formulation sector focus and ind
ustry led initiatives to move up the value chain in the global export basket The
Opportunity It is very clear that Indian exports have still not achieved their
true potential and there exists immense opportunities for expanding the basket o
f Indias exports. With a strategic attention on the new markets that are evolving
due to free trade, India is witnessing a boom in both manufacturing and service
s. Problems of the Indian Export Sector There are few problems which need to be
solved before India makes a mark for itself in the export sector. The Indian goo
ds have to be of superior quality. The packaging and branding should be such tha
t countries are interested to export from India. At the same time India must loo
k for potential market to sell their goods. The government should frame policies
which gives boost to the exports.
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Directional Change in Exports India has seen massive directional change in the c
ontext of origin of demand for Indian products. Till 2001-02 North America and t
he EU markets shared nearly 21% and 23.2 % respectively of total exports and the
remaining to the rest of the.
Export License in India
To export in India, you must first obtain an export license. Before submitting y
our application, you should consult the latest import and export procedures and
policies, which list all the regulations for obtaining an export license in Indi
a. Before you receive a license, a careful review will be conducted of the facto
rs surrounding the your intended export transactions. Licensing is determined by
the goods to be exported and the port of export. Setting up an appropriate busi
ness organization The first and the foremost question you as a prospective expor
ter has to decide are about the kind of business organisation needed for the pur
pose. You have to take a crucial decision as to whether a business will be run a
s a sole proprietary concern or a partnership firm or a company. The proper sele
ction of organisation will depend upon
Your ability to raise finance Your capaci
ty to bear the risk Your desire to exercise control over the business Nature of
regulatory framework applicable to you
If the size of the business is small, it would be advantageous to form a sole pr
oprietary business organisation. It can be set up easily without much expenses a
nd legal formalities. It is subject to only a few governmental regulations. Howe
ver, the biggest disadvantage of #138;sole proprietary business is limited liabi
lity to raise funds which restricts its growth. Besides, the owner has unlimited
personal liability. In order to avoid this disadvantage, it is advisable to for
m a partnership firm. The partnership firm can also be set up with ease and econ
omy. Business can take benefit of the varied experiences and expertise of the pa
rtners. The liability of the partner though joint and several, is practically di
stributed
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amongst the various partners, despite the fact that the personal liability of th
e partner is unlimited. The major disadvantage of partnership form of business o
rganisation is that conflict amongst the partners is a potential threat to the b
usiness. It will not be out of place to mention here that partnership firms are
governed by the Indian Partnership Act, 1932 and, therefore they should be form
within the parameters laid down by the Act. Exporters Manual and Documentation C
ompany is another form of business organisation, which has the advantage of dist
inct legal identity and limited liability to the shareholders. It can be a priva
te limited company or a public limited company. A private limited company can be
formed by just two persons subscribing to its share capital. However, the numbe
r of its shareholders cannot exceed fifty, public cannot be invited to subscribe
to its capital and the member s right to transfer shares is restricted. On the
other hand, a public limited company has a minimum of seven members. There is no
limit to maximum number of its members. It can invite the public to subscribe t
o its capital and permit the transfer of shares. A public limited company offers
enormous potential for growth because of access to substantial funds. The liqui
dity of investment is high because of easiness of transfer of shares. However, i
ts formation can be recommended only when the size of the business is large. For
small business, a sole proprietary concern or a partnership firm will be the mo
st suitable form of business organisation. In case it is decided to incorporate
a private limited company, the same is to be registered with the Registrar of Co
mpanies.
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India Exim Policy - Foreign Trade Policy

Exim Policy or Foreign Trade Policy is a set of guidelines and instructions esta
blished by the DGFT in matters related to the import and export of goods in Indi
a. The Foreign Trade Policy of India is guided by the Export Import in known as
in short EXIM Policy of the Indian Government and is regulated by the Foreign Tr
ade Development and Regulation Act, 1992. DGFT (Directorate General of Foreign T
rade) is the main governing body in matters related to Exim Policy. The main obj
ective of the Foreign Trade (Development and Regulation) Act is to provide the d
evelopment and regulation of foreign trade by facilitating imports into, and aug
menting exports from India.
EXIM Policy
Indian EXIM Policy contains various policy related decisions taken by the govern
ment in the sphere of Foreign Trade, i.e., with respect to imports and exports f
rom the country and more especially export promotion measures, policies and proc
edures related thereto. Trade Policy is prepared and announced by the Central Go
vernment (Ministry of Commerce). India s Export Import Policy also know as Forei
gn Trade Policy, in general, aims at developing export potential, improving expo
rt performance, encouraging foreign trade and creating favorable balance of paym
ents position.
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Market Entry India, Exporting to India

Entering the Indian market by exporting to India (directly or indirectly) requir
es only a small investment from the producer (e.g. market research, trade fair p
articipation, B2B Meetings, eventual travel expenses etc.) Direct Export means t
he producers sells directly to the importer / distributor in India. Whereas in t
he case of indirect export, a European broker / trading company or the importers
subsidiary in Europe will buy from the producer and sell to the importer in Ind
ia. Indirect Export is the easiest way to sell in the Indian market. The produce
r does not even have to deal with international billing, shipping documents or p
ayment methods. Investments and risks are very low. The drawback of the indirect
export is that the producer cannot really control where his products end up and
he most probably will never be able to build his own brand in the Indian market
.
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Since exporting to India involves minimal costs and risks producers can offer a
lower product price. Moreover many European trade and government associations sub
sidies export promotion activities. The disadvantage, which come along with expo
rting, are the rather high transportation costs to India, high import duties and
other tariff and nontariff barriers. Also the producer will have no or little u
nderstanding of the Indian market and will not be able to anticipate changes in
consumer demands. Being a pure exporter will also create some image problems, si
nce the European company will never be considered as an Indian player, which mea
ns no local and fast after sales service. Another risk factor when exporting to
India are the currency fluctuations. The Indian Rupee / Euro exchange rate keeps
on fluctuating +/- 15%, making it difficult for Indian importers to work out th
eir long term pricing strategy. If the Rupee looses too much against the Euro, t
his could mean the importer will stop buying from Europe and procure from other
countries. Still, exporting to India remains the most favorite market entry stra
tegy . At least for the beginning. Many European companies decide to start with
export and once a certain trade volume is reached and they are sure that their p
roducts are well accepted by the Indian consumer, a foreign direct investment to
set up their own subsidiary in India can be made. Many global beer brands (like
Fosters, Tiger or Carlsberg) initially used to export to India and only after r
eaching a certain threshold volume, started to produce locally in India.
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EXPORT PROCEDURE IN INDIA

Documents Required Export procedure describes the documents required for exporti
ng from India. Special documents may be required depending on the type of produc
t or destination. Certain export products may require a quality control inspecti
on certificate from the Export Inspection Agency. Some food and pharmaceutical p
roduct may require a health or sanitary certificate for export. Shipping Bill/ B
ill of Export is the main document required by the Customs Authority for allowin
g 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 men
tioned below:
Export duty/ cess Free of duty/ cess Entitlement of duty drawback Entitlement of
credit of duty under DEPB Scheme Re-export of imported goods
The following are the export documents required for the processing of the Shippi
ng Bill:

GR forms (in duplicate) for shipment to all the countries. 4 copies of the packi
ng list mentioning the contents, quantity, gross and net weight of each package.
4 copies of invoices which contains all relevant particulars like number of pac
kages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full descripti
on of goods etc. Contract, L/ C, Purchase Order of the overseas buyer. AR4 (both
original and duplicate) and invoice. Inspection/ Examination Certificate.
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The formats presented for the Shipping Bill are as given below
White Shipping Bill in triplicate for export of duty free of goods. Green Shippi
ng Bill in quadruplicate for the export of goods which are under claim for duty
drawback.
Note: - For the goods which are cleared by Land Customs, Bill of Export (also of
4 types - white, green, yellow & pink) is required instead of Shipping Bill.
Documents Required for Post Parcel Customs Clearance
In case of Post Parcel, no Shipping Bill is required. The relevant documents are
mentioned below:

Customs Declaration Form - It is prescribed by the Universal Postal Union (UPU)

and international apex body coordinating activities of national postal administr
ation. It is known by the code number CP2/ CP3 and to be prepared in quadruplica
te, 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 destina
tion in case the address is non-traceable or the parcel is refused to be accepte
d. 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 circu
mference 0.9 m./ 2.00 m. Maximum weight: 10 kg usually, 20 kg for some destinati
ons. Commercial invoice - Issued by the seller for the full realizable amount of
goods as per trade term. Consular Invoice - Mainly needed for the countries lik
e Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Australia, Fiji,
Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format a
nd is signed/ certified by the counsel of the importing country located in the c
ountry of export. Customs Invoice - Mainly needed for the countries like USA, Ca
nada, etc. It is prepared on a special form being presented by the Customs autho
rities of the importing country. It facilitates entry of goods in the importing
country at preferential tariff rate. Legalized/Visaed Invoice - This shows the s
eller s genuineness before the appropriate consulate/ chamber of commerce/ embas
sy. It do not have any prescribed form.
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Certified Invoice - It is required when the exporter needs to certify on the inv
oice that the goods are of a particular origin or manufactured/ packed at a part
icular place and in accordance with specific contract. Packing List - It shows t
he details of goods contained in each parcel/ shipment. Certificate of Inspectio
n - It shows that goods have been inspected before shipment. Black List Certific
ate - It is required for countries which have strained political relation. It ce
rtifies that the ship or the aircraft carrying the goods has not touched those c
ountry(s). Weight Note - Required to confirm the packets or bales or other form
are of a stipulated weight. Manufacturers/ Supplier s Quality/ Inspection Certif
icate. Manufacturer s Certificate - It is required in addition to the Certificat
e of Origin for few countries to show that the goods shipped have actually been
manufactured and are available. Certificate of Chemical Analysis - It is require
d to ensure the quality and grade of certain items such as metallic ores, pigmen
ts, 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 Conditionin
g - It is issued by the competent office to certify compliance of humidity facto
r, dry weight, etc. Antiquity Measurement - Issued by Archaeological Survey of I
ndia in case of antiques. Transshipment Bill - It is used for goods imported int
o a customs port/ airport intended for transshipment. Shipping Order - Issued by
the Shipping (Conference) Line which intimates the exporter about the reservati
on of space of shipment of cargo through the specific vessel from a specified po
rt and on a specified date. Cart/ Lorry Ticket - It is prepared for admittance o
f the cargo through the port gate and includes the shipper s name, cart/ lorry N
o., marks on packages, quantity, etc. Shut Out Advice - It is a statement of pac
kages which are shut out by a ship and is prepared by the concerned shed and is
sent to the exporter.
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FEDRATION OF INDIAN EXPORT ORGANISATION

FIEO-India s Premier Institution for International Trade The Federation of India
n Export Organizations represents the Indian entrepreneurs spirit of enterprise i
n the global market. set up in October, 1965, the Federation, known popularly as
"FIEO", has kept pace with the country s evolving economic and trade policies,
and provided the content, direction and thrust to India s expanding internationa
l trade. As the apex body of all Indian export promotion organizations, FIEO wor
ks as a partner of the Government of the India to promote Indian exports. Today,
FIEO expresses all the dynamism and resurgence that are the hallmark of India s
open, liberal and progressively market-friendly economic and trade regime, repr
esenting the Indian export promotion effort in its entirely. Its membership, lar
gely comprising professional exporting films or long experience called Governmen
t recognised Export Houses, Trading Houses, Star Trading Houses and Super Star T
rading Houses and Consultancy exporting firms, contributes 72 % of the total exp
orts of India. In essence, FIEO represents directly or indirectly, over 100,000
exporters across India. Exports by FIEO members comprise a wide spectrum of prod
ucts including Gems & Jewellery, Textiles, Garments, Engineering Goods, Leather
and Leather Products, Handicrafts, Chemicals and allied products, Cosmetics, Dru
gs and Pharmaceuticals, etc. as well as a wide range of Consultancy Services cov
ering Infrastructure, Engineering, Industries, Cement, Leather, Paper & Rubber I
ndustries. Agro-based Industries, Small Scale Industries etc. The activities of
our members also include manufacturing, international trading, investment and jo
int ventures etc. To any foreign investor, user or seller, FIEO is the one-stop
organisation which will put him in touch with a trade partner or high repute, ba
cked by its own credentials as an organisation of excellence in India. FIEO has
forged strong links with counterpart organisations in several countries as well
as international agencies to enable direct communication and interaction
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between India and world businessmen. It is registered with UNCTAD as a national

non-Government organisation, and has direct access to information/data originati
ng from UN bodies and world agencies like the IMF, ADB, ESCAP, WORLD BANK, FAO,
UNIDO and others. In addition, it has bilateral arrangements for exchange of inf
ormation as well as for liasioning with several How FIEO has developed: Today th
e Federation is proud of the fact that its members accounts for an estimated exp
orts of US$ 24.3 billion out of the total India s export of US$ 33.0 billion. It
shows for itself an achievement which notes that approximately 73.6 % of the to
tal exports from India emanate from FIEO members. This enviable position has bee
n reached rapidly in a very short span, albeit with a long legacy behind it. It
was in the year 1965 that this Federation came into being with the support of Mi
nistry of Commerce. Government of India and private trade and Industry. It has n
ow graduated to a level of organisation providing global link to exporters and w
orking as a nerve centre of Indian exports. FIEO ACTIVITIES What FIEO Specific
ally achieves The Federation keeps its members posted with the latest developmen
ts in the field of Export / Import by organising Seminars and Workshops, Invitin
g delegations, organising Buyer-Sellermeets in India and abroad. Trade Fairs, pr
oviding advisory and consultative services and bringing about constant interacti
on between member exporters and various Government departments. The end result o
f such activity is discussion of issues in depth, evolving of suitable action pl
ans to promote Indian exports, formulation and dissemination of government polic
ies pertaining to all sectors in manufacturing and merchant exporting and appris
ing Government on problems and suggesting remedial measures. What FIEO does When
Federation was constituted in 1965, certain economic realities had taken shape
in India. There was greater industrialisation, centralised planning and
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Government controls. Side by side, there existed a buoyant and thriving private
sector. Thus there was an urgent need for :

Wider exchange of views between allied industies in public as well as the privat
e sectors. Apprising all concerned bodies of Status of exports. Monitoring the e
ffects of Government policies on Exports - Imports. Interacting with the Governm
ent on behalf of the exporting community. Basically, the Federation fulfills the
above needs in these three ways : o Sending representations on policy matters t
o Central and State (Regional)
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India s Rupee Keeps Falling and the Trade Deficit Keeps Widening:Its standard macroeconomics: When a countrys currency declines, its exporters sho
uld soon get a boost as the lower currency makes their goods more competitive. B
y that rule, India should be enjoying an export boom. Since the start of May, th
e currency has dropped 23 percent, making it one of the worlds worst performers.
Sure enough, exports did go up in July, rising 11.6 percent year-on-year, the be
st increase in more than 12 months.
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PROBLEMS OF RICE EXPORT FROM INDIA

India is facing stiff competition in the world markets for export of rice. Besid
es, there are many domestic problems for rice exporters. If these internal probl
ems are relaxed to the extent possible, the exporters may find easy way to boost
rice export and such measures will go a long way to sustain the exports. Some o
f the major problems are discussed in this chapter below: 1. As per the state Go
vt. policy, various taxes are imposed on rice exports, such as the states are im
posing Purchase Tax (on indirect export), Market Fees, Rural Development Fund, A
dministrative Charges etc. These taxes are rendering the pricing of rice interna
tionally in competitive. Thus, Indian rice becomes costlier in the international
market as compared to other competing countries in the world and Indian rice ex
ports get setback many times. In fact, in Pakistan rice meant for exports specia
lly the branded ones; duties are extremely low or duty free. 2. There is lack of
proper infrastructural facilities. Many times exporters, when they carry their
stock to sea port and if the stock is not loaded due to some reason or the other
, exporters do not find godown or proper place to store their stocks properly an
d safely at sea port, exporters have to face lot of difficulties, besides, it ad
ds additional expenditure to the exporters. 3. Due to increase in the cost of in
puts used for paddy cultivation the production cost goes up and the Minimum Supp
ort Price (MSP) for paddy is enhanced every year by the govt. of India to safegu
ard the interest of the growers. When paddy is converted to rice, it becomes cos
tlier and thus makes it internationally uncompetitive. 4. Rice production meant
for export purpose is having subsidy in other countries, which reduces the cost
of production and thereby reducing the cost of rice. Therefore, the export price
of rice of such countries is more competitive in the international markets comp
ared to Indian rice. 5. The major rice producing nations have decreased the pric
e to capture the international markets but Indian rice prices are inelastic due
to relatively high cost of production and become uncompetitive in the internatio
nal markets. Much of basmati rice export prospects have been lost in the recent
part to other competing countries like Pakistan etc because of high prices.
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6. Rice mills have not been fully modernized to ensure high milling recovery and
reduce the percentage of broken rice. The conventional rice mills are having Ru
bber Roll Sheller in which percentage of broken rice is more than the modern ric
e mills that are having under Runner Sheller. Hence, head rice obtained from mil
ling of conventional mills becomes costly due to recovery of higher percentage o
f broken rice. Therefore, conventional mills are required to be modernized to ge
t recovery of higher percentage of head rice suitable for export. 7. Lack of pro
per arrangements for production of sufficient quantity of quality seeds needed f
or cultivation of rice for export purposes. 8. The export is also suffering much
due to the competition from other exporting countries like Thailand, Vietnam an
d Pakistan because the cost of production in these competing countries is low as
compared to the cost of production in India. Infact, trade segment believes tha
t Indian rice can face the global competition if subsidy is provided. 9. In thes
e days basmati rice is facing aroma problem, because intensity of aroma in tradi
tional basmati varieties is not so high as it used to be. Infact, basmati variet
ies are highly prone to lodging and lodging affects the natural grain developmen
t. In such situation both aroma and linear kernel elongation are affected. 10.Po
st harvest handling of produce is another important aspect. Generally, farmers a
re harvesting the crop at different moisture levels and keeping the produce at h
igher moisture level for a longer period will impair the intensity of aroma. 11.
In absence of genetically pure seed of basmati varieties, in majority of basmati
rice fields, a variation in plant height, grain size and maturity of the crop i
s found. This is one of the major reasons for poor quality of basmati rice. Infa
ct, at the time of rice processing the grain size can be taken care of, but it i
s a waste. However, using good quality seed the loss can be converted into profi
t.
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Trade Barriers in India

Any restriction imposed on the free flow of trade is a trade barrier. Trade barr
iers can either be tariff barriers (the levy of ordinary negotiated customs duti
es in accordance with Article II of the GATT) or non-tariff barriers, which are
any trade barriers other than tariff barriers.
Import Licensing: One of the most common non-tariff barriers is the prohibition
or restrictions on imports maintained through import licensing requirements. Tho
ugh India has eliminated its import licensing requirements for most consumer goo
ds, certain products face licensing related trade barriers. For example, the Ind
ian government requires a special import license for motorcycles and vehicles th
at is very restrictive. Import licenses for motorcycles are provided to only for
eign nationals permanently residing in India, working in India for foreign firms
that hold greater than 30 percent equity or to foreign nations working at embas
sies and foreign missions. Some domestic importers are allowed to import vehicle
s without a license provided the imports are counterbalanced by exports attribut
able to the same importer.
Standards, testing, labeling & certification: The Indian government has identifi
ed 109 commodities that must be certified by its National Standards body, the Bu
reau of Indian Standards (BIS). The idea behind these certifications is to ensur
e the quality of goods seeking access into the market, but many countries use th
em as protectionist measures. For more on how this relates to labeling requireme
nts, please see the section on Labeling and Marking Requirements in this chapter
.
Anti-dumping and countervailing measures: Anti-dumping and countervailing measur
es are permitted by the WTO Agreements in specified situations to protect the do
mestic industry from serious injury arising from dumped or subsidized imports. I
ndia imposes these from time-to-time to protect domestic manufacturers
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from dumping. India s implementation of its antidumping policy has, in some case
s, raised concerns regarding transparency and due process. In recent years, Indi
a seems to have aggressively increased its application of the antidumping law. I
n the first half of the calendar year 2006 India topped the list of countries in
itiating new anti-dumping investigations with 20 new initiations.
Export subsidies and domestic support: Several export subsidies and other domest
ic support is provided to several industries to make them competitive internatio
nally. Export earnings are exempt from taxes and exporters are not subject to lo
cal manufacturing tax. While export subsidies tend to displace exports from othe
r countries into third country markets, the domestic support acts as a direct ba
rrier against access to the domestic market.
Procurement: The Indian government allows a price preference for local suppliers
in government contracts and generally discriminates against foreign suppliers.
In international purchases and International Competitive Bids (ICB s) domestic c
ompanies gets a price preference in government contract and purchases.
Service barriers: Services in which there are restrictions include: insurance, b
anking, securities, motion pictures, accounting, construction, architecture and
engineering, retailing, legal services, express delivery services and telecommun
ication.
Other barriers: Equity restrictions and other trade-related investment measures
are in place to give an unfair advantage to domestic companies. The GOI continue
s to limit or prohibit FDI in sensitive sectors such as retail trade and agricul
ture. Additionally there is an unpublished policy that favors counter trade. Sev
eral Indian companies, both government-owned and private, conduct a small amount
of counter trade.
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Non-tariff barriers to trade

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

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

INTRODUCTION
The central bank of any country is usually the driving force in the development
of the national payment system. The Reserve Bank of India (RBI) as the central b
ank of the country has been playing this developmental role and has taken severa
l initiatives for a safe, secure, sound and efficient payment system. The buyer
and the seller incorporate the details in the contract of sale itself that how p
ayments for goods to be send. Depending upon the bargaining power of the buyer a
nd seller, provisions of Exchange Contracts in the countries concerned, the dura
tion of trade relationship between the buyer and seller and also the credit wort
hiness of the parties concerned, terms of payment are arrived at. It can also be
said in general that, terms of payment reflects the extent to which the seller
requires a guarantee of payment before he loses control over the goods. There ar
e four main methods using by the exporters and importers to fulfill the contract
value. These are Advance payment, open Account System, Consignment Sale and Doc
umentary Collection. ADVANCE PAYMENT 1) Meaning: - An amount paid before it is e
arned or incurred, for example, a prepayment by an importer to an exporter befor
e goods are shipped, or a cash advance for travel expenses. 2) This method is th
e most desirable for the Exporter; the Importer has to rely on the integrity of
the Exporter and his capacity to execute the order in time. More than that, the
entire transaction is financed by the Importer in this method thereby making the
transaction more costly for him; besides exposing the Importer to credit risks.
On account of the above factors some countries have imposed Exchange Control re
striction regarding imports. 3) In India advance payment is allowed only in resp
ect of import of books, periodicals, life saving payment apparatus, capital good
s, machinery and a few other items.
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4) Advance payment of USD 2500/- or equal to this amount can be made for commerc
ial purposes. If the following condition are followed by the contract party. a)
Documents produced by the parties must be evidence showing the demand of the ove
rseas supplier. b) Payment must be given to the overseas supplier. c) Endorsemen
t in the import license if any. d) Import is permitted either by a license cover
ed under OGL. As regards exports, depending on the nature of goods exported and
the competitiveness of the product, advance payments are insisted. For example i
n the case of export of vegetables and fruits, it is customary to demand 100% ad
vance payment. e) Application in F.A.I. in duplicate. f) Importer will submit ev
idence of import in the Exchange Control Copy of Bill of Entry/Postal wrapper wi
thin a period of 3 months.
OPEN ACCOUNT SYTEM 1) It is just opposite to the Advance payment. 2) Meaning: Wh
en an Exporter agrees to sell the commodity on open account system to the Import
er, he dispatches the goods to the buyer directly followed by the transport docu
ments and an invoice requesting payment. 3) The Exporter loses control over the
goods completely and leaves everything on the integrity of the buyer. 4) It is b
eneficiary to the Importer; the Exporter bears the entire financial and commerci
al risks. This system is normally resorted to when the goods command buyer s mar
ket. 5) The commercial risk is, to some extent minimized by taking a policy of E
CGC. To take care of the interest of the Indian Exporters, there are Exchange Co
ntrol restrictions imposed by RBI on open account export Sales.
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CONSIGNMENT SALE If you sell goods sold on consignment, you have agreed to sell
the goods without first buying those goods from the owner. Typically, your agree
ment specifies one of the following: 1) you agree to sell the goods on behalf of
the owner as an agent 2) you agree to purchase the goods for an agreed price wh
en you find a buyer. There are no restrictions on what goods can be sold on cons
ignment. Goods regularly sold on consignment include: motor vehicles, boats, wed
ding and formal dresses, cameras, farm machinery and artworks. For Example: Sell
ing on consignment means giving your car to someone else, usually a motor dealer
, to sell on your behalf. Generally you set the minimum price you will accept an
d the dealer will add a commission to it. While the ownership and possession pas
ses to the buyer in the case of open account system, the ownership remains with
the seller in the case of consignment sale. In the case of goods exported on con
signment basis, freight and marine insurance must be arranged in India. DOCUMENT
ARY COLLECTION The Exporter prepares the proper financial and commercial documen
t including the transport document and hands over to his Banker requesting in cl
ear terms as to how the documents are to be delivered to the Importer at the oth
er end. Four main parties to a documentary collection are The Principal i.e.. th
e Exporter, The Remitting Bank - The Exporter s Bank , The Collecting Bank - The
Bank in the Importer s country and The Importer, the consignee. When the Export
er wants the Bank to hand over the export documents to the Importer only against
payment immediately, the Bill of Exchange is called a Sight Draft. In case the
Exporter wishes to give some time (30 days, 60 days, 90 days etc.)
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CHAPTER-4 ANALYSIS OF DATA

Major Export Products of India, Export from India
Exports have boosted the growth of Indian economy substantially and Indian expor
ts in the current year has earned nearly US $ 125 billion and is expected to ear
n US $ 160 billion for the next fiscal year. The major export products of India
include leather, medical appliances, equipments, textiles and so on. Leather Goo
ds among Major Export Products of India: India has developed over the years to b
ecome a key player in the export of leather goods and accessories among the majo
r export products of India. India exports numerous leather products for daily us
e like leather wallets, belts, key holders, folders, pouches, leather toys, hand
bags etc. Gift items made of leather such as Leather notebooks, decorated leathe
r journals, key rings, rugs are quite popular in foreign countries. A large numb
er of small scale, medium scale as well as large scale companies in India are en
gaged in the export of leather goods, the list of such companies include:
Sharie International Islam International Indobest Falcon International Z.N.T Int
ernational Balaji Impex Private Limited Paradise Noble Creations Asian adores Th
e Lotus Handicrafts
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Medical Appliances among Major Export Products of India:

Indian medical appliances have made their mark in the foreign countries on accou
nt of superior quality and variety. Common medical appliances exported from Indi
a include absorbent gauze, sterile gloves, crepe bandages, gauze sponge, surgica
l face masks, surgical caps, surgical disposables. Export of specialized medical
appliances have also gained importance among major export products of India and
appliances such as baby incubator, automatic vertical autoclave, air ionisers,
nelaton catheter, digital video colposcopes, digital imaging softwares. A large n
umber of small scale, medium scale as well as large scale companies in India are
engaged in the export of medical appliances goods, the list of such companies i
nclude:
Nidhi Meditech Systems Coral Marketing Narang Scientific Works Private Limited R
elique Technologies Surya Surgical Industries Chatterjee Surgical United Surgica
l Industries B. L. Lifesciences Private Limited Paramount Surgical Emporium, Del
hi Magnum Medicare Pvt. Ltd.
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Textile goods among Major Export Products of India:

Textile goods have gained prominence among the export products of India, designe
r garments for ladies as well as gents manufactured by the big houses in India h
ave created huge demand in the International garment industry. The popular ladie
s garment include knitted tops, embroidered salwar, sequin work blouses, sarongs
, floral t-shirts, beaded garments, poplin embroidered kurta, viscose crape prin
ted skirt. A large number of small scale, medium scale as well as large scale co
mpanies in India are engaged in the export of textile goods, the list of such co
mpanies include:
Kshethra Exports Mirza Fabric Private Limited Kanha Designs Pvt. Ltd. Knitco Fas
hionns Boom Buying Private Limited Revolution Exports Flying Fashions Subasri Te
xtile Vipro Garments Kewal Impex Sudharshanaa Tex Macsam
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Equipments among Major Export Products of India:

India caters to the need of varied equipments of the foreign countries, therefor
e the Indian equipment industry have grown in leaps and bounds and ranks high am
ong the major export products of India like conveyor systems, hand pallet trucks
, magnetic coolent cleaners, vibrating screens, EOT cranes, industrial magnetic
conveyors, cantilever racks, steel rolling mill plants, hydraulic stackers, heav
y duty pallet rack, pin pulveriser, agitator vessel, rotary vane feeders. A larg
e number of small scale, medium scale as well as large scale companies in India
are engaged in the export of equipments, the list of such companies include:
Orton Engineering Private Limited A.S. Precision Machines Pvt. Ltd. Dewas Techno
Products P Ltd. Metal Storage Systems Private Limited Yagnam Pulverizer Private
Limited Elegant Engineers Metro Engineering Industries Jai Gopal Engineering Wo
rks Private Limited
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CHAPTER-5
CONCLUSION,FINDINGS & SUGGESTIONS
While India has gradually opened up its economy, its tariffs continue to be high
when compared with other countries, and its speculation norms are still restric
tive. This leads some to see India as a rapid globalizer while others still see it
as a highly protectionist economy. The main focus of this page is the foreign tra
de policy of India. Foreign trade concerning main legislation in India is the Fo
reign Trade (Development and Regulation) Act, 1992. The Act endow with the expan
sion and regulation of foreign trade by assisting imports into, and supplementin
g exports from, India and for matters associated therewith or incidental thereto
. As per the requirements of the Act, the government:i. ii. iii. may make necess
ities for assisting and controlling foreign trade; may proscribe, confine and re
gulate exports and imports, in all or particular cases as well as subject them t
o exclusion; is endorsed to formulate and proclaim an export and import policy a
nd also modify the same from time to time, by notification in the Official Gazet
te; Is also authoritative to appoint a Director General of Foreign Trade for t
he purpose of the Act, including formulation and accomplishment of the export-im
port policy.
iv.
Nevertheless, in modern years, the governments stand on trade and investment poli
cy has demonstrated a marked shift from protecting producers to benefiting consumer
s. This is revealed in its foreign trade policy of India for 2004/09 according to
which, "For India to become a major player in world trade we have also to make
possible those imports which are required to stimulate our economy." Along with
economic transformations, globalization of the Indian economy has been the leadi
ng factor in devising the trade policies. The reform procedures
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pioneered in the subsequent policies have focused on liberalization, ingenuousne

ss and lucidity. They have given export friendly surroundings by simplifying the
procedures for trade facilitation. The declaration of a new Foreign Trade Polic
y of India for a five year period of 2004-09, substituting the till now nomencla
ture of EXIM Policy by Foreign Trade Policy (FTP) is another step in this course
. It takes an incorporated view of the overall development of Indias foreign trad
e and provides a roadmap for the development of this sector. A dynamic export-le
d growth strategy of doubling Indias share in global commodities trade (in the ne
xt five years), with a spotli ght on the sectors having prospects for export exp
ansion and prospective for employment generation, constitute the main lath of th
e policy. All such events are expected to enhance India s international competit
iveness and aid in auxiliary increasing the acceptability of Indian exports. The
policy sets out the core intentions, identifies key strategies, spells out focu
s initiatives, delineates export incentives, and also addresses issues relating
to institutional support including simplification of procedures relating to expo
rt activities. The coming years are sure to witness a vigorous export-led growth
strategy of doubling Indias share in global merchandise trade with a focus on th
e sectors having prospects for export expansion. The rising potential for employ
ment generation will constitute the main backbone for the Indian foreign trade p
olicy.
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