HOW TO START A IMPORT/EXPORT

BUSINESS TAKING INTO ACCOUNT THE

W.T.O.(WORLD TRADE ORGANISATION)
REGULATIONS?
AGRO PRODUCTS
MEMBERS:
1. NAMAN VERMA
2. PRIYANKA DAS
3. NEHA JAISWAL
4. SWETHA VADLA
5. SUBROJYOTI GOUDA
6. KHALID AZAM
7. KUNAL YADAV
8. PRIYAM SARKAR
9. UPASNA SONI

Agro Products embraces a broad all-inclusive
category of products related to AGRICULTURE
It includes a comprehensive range of raw and
finished goods under the classifications of
plants, animals and other life forms
An approximate 36% of the world's workers
are engaged in agriculture with India's 65% of
the population being directly and indirectly
employed in this sector.
Location: Geneva, Switzerland
Established: 1 January 1995
Created by: Uruguay Round negotiations
(1986-94)
Membership: 159 countries on 2 March 2013

Administering WTO trade agreements
Forum for trade negotiations
Handling trade disputes
Monitoring national trade policies
Technical assistance and training for
developing countries
Cooperation with other international
organizations
The Agreement on Agriculture(AOA) forms a
part of the Final Act of the Uruguay Round of
Multilateral Trade Negotiations.
It was signed by the member countries in
April 1994 at Marrakesh, Morocco and came
into force on 1
st
January, 1995.
Uruguay Round marked a significant turning
point in world trade in agriculture
The root cause of distortion of international
trade in agriculture the massive domestic
subsidies given by the industrialised
countries to their agricultural sector over
many years.
Led to:
to excessive production and its dumping in
international markets
import restrictions to keep out foreign agricultural
products from their domestic markets
The starting point for the establishment of a
fair agricultural trade has to be:
1. Reduction of domestic subsidies given by
industrilised countries
2. Reduction in the volume of subsidised
exports
3. Minimum market access opportunities for
agricultural producers world wide

The AoA contains provisions in the following
three broad areas of agriculture and trade
policy.
1. Market Access
2. Domestic Subsidy or domestic support
3. Export Subsidy

On market access , the Agreement has two
basic elements
(i) Tariffication of non-tariff barriers
i.e. quantitative restrictions and export and
import licensing etc. are to be replaced by
tariffs to provide the same level of protection.
Tariffs to be reduced by a simple average of
36% over 6 years in case of developed
countries and 24% over 10 years in case of
developing countries.

The only commitment India has undertaken is
to bind its tariffs
-on primary goods at 100%
- on processed foods at 150% and
- on edible oils at 300%

(ii) The second element relates to minimum
level for imports of agricultural products by
member countries as a share of domestic
consumption.

Countries are required to maintain current
levels(1986-88) of access for each individual
product.

Where the current level of import is
negligible, the minimum access should not be
less than 3% of domestic consumption.

The minimum level is to rise by 5% by the
year 2000 in the case of developed countries
and by 2004 in the case of developing
countries.

Provisions of the agreement regarding domestic
support have two main objectives

1. To identify acceptable measures that support
farmers.
2. To deny unacceptable, trade distorting support
to the farmers.

These provisions are aimed largely at the
developed countries where the levels of
domestic agricultural support have risen to
extremely high levels in recent decades.
All domestic support is quantified through
the mechanism of total Aggregate
Measurement of Support(AMS)

AMS is a means of quantifying the aggregate
value of domestic support or subsidy given to
each category of agricultural product.

A commitment made requires 20% reduction
in total AMS for developed countries over 6
years: for developing countries this
percentage is 13% and no reduction is
required in least developed countries.
AMS consists of two parts- product specific
subsidies and non-product specific subsidies.

Product specific subsidy refers to the total
level of support for each individual
agricultural commodity, essentially signified
by procurement price in India.

Non-product specific subsidy refers to the
total level of support for the agricultural
sector as a whole, i.e. subsidies on inputs
such as fertilizers, electricity, irrigation,
seeds, credit etc.
The AoA lists several types of subsidies to
which reduction commitments apply.
Such subsidies are virtually non-existent in
India.
Developing countries are free to provide three
of the listed subsidies, namely, reduction of
export marketing costs, internal and
international transport and freight charges.
Prohibition of export subsidies are in effect
from 1956.

The AoA covers not only basic agricultural
goods such as wheat, milk and live animals
but the products derives from them such as
bread, butter, other dairy products and meat,
as well as processed agricultural products
such as chocolates and sausages.
The coverage also includes wines, spirits and
tobacco products, fibers such as cotton, wool
and silk, and raw animal skins designated for
leather production.
Fish and fish products are not included.
Indias economic structure today presents a
distinctly different picture from what it was in
1991 when economic reforms started.
Indias foreign exchange reserves had depleted
substantially.
It was in this context that India gradually started
dismantling its quantitative restrictions, partially
liberalized its exchange rate and reduced the
peak rate of customs duties.
The only recourse left to India was to increase its
exports to tide over the ever-increasing imports.











The Export and Import Policy or the Exim
Policy, 1992-97 was a significant landmark in
Indias economic history.

A conscious effort was made to dismantle
various protectionist and regulatory policies
and accelerate the countrys transition
towards a globally oriented economy.
It is necessary for any developing country to
expand exports continuously because export
growth ultimately results in creation of jobs,
building up of infrastructure, economies of
scale and added foreign exchange earnings.

Todays world is economic in nature and
increased exports give credibility to the
standing of the country in overseas market.
One can sell products only if the quality of
the product is better than that of
competitors, the price most competitive and
the buyers get delivery on time.

We need to have access to international
standard quality materials, capital goods and
technology at our command as there is a sea
change in the markets worldwide.

The areas in which the imports are essential:
defence requirements,
crude oil,
fertilizers,
capital goods,
industrial inputs like raw materials,
components, consumables, spares, etc.,
import of samples,
import of technology, etc.
For example, a company in USA may buy
fabric from China, source design from Italy,
labour from Bangladesh and Sri Lanka and
arrange to make a garment to be sold in
Europe.
The advantages of such outsourcing are :
there is no need to invest in plant overseas
the risks of asset expropriation are minimized
risks associated with currency fluctuations are
better managed
control of marketing is retained by the contractor
a product manufactured in the overseas market
may be easier to sell, especially to government
customers
lower transport costs and
Some times lower production costs can be
obtained.
1. Registration and documentation procedures
in India,Rental agreement / or own property
2. PAN Permanent Account Number
3. Is individual PAN number sufficient for firm
name?
4. PARTNERSHIP agreement
5. CURRENT ACCOUNT opening.
6. obtain an IEC number with DGFT with branch
code


7. AD code - Authorized Dealer Code -
registration with customs
8. Registration with central excise department
9. RCMC registration procedures
10. Registration with sales tax office
www.wto.org
www.foreign-trade.com
Import and Export (Control) Act, 1947
WTO Agreement on Agriculture