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PROJECT REPORT

CHALLENGES & THREATS BEFORE THE EXPORTER IN THE

RAPIDLY CHANGING ENVIRONMENT

Bachelor of Business Adiministration

submitted By

JYOTI JADON

ROLL NO. 82017

ENROLMENT NO. 08432

UNDER THE SUPERVISION OF

MR. MOHD. ASIF KHAN MISS PALLAVI VARSHNEY M.Com., L.L.B., M.S.W. M.B.A.

(HEAD OF THE DEPARTMENT) (PROJECT SUPERVISOR)

DEPARTMENT OF MANAGEMENT STUDIES

GAGAN COLLEGE OF MANAGEMENT AND TECHNOLOGY

ALIGARH(INDIA)

(AFFILIATED TO D.R.BHEEM RAO AMBEDKAR UNIVERSITY,AGRA)



DEPARTMENT OF BUSINESS ADMIMISTRATION

GAGAN COLLEGE OF MANAGEMENT &

TECHNOLOGY

ALIGARH

(Affiliated to Dr. B. R. AMBEDKAR UNIVERSITY, AGRA)

CERTIFICATE Mr. Mohd. Asif Khan

M.COM,L.L.B.,M.S.W.

This is to certify that Jyoti Jadon Roll no. 82017, Enrollment no.08432 of B.B.A. VIth sem . Has worked for the preparation of project report

entitled _ Challanges & Thr eats Bef or e The Exporter In The Rapidly

Changing Environment _ under my supervision. Questionnaire method

is used.

I further certify that the work is original & based on data collection &

analyzed by herself is not been submitted for any other examination.

In my opinion, the project report is suitable for the submission in partial

fulfillment of the requirement of the award of B.B.A degree.

HOD ± B.B.A SUPERVISOR

Mr Mohd .Asif khan Miss Pallavi Varshney



I express my sincerest gratitude and thanks to director ³Mrs. Shashi Bala

Sharma´ and ³Mr. Girish Sharma´ (Dean of G.C.M.T. Aligarh)

I thank my HOD ³Mr. Mohd Asif Khan´ guiding me in the preparing project

report.

I specially thank my supervisor Miss. ³Pallavi Varshney´ who supported me and

provide me the solutions of all my queries.

This project report is expending my overall talent and export. I am very thankfull

to all faculty members of my college namely-

³Mr. Hitendra Kumar Gaur´, ³Mr. Mohit Sharma´, ³Miss.

Shivani Gupta´, ³Miss. Geeta Rajpoot´ for always being there for us.

I owe a particularly thank to all those person who responded to my survey. Last but

not the least I thank my parents, family members and all my friends from the

bottom of my heart who always supported me, guides me and encourage me.

DATE JYOTI JADON

BBA 6th sem



All the learning¶s in our BBA Course is practice oriented. However, hands-on

experience in the corporate world during our course is very necessary to be able to

test the ability and extent of learning of the student before fully entering the

corporate world.

With the guidance and suggestions provided by Mr. Mohd Asif Khan, my

Industry Guide,

I started first phase of my Project by doing a market analysis, After that I started

with the second phase which involved research work pertaining to the customer

analysis.

In this report I have explained what I undertook based on research and my personal

experience. I have also tried to understand business relations with the market

developers, business strategies, and ethics and work compliance in an industry as

an additional part of my study.

JYOTI JADON

BBA 6th sem.

Roll. No . 82017



Jyoti Jadon is a student of BBA in Gagan College Of Management &

Technology Aligarh hereby declares that all the information , facts and

figures furnished in this report is based on my own. This information has

been used for purely academic purpose.

I hereby declare the work was done by me and suitable information has

been downloaded form websites and other related resources.The project

report is the result of my own hard work and self belife.

Name & Signature of Student

Jyoti Jadon

BBA6th sem.



TABLE OF CONTENT

Introduction 01

Objective 06

History 08

Exports 16

Exports sector in India 23

New export and import policy 2001-2002 27

Development regarding the deemed export rule 54

Business environment 61

Factors in product selection key 67

Foreign market research 70

Global environment threats and challenges 75

Research Methodology 79

Data Analysis 83

Findings 92

Suggestions 93

Limitation 94

Conclusion 95

Bibliography 96

Questionnaire 97



Introduction

y Introduction

How to Start Export is a fair question that every first time exporter wants to ask.

Export in itself is a very wide concept and lot of preparations is required by an

exporter before starting an export business.

A key success factor in starting any export company is clear understanding and

detail knowledge of products to be exported. In order to be a successful in

exporting one must fully research its foreign market rather than try to tackle every

market at once. The exporter should approach a market on a priority basis.

Overseas design and product must be studies properly and considered carefully.

Because there are specific laws dealing with International trade and foreign

business, it is imperative that you familiarize yourself with state, federal, and

international laws before starting your export business.

Price is also an important factor. So, before starting an export business an exporter

must considered the price offered to the buyers. As the selling price depends onsourcing price, try to avoid unnecessary middlemen who only add cost but no

value. It helps a lot on cutting the transaction cost and improving the quality of the

final products.



However, before we go deep into "How to export ?´ let us discuss what an export

is and how the Government of Indian has defined it.

In very simple terms, export may be defined as the selling of goods to a foreign

country. However, As per Section 2 (e) of the India Foreign Trade Act (1992), theterm export may be defined as 'an act of taking out of India any goods by land, sea

or air and with proper transaction of money´.

Exporting a product is a profitable method that helps to expand the business and

reduces the dependence in the local market. It also provides new ideas,

management practices, marketing techniques, and ways of competing, which is not

possible in the domestic market. Even as an owner of a domestic market, an

individual businessman should think about exporting. Research shows that, on

average, exporting companies are more profitable than their non-exporting

counterparts.

Before starting an export, an individual should evaluate his company¶s ³export

readiness´. Further planning for export should be done only, if the company¶s

assets are good enough for export.

There are several methods to evaluate the export potential of a company. The most

common method is to examine the success of a product in domestic market. It is

believed that if the products has survived in the domestic market, there is a good

chance that it will also be successful in international market, at least those where

similar needs and conditions exist.

One should also evaluate the unique features of a product. If those features are

hard to duplicate abroad, then it is likely that you will be successful overseas. A

unique product may have little competition and demand for it might be quite high.



Once a businessman decides to sell his products, the nextstep is to developing a

proper export plan. While planning an export strategy, it is always better to

develop a simple, practical and flexible export plan for profitable and sustainable

export business. As the planners learn more about exporting and your company'scompetitive position, the export plan will become more detailed and complet

After evaluation of company¶s key capabilities, strengths and weaknesses, the next

step is to start evaluating opportunities in promising export markets. It involves the

screening of large lists of countries in order to arrive at a short list of four to five.

The shorting method should be done on the basis of various political, economic

and cultural factors that will potentially affect export operations in chosen market.



Why Need to Export ?

There are many good reasons for exporting:

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

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

condition of the country.

Secondly, companies that export their goods are believed to be more reliable thantheir counterpart domestic companies assuming that exporting company has

survive the test in meeting international standards.

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

business and trade opportunities for a company.

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

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

foreign lands.

Fifthly, by exporting goods, an exporter also becomes safe from offset lack of

demand for seasonal products.

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

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

simultaneously witnessing a bust in a different sector.



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

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

exporters through various incentives and schemes to promote Indian export for meeting the much needed requirements for importing modern technology and

adopting new technology from MNCs through Joint ventures and collaboration.



Ob jective

The main ob jective of a typical export plan is to:

y Identifies what you want to achieve from exporting.

y Lists what activities you need to undertake to achieve those objectives.

y Includes mechanisms for reviewing and measuring progress.

y Helps you remain focused on your goals.



For a proper export planning following questions need to

answered:

1. Which products are selected for export development?

2. What modifications, if any, must be made to adapt them for overseas markets?

3. Which countries are targeted for sales development?

4. In each country, what is the basic customer profile?

5. What marketing and distribution channels should be used to reach customers?



History

the new OPEC headquarters in Vienna

Venezuela and Iran were the first countries to move towards the

establishment of OPEC in the 1960s by approaching Iraq, Kuwait and Saudi

Arabia in 1949, suggesting that they exchange views and explore avenues

for regular and closer communication among petroleum-producing nations.

The founding members are Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.

Later members include Algeria, Ecuador, Gabon, Indonesia, Libya, Qatar,

Nigeria, and the United Arab Emirates.

In 10±14 September 1960, at the initiative of the Venezuelan Energy and

Mines minister Juan Pablo Pérez Alfonzo and the Saudi Arabian Energy and



Mines minister Abdullah al-Tariki, the governments of Iraq, Iran, Kuwait,

Saudi Arabia and Venezuela met in Baghdad to discuss ways to increase the

price of the crude oil produced by their respective countries. OPEC was

founded in Baghdad, triggered by a 1960 law instituted by AmericanPresident Dwight Eisenhower that forced quotas on Venezuelan and Persian

Gulf oil imports in favor of the Canadian and Mexican oil industries.

Eisenhower cited national security, land access to energy supplies, at times

of war. When this led to falling prices for oil in these regions, Venezuela's

president Romulo Betancourt reacted by seeking an alliance with oil

producing Arab nations as a preemptive strategy to maintain the continued

autonomy and profitability of Venezuela's oil resources.

Oil exports imports difference

As a result, OPEC was founded to unify and coordinate members' petroleum policies. Original OPEC members include Iran, Iraq, Kuwait, Saudi Arabia,

and Venezuela. Between 1960 and 1975, the organization expanded to

include Qatar (1961), Indonesia (1962), Libya (1962), the United Arab

Emirates (1967), Algeria (1969), and Nigeria (1971). Ecuador and Gabon

were early members of OPEC, but Ecuador withdrew on December 31, 1992

because it was unwilling or unable to pay a $2 million membership fee and

felt that it needed to produce more oil than it was allowed to under the

OPEC quota, although it rejoined in October 2007. Similar concerns

prompted Gabon to suspend membership in January 1995. Angola joined on

the first day of 2007. Norway and Russia have attended OPEC meetings as



observers. Indicating that OPEC is not averse to further expansion,

Mohammed Barkindo, OPEC's Secretary General, recently asked Sudan to

join. Iraq remains a member of OPEC, but Iraqi production has not been a

part of any OPEC quota agreements since March 1998.In May 2008, Indonesia announced that it would leave OPEC when its

membership expired at the end of that year, having become a net importer of

oil and being unable to meet its production quota. A statement released by

OPEC on 10 September 2008 confirmed Indonesia's withdrawal, noting that

it "regretfully accepted the wish of Indonesia to suspend its full Membership

in the Organization and recorded its hope that the Country would be in a

position to rejoin the Organization in the not too distant future."

Indonesia is still exporting light, sweet crude oil and importing heavier,

more sour crude oil to take advantage of price differentials (import is greater

than export) due to Air pollution in Indonesia still being low as compared to

China or The United States.



Economic history of India

The known Economic history of India begins with the Indus Valley civilization.

The Indus civilization's economy appears to have depended significantly on trade,

which was facilitated by advances in transport. Around 600 BC, the

Mahajanapadas minted punch-marked silver coins. The period was marked by

intensive trade activity and urban development. By 300 BC the Maurya Empire

united most of the Indian subcontinent. The political unity and military security

allowed for a common economic system and enhanced trade and commerce, with

increased agricultural productivity.

For the next 1500 years, India produced its classical civilizations such as the

Rashtrakutas, Hoysalas and Western Gangas. During this period India is estimated

to have had the largest economy of the ancient and medieval world between the 1st

and 17th centuries AD, controlling between one third and one fourth of the world's

wealth up to the time of the Marathas, from whence it rapidly declined during

European rule.

India has followed central planning for most of its independent history, which have

included extensive public ownership, regulation, red tape, and trade barriers.

After the 1991 economic crisis, the central government launched economic

liberalization. India has turned towards a more capitalist system and has emerged

as one of the fastest growing large economies of the world.



Indus Valley civilization

The Indus Valley civilization, the first known permanent and predominantly urban

settlement that flourished between 2800 BC to 1800 BC boasted of an advancedand thriving economic system. Its citizens practiced agriculture, domesticated

animals, made sharp tools and weapons from copper, bronze and tin and traded

with other cities. Evidence of well laid streets, layouts, drainage system and water

supply in the valley's major cities, Harappa, Lothal, Mohenjo-daro and Rakhigarhi

reveals their knowledge of urban planning. One of the theories about their end is

that they eventually overused their resources, and slowly died out.

Ancient and medieval characteristics

Though ancient India had a significant urban population, much of India's

population resided in villages, whose economy was largely isolated and self-

sustaining. Agriculture was the predominant occupation of the populace andsatisfied a village's food requirements besides providing raw materials for hand

based industries like textile, food processing and crafts. Besides farmers, other

classes of people were barbers,



Religion

Religion, especially Hinduism, played an influential role in shaping economic

activities. The Indian caste system castes and sub-castes functioned much likemedieval European guilds, ensuring division of labour and provided for training of

apprentices. The caste system restricted people from changing one's occupation

and aspiring to an upper caste's lifestyle. Thus, a barber could not become a

goldsmith and even a highly skilled carpenter could not aspire to the lifestyle or

privileges enjoyed by a Kshatriya (person from a warrior class). This barrier to

mobility on labour restricted economic prosperity to a few castes.

Pilgrimage towns like Allahabad, Benares, Nasik and Puri, mostly centred around

rivers, developed into centres of trade and commerce. Religious functions, festivals

and the practice of taking a pilgrimage resulted in a flourishing pilgrimage

economy.[

Family business

In the joint family system, members of a family pooled their resources to maintain

the family and invest in business ventures. The system ensured younger members

were trained and employed in the family business and the older and disabled

persons would be supported by the family. The system, by preventing the

agricultural land from being split ensured higher yield because of the benefits of

scale. The system curbed members from taking initiative because of the support

system and family or work.[



Organizational entities

Along with the family-run business and individually owned business enterprises,

ancient India possessed a number of other forms of engaging in business or collective activity, including the gana, pani, puga, vrata, sangha, nigama and sreni.

Nigama, pani and sreni refer most often to economic organizations of merchants,

craftspeople and artisans, and perhaps even para-military entities. In particular, the

sreni was a complex organizational entity that shares many similarities with

modern corporations, which were being used in India from around the 8th century

BC until around the 10th century AD. The use of such entities in ancient India was

widespread including virtually every kind of business, political and municipal

activity.

The sreni was a separate legal entity which had the ability to hold property

separately from its owners, construct its own rules for governing the behavior of its

members, and for it to contract, sue and be sued in its own name. Some ancient

sources such as Laws of Manu VIII and Chanakya's Arthashastra have rules for

lawsuits between two or more sreni and some sources make reference to a

government official ( Bhandagarika) who worked as an arbitrator for disputes

amongst sreni from at least the 6th century BC onwards. There were between 18 to

150 sreni at various times in ancient India covering both trading and craft

activities. This level of specialization of occupations is indicative of a developed

economy in which the sreni played a critical role. Some sreni could have over 1000

members as there were apparently no upper limits on the number of members.

The sreni had a considerable degree of centralised management. The headman of

the sreni represented the interests of the sreni in the king¶s court and in many

official business matters. The headman could also bind the sreni in contracts, set



the conditions of work within the sreni, often received a higher salary, and was the

administrative authority within the sreni. The headman was often selected via an

election by the members of the sreni, who could also be removed from power by

the general assembly. The headman often ran the enterprise with two to fiveexecutive officers, who were also elected by the assembly.[



Exports

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: A History

The history of Indian exports is very old. During ancient times India exported

spices to the other parts of the world. India was also famous for its textiles which

were a chief item for export in the 16th century. Textiles and cotton were exported

to the Arab countries from Gujarat. During the Mughal era India exported various

precious stones such as ivory, pearls, tortoise stones etc. But during the British era,Indian exports declined as the East India Company took control of foreign trade.

Markets

Though India has seen some product diversification in its export basket, it has not

expanded significantly in the two big markets-Africa and Latin America.

India¶s business with South Asian countries is also negligible. This region has not

been integrated with the global economy, though political and economic initiatives

have been taken in the recent past in this direction



Leading Export Items of India

In the past ten years, Indian exports have grown at a rate of nearly 22%. Some

commodities have enjoyed faster export growth than others. Some of India's main

export items are cotton, textiles, jute goods, tea, coffee, cocoa products, rice,

wheat, pickles, mango pulp, juices, jams, preserved vegetables etc. India exports its

goods to some of the leading countries of the world such as UK, Belgium, USA,

China, Russia etc.

Restriction on the Exports of Items

However there are some restrictions on the export of goods. Under sub section (d)

of section 111 and sub section (d) of section 113, any good exported or attempted

to be exported, contrary to any prohibition imposed by or under the customs act or

any other law is liable for confiscation.

Export Trends

If the Indian economy grows at the same pace, India would most definitely export

goods worth US $500 billion by 2013 and may supersede the exports of other large

developing countries like Brazil.

The Way Ahead

India needs the right mix of policy formulation sector focus and industry led

initiatives to move up the value chain in the global export basket



The Opportunity

It is very clear that Indian exports have still not achieved their true potential and

there exists immense opportunities for expanding the basket of India¶s exports.

With a strategic attention on the new markets that are evolving due to free trade,

India is witnessing a boom in both manufacturing and services.

Problems of the Indian Export Sector

There are few problems which need to be solved before India makes a mark for

itself in the export sector. The Indian goods have to be of superior quality. The

packaging and branding should be such that countries are interested to export from

India. At the same time India must look for potential market to sell their goods.

The government should frame policies which gives boost to the exports.

Directional Change In Exports

India has seen massive directional change in the context of origin of demand for

Indian products. Till 2001-02 North America and the EU markets shared nearly

21% and 23.2 % respectively of total exports and the remaining to the rest of the

globe. By 2006-07, North America had a share of only 16% of the total exports and

the EU's share was 21.2%.



Export Trading - What are Exporting

Advantages

Before initiating resources to project in the export business trade, small and

medium enterprises (SME) must cautiously assess the advantages of exporting.

Exporting products is not just an add-on to your existing business. It should be a

part of an entire business policy. Before you initiate exporting, it¶s vital to make

sure that you have developed an entire export scheme evaluating all the advantages

and risks involved:

Main exporting advantages

Below are a few of the main advantages of exporting:

Improved Profits and Sales. Selling items and services in a marketplace

which the company has never touched before will boost sales and hence raised



revenues. Additional overseas sales over the long term, once export

development expenses have been covered, enhances overall profitability.

Develop Domestic Competitiveness. Most firms become competitive in

the local market before they take the plunge in the worldwide arena. Being

competitive in the local market helps companies to obtain some strategies that

can assist them in the global market.

Increase Worldwide Market Shares. By going international, companies

will partake in the international market and expand a piece of their share fromthe huge global marketplace.

Diversification and risk minimization. Selling to numerous markets

allows firms to branch out their business and spread their risk. Firms will not be

tied to the changes of the trade cycle of local market or of one specific nation.

Minimize Per Unit Overheads. Capturing an added overseas market will

generally increase production to meet overseas demand. Improved production

can often minimize per unit overheads and lead to bigger use of existing

capacities.

Balance for Seasonal Demands. Firms whose items or services are onlyused at certain seasons locally may be competent to sell their items or services

in overseas markets during different seasons.



Potential for Company Development. Companies who venture into the

exporting business usually have to have a presence or representation in the

overseas market. This might need additional personnel and thus lead to

development.

Sell Surplus Production Capacity. Companies who have excess

production for any cause can most likely sell their items in an overseas market

and not be forced to give huge concession or even dispose of their excess

production.

Expand New Knowledge and Experience. Going worldwide can yield

precious ideas and information about new technologies, new marketing

methods and overseas competitors. The gains can help nation¶s domestic as

well as overseas businesses.

Develop Life Cycle of Item. Many items go through their Life cycles

namely introduction, growth, maturity and declining phase that is the end of

their efficacy in a specific souk. Once the item reaches the last stage, maturity

in a given market, the same item can be introduced in a different market where

the item was never marketed before.



Threats of Exporters

History can pose a threat to internal validity when the group under study

experiences an event--unrelated to the treatment--which has an impact on their

performance on the posttest. For example, if a researcher is evaluating a drug

prevention program, and during the time of the study a popular celebrity dies froma drug overdose, the effect (or lack of effect) that is noticed may have been caused

by the group's reaction to the celebrity's death rather than the program that was

implemented.

How do you think a comparison group can alleviate this threat to internal validity?



Export Sector in India

The export sector of Indian economy made comprehensive progress over the last

decade. The exponential growth of the export sector of Indian economy can be

attributed to the liberal Government of India economic policy. Indian exports have

an ambitious target of US 160 billion in 2007-08. The achievement came to the

Indian exports in the last fiscal despite the odds against the exports, minimizing the

gains. In the first two months of 2007-08 exports grew by 20.3%, which was alittle lower than the previous year over the same period a year ago.

The Government of India latest export policy for the exporters will help in

stabilizing the export growth levels attained in the 1st quarter of 2007-2008. Ores

and minerals exports grew moderately to 12.9% against 37.4% in 2005-06. Similar

trend was also observed in the exports of manufacturing sector. The exports of

manufactured goods from India grew moderately by 15% in the first quarter of

2007-2008 as compared to 21.2% in the last fiscal year. High value commodities

like engineering goods and rice registered very high growth rate in the 1st quarter

of this fiscal against the same period last year. The overall exports suggests that the

Indian exports grew considerably across all major exporting destinations. The

Indian exports to Pakistan, UAE and Italy showed remarkable growth in the first

quarter of the current fiscal year.

The astronomical growth of the Indian export sector was led by the following

industry -



y Information Technology

y Information Technology Enabled Services

y Telecommunications hardware

y Electronics and hardwarey Pharmaceutical and biotechnology products

y Consumer durables

y Textiles

y Construction machinery

y Power equipment

y Food grains

y Iron and steel

y Chemicals and fertilizers

The robust overall growth of export sector of Indian economy led to secondary

growth of the following economic parameters -

y India's economy grew at 9.3% in quarter April-June and it was driven by

manufacturing, construction and services sector and agriculture sector

y GDP factor for the first quarter of 2007-08 was at Rs 7,23,132 crore, registering a

growth rate of 9.3% over the corresponding quarter of previous year

y Exports grew by 18.11% during the 1st quarter of 2007-2008 and the imports shoot

up by 34.30% during the same period

y India's FOREX reserves (excluding Gold and SDRs) stood at $219.75 billion at the

end of July ' 07

y The annual inflation rate was 4.45% for the week ended July 28, 2007

y India's Balance of Payments is expected to remain comfortable

y Merchandise Exports recorded strong growth



y According to reports, productivity growth rate of Indian economy is estimated to

be around 8% and above until 2020

At this stupendous growth of the export sector of Indian economy, it is expected

that India will become the second largest economy in the world after China.

The state of knowledge management in the Indian

export sector

The growth rate of Indian exports has picked up in the recent past. India still has a

huge untapped potential for meeting world demand. Empirical research has found

that Knowledge Management (KM) leads to improved performance and

competitiveness. This research work studies the state of the art of KM amongIndian exporters. The research work surveyed experts to have a macro perspective

and exporters to have a micro perspective. Based on the experts' opinion and

exporters' survey, we found that international export firms are more involved with

KM as compared to Indian exporters but that KM is gaining currency among

Indian exporters. Lack of information and poor knowledge sharing are the main

problems faced by Indian exporters and they need to focus on KM for achieving

sustainable competitiveness.



Some "Do's and Don'ts of Export Planning

DO ensure your key staff members are µsigned on¶ to the Plan.

DO seek good advice ± and test your Export Plan with advisers.

DON¶T create a bulky document that remains static.

DO review the Export Plan regularly with your staff and advisers.

DO assign responsibility to staff for individual tasks.

DON¶T use unrealistic timelines. Review them regularly ± they often slip.

DO create scenarios for changed circumstances ± look at the ³what ifs´ for

changes in the market environment from minor to major shifts in settings. e.g.

changes of government, new import taxes.

DO develop an integrated timeline that draws together the activities that make upthe Export Plan.

DO make sure that you have the human and financial resources necessary to

execute the Export Plan. Ensure existing customers are not neglected.



NEW EXPORT AND IMPORT POLICY 2001-2002

INTR ODUCTION

Notification 1.1 In exercise of the powers conferred under Section 5

of the Foreign Trade (Development and Regulation

Act), 1992 (No. 22 of 1992), the Central Government

hereby notifies the Export and Import Policy for the

period 1997-2002.

Duration 1.2 This Policy shall come into force with effect from 1st

April, 1997 and shall remain in force for a period of

five years, i.e, upto 31st March, 2002 and will be co-

terminus with the Ninth Five Year Plan (1997-2002).

1.3 The Central Government reserves the right in public

interest to make any amendments to this Policy in

exercise of the powers conferred by section 5 of the

Act. Such amendment shall be made by means of a

Notification published in the Gazette of India.

Transitional

Arrangements

1.4 Any Notifications made or Public Notices issued or

anything done under the previous Export/Importpolicies, and in force immediately before the

commencement of this Policy shall, in so far as they

are not inconsistent with the provisions of this

Policy, continue to be in force and shall be deemed



to have been made, issued or done under this

Policy. Licences issued before the commencement

of this Policy shall continue to be valid for import

export of the items permitted therein unless

otherwise stipulated

1.5 In case an export or import that is permitted freely

under this Policy is subsequently subjected to any

restriction or regulation, such export or import will

ordinarily be permitted notwithstanding such

restriction or regulation, unless otherwise stipulated,

provided that the shipment of the export or import is

made within the original validity of the irrevocable

letter of credit established before the date of

imposition of such restriction.



OBJECTIVES

2.1 The principal objectives of this Policy are:

To accelerate the country's transition to a globally oriented vibranteconomy with a view to deriving maximum benefits from expandingglobal market opportunities.

To stimulate sustained economic growth by providing access toessential raw materials, intermediates, components, consumables andcapital goods required for augmenting production.

To enhance the technological strength and efficiency of Indian

agriculture, industry and services, thereby improving their competitive strength while generating new employmentopportunities, and to encourage the attainment of internationallyaccepted standards of quality.

To provide consumers¶ with good quality products at reasonable prices.

2.2 The objectives will be achieved through the coordinated efforts of allthe departments of the government in general and the Ministry of Commerce and Industry and the Directorate General of Foreign Tradeand its network of Regional Offices in particular, with a shared visionand commitment and in the best spirit of facilitation, in the interest of export promotion.



GENERAL PR OVISIONS R EGARDING IMPORTS AND

EXPORTS

Exports andImports FreeUnlessRegulated

4.1 Exports and Imports shall be free, except to the extentthey are regulated by the provisions of this Policy or any other law for the time being in force. Theitemwise export and import policy shall be, asspecified in ITC(HS) published and notified byDirector General of Foreign Trade, as amended fromtime to time.

For the purpose of claiming any benefit under thePolicy, it shall be obligatory to mention 8 digitITC(HS) code invariably in the shipping bill.Wherever a specific code entry does not appear at the8 digit level, the 8 digit of "others" in that categorywill be mentioned.

Principles of Restriction

4.2 DGFT may,through a notification, adopt and enforceany measure necessary for:-

Protection of public morals.

Protection of human, animal or plant life or health.

Protection of patents, trade marks and copyrights andthe prevention of deceptive practices.

Prevention of prison labour.

Protection of national treasures of artistic, historic or

archeological value.

Conservation of exhaustible natural resources.

Protection of trade of fissionable material or materialfrom which they are derived; and



Prevention of traffic in arms, ammunition andimplements of war.

4.3 Deleted4.4 Deleted

RestrictedGoods.

4.5 Any goods, the export or import of which isrestricted under ITC(HS) may be exported or imported only in accordance with a licence issued inthis behalf.

Terms andConditions of

a Licence

4.6 Every licence shall be valid for the period of validityspecified in the licence and shall contain such terms

and conditions as may be specified by the licensingauthority which may include:

y The quantity, description and value of the goodsy Actual User condition ;y Export obligation ;y The value addition to be achieved; andy The minimum export price.

Licence not aRight

4.7 No person may claim a licence as a right and theDirector General of Foreign Trade or the licensingauthority shall have the power to refuse to grant or renew a licence in accordance with the provisions of the Act and the Rules made thereunder.



State Trading 4.8 Any good, the import or export of which is governedthrough exclusive or special privileges granted toState Trading Enterprise(s), may be imported or exported by the State Trading Enterprise(s) as

specified in the ITC(HS) Classification of Export andImport Item Book subject to the conditions specifiedtherein. The Director General of Foreign Trade may,however, grant a licence to any other person toimport or export any of these goods.

In respect of goods the import or export of which isgoverned through exclusive or special privilegesgranted to State Trading Enterprise(s) the StateTrading Enterprise(s) shall make any such purchases

or sales involving imports or exports solely inaccordance with commercial considerations,including price, quality, availability, marketability,transportation and other conditions of purchase or sale. These enterprises shall act in a nondiscriminatory manner and shall afford theenterprises of other countries adequate opportunity,in accordance with customary business practice, tocompete for participation in such purchases or sales.

Importer-Exporter Code Number

4.9 No export or import shall be made by any personwithout an Importer-Exporter Code (IEC) number unless specifically exempted. An Importer-Exporter Code (IEC) number shall be granted on application bythe competent authority in accordance with the

procedure specified in the Handbook (Vol.1)

Registration -cum-Membership

Certificate

4.10 Any person, applying for (i) a licence to import/export, [except items listed as restricted items inITC(HS)] or (ii) any other benefit or concession under

this Policy shall be required to furnish Registration-cum-Membership Certificate (RCMC) granted by thecompetent authority in accordance with the procedurespecified in the Handbook (Vol.1) unless specificallyexempted under the Policy.



Procedure 4.11 The Director General of Foreign Trade may, in anycase or class of cases, specify the procedure to befollowed by an exporter or importer or by anylicensing, competent or other authority for the

purpose of implementing the provisions of the Act,the Rules and the Orders made thereunder and thisPolicy. Such procedures shall be included in theHandbook (Vol.1), Handbook(Vol.2) and inITC(HS) and published by means of a Public Notice.Such procedures may, in like manner, be amendedfrom time to time.

Compliancewith Laws

4.12 Every exporter or importer shall comply with the provisions of the Foreign Trade (Development and

Regulation) Act, 1992, the Rules and Orders madethereunder, the provisions of this Policy and the termsand conditions of any licence granted to him, as wellas provisions of any other law for the time being inforce. All imported goods shall also be subject todomestic Laws, Rules, Orders, Regulations, technicalspecifications, environmental and safety norms asapplicable to domestically produced goods.

Interpretationof Policy

4.13 If any question or doubt arises in respect of theinterpretation of any provision contained in thisPolicy, or regarding the classification of any item inthe ITC(HS), Handbook (Vol.1), Handbook (Vol.2),the said question or doubt shall be referred to theDirector General of Foreign Trade whose decisionthereon shall be final and binding.

If any question or doubt arises whether a licence has been issued in accordance with this Policy or if anyquestion or doubt arises touching upon the scope and

content of a licence, the same shall be referred to theDirector General of Foreign Trade whose decisionthereon shall be final and binding.



Exemptionfrom Policy/Procedure

4.14 Any request for relaxation of the provisions of thisPolicy or of any procedure, on the ground that thereis genuine hardship to the applicant or that a strictapplication of the Policy or the procedure is likely to

have an adverse impact on trade, may be made to theDirector General of Foreign Trade for such relief asmay be necessary. The Director General of ForeignTrade may pass such orders or grant such relaxationor relief as he may deem fit and proper. The Director General of Foreign Trade may, in public interest,exempt any person or class or category of personsfrom any provision of this Policy or any procedureand may, while granting such exemption, imposesuch conditions as he may deem fit. Such request

may be considered only after consulting ALC if therequest is in respect of a provision of Chapter 7 of the Policy/Procedure. However, any such request inrespect of a provision other than Chapter-7, may beconsidered only after consulting Policy RelaxationCommittee.

Private/PublicBondedWarehouses

for Imports

4.15 Private/Public bonded warehouses may be set up inthe Domestic Tariff Area as per the terms andconditions of notification issued by Department of

Revenue. Any person may import goods except prohibited items, arms and ammunition, hazardouswaste and chemicals and warehouse them in such

private/public bonded warehouses. Such goods may be cleared for home consumption in accordance withthe provisions of this Policy and against Licence,wherever required. Customs duty as applicable shall

be paid at the time of clearance of such goods. If suchgoods are not cleared for home consumption within a

period of one year or such extended period as thecustom authorities may permit, the importer of suchgoods shall re-export the goods.

Trade with NeighboringCountries

4.16 The Director General of Foreign Trade may issue,from time to time, such instructions or frame suchschemes as may be required to promote trade andstrengthen economic ties with neighboring countries.



rade withRussia under Debt-Repayment

Agreement

4.17 In the case of trade with Russia under the DebtRepayment Agreement, the Director General of Foreign Trade may issue, from time to time, suchinstructions or frame such schemes as may be

required, and anything contained in this Policy, in sofar as it is inconsistent with such instructions or schemes, shall not apply.

TransitFacility

4.18 Transit of goods through India from or to countriesadjacent to India shall be regulated in accordance withthe treaty between India and those countries.

Execution of BG/LUT

4.19 Wherever any duty free import is allowed or whereotherwise specifically stated, the importer shallexecute a Legal Undertaking (LUT )/ Bank

Guarantee (BG ) with the Customs Authority beforeclearance of goods through the Customs, in themanner as may be prescribed. In case of indigenoussourcing, the licence holder shall furnish BG/LUT tothe licensing authority before sourcing the materialfrom the indigenous supplier/nominated agencies.

Penalty 4.20 If a licence holder violates any condition of thelicence or fails to fulfil the export obligation, he shall

be liable to action in accordance with the Act, the

Rules and Orders made there under, the Policy andany other law for the time being in force.

Freemovement of Export Goods

4.21 Consignments of items allowed for exports shall not be withheld delayed for any reason by any agency of the Central/State Government. In case of any doubt,the authorities concerned may ask for an undertakingfrom the exporter.

Import/Exportof Samples

4.22 Import and export of samples shall be governed by the provisions given in Handbook (Vol.1)

Third PartyExports

4.23 Third party exports, as defined in paragraph 3.54,shall be allowed under the Policy.

Clearance of Goods fromCustoms

4.24 The goods already imported/ shipped/ arrived, inadvance, but not cleared from Customs may also becleared against the licence issued subsequently.



Green Card 4.25 All status holders and manufacturer exporter exportingmore than 50% of their production, subject to aminimum turnover of Rs.1 crore in preceding year andservice providers rendering services in free foreign

exchange for more than 50% of their servicesturnover, subject to a minimum value of Rs.35 lakhsin free foreign exchange in the preceding year, shall

be issued a green card by Directorate General of Foreign Trade. This card will entitle the holder to thefollowing facilities:

Automatic licensing as mentioned in paragraph 4.26of Handbook (Vol.1).

Automatic Customs clearance for Exports.

Automatic Customs clearance for Imports related toexports. Deleted.

ElectronicDataInterchange

4.26 In an attempt to speed up the transactions and to bring about transparency in various activities relatedto exports, electronic data interchange would beencouraged. Applications received electronicallyfrom the status holders and green card holders shall

be cleared within 24 hours.



IMPORTS

FreeImportability

5.1 Deleted

Actual User Condition

5.2 Capital goods, raw materials, intermediates,components, consumables, spares, parts, accessories,instruments and other goods, which are importablewithout any restriction, may be imported by any

person. However, if such imports require a licence,the Actual User alone may import such goods unlessthe Actual User condition is specifically dispensedwith by the licensing authority.

Second HandGoods

5.3 All second hand goods shall be restricted for importsand may be imported only in accordance with the

provisions of this Policy, ITC(HS), Handbook (Vol.1),Public Notice or a licence issued in this behalf.

5.4 Deleted

Import of Gifts

5.5 Import of gifts shall be permitted where such goodsare otherwise freely importable under this Policy. In

other cases, a Customs Clearance Permit (CCP) shall be required.

Passenger Baggage.

5.6 Bonafide household goods and personal effects may be imported as part of a passenger baggage. Samplesof such items that are otherwise freely importableunder this Policy may also be imported as part of a

passenger baggage without a licence. Exporterscoming from abroad are also allowed to importdrawings, patterns, labels, price tags, buttons, belts,

trimming and embellishments required for export, as part of their passenger baggage without a licence.

Import onExport Basis

5.7 y New or second hand jigs, fixtures, dies(including contour roller dies), moulds(including moulds for die-casting), patterns,

press tools and lasts, construction machinery,



containers/ packages meant for packing of goods for export and other equipments, may beimported for export without a licence onexecution of Legal Undertaking/Bank

Guarantee with the Customs Authoritiesy Deleted

Re-Import Of GoodsRepairedAbroad

5.8 Capital goods, aircraft including their components,spare parts and accessories, whether imported or indigenous, may be sent abroad for repairs, testing,quality improvement or upgradation of technology andre-imported without a licence.

Import Of

MachineryAndEquipmentUsed InProjectsAbroad.

5.9 After completion of the projects abroad, project

contractors may import, without a licence, usedconstruction equipment, machinery, related sparesupto 20% of the CIF value of such machinery, toolsand accessories. Used office equipment and vehiclesmay also be imported after completion of the projectsabroad without a licence provided they have been usedfor at least one year.

Sale on HighSeas

5.10 Sale of goods on high seas for import into India may be made subject to this Policy or any other law for thetime being in force.

Import under LeaseFinancing

5.11 Permission of licensing authority is not required for import of new capital goods under lease financing.



EXPORT PR OMOTION CAPITAL GOODS SCHEME

Scheme 6.1 New capital goods, including computer softwaresystems, may be imported under the ExportPromotion Capital Goods (EPCG) Scheme.

Import onConcessionalDuty

6.2 Capital goods (CG), including jigs, fixtures, dies,moulds and spares may be imported at 5% Customsduty subject to an export obligation equivalent to 5times CIF value of capital goods on FOB basis or 4times the CIF value of capital goods on NFE basisto be fulfilled over a period of 8 years reckonedfrom the date of issuance of licence.

For calculation of NFE, the provision of paragraph12.6 of the Policy shall apply.

Eligibility y Under the scheme, manufacturer exporterswith or without supporting manufacturer(s)/vendor(s), merchant exporters tied tosupporting manufacturer(s) and service

providers are eligible to import capital goods.

The capital goods imported by the licenceholder shall be installed at the factory of thelicence holder or his supportingmanufacturer(s)/ vendor(s).

y If the licence issued under the scheme hasactually been utilised for import of a value inexcess of or less than 10% of the CIF value of the licence, license shall be deemed to have

been enhanced/ reduced by that proportion.

Export obligation shall accordingly beenhanced/ reduced as per the actual utilisationof the licence.

Conditions for Import of Capital Goods

6.4 Import of capital goods shall be subject to ActualUser condition till the export obligation is completed.



ExportObligation

6.5 The following conditions shall apply to thefulfillment of the export obligation:

y The export obligation shall be fulfilled by the

export of goods manufactured or produced bythe use of the capital goods imported under the scheme. The export obligation may also

be fulfilled by the export of same goods, for which EPCG licence has been obtained,manufactured or produced in differentmanufacturing units of the licenceholder/specified supporting manufacturer(s)/vendor(s).

However, if exporter is processing further toadd value on the goods so manufactured, theexport obligation shall stand enhanced by50%.

y The exports shall be direct exports in thename of the EPCG licence holder. However,the export through third party(s) is alsoallowed provided the name of the EPCGLicence holder is also indicated on the

shipping bill. If a merchant exporter is theimporter, the name of the supportingmanufacturer shall also be indicated on theshipping bills. At the time of export, theEPCG licence No. and date shall be endorsedon the shipping bills which are proposed to be

presented towards discharge of exportobligation.

y Export proceeds shall be realised in freelyconvertible currency except for deemed

exports under paragraph 6.5(iv). However, incase of exports against irrevocable letter of credit in free foreign exchange, realisation of export proceeds need not be insisted for fulfillment of export obligation.

y Exports shall be physical exports. However,deemed exports as specified in paragraph 10.2



(a), (b), (d), (f), and (g) of Policy shall also becounted towards fulfillment of exportobligation, but the EPCG licence holder shallnot be entitled to claim any benefit under

paragraph 10.3 of this Policy in respect of such deemed exports. The supplies made tothe Oil and Gas sector may be countedtowards discharge of export obligation againstan EPCG licence provided the licence has

been issued on or before 31.3.2000 and no benefit under paragraph 10.3 of the Policy has been claimed on such supplies.

y The export obligation under the scheme shall be, in addition to any other export obligation

undertaken by the importer, except the exportobligation for the same product as defined in

paragraph 6.5(vi) below. The exportobligation under the scheme, shall be, over and above, the average level of exportsachieved by him in the preceding threelicensing years for same and similar products.Wherever the average level of export wasfixed taking into account the exports made to

such countries as are notified by the DGFTfrom time to time for this purpose, theaverage level of exports shall be reduced byexcluding exports made to these countries.This waiver shall be applicable to all EPCGlicences which have not been redeemed/regularised.

However, exports made against any EPCGlicence, except the EPCG licences, which

have been redeemed, shall not be added upfor calculating the average export

performance for the purpose of thesubsequent EPCG licence. If the exporter achieves an export of 75% of the annual valueof the production of the relevant export



product, the export obligation against theEPCG licence shall be subsumed under thatexport, provided the aggregate value of suchexports during the specified period shall not

be less than the aggregate value of the exportobligation fixed under paragraph 6.2 of thisPolicy.

y Where the manufacturer exporter hasobtained licences for the manufacture of thesame export product both under EPCG andthe Duty Exemption or Diamond ImprestLicence Scheme or made exports under DEPB/DFRC/ replenishment licences, the

physical exports made under these Schemes

shall also be counted towards the discharge of the export obligation under EPCG scheme.

y In case of export of computer software,agriculture, aquaculture, animal husbandry,floriculture, horticulture, pisciculture,viticulture, poultry and sericulture, the exportobligation shall be determined in accordancewith paragraph 6.2 of the Policy, but thelicence holder shall not be required to

maintain the average level of exports asspecified in sub- paragraph (v) above.

6.6 Deleted

Import of Componentsand Goods inDisassembled/

Un-assembledCondition

6.7 A person may apply for a licence under the EPCGscheme to import the capital goods in dis-assembled/ un-assembled condition to be assembledinto capital goods by the importer or components of

such capital goods required for assembly or manufacture of capital goods by the importer. Thisfacility shall not be available for replacement of

parts.



IndigenousSourcing of Capital Goodsand benefits to

domesticsupplier

6.8 A person holding an EPCG licence may source thecapital goods from a domestic manufacturer insteadof importing them. The domestic manufacturer supplying capital goods to EPCG licence holders

shall be eligible for deemed export benefit under paragraph 10.3 of the Policy.

In the event of a firm contract between the EPCGlicence holder and domestic manufacturer for suchsourcing, the domestic manufacturer may apply for the issuance of Advance Licence for deemedexports for the import of inputs includingcomponents required for the manufacturer of saidcapital goods.

The domestic manufacturer may also replenish theinputs including components after supply of capitalgoods to the EPCG licence holders. The exportobligation relating to the EPCG licence shall bereckoned with reference to the CIF value of thelicence actually utilized.

Fulfillment of export

obligation bydomesticsupplier

Notwithstanding anything stated in paragraph 6.5above, the domestic manufacturer supplying capital

goods against EPCG licence shall be required tofulfill the export obligation by supplying the specifiedcapital goods as indicated on the licence and byreceiving payment from EPCG licence holder through normal banking channels.



DUTY EXEMPTION/R EMISSION SCHEMES

7.1 The Duty Exemption Scheme enables import of inputs required for export production. The DutyRemission Scheme enables post exportreplenishment/ remission of duty on inputs used inthe export product.

7.2 An Advance Licence is issued under Duty Exemption

Scheme to allow import of inputs, which are physically incorporated in the export product (makingnormal allowance for wastage). In addition, fuel, oil,energy, catalysts etc. which are consumed in thecourse of their use to obtain the export product, mayalso be allowed under the scheme. Advance Licencecan be issued for:-

Physical exports

Intermediate supplies

Deemed exports.

Advance Licences can also be issued on the basis of annual requirement for exports/supplies as mentionedat (a) to (c) above in accordance with the conditionsgiven in Handbook (Vol.1).

Duty Remission Scheme consists of (a) Duty Free

Replenishment Certificate and (b) Duty EntitlementPassbook Scheme. The scheme allows drawback of import charges on inputs used in the export product(making normal allowance for the wastage).



AdvanceLicence

7.3 (a)

Advance Licence is issued for duty free import of inputs, as defined in paragraph 7.2, subject to actual

user condition. Such licences (other than AdvanceLicence for deemed exports) are exempted from payment of basic customs duty, additional customsduty, anti dumping duty and safeguard duty, if any.However, Advance Licence for deemed export shall

be exempted from basic customs duty and additionalcustoms duty only. Such licences are issued to:

y Manufacturer exporter or Main contractor incase of deemed exports.

y Merchant exporter where the merchantexporter agrees to the endorsement of thename(s) of the supporting manufacturer(s) onthe relevant DEEC Book and in the case of deemed exports, sub contractor(s) whosename(s) appear in the main contract.

Such licences and/or materials imported thereunder shall not be transferable even after completion of export obligation.

Such licences shall be issued with a positive valueaddition. However, for exports for which paymentsare not received in freelyconvertible currency, thesame shall be subject to value addition as specified inAppendix- 39 of Handbook (Vol.1) , 1997-2002.

Advance Licence shall be issued in accordance withthe Policy and procedure in force on the date of issue

of licence and shall be subject to the fulfillment of atime bound export obligation as may be specified.

The facility of Advance Licence shall also beavailable where some of the inputs are supplied freeof cost to the exporter. In such cases, for calculationof value addition, the notional value of free of cost



inputs alongwith value of other duty-free inputs shall be taken into consideration.

AdvanceLicence for IntermediateSupply

(b) Advance Licence may be issued for intermediatesupply to a manufacturer-exporter for the import of inputs required in the manufacture of goods to besupplied to the ultimate exporter/deemed exporter holding another Advance Licence.

AdvanceLicence for Deemed Export

(c) Advance Licence can be issued for deemed export tothe main contractor for import of inputs required inthe manufacture of goods to be supplied to thecategories mentioned in paragraph 10.2(b), (c), (d),

(e), (f) and (g) of the Policy.In addition, in respect of supply of goods to specified

projects mentioned in paragraph 10.2 (d), (e), (f) &(g) of the Policy, an Advance Licence for deemedexport can also be availed by the sub-contractor of the main contractor to such project. Such licence for deemed export can also be issued for supplies madeto United Nations Organisations or under the AidProgramme of the United Nations or other

multilateral agencies and paid for in foreignexchange.

Duty FreeReplenishmentCertificate(DFRC)

7.4 Duty Free Replenishment Certificate is issued to amerchant-exporter or manufacturer-exporter for theimport of inputs used in the manufacture of goodswithout payment of basic customs duty, and specialadditional duty. However, such inputs shall besubject to the payment of additional customs dutyequal to the excise duty at the time of import.

Duty Free Replenishment Certificate shall be issuedonly in respect of export products covered under theSIONs as notified by DGFT. However, DFRC shallnot be issued in respect of SIONs which are subjectto "actual user" condition or where the input isallowed with prior import condition or where the



norms allow import of acetic anhydride, ephedrineand pseudo ephedrine in the Handbook (Vol-II).

Duty Free Replenishment Certificate shall be issued

for import of inputs, as per SION, having samequality, technical characteristics and specifications asthose used in the end product and as indicated in theshipping bills. The validity of such licences shall be18 months. DFRC and or the material(s) importedagainst it shall be freely transferable.

The Duty Free Replenishment Certificate shall besubject to a minimum value addition of 33

The export products, which are eligible for modifiedVAT, shall be eligible for CENVAT credit.However, non excisable, non dutiable or noncentrally vatable products, shall be eligible for drawback at the time of exports in lieu of additionalcustoms duty to be paid at the time of imports under the scheme.

The exporter shall be entitled for drawback benefitsin respect of any of the duty paid materials, whether

imported or indigenous, used in the export product as per the drawback rate fixed by Directorate of Drawback (Ministry of Finance). The drawback shallhowever be restricted to the duty paid materials notcovered under SION.

Duty Free Replenishment Certificate may be issuedin respect of exports for which payments are receivedin non-convertible currency. Such exports shall,

however, be subject to value addition as specified inAppendix±39 of Handbook (Vol.1).

Jobbing,Repairing etc.For Re-Export

7.5 Import of goods, including those mentioned asrestricted in ITC(HS) but excluding prohibited items,in terms of paragraph 7.2 supplied free of cost, may be

permitted for the purpose of jobbing without a licenceas per the terms of notification issued by Department



of Revenue from time to time.

ExportObligation 7.6 The period for fulfillment of the export obligationunder Advance Licence shall be as prescribed in theHandbook (Vol.1).

AdvanceRelease Orders/td>

7.7 An Advance Licence holder (except Advance Licencefor intermediate supply) and holder of DFRCintending to source the inputs from indigenoussources/state trading enterprises / EOU/ EPZ/SEZ/EHTP/STP units in lieu of direct import has the optionto source them against Advance Release Orders

denominated in foreign exchange/ Indian rupees. Insuch a case the licence shall be invalidated for directimport and a permission in the form of ARO shall beissued which will entitle the supplier to the benefits of deemed export. The transferee of a Duty FreeReplenishment Certificate shall also be eligible for ARO facility.

Back-to-Back Inland Letter of Credit

7.8 An Advance Licence holder, (except Advance Licencefor intermediate supply) and holder of DFRC may,instead of applying for an Advance Release Order,avail of the facility of Back-to-Back Inland Letter of Credit in accordance with the procedure specified inHandbook (Vol.1).

Prohibited Items 7.9 Prohibited items of imports mentioned in ITC(HS)shall not be imported under the licences issued under the scheme.

Compliancewith ExportPolicy

7.10 Goods mentioned as restricted for exports in ITC(HS)may be exported without specific export licence under Advance Licence for physical exports issued with

prior import condition. In such cases, the licenceholder shall not be allowed to use indigenous inputsand the export product shall be manufactured only outof imported inputs under Advance Licence for

physical exports.



Re-import of Exported Goodsunder AdvanceLicence.

7.11 Goods exported under Advance Licence/DFRC/DEPB may be re-imported in the same or substantially the same form subject to suchconditions as may be specified by the Department of

Revenue from time to time.Admissibility of Drawback

7.12 In the case of an Advance Licence, the drawback shall be available in respect of any of the duty paidmaterials, whether imported or indigenous, used in thegoods exported, as per the drawback rate fixed byMinistry of Finance (Directorate of Drawback). TheDrawback shall however be restricted to the duty paidmaterials as indicated in the DEEC.

Value Addition 7.13 The value addition for the purposes of this chapter

shall be:-VA A - B

= ------------ x 100, where

B

VA is Value Addition

A is the FOB value of the export realised /FOR value of

supply received.B is the CIF value of the imported inputs covered by thelicence, plus any other imported materials used onwhich the benefit of duty drawback is being claimed.

DutyEntitlementPassbook Scheme (DEPB)

7.14 For exporters not desirous of going through thelicensing route, an optional facility is given under DEPB. The objective of Duty Entitlement Passbook Scheme is to neutralise the incidence of Customs dutyon the import content of the export product. The

neutralisation shall be provided by way of grant of duty credit against the export product.

Under the Duty Entitlement Passbook Scheme(DEPB), an exporter may apply for credit, as aspecified percentage of FOB value of exports, made infreely convertible currency. The credit shall be



available against such export products and at suchrates as may be specified by the Director General of Foreign Trade by way of public notice issued in this

behalf, for import of raw materials, intermediates,

components, parts, packaging material etc.The holder of Duty Entitlement Passbook Scheme(DEPB) shall have the option to pay additionalcustoms duty, if any, in cash as well.

Validity 7.15 The DEPB shall be valid for a period of 12 monthsfrom the date of issue.

Transferability 7.16 The DEPB and/or the items imported against it arefreely transferable. The transfer of DEPB shallhowever be for import at the port specified in theDEPB which shall be the port from where exportshave been made. Imports from a port other than the

port of export shall be allowed under TRA facility as per the terms and conditions of the notificationissued by Department of Revenue.

Applicability of Drawback 7.17 The exports made under the DEPB Scheme shall not be entitled for drawback. However, the additionalcustoms duty paid in cash on inputs under DEPB shall

be adjusted as CENVAT Credit or Duty Drawback as per rules framed by the Deptt. of Revenue. In cases,where the Additional Customs Duty is adjusted fromDEPB, no benefit of CENVAT/Drawback shall beadmissible.



DEEMED EXPORTS

Definition 10.1 "Deemed Exports" refers to those transactions inwhich the goods supplied do not leave the country.

Categories of Supply

10.2 The following categories of supply of goods by themain/ sub-contractors shall be regarded as "DeemedExports" under this Policy, provided the goods aremanufactured in India:

y Supply of goods against AdvanceLicence/DFRC under the Duty Exemption

/Remission Scheme;y Supply of goods to Export Oriented Units

(EOUs) or units located in Export ProcessingZones (EPZs) or Special Economic Zone(SEZs) or Software Technology Parks (STPs)or to Electronic Hardware Technology Parks(EHTPs);

y Supply of capital goods to holders of licencesunder the Export Promotion Capital Goods(EPCG) scheme;

y supply of goods to projects financed bymultilateral or bilateral agencies/funds asnotified by the Department of EconomicAffairs, Ministry of Finance under International Competitive Bidding inaccordance with the procedures of thoseagencies/ funds, where the legal agreements

provide for tender evaluation withoutincluding the customs duty;

y

supply of capital goods, including inunassembled/ disassembled condition as wellas plants, machinery, accessories, tools, diesand such goods which are used for installation

purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertiliser plants.



y supply of goods to any project or purpose inrespect of which the Ministry of Finance, by anotification, permits the import of such goodsat zero customs duty coupled with the

extension of benefits under this chapter todomestic supplies;y Supply of goods to the power and refineries

not covered in (f) above.y Supply of marine freight containers by 100%

EOU (Domestic freight containers± manufacturers) provided the said containersare exported out of India within 6 months or such further period as permitted by theCustoms; and

y Supply to projects funded by UN agencies.

The benefits of deemed exports shall be availableunder paragraph (d) (e) (f), and (g) only if the supplyis made under the procedure of InternationalCompetitive Bidding (ICB)

Benefits for Deemed Exports

10.3 Deemed exports shall be eligible for the following benefits in respect of manufacture and supply of goods qualifying as deemed exports:

y Advance Licence for intermediate supply/deemed export.

y Deemed Exports Drawback.



y Refund of Terminal Excise Duty.



Developments Regarding The DeemedExport Rule

Within the panoply of governmental strictures encompassing the American export

control world, two foundational legislative planks are the Export Administration

Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). The

ITAR imposes specific requirements and restrictions on how corporations may

conduct business in the international marketplace even before a license has been

approved. The Department of Stateâ¼�s involvement in regulating export control

activity is fundamentally a function of furthering foreign policy and national

security interests. As such, all permanent or temporary exports of defense articles;

related technical data; and the performance of defense services by a U.S. person to

a foreign person, individual, company or government, require the correct usage of

licenses or license exceptions. The EAR regulates the export of â¼dual useâ¼

items or inherently non-defense products and data, and is administered and

controlled by the Department of Commerce. Exports usually encompass the

physical transfers of goods to locations outside of the U.S. However, in addition to

goods, the export of technology or software source code (exception being

encryption source code) is ³Deemed´ to take place when it is released to a foreign

national within the United States. (See Â§734.2(b)(2)(ii) of the EAR). Deemedexports refer to the transfer of sensitive dual-used technologies to foreign nationals

working or studying in the United States.



Any foreign national is subject to the ³deemed export´ rule except a foreign

national who (1) is granted permanent residence, as demonstrated by the issuance

of a permanent resident visa (i.e., ³Green Card´); or (2) is granted U.S. citizenship;

or (3) is granted status as a ³protected person´ under 8 U.S.C. 1324b(a)(3). Thisincludes all persons in the U.S. as tourists, students, businesspeople, scholars,

researchers, technical experts, sailors, airline personnel, salespeople, military

personnel, and diplomats. As noted, one exception to this general statement is a

³protected person.´ ³Protected persons´ include political refugees and political

asylum holders. Be aware that individuals seeking ³protected person´ status must

satisfy all of the terms and conditions that are fully set forth in 8 U.S.C.

1324b(a)(3). It should be emphasized that although the deemed export rule may be

triggered; this does not necessarily mean that a license is required. For example,

the technology may be EAR99 or license exception eligible. Technology may be

³released´ for export when it is available to foreign nationals for visual inspection

(for example, reading technical specifications, plans, blueprints, etc.); when

technology is exchanged orally; or when technology is made available by practice

or application under the guidance of persons with knowledge of the technology.

Per Part 772 of the Export Administration Regulations (EAR), ³technology´ is

specific information necessary for the ³development,´ ³production,´ or ³use´ of a

product.

Several developments in the field of deemed exports have occurred recently. The

Commerce Department has now formed an Advisory Committee to help it revise

rules on deemed exports of sensitive dual-use technologies. The government would

like to revise the current rules because foreign researchers are playing a growing

role in technology research and development. Norman Augustine, former CEO of

Lockheed Martin Corp. and chairman of an advisory committee on deemed



exports, delivered the panel¶s report three months ago. It has been under review

since then by the Bureau of Industry and Secretary (BIS). ³U.S. deemed export

policy must account for the variety of risks we face,´ Mario Mancuso,

Undersecretary of Commerce for industry and security, said in a statement on Feb.6, 2008. ³While our rules should not permit the transfer of sensitive U.S.

technology to a real or potential adversary, they must ensure the United States

remains the most innovative and competitive economy in the world.´ But critics of

the report said it doesn¶t reflect the many adverse comments the advisory

committee received about proposed changes to U.S. deemed export rules. Last

June, the agency dropped plans to tighten restrictions on foreign researchers

working in the U.S. The restrictions were being pushed by the Defense

Department. At the time, universities and research groups vigorously opposed the

plan. Mancuso said the Commerce Department is now working with Pentagon

officials along with bureaucrats at the departments of State and Energy on how to

reform U.S. deemed export rules.

So what are the business implications for your company? Corporate employeeshave frequent contact with foreign nationals, such as at social or professional

interactions; when attending conferences; and through the exchange of written

material by email, facsimile transmissions, and reports. Through these contacts,

employees are precluded from communicating or transmitting technical data. Your

corporation must educate its employees about the risks of unauthorized release of

information. Potential risks include: financial penalties; possible prison sentences;

and loss of export privileges by the Departments of Commerce and State. The

more attention your company pays to the deemed export rule, the stronger your

internal export control regime will become and the risk of violation will be

significantly reduced.



Import Export Law

US businesses compete within an increasingly global economy where large

corporations operate from two or three different nations, with complex import

export laws governing all transactions. When a company has one location

overseas that manufactures an item, another location in another country that

assembles the item with corporate offices located in yet another country, the topic

of International Trade Law immediately becomes a priority for businesses in that

marketplace. In spite of a major trade deficit with most of the world, the UnitedStates continues to play a very important role as both a world importer and

exporter. To understand the laws and regulations regulating import-export trade, it

is important to have a firm grasp of the mechanics and the players involved.

International Shipping and Customs

Most companies involved in the manufacture and export of goods must first select

a shipping company. The choice is based not only on rates but also on a number of

other factors, including specialization in the shipping of certain items. Although

most cargo now travels on board containers which are uniform in size and shape,

certain types of cargo require special arrangements. When cargo arrives at a

foreign port of destination it must normally clear customs. The shipping company



does not deal with customs procedures and delegates the task to a customs broker

who can also be completely independent of the company. The shipper can select its

own customs broker, though it is often the shipping company that selects one.

For the shipment of certain types of cargo and restricted items, a whole set of laws

comes into play relating to export controls. The purpose of export controls is to

deny actual and potential enemies access to technologies which are likely to

increase their military threat. Although after the end of the Cold War some controls

are being relaxed, there are still some which remain in place. Among the relevant

laws are the Arms Export Control Act and the Export Administration Act, as

amended. In addition to specific U.S. regulations, there are also laws which were

drafted by Western nations in order to implement a common defense policy.

Among them are the COCOM Procedures (Coordinating Committee on

Multilateral Export Controls). The main difference between COCOM controls and

U.S. export controls is that the American ones are more comprehensive, more

likely to be vigorously enforced and involve more severe penalties for

infringement.

Doing Business in a Foreign Country

In many cases, an American company wishing to export to a country where importrestrictions and high duty rates apply or where market penetration is particularly

difficult, may wish to work with a company in that country or even the

government. Cooperation with a local company or the local government can take

different forms. The most common device is to form a joint venture. Another



option is to form a subsidiary of the American company in the country concerned.

Other forms of corporate arrangements such as the sale of stock can also be

available.

In order to better do business in a foreign country, in addition to forming alliances

with foreign entities, the American company should also certainly be familiar with

the laws and regulations of that country. Among the issues to consider are general

restrictions on imports, specific quality and safety requirements, origin of

components for duty and tariffs purposes, copyright and patent rights, and others.

When a third country is involved in the transactions (i.e. when a semifinished

product is shipped to one country for final assembly and then reshipped to another

for distribution and sale), many of the same issues come into play several times

over. In conducting international trade, it is often necessary to study the laws and

regulations of several countries before even completing the business plan.

Importing Goods, Trade Barriers

What has been said about exporting goods and services overseas is also true for

importing goods and services into the United States. In fact, while the U.S. raises

very few barriers to trade and is a very efficient place to conduct business in, it has

many laws and regulations in place regarding safety and quality controls that donot exist in other countries. Take, for example, unique copyright infringement and

software distribution laws governing US transactions. Also of concern are the same

type of customs regulations faced in the foreign market, but now subject to

regulation by US Customs itself.



Dealing with import export laws and international trade of goods is often one of

the first steps for a growing, worldwide business. While United States business law

actively encourages growth, there are complex legal issues that must be considered

before entering the global marketplace. Consult the international law attorneys of Knox, Johnson, Rockwell & Babbitt for assistance in these and other trade matters.



Business Environment

Generally speaking an environment includes the air we breathe, the water we

drink, the available business, social and educational infrastructure in the locality ,

state and country etc. In the context of business the environment refers to the sum

of internal and external forces operating on an organization. The managers must

perforce recognize the elements, severity and impact of these forces on the

organization. They must identify, evaluate and react to the forces triggered by the

external environment.

More often than not, these forces are beyond the control of an organization and its

managers. Accordingly, the factors of the environment will need to be considered

as inputs in the planning and forecasting models developed by an organization.

It is quite possible that some large organizations themselves constitute a greater

part of the business environment e.g. Public Sector Oil Companies in India.

An organization operates within the larger framework of the external environment

that shapes opportunities and poses threats to the organization. The external

environment is a set of complex, rapidly changing and significant interacting

institutions and forces that affect the organization's ability to serve its customers.

External forces are not controlled by an organization, but they may be influenced

or affected by that organization. It is necessary for organizations to understand the

environmental conditions because they interact with strategy decisions. The

external environment has a major impact on the determination of marketing

decisions. Successful organizations scan their external environment so that they



can respond profitably to unmet needs and trends in the targeted markets.

The Organization as a System

Internally, an organization can be viewed as a resource conversion machine thattakes inputs (labor, money, materials and equipment) from the external

environment (i.e., the world outside the boundaries of the organization), converts

them into useful products, goods, and services, and makes them available to

customers as outputs. The organization must continuously monitor and adapt to the

environment if it is to survive and prosper. Disturbances in the environment may

spell profound threats or new opportunities. The successful organization will

identify, appraise, and respond to the various opportunities and threats in its

environment.

External Macro environment

The external macro environment consists of all the outside institutions and forces

that have an actual or potential interest or impact on the organization's ability to

achieve its objectives: competitive, economic, technological, political, legal,

demographic, cultural, and ecosystem. Though noncontrollable, these forces

require a response in order to keep positive actions with the targeted markets. An

organization with an environmental management perspective takes aggressive

actions to affect the forces in its marketing environment rather than simply

watching and reacting to it.

1. Economic Environment

The economic environment consists of factors that affect consumer purchasing power and spending patterns. Economic factors include business cycles, inflation,

unemployment, interest rates, and income. Changes in major economic variables

have a significant impact on the marketplace. For example, income affects

consumer spending which affects sales for organizations. According to Engel's



Laws, as income rises, the percentage of income spent on food decreases, while the

percentage spent on housing remains constant.

2. Technological Environment

The technological environment refers to new technologies, which create new product and market opportunities. Technological developments are the most

manageable uncontrollable force faced by marketers. Organizations need to be

aware of new technologies in order to turn these advances into opportunities and a

competitive edge. Technology has a tremendous effect on life-styles, consumption

patterns, and the economy. Advances in technology can start new industries,

radically alter or destroy existing industries, and stimulate entirely separate

markets. The rapid rate at which technology changes has forced organizations to

quickly adapt in terms of how they develop, price, distribute, and promote their

products.

3. Political and Legal Environment

Organizations must operate within a framework of governmental regulation and

legislation. Government relationships with organizations encompass subsidies,

tariffs, import quotas, and deregulation of industries.

The political environment includes governmental and special interest groups that

influence and limit various organizations and individuals in a given society.

Organizations hire lobbyists to influence legislation and run advocacy ads that state

their point of view on public issues. Special interest groups have grown in number

and power over the last three decades, putting more constraints on marketers. The

public expects organizations to be ethical and responsible. An example of response by marketers to special interests is green marketing, the use of recyclable or

biodegradable packing materials as part of marketing strategy.

The major purposes of business legislation include protection of companies from

unfair competition, protection of consumers from unfair business practices and



protection of the interests of society from unbridled business behavior. The legal

environment becomes more complicated as organizations expand globally and face

governmental structures quite different from those within the United States.

4. Demographic EnvironmentDemographics tell marketers who current and potential customers are; where they

are; and how many are likely to buy what the marketer is selling. Demography is

the study of human populations in terms of size, density, location, age, sex, race,

occupation, and other statistics. Changes in the demographic environment can

result in significant opportunities and threats presenting themselves to the

organization. Major trends for marketers in the demographic environment include

worldwide explosive population growth; a changing age, ethnic and educational

mix; new types of households; and geographical shifts in population.

5. Social / Cultural Environment

Social/cultural forces are the most difficult uncontrollable variables to predict. It is

important for marketers to understand and appreciate the cultural values of the

environment in which they operate. The cultural environment is made up of forces

that affect society's basic values, perceptions, preferences, and behaviors. U.S.

values and beliefs include equality, achievement, youthfulness, efficiency,

practicality, self-actualization, freedom, humanitarianism, mastery over the

environment, patriotism, individualism, religious and moral orientation, progress,

materialism, social interaction, conformity, courage, and acceptance of

responsibility. Changes in social/cultural environment affect customer behavior,

which affects sales of products. Trends in the cultural environment includeindividuals changing their views of themselves, others, and the world around them

and movement toward self-fulfillment, immediate gratification, and secularism.

6. Ecosystem Environment

The ecosystem refers to natural systems and its resources that are needed as inputs



by marketers or that are affected by marketing activities. Green marketing or

environmental concern about the physical environment has intensified in recent

years. To avoid shortages in raw materials, organizations can use renewable

resources (such as forests) and alternatives (such as solar and wind energy) for nonrenewable resources (such as oil and coal). Organizations can limit their energy

usage by increasing efficiency. Goodwill can be built by voluntarily engaging in

pollution prevention activities and natural resource.

External Microenvironment

The external microenvironment consists of forces that are part of an organization's

marketing process but are external to the organization. These micro environmental

forces include the organization's market, its producer-suppliers, and its marketing

intermediaries. While these are external, the organization is capable of exerting

more influence over these than forces in the macro environment.

1. The Market

Organizations closely monitor their customer markets in order to adjust to

changing tastes and preferences. A market is people or organizations with wants to

satisfy, money to spend, and the willingness to spend it. Each target market has

distinct needs, which need to be monitored. It is imperative for an organization to

know their customers, how to reach them and when customers' needs change in

order to adjust its marketing efforts accordingly. The market is the focal point for

all marketing decisions in an organization.

2. Suppliers

Suppliers are organizations and individuals that provide the resources needed to produce goods and services. They are critical to an organization's marketing

success and an important link in its value delivery system.

3. Marketing Intermediaries

Like suppliers, marketing intermediaries are an important part of the system used



to deliver value to customers. Marketing intermediaries are independent

organizations that aid in the flow of products from the marketing organization to its

markets. The intermediaries between an organization and its markets constitute a

channel of distribution. These include middlemen (wholesalers and retailers who buy and resell merchandise). Physical distribution firms help the organization to

stock and move products from their points of origin to their destinations.

Warehouses store and protect the goods before they move to the next destination.

Marketing service agencies help the organization target and promote its products

and include marketing research firms, advertising agencies, and media firms.

Financial intermediaries help finance transactions and insure against risks and

include banks, credit unions, and insurance companies.



Factors in Product Selection Key

� The product should be manufactured or sourced with consistent standard quality,comparable to your competitors. ISO or equivalent certification helps in selling the

product in the international market.

� If possible, avoid products which are monopoly of one or few suppliers. If you

are the manufacturer - make sure sufficient capacity is available in-house or you

have the wherewithal to outsource it at short notice. Timely supply is a key success

factor in export business� The price of the exported product should not fluctuate very often - threatening

profitability to the export business.

� Strictly check the government policies related to the export of a particular

product. Though there are very few restrictions in export - it is better to check

regulatory status of your selected product.

� Carefully study the various government incentive schemes and tax exemption like

duty drawback and DEPB.

� Import regulation in overseas markets, specially tariff and non-tariff barriers.

Though a major non-tariff barrier (textile quota) has been abolished - there are still

other tariff and non-tariff barriers. If your product attracts higher duty in target

country - demand obviously falls.

� Registration/Special provision for your products in importing country. This is

specially applicable for processed food and beverages, drugs and chemicals.



� Seasonal vagaries of selected products as some products sell in summer, while

others in winter. Festive season is also important factor, for example certain

products are more sellable only during Christmas.

� Keep in mind special packaging and labeling requirements of perishable products

like processed food and dairy products.

� Special measures are required for transportation of certain products, which may

be bulky or fragile or hazardous or perishable.



Factors to consider include:

1. Geographical Factors

o Country, state, region,

o Time zones,

o Urban/rural location logistical considerations e.g. freight and distribution

channels

2. Economic, Political, and Legal Environmental Factors

o Regulations including quarantine,

o Labelling standards,

o Standards and consumer protection rules,

o Duties and taxes

3. Demographic Factors

o Age and gender,

o Income and family structure,

o Occupation,o Cultural beliefs,

o Major competitors,

o Similar products,

o Key brands.

4. Market Characteristics

o Market size,o Availability of domestic manufacturers,

o Agents, distributors and suppliers.



Foreign Market Research

Understanding a market¶s key characteristics requires gathering a broad range of primary and secondary research, much of which you can source without cost from

the internet.

Primary research, such as population figures, product compliance standards,

statistics and other facts can be obtained without any cost from international

organizations like United Nations (UN) and World Trade Organizations (WTO).

Analysis of export statistics over a period of several years helps an individual to

determine whether the market for a particular product is growing or shrinking.

Secondary research, such as periodicals, studies, market reports and surveys, can

be found through government websites, international organisations, and

commercial market intelligence firms.



Foreign Market Selection Process

Step 1: Gather Information on a Broad Range of Markets

Market selection process requires a broad range of informations depending upon

the products or services to be exported, which includes:

y The demand for product/service.

y The size of the potential audience.

y Whether the target audience can affords product.y What the regulatory issues are that impact on exports of product.

y Ease of access to this market ± proximity/freight.

y Are there appropriate distribution channels for product/service.

y The environment for doing business ± language, culture, politics etc.

y Is it financially viable to export to selected market.

You can gather much of the first step information yourself from a variety of

sources at little or no cost. Sources of information include:

y Talking to colleagues and other exporters.

y Trade and Enterprise ± web site, publications, call centre.

y The library.

y The Internet.

Step 2: Research a Selection of Markets In-Depth



From the results of the first stage, narrow your selection down to three to five

markets and undertake some in-depth research relating specifically to your product.

While doing so, some of the questions that may arise at this stage are:

y What similar products are in the marketplace (including products that may

not be similar but are used to achieve the same goal, e.g. the product in our

sample matrix at the end of this document is a hair removal cream. As well

as undertaking competitor research on other hair removal creams, we would

also need to consider other products that are used for hair removal, i.e.

razors, electrolysis, wax).

y What is your point of difference? What makes your product unique? What

are the key selling points for your product?

y How do people obtain/use these products?

y Who provides them?

y Are they imported? If so from which countries?

y Is there a local manufacturer or provider?

y Who would your major competitors be? What are the key brands or tradenames?

y What is the market¶s structure and shape?

y What is the market¶s size?

y Are there any niche markets, and if so how big are they?

y Who are the major importers/ stockists / distributors / agencies or suppliers?

y What are the other ways to obtain sales/representation?

y What are the prices or fees in different parts of the market?

y What are the mark-ups at different distribution levels?

y What are the import regulations, duties or taxes, including compliance and

professional registrations if these apply?



y How will you promote your product or service if there is a lot of

competition?

y Are there any significant trade fairs, professional gathers or other events

where you can promote your product or service?y Packaging ± do you need to change metric measures to imperial, do you

need to list ingredients?

y Will you need to translate promotional material and packaging?

y Is your branding ± colours, imagery etc., culturally acceptable?



Foreign Market Selection Entry

Having completed the market selection process and chosen your target market, the

next step is to plan your entry strategy.

There are a number of options for entering your chosen market. Most exporters

initially choose to work through agents or distributors. In the longer term, however,

you may consider other options, such as taking more direct control of your market,

more direct selling or promotion, or seeking alliances or agreements.



GLOBAL ENVIR ONMENTAL THR EATS

AND CHALLENGES

Our damaged environment now concerns us all. We as caretakers

should address these global environmental threats and challenges

through collective action.



GLOBAL ENVIR ONMENTAL THR EATS AND

CHALLENGES

W e sometimes emphasize the danger in a crisis without focusing on the

opportunities that are there. W e should feel a great sense of urgency because it is

the most dangerous crisis we have ever faced, by far. But it also provides us with

opportunities to do a lot of things we ought to be doing for other reasons anyway.

And to solve this crisis we can develop a shared sense of moral purpose. -

Undoubtedly all of us accept that in the past several decades, environmental threatsand challenges are continuously becoming evident and alarming. The biochemistry

of the planet earth is affected by global warming, climate change, ozone depletion,

deforestation, species extinction, pollution, desertification and soil erosion. Global

warming threatens to destabilize every bioregion on Earth in the new millennium.

Several scientists predict climate changes of unprecedented magnitude. Changes

that are now leading to worldwide loss of agricultural products, rising of oceans,floods, super hurricanes and could also lead to the whole destruction of the entire

ecosystems. The atmospheric ozone depletion is causing additional cancers and

deaths from exposure to deadly ultraviolet radiation. Ultraviolet rays also greatly

decrease the growing capacity of plants and seriously weakening the immune

systems of humans and animals, raising famine and pestilence. We are even

witnesses to mass deforestation which is being done to give way to cattle pastures

and cultivation and to provide logs for commercial and residential purposes.

Cutting of trees are leading to massive soil erosion. Desertification makes the

entire land surfaces of the planet in danger. Globally, a potentially catastrophic

reduction in the gene pool of edible plants and animals has happened in just a few



decades and is rapidly worsening. Researches show that every six minutes we are

losing a species and we are experiencing now the loss of more than 15 percent of

the entire planet and animal kingdom. Many of these species play a critical role in

human survival, in providing us with food, fiber, pharmaceuticals and an array of useful substances and products.

The global environmental crisis affects every one of us. Nobody can ever escape

the global consequences of these environmental realities. Their impacts will

continue to be felt by every human being and by every species with which we

share this planet. Our damaged environment now concerns us all. We as caretakers

should address these global environmental threats and challenges through

collective action. Let us act now. Let us do our part. W e have to think about the

future generations. Our planet earth needs us. Most of all we should not forget that

God created everything for us to enjoy and not to destroy and we should not wait

for the time He would get everything back from us.



The study found that northern and western India were most affected by thethreat of desertification



RESEARCH

METHODOLOGY



RESEARCH METHODOLOGY

The research design in simply the framework for a study that

guides the collection & and analysis of data by the survey of 100 users

of exporters.

The sampling method used is the judgement sampling .

All the data required for the purpose obtained mainly from data

collection method .

The research is to look for the sources of data , which may

yield required information .

At the stage two types of data are available .

a. Primary data .

b. Secondary data .



The data which is collected , at first hand either by the researcher or by someone else specially for the purpose of the study is known as

primary data . The primary data collection scan various existing sources.

Secondary data for required information.

The secondary data on the other hand are those which already been

passed through the statistical process .

The data collection mode is used to get desired information

from primary sources is unstructured direct interview & the instrument

used into the questionnaire .

SURVEY OF USERS OF EXPORTERS:

THE UNIVERSE :

The universe for this project in the exporters.



SAMPLING UNITS :

The sampling units for the project are main

industry of exporters.

SAMPLING SIZE :

A Sample size of 100 users of exporters has been

taken for this project the sampling has been done in the random names &

is not at all biased .

SAMPLING METHOD :

The random sampling method is used for this

research project .



DATA

ANALYSIS



DATA ANALYSIS & INTERPR ETATION

1. Is government provide the facility to the exporter?

a) Yes b) Noc) Can¶t say

70%

20%

10%

Data analysis

yes

no

can't say



2. Is our exim policy favour to the exporters and the importers?

a) Yes b) Noc) Can¶tsay

45%

35%

20%

Data analysis

yes

no

can'ysay



3. Is government provide any tax relif to the exporter?

a) Yes b) Noc) Can¶tsay

70%

25%

5%

Data analysis

yes

no

can't say



4. Does Special economic zone support to the promotion to the

export?

a) Yes

b) No

c) Cant say

55%

25%

20%

Yes No Can't say



5. Does export promotion board generated the proper economic

environment for export promotion?a) Yes

b) No

c) Cant say

60%20%

20%

Data analysis

Yes

No

Can't say



6. Is our manufacturing or technology providing the export

quality productions?

a) Yes

b) No

c) Cant say

35%

55%

10%

Data analysis

Yes

No

Can't say



7. Does electricity problem in the manufacturing process

reduces the export quotas?

a) Yes

b) No

c) Cant say

75%

20%

5%5%

Data analysis

Yes

No

Can't say



8. Government policies are favorable or not favorable the

export business to exporter?

a) Yes

b) No

65%

35%

Data analysis

Yes

No



FINDINGS

Exports are helpful in economic growth.

During the project I found good employment oppourtunities.

Through exporters have a great facility of choice of product

to their customers. And provide better quality of product.

Through export import easily exporters arrange and availableforeign currency in our country.

Through EXIM policy increase the demand of product

because customer having a lots of choice of product.

Exporters easily full utilized the whole resources.



SUGGESTIONS

Government should help to the exporters to exports their

business for development of our country.

There should be updated technology for increasing their business and standard of living.

Government should provide tax relectation to exporters of any

export business.

There should be proper electricity facility to increase

their export business and increase their income.



LIMITATION

Some limitation faced while doing this project and those are

following-

When I meet exporter person, they consume lots of time.

When I meet exporter person, they not respond properly.

When I meet person but they able to give answer.

The project cost is also a limitation.



CONCLUSION

Exporting helps in the economic growth of the country.

With the help of export policy it improves the standard

of living.

Export policy help in providing proper quality of product.

Exports helps in increasing the foreign exchange

reserve.

Export helps in the proper utilization of resources.



BIBLIOGRAPHY

BOOKS ;

Indian Economy

Business Environment

NEWSPAPERS ;

Times of India

Hindustan Times

The Hindu

Business Line

WEBSITE ;

www.google.com

WWW. India earning. Com

WWW. Times of India.com

MAGAZINE;

Current Affair Magzines

Business Today Magzine



Q UESTIONNAIRE

Name:««..

Occupation:««..

1. Is government provide the facility to the exporter?

�Yes � No �Can¶t say

2. Is our exim policy favour to the exporters and the importers?


3. Is government provide any tax relif to the exporter?

�Yes � No �Can¶t say4. Does Special economic zone support to the promotion to the

export?


5. Does export promotion board generated the proper

economic environment for export promotion?




6. Is our manufacturing or technology providing the

export quality productions?


7. Does electricity problem in the manufacturing

process reduces the export quotas?


8. Government policies are favorable or not favorable

the export business to exporter?


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