Introduction to the Programme: Part-1 : Overall Coverage and Assessing Export Readiness

1. For Niryat Bandhu Scheme (Session on 25.7.2016) Introduction to the Programme: Part-1 : Overall Coverage and Assessing Export Readiness Dr. Vijaya Katti Chairperson (MDPs) Indian Institute of Foreign Trade New Delhi

2. Coverage • What is meant by exports? • Legal definition • Why to export? Who can export? • International trade scenario and India’s position in global trade • Product specific specialties • Demand of pattern of specific export market specific products • Global market and possibilities of exports • How to assess your export readiness?

3. What is meant by export? - Legal definition

4. Concept of Export • The term export derives from the conceptual meaning as to ship the goods and services out of the port of a country. • The seller of such goods and services is referred to as an “exporter” who is based in the country of export whereas the overseas based buyer is referred to as an “importer”. • In International Trade, “export” refers to selling goods and services produced in the home country to other markets. • In very simple terms, export may be defined as the selling of goods to a foreign country. However, As per Secion2(e) of the India Foreign Trade (Development & Regulations) Act (1992), the term export may be defined as ‘an act of taking out of India any goods by land, sea or air and with proper transaction of money”.

5. Why Export- Reasons for Export • There are many good reasons for exporting. Some of the motives of export are given below: • 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 than their counterpart domestic companies assuming that exporting company has survived 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 area while simultaneously witnessing a bust in a different area.

6. Who can export? • Any one who wants to do something different • Anyone who wants to enter in a profit zone • Anyone who has assessed his readiness to enter in new field & try his luck • Anyone who is willing to take risk • Anyone who is constantly updating himself on global business environment

7. Planning for Export • The organization should plan well before exporting as to what product to be exported, where to be exported etc. The organization should also evaluate the export potential of a company. The main objective of a typical export plan should be to identify: • The objectives of exporting • Lists of activities to undertake to achieve those objectives • Mechanism for review and • Activities to help focus on goals

8. Contd.. • Successful exporters agree that your ability to become an accomplished international traders depends largely on how you Adopt appropriate export development strategy Make every penny count Target new business areas Identify and focus on markets, which consume products having the same competitive profile as the products you can supply Have some idea of impact of the FTAs, WTO standards, SPS Measures, Intellectual Property Rights, domestic regulations on the products of interest Dig out every penny due to you from the system, by making best use of available opportunities, policies and schemes

9. Contd.. • Information on the above subject is spread across numerous websites and documents produced by the Trade Ministries of various countries (For FTA, GSP, Customs duty), DGFT, Customs, RBI, Central Excise, Banks, WTO, Other international bodies. • You do not need to understand everything available, but how do you know what to miss. Information Overload makes impossible demand on your resources and time.

10. Contd.. • The course you have enrolled provides straight answers to innumerable questions asked by the exporters as they launched, developed and grew their business. It is a one stop access to information scattered across 100s of websites, manuals, and schemes : and covers basic essentials for starting your business endeavor.

11. The course on “Export & Import Business” has 7 segments Basic steps for Exporting Marketing related issues (Identification of Product and Market) WTO Related Issues FTP related issues Finance/Risk Management issues • Customs and Excise interface/Sales contract Preparation & Execution of Export Business Plan

12. Contents of the Program

13. Session 1: Introduction to the Programme: Overall Coverage and Assessing Export Readiness

14. Contd.. • Contents of the programme : • Different issues related with identification of products and markets, Exports and Imports, International Sales Contracts, Risk Management and Finance related issues • Foreign Trade Policy related issues • How to assess your export readiness (questionnaire…)

15. Session 2 : Basic Steps involved and Export Potential of States

16. Session 2 contd… : Knowledge about State’s export potential

17. Session 3: How to Access Markets

18. Session 3 contd.: How to find buyers?

19. Session 4 : Sources of International market data (Online & Offline)

20. Session 5 : INCOTERMS 2010

21. Session 6 : Introduction to ITC(HS) Codes. How to get IEC Code

22. Session 6 contd…

23. Session 7 : Free Trade Agreements

24. Session 8 : Foreign Trade Policy (2015:2020): Major highlights

25. Session 8 contd.. : Export: Import Incentives

26. Session 9 : SPS, TBT, NTB

27. Session : 10

28. Session 11 : Export Documentation

29. Session 12 : Duty Draw Back and claims procedures

30. Session : 13

31. Session 14 : Letter of Credit and implication of UCP: 600 rules

32. Session 15 : Financial schemes

33. Session 16 : Understanding RBI guidelines

34. Session 17 : Currency Management

35. Session 18 : Risk Management

36. Session 19 : Preparation & Execution of Export Business Plan

37. Session 20 : PANEL DISCUSSION

38. Export Preliminaries • Export-Import is totally free with very limited restriction (96% items are free items) • To find Buyers-Seller is your decision • To decide Product and its Price-Qty are your decision • You must prepare Export Business Plan

39. Export • Take Order • Find CHA (Custom House Agent) • Find mode of export (Sea/Air) • Find Carrier • Fill Shipping Bill • Take payment • Request for Bank Realisation Certificate • Register for Export Scheme

40. Marketing related issues

41. Marketing – The Concept • Marketing, in the simplest of terms, can be defined as the process which profitably meets the need for products. • The more formal definition of marketing" is that it is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

42. Contd.. • Marketing activities have been traditionally depicted in terms of a marketing mix, which can be defined as the set of marketing tools needed to pursue marketing objectives. The marketing mix consists of four broad groups, popularly referred to as the four Ps of marketing. These are: • Product • Price • Place • Promotion

43. INTERNATIONAL MARKETING • Marketing as a concept is universal, but the markets and behaviour of consumers vary across countries and can be quite different. This makes it essential for any student of international marketing to gain knowledge in three critical areas: • Cross-cultural knowledge • Country/regional knowledge • Cross-border transactions knowledge

44. EXPORT MARKETING-GOING GLOBAL This section addresses the all-important question: Why should a firm enter the international market? Some of the more obvious reasons for firms to enter overseas markets are: • Profitability • Growth • Achieving economies of scale • Risk spread • Access to imported inputs • Uniqueness of products and services • Marketing opportunities due to life cycle • Spreading R&D costs

45. Find Buyer • Experience • Business Promotion: Website • Distributor, Dealers, Commission Agents • Reference • Visits, Exhibition, Event Participation • Advertise and Marketing • Surfing

46. Deciding on Pricing • Price and Pricing Strategies • Profit-Oriented Pricing Objectives • Sales-Oriented Pricing Objectives

47. Product Specific Issues

48. Find Item for Export • Your background : Education, Job Experience, Family Business • Understand Export/Import Database • Supply/Demand • Price • Profitability • Example: Embroidery Machine, Pressing Machine, spinning machine

49. Find HS Code • HS Code – Harmonised System Code • Type in google : Find (item) HS Code • Example : Vitrified Tiles (69071010) • See Chapters, sub heading • Match with your item • Match with 8 digit HS Code

50. Find your Item Type • Three type of items : Free, Prohibitive, Restrictive • Free : Without any restriction, no license, no certificate • Prohibitive: Total ban • Example: All wild animal, animal articles including their products and Derivatives • Restrictive : Under specific condition • Example : Live Horses – Kathiawari, Marwari and Manipuri breeds 96% items are free items