Business Studies

International Business II

Question:

Rekha Garments has received an order to export 2000 men's trousers to Swift Imports Ltd. located in Australia. Discuss the procedure that Rekha Garments would need to go through for executing the export order.

Answer:

Rekha Garments will have to adopt the following procedures given below to execute the export order.

  • As the exporter, it should first assess the credit worthiness of the importer. Swift Imports, through an enquiry. It should then ask for a letter of credit from the importer's bank, guaranteeing to honour a draft of a specified amount drawn on it by the exporter.
  • Once Rekha Garments is assured that it will be paid for the goods, it will need to register itself and secure an Importer Exporter Code number in order to obtain an export license.
  • After obtaining the license, it should acquire pre-shipment finance from a bank in order to purchase raw materials to undertake production and packaging.
  • With the finance made available, Rekha Garments can procure the raw materials and other inputs required and start the production process.
  • After the goods are produced, Rekha Garments must get them inspected before exporting them. For this inspection, it must contact the Export Inspection Agency (EIA) or another designated agency and obtain a certificate of inspection.
  • The exporter then needs to secure excise clearance, for which it must submit an invoice to the regional excise commissioner. The excise commissioner then examines the invoice and, if satisfied, issues the excise clearance to the exporter.
  • Once the excise clearance is received, Rekha Garments needs a certificate of origin, which specifies the country in which the goods are being produced. It allows the importer to claim tariff concessions and other exemptions, if any.
  • The next step is for the exporter to submit an application to a shipping company for booking shipping space in a vessel. In the application, it must provide details such as the type of goods to be shipped and the port of destination. After the application is received, the shipping company will issue a shipping order to the captain of its ship to inform him or her that the specified goods will be received on board after the customs clearance.
  • The goods are then properly packed and labelled with Ml the necessary information such as the importer's name, port of destination, and gross and net weight of the goods.
  • Once the goods are ready for export, Rekha Garments must insure the goods against perils of the sea or any related damage.
  • It must then secure customs clearance before loading the goods on the ship. For getting customs clearance, the exporter must submit the necessary documents to the customs appraiser at Customs House.
  • After customs clearance, a mate's receipt will be issued by the captain or commanding officer of the ship to the exporter as evidence that the cargo has been loaded on the ship.
  • Later, a bill of lading will have to be obtained from the shipping company as a token of acceptance that the goods have been put on board in its vessel.
  • After the goods are shipped, an invoice will have to be prepared by the exporter, which will include the quantity of goods sent and the amount to be paid by the importer.
  • The exporter then needs to send a set of documents to the banker, which is to be handed over to the importer on acceptance of a bill of exchange. After receiving the bill of exchange, the importer, Swift Imports, will instruct its bank to transfer money to the exporter's bank account.
  • Last, the exporter would be required to collect a bank certificate of payment, which will state that the necessary documents, along with the bill of exchange, have been presented to the importer for payment, and that the payment has been received in accordance with the exchange control regulations.
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International Business II

Q 1.

List various affiliated bodies of World Bank.

Q 2.

Write a detailed note on features, structure, objectives and functioning of WTO.

Q 3.

Name any two WTO Agreements.

Q 4.

What is Advance License Scheme?

Q 5.

Explain the meaning of the following documents used in connection with import transactions

  1. Trade enquiry,
  2. Import license,
  3. Shipment of advice,
  4. Import general manifest,
  5. Bill of entry.

Q 6.

When was State Trading Corporation established?

Q 7.

What was the objective of MIGA?

Q 8.

Discuss the process involved in securing for exports.

Q 9.

What is the main objective of WTO?

Q 10.

What is Shipping Bill?

Q 11.

Why is it necessary for an export firm to go in for pre-shipment inspection?

Q 12.

How many Export Promotion Councils are there in India?

Q 13.

Define Mate's Receipt.

Q 14.

List out major affiliated bodies of the World Bank.

Q 15.

When was IIFT formed?

Q 16.

Name the most important document of export.

Q 17.

Name the most important document used in import.

Q 18.

Which certificate is necessary to prove that goods are produced in the home country itself ?

Q 19.

Why is export promotion necessary?

Q 20.

Write the full form of ICSID.

Q 21.

Rekha Garments has received an order to export 2000 men's trousers to Swift Imports Ltd. located in Australia. Discuss the procedure that Rekha Garments would need to go through for executing the export order.

Q 22.

Write short notes on the following:

  1. UNCTAD
  2. MIGA
  3. World Bank
  4. ITPO
  5. IMF

Q 23.

Define Export Processing Zones.

Q 24.

Give full form of EPZ and SEZ.

Q 25.

What is IEC number?

Q 26.

How many Commodity Boards are there in India?

Q 27.

What is pre-shipment finance?

Q 28.

Write the full form of DTA.

Q 29.

List and explain various incentives and schemes that the government has evolved for promoting the country's foreign trade.

Q 30.

Identify various organizations that have been set up in the country by the government for promoting country's foreign trade.

Q 31.

Santa Cruz is famous for which exclusive items?

Q 32.

How many regional and international offices does ITPO have?

Q 33.

What is IMF? Discuss its .various objectives and functions.

Q 34.

Name the certificate which is used for ensuring timely payment.

Q 35.

Discuss the principal documents used in exporting.

Q 36.

Why did WTO establish? What are its objectives?

Q 37.

Why is it necessary to get registered with an Export Promotion Council?

Q 38.

What is a Letter of Credit? Why does an exporter need this document?

Q 39.

What is World Bank? Discuss its various objectives and role of its affiliated agencies.

Q 40.

Which agency of World Bank provides loan to private sector of developing countries?

Q 41.

Discuss the formalities involved in getting an export license.

Q 42.

Explain briefly the process of customs clearance of export goods.

Q 43.

Explain the term FOB.

Q 44.

Who is a clearing agent?

Q 45.

Explain the term FOB.

Q 46.

Explain the steps of export procedure.

Q 47.

Discuss the process involved in securing for exports.

Q 48.

What is Performa Invoice?

Q 49.

Write short note on Indent House and Dock Challan.

Q 50.

Explain different organizations involved in export promotion or facilitating foreign trade.