Question:
Why is export promotion necessary?
Answer:
- To Earn Foreign Exchange: Every country in the world is trying to earn a share in the global trade. This is due to the lowering of trade barriers since the inception of the World Trade Organisation (WTO), increased import bills, and increased global competition in the domestic market. Also, most developing countries row heavily from financial institutions like the World Bank and the International Monetary Fund (IMF) and other sources to finance their developmental activities and reduce the balance of payment deficits. It is, therefore, imperative that the import bills as well as foreign loans be paid back in foreign exchange. In order to achieve this, earning foreign exchange through various export activities is the need of the hour.
- To Motivate Organisations to Export: In order to motivate organisations to export and earn precious foreign exchange, governments offer certain incentives. These incentives help reduce the tax burden of the exporters and also achieve a competitive price-edge for their products in foreign markets. However, being a member of WTO, each country has to ensure that the incentives offered by its government do not give an unfair advantage to the exporters. Thus, no country is to give special trading advantages to another or to discriminate against its all nations stand on an equal basis and share the benefits of any move towards lower trade barriers (branch). Also, all export incentives have to comply with WTO norms and should be in line with its various principles.
- To Promote Interests of Indian Exporters and keeping commitment of WTO: In India, the framework of export incentives in the form of duty exemption and remission schemes has been devised keeping in mind the interests of exporters as well as the commitments India has made to WTO.
The Duty Exemption Scheme helps exporters import duty-free inputs required for manufacturing export products. The Duty Remission Schemes enable post-exports replenishment/remission of duty on inputs.
- To Import Capital Goods: In addition to this, the Export Promotion Capital Goods (EPCG) scheme enables exporters to import capital goods at concessional rate of duty and suitable export obligation.
- To Reduce Bureaucratic Hurdles: The incentives detailed above are available to all eligible exporters in India. In addition, the government has launched the very ambitious scheme of Special Economic Zones (SEZs) in order to reduce bureaucratic hurdles in importing inputs for exports and exporting finished products from India. These SEZs are modelled on the highly successful Chinese Economic Zones. It is expected that the SEZs will be the engines of growth in international trade for India.
- To Correct Unfavourable Balance of Trade: During the period of planning, except two years, all other years have witnessed unfavourable balance of trade. It not only reduced the foreign exchange reserves of India but also made it difficult to achieve plan targets. Successful completion of plans, therefore, calls for turning of unfavourable balance of trade into favourable one which requires increase in exports.
- To Reduce Foreign Loans: India has to row large foreign funds to import essential machinery for economic and industrial development. Till March 2009, India had contracted foreign loans amounting to ? 11, 42,618 crore. These loans are to be repaid one day. To pay interest and repay the principal amount of these loans, it is necessary that a policy of export promotion be adopted. Foreign exchange earned as a result of larger exports will be utilized for the repayment of foreign loans.
- To Achieve the Objective of Self-Reliance: One of the main objectives of Indian
plans is to make the country independent of foreign assistance. To achieve this objective, it is necessary to promote exports. By accelerating exports, large amount of foreign currency can be earned. ‘
- To Sell Surplus Production: During the period of planning, new industries have been set-up in India. In order to increase the sale of the products of these industries, their export is to be promoted. It becomes easy to increase exports under export promotion program.
- To Finance Imports: Successful execution of the plans necessitates import of machines and other capital goods from abroad. To earn necessary foreign exchange to meet their import bills, it becomes necessary to increase exports.
International Business II
Q 1.
List various affiliated bodies of World Bank.
Q 2.
Name any two WTO Agreements.
Q 3.
Write a detailed note on features, structure, objectives and functioning of WTO.
Q 4.
What is Advance License Scheme?
Q 5.
Discuss the process involved in securing for exports.
Q 6.
Explain the meaning of the following documents used in connection with import transactions
- Trade enquiry,
- Import license,
- Shipment of advice,
- Import general manifest,
- Bill of entry.
Q 7.
When was State Trading Corporation established?
Q 8.
What is Shipping Bill?
Q 9.
Name the most important document of export.
Q 10.
What was the objective of MIGA?
Q 11.
What is the main objective of WTO?
Q 12.
Name the most important document used in import.
Q 13.
How many Export Promotion Councils are there in India?
Q 14.
Define Mate's Receipt.
Q 15.
Why is it necessary for an export firm to go in for pre-shipment inspection?
Q 16.
Why is export promotion necessary?
Q 17.
List out major affiliated bodies of the World Bank.
Q 18.
Which certificate is necessary to prove that goods are produced in the home country itself ?
Q 19.
Define Export Processing Zones.
Q 20.
When was IIFT formed?
Q 21.
Write the full form of ICSID.
Q 22.
Write short notes on the following:
- UNCTAD
- MIGA
- World Bank
- ITPO
- IMF
Q 23.
Give full form of EPZ and SEZ.
Q 24.
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 25.
Santa Cruz is famous for which exclusive items?
Q 26.
What is pre-shipment finance?
Q 27.
List and explain various incentives and schemes that the government has evolved for promoting the country's foreign trade.
Q 28.
Write the full form of DTA.
Q 29.
What is IEC number?
Q 30.
Identify various organizations that have been set up in the country by the government for promoting country's foreign trade.
Q 31.
What is World Bank? Discuss its various objectives and role of its affiliated agencies.
Q 32.
Name the certificate which is used for ensuring timely payment.
Q 33.
How many regional and international offices does ITPO have?
Q 34.
How many Commodity Boards are there in India?
Q 35.
Explain the steps of export procedure.
Q 36.
Explain briefly the process of customs clearance of export goods.
Q 37.
Explain the term FOB.
Q 38.
What is a Letter of Credit? Why does an exporter need this document?
Q 39.
What is IMF? Discuss its .various objectives and functions.
Q 40.
Explain the term FOB.
Q 41.
Why is it necessary to get registered with an Export Promotion Council?
Q 42.
Who is a clearing agent?
Q 43.
Which agency of World Bank provides loan to private sector of developing countries?
Q 44.
Discuss the procedure related to excise clearance of goods.
Q 45.
Who is a clearing agent?
Q 46.
What is the purpose of pre-shipment finance?
Q 47.
Discuss the process involved in securing for exports.
Q 48.
Discuss the formalities involved in getting an export license.
Q 49.
What is Performa Invoice?
Q 50.
Discuss the principal documents used in exporting.
