IB0013–Export-Import Management

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Master of Business Administration- MBA Semester 3

IB0013–Export-Import Management -4 Credits

(Book ID: B1201)

Assignment (60 marks)

Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions.

Q1. Define international business and discuss the scope of international business.

Answer. International business is a term used rarely to describe all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundary. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc.

Q2. What do you mean by Pre-shipment finance? Enumerate the RBI guidelines regarding pre-shipment finance.

Answer. Pre Shipment Finance is issued by a financial institution when the seller want the payment of the goods before shipment. The main objectives behind reshipment finance or pre export finance is to enable exporter to:

·         Procure raw materials.

·         Carry out manufacturing process.

·         Provide a secure warehouse for goods and raw materials.

·         Process and pack the goods.

·         Ship the goods to the buyers.

·         Meet other financial cost of the business.

Q3. Explain the various types of custom duties.

Answer. Types of customs Duties in India

While Customs Duties include both import and export duties, but as export duties contributed only nominal revenue, due to emphasis on raising competitiveness of exports, import duties alone constituted major part of the revenue from Customs Duties and include the following:

Basic Customs Duty

All goods imported into India are chargeable to a duty under Customs Act, 1962 .The rates of this duty, popularly known as basic customs duty, are indicated in the First Schedule of the Customs Tariff Act, 1975 as amended from time to time under Finance Acts. The duty may be fixed on ad -valorem basis or specific rate basis.

Q4. Describe the steps to be takes for establishment of Export Import firm.

Answer. In continuation to our first instalment which covered how to start and map out an import/export business, here we provide the sales and distribution aspects of establishing an import/export business.

• Price the product.

The business model for an import/export business is based on two critical elements within the international sales operation.

Q5. Write the names of principal export documents and explain any two of them.

Answer. EXPORT DOCUMENTS

Documents required for an international sale can vary significantly from transaction to transaction, depending on the destination and the product being shipped. At a minimum, there will be two documents: the invoice and the transport document. The buyer will usually provide the seller with a list of documents needed to get the goods into his country as expeditiously and inexpensively as possible. Some documentary requirements are not open to negotiation, as they are needed by the importer to clear customs at the port of destination. This presentation discusses documentation in relation to export letters of credit.

When the letter of credit payment method is used for an export sale, each document presented under the terms and conditions of the letter of credit must:

1)  Conform to all L/C terms and conditions.

2)  Comply with the UCP 500.

3)  Agree with the data content of every other document.

Q6. Write short notes on:

I) Importer-Exporter Code Number

Answer. Importer Exporter Code Number

Definition of IEC Code

IEC Code is unique 10 digit code issued by DGFT – Director General of Foreign Trade , Ministry of Commerce, Government of India to Indian Companies.

Full form of IEC Code

Full From of IEC Code is : “Importer Exporter Code ”. To import or export in India, IEC Code is mandatory. No person or entity shall make any Import or Export without IEC Code Number.

ii) Registration cum-Membership Certificate of an Export Promotion Council

Answer. Registration Cum- Membership Certificate (RCMC)

Registration Cum- Membership Certificate (RCMC):

Rubber Board has been designated as the Export Promotion Council (EPC) to issue RCMC in the case of export of Natural Rubber. An Exporter may, on application, register and become member of an EPC. Given the membership, the applicant shall be granted

forthwith Registration-Cum-Membership Certificate (RCMC) of the EPC concerned. Only registered exporters having valid RCMC will qualify for the benefits provided in the current Exim Policy.

Terms and Conditions for issue of Registration-cum-Membership Certificate (RCMC):

Registering authority for export of raw Natural Rubber is the Rubber Board and all intending

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