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Subject Code: IMT-18
Subject Name : Export
Finance and Documentation
Objective:
1. To develop necessary insights
in financing options available for exports in India.
2. To equip the students with the
management of export operation and decision – making
3. To equip the students with the
knowledge of export documentation and procedures.
PART– A
1. Explain the role export credit plays in export promotion in India.
How is the export credit delivery system in India implemented.
Answer: An export credit agency (known in trade
finance as ECA) or Investment Insurance Agency is a private or
quasi-governmental institution that acts as an intermediary between national
governments and exporters to issue export financing. The financing can take the
form of credits (financial support) or credit insurance and
2. Outline various risks covered under standard policy.
Answer: Under the Standard
Policy, ECGC covers, from the date of shipment, the following risks:
a. Commercial risks
·
Insolvency of the buyer
·
Failure of the buyer to make the payment
3. Explain FERA TO FEMA Transition .What do you understand by current
account and capital account convertibility.
Answer: Transition from FERA to FEMA
A cut-off period of two years has
been stipulated for transition from FERA to FEMA, which means that cases in
which proceedings have already begun under FERA will continue to be governed by
it.
4. How is a letter of credit transacted? Explain in detail various
types of letter of credit.
Answer: Transaction of letter of credit:
1. The starting point of the
letter of credit process is the agreement upon the sales terms between the
exporter and the importer. Then they sign a sales contract. It is important to
stress here that letters of credit are not a sales contract.
5. Does Cargo Insurance play a role in Export Transaction? Explain
difference between Marine and cargo insurance
Answer: Yes, Cargo Insurance is
playing role in Export Transaction . Cargo insurance is concerned primarily
with international commerce. Basically, anyone who has an insurable interest in
a cargo shipment (i.e., anyone who would suffer a loss if the cargo were
damaged or destroyed or who would benefit from the safe arrival of the cargo)
has a need for an ocean cargo policy. The cargo insurance policy indemnifies
the exporter or
PART– B
1. Outline in detail the claims procedure for a export cargo.
Answer: Claims Handling
·
It is important that exceptions be taken in
writing on all receipts. This will not only facilitate the processing of the
claim with insurers but is also extremely important for subrogation purposes.
·
If loss/damage is suspected, immediate
2. As goods exported are in foreign countries, highlight the major
standard clauses of export order
Answer: Major
standard clauses of export order:
1. Seller Acceptance
2. Delivery
3. Inspection and Test
4. Non-Conforming
3. The Indian Exporters are given certain foreign exchange facilities
outline the same.
Answer: Facilities Available To Exporters And Importers
Exporters
·
Exporters are provided timely and adequate
credit to meet the exports commitments.
·
Exporters are allowed pre and post-shipment
credit at competitive interest rates.
·
Export Credit is made available both in
·
4. What do you understand by foreign exchange .Explain different types
of possible exchange rate
regimes?
Answer: The foreign exchange market (forex, FX, or currency market) is a global
decentralized market for the trading of currencies. The main participants in
this market are the larger international banks. Financial centers around the
world function as anchors of trading between a wide range of multiple types of
buyers and sellers around the clock, with the exception of weekends. The
foreign exchange market determines the relative values of different currencies.
5. Outline the factors affecting exchange rate
Answer: 1. Differentials in Inflation
As a general rule, a country with
a consistently lower inflation rate exhibits a rising currency value, as its
purchasing power increases relative to other currencies. During the last half
of the twentieth century, the countries with low inflation included Japan,
Germany and Switzerland, while the U.S. and Canada achieved low inflation only
later.
2. Differentials in Interest Rates
PART– C
1. Export finance is important to be competitive do you agree with this
statement. What are the means of short term financing?
Answer: Without exception, every
country on the globe has some form of export financing or guarantee program.
The point of this is to both encourage exports and boost the profitability of
the domestic firms involved in exporting. The importance of this sort of financing
is difficult to exaggerate, since so much hard currency is earned through
exports. Entire economies, such as the Korea or Chinese, are based around
exports. Export financing has helped turn third world countries into
international economic powerhouses.
2. Outline need of export documentation. Explain major shipping documents needed in
export transaction
Answer: Documents Required for Post Parcel Customs Clearance
In case of Post Parcel, no
Shipping Bill is required. The relevant documents are mentioned below:
·
Customs
Declaration Form - It is prescribed by the Universal Postal Union (UPU) and
international apex body coordinating activities of national postal
administration. It is known by the code number CP2/ CP3 and to be
3. Explain major steps required in custom clearance of export shipment
Answer: a. Declaration
Any person who imports or exports
goods must file a prescribed import or export declaration to Customs, together
with an invoice and other related documents. Related documents (such as
certificates of country of origin, etc.) are
4. What is the role of clearing and forwarding agents in international
trade
Answer: Clearing and forwarding
agents act as intermediaries in transactions between shippers and suppliers of
logistics services, and are required by customs to represent the owner in the
procedures for clearing cargo over international
5. Explain in detail major Inco terms used in export transaction
Answer: Incoterms are
internationally accepted commercial terms, developed in 1936 by the
International Chamber of Commerce (ICC) in Paris. Incoterms 2000 define the
respective roles of the buyer and seller in the agreement of
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CASE STUDY – I
Questions
1. Does FEMA allows better flexibility of all export and import
Transactions .
Answer: Yes , FEMA allows better flexibility of all
exports and import Transactions . Foreign Exchange Management Act or in short
(FEMA) is an act that provides guidelines for the free flow of foreign exchange
in India. It has brought a new management regime of foreign exchange consistent
with the emerging frame work of the World Trade Organisation (WTO). Foreign
Exchange Management Act was earlier known as FERA (Foreign
2. What Role does agriculture trade play in International Trade and
Negotiations with WTO.
Answer: The department
contributes to international negotiations to improve market access for
Australian agricultural commodities and processed foods through the WTO Doha
Round of negotiations.
The department's aim is to ensure
that these negotiations address portfolio interests and maximise opportunities
to improve the international competitiveness of Australia's agricultural, food,
fisheries and forest industries. The department works
CASE STUDY-II
QUESTIONS
1 Did the ITC exceed the scope of authority by ordering certification
of secondary products.
Answer: No. The decision of the
ITC is affirmed.
REASONS
The commission’s remedy
determination in this case represents a careful and common sense balancing of
the parties’ conflicting interests as well as other relevant factors and is
socially based on the evidence in the record.
The commission’s limited exclusion
order requiring Hyundai to clarify, as a condition of entry, tht certain of
it’s downstream products do not
2 Was the export by Hyundai of memory chips to Taiwan and re-export to
USA a unfair trade practice
Answer : No, it was not an
unfair trade. The immense difficulties of diversifying from the US market
in an increasingly protectionist world are suggested by the following set of
statistics. In 1988, Hyundai sold over 300,000 Excel subcompact cars in
Dear
students get fully solved assignments
Send
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us at : 08263069601
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