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C HAPTER 12 I NTERNATIONAL B USINESS -II LEARNING OBJECTIVES After studying this chapter, you should be able to: discuss important steps and documents involved in executing export transactions; explain major steps and documents involved in carrying out import transactions; identify various incentives and schemes available to international firms; identify and state the role of various organisations that have been set up in the country to promote foreign trade; and list major international institutions and agreements existing at the global level and discuss their role in promoting international trade and development.
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279 INTERNATIONAL BUSINESS - II 12.1 I NTRODUCTION Exporting goods to foreign countries is quite different from marketing products domestically. One needs to be familiar with various procedural formalities that need to be complied with before goods are actually shipped to foreign destinations or imported from overseas suppliers. In order to facilitate and promote trade, government provides several incentives schemes for international firms to import goods at zero or concessional rates of customs duty for use in manufacture of products meant for exports; exempt them from payment of various other After deliberations with his friend and son, Mr. Sudhir Manchanda feels convinced that this is the right time for him to step into international markets. This will enable him not only to tide over the problems of demand saturation for his automotive parts in the domestic market, but would also help him reap various benefits that accrue to international firms. Since he has limited capital available with him right now and does not have any past experience of overseas operations, he has decided to opt for exporting as the mode of entry into international markets. But the problem with him is that he does not know as to how to get into export business. His friend in the tyre business tells him that exporting and importing is not that simple an activity as operating domestically. A number of formalities are needed to be performed and documents to be filled in before goods are finally dispatched to export markets. A similar and somewhat tedious process is needed in case he desires to import some of the tools and raw materials for producing export quality products. Mr. Manchanda is once again in a fix. He does not have any idea of what the various formalities and documents involved in exporting and importing are. Mr. Manchanda is also wondering as to how he will protect himself against export risks. He is, moreover, worried about the additional costs that he would have to incur in making goods export worthy. He is contemplating making use of some imported machines and raw materials.
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