Export Marketing

EXPORT MARKETING (ENTRY STRETEGY)
 INTRODUCTION
 WHAT IS Export marketing?
Marketing is defined as using all of the
resources of the organization to satisfy customer needs
for a profit. The difference between export marketing
and domestic marketing is simply that it takes place
across national borders. This means that you are faced
with barriers to trade that you will not have encountered
before, such as differing languages, politics, laws,
governments and cultures. You may need to account for
getting the product half-way across the globe to distant
markets and pay the import duties imposed on these
products by the importing country. You will also need to
deal with the logistical and documentation problems
surrounding exports. These are just some of the
problems you will face.
Export marketing also involves preparing an offering
that will entice the foreign buyer and customer. This
offering comprises a product that is offered at a certain
price and that is made available – distributed – to the
foreign customer. At the same time, the offering is
communicated – or promoted – to the buyer using
certain communication or promotion channels. These
elements – the product, price, distribution (also referred
to as the place) and promotion – are called the
marketing mix.
The features of export marketing includes the
following
1) It is a process -
Export marketing is a process of
planning and implementing the production, and
distributing of goods and services, it consists of
1
various activities such as branding, packaging,

advertising etc.
2) Identification and satisfaction of

consumer’s needs & wants-
The heart of marketing is the
identification of consumer needs and wants. The
exporter must constantly try to find out the
problems or needs and wants of the foreign buyer,
so export marketing adopts a total consumer
oriented approach in the foreign markets.
3) Flow of goods and services –
Export marketing involves flow of goods
and services across the national boundaries.
4) Large scale operations –

Export marketing is carried in bulk
quantities so as to derive the benefits of large scale
selling such as in respect of transportation, handling
etc.
5) Prominence of multinational –
Export marketing in dominated by
MNC’S. At present MNC’S from USA, EUROP and
JAPAN play a dominant role in foreign trade. They
are in a position of develop world wide contracts
through their network of branches / offices /
subsidiaries. These companies are in a position to
carry on a large scale operation in foreign trade
more efficiently and economically.
6) Tariff and non –tariff barriers –
2
Export trade is subject to tariff and

non tariff barriers , these are restrictions imposed
mostly by importing countries , so as to restrict
imports every export firm should have a close
study of various trade barriers imposed by different
countries , so as to carry on its export trade more
efficiently .
7) Presence of trading bloc’s-
Certain nations of particular region come
together to farm customs union or trading bloc’s for
their mutual benefit and economic development the
main purpose of such bloc is to eliminate trade
barriers among member nations and they may
impose external tariff and non-tariff barrier on non
member’s .the exporter should have knowledge of
the regulation of such trading blocs. The powerful
trading blocs are NAFTA (north American free trade
area) EC (European community) and ASEAN
(association of south east Asian nation)
8) International marketing research –

Knowing more about customer, dealer
and competitor is a must not only in the domestic
market but also in the export markets.
9) International forum -
International trade is regulated to a
great extent by international forum such a general
agreement on tariff and trade (GATT). Now world
trade organization (WTO).exporters from all over
the world should have through knowledge of the
rules regulation and principals of such forums.
3
20 steps of export marketing

Step1:
Those who are interested in export- import

business need to apply to the director general foreign
trade regional office for getting importer-exporter code
number. This is true for any individual or company
willing to undertake export or import from India.
Step2:
One has to resister with the concerned export

promotion council for example- in the case of garments,
it is essential to obtain registration cum-membership
certificate (RCMC) from the apparel export promotion
council, registration is essential for obtaining various
permissible benefits given by the government.
Step3:
With the completion of these formalities. The

exporters can go in for procuring their export order.
Step4:
4
With export order in hand they start

manufacturing or buy the goods from manufacturing
Step5:
Once manufacturing is over , the exporter

make arrangements for quality control and obtain a
certificate from the inspector of quality control
confirming their quality.
Step6:
Exportable are then dispatched to parts,

airports for transit.
Step7:
With dispatch of goods, the export firm has to

apply an insurance company for marine lair insurance
cover.
Step 8:
After completion of these formalities, the

contract the clearing and forwarding agent for storing
the goods in warehouse, uses . The forwarding agent
comes out with a document called shipping bill, required
for allowing shipment by the custom authority.
Step 9:
The clearing and forwarding (c and f ) agent

submits the shipping bill in the customs house for
verification .the customs appraised examines the
documentation.
Step 10:
5
The C and F agent also submits a copy of the

verified shipping bill to the shed superintendent and
obtains certain order for exports.
Step 11:
There after for loading exports into ships or

aircraft ,the C and F agent . present the shipping bill to
the preventive officers who oversee the transit
procedure
Step-12:
After loading goods in to the ship the captain of

the ship issuer a receipt know as ‘ mate’s receipt’ to the
ship superintendent of the port . The shed
superintendent calculates port charges and bills the C
and F agents for it.
Step-13
When port payments are made the C and F

agent takes delivery of mates receipt and requests port
or airport authority to prepare bill of loading or airway
bill.
Step-14
After obtaining bill of loading, the C and F

agent sends these documents to the respective
exporters.
Step-15
6
On receipt of the documents, the exporter

makes an application to the relevant chamber for getting
certificates of origin, stating that the goods originated
from India.
Step-16
Exporters also send shipping documents to

the importers stating date of shipment, name of vessel
etc. Moreover, it is essential to send certain other
documents like bill of loading ,custom invoice and
packing list, to their foreign counterparts.
Step-17
The exporter now presents all important

documents at bank. The bank scrutinizes this document
against the original letter of credit / purchase order. The
bank has to follow UCPDC/URC guidelines.
Step-18
The exporters’ bank sends all important

documents to the foreign importers bank. This presents
the documents to the importer. Then the importer
accepts , the bill if it is a usance bill and pay before the
due date.
Step-19
After receiving the requisite document , the

importer makes the payments through .the bank, the
money then gets credited in the name of the exporter
here. Simultaneously, adockment called the GR from is
sent to Reserve Bank of India.
7
Step-20
As a last step exporters apply for benefit from

various duty drawback schemes which subsequently get
credited in their account.
Need and Importance of Export-market

No country in the world, whether highly developed or not
is self sufficient in every respect, more ever every
country want to be more and more economically
developed and in order to do so, it has to resort to
foreign trade e.g. export and import, export trade bring
in valuable foreign exchange which can be utilized to
pay for imports and at the same time enhances. Foreign
exchange reserve of the country.
The need and importance of export marketing can be

explained from the viewpoint of the country and that of
business organization
NEED AND IMPORTANCE OF EXPORT

MARKET
A)Review point of nation B)from view point of
business orgnisation
• Foreign exchange • reputation optimum
8
• International production
relations • optimum production
• Balance of payments • spreading of risk
• Reputation in the • export obligation
world • keeping a live old
• Employment • improvement in
opportunities organizational
• Financing of • improvement in
development plans product standards
• Research and • liberal imports
development • higher prices
efficiency • financial and non –
• Optimum utilization financial benefits
of resources
• Spread effect
• Higher standard of
living
A) From view point of nation –
1)Foreign exchange –
Export bring valuable foreign
exchange to the exporting country which is mainly
required to pay for import of capital goods raw
material spares and components , also foreign
exchange is required to pay for the import of
techniques how and service external debts
2) International relation –
All countries of the world want to
proposer in a peace full environment, one way to
maintain political and cultural .it make relation with
other countries is through international trade
3) Balance of payment –
9
A country external economic strength

depends upon its balance of payments position
.since export brings foreign exchange, it helps a
country to solve and improve its balance of
payments position.
4) Reputation in the world –

A country which Is fore most in the
fields of export, commands a lot of respect, goodwill
and reputation from other countries for instance,
Japan commands international reputation due to its
high quality product and in the export markets.
5)Employment Opportunities:
Export trade calls for more
production more production opens the doors for
more employment opportunities not only in the
export sectors but also in allied sectors like
banking, insurance etc.
6) Financing of development plans:

Export earnings can be a source of
financing development plans through the import of
capital goods and sophisticated technology, thus
the foreign exchange generated through exports
can be utilized for planned economic development
of the country.
7) Research and development:

There is a continuous pressure on the
export industry to improve technology and
production system to retain its competitive edge in
10
foreign markets. The fruits of Rs D would benefit the

consumers not only in the overseas markets but
also in the domestic market.
8) Optimum utilization of resources:

A country which passes a abundant
resources in form of Raw Material or finished goods
in exports of domestic requirements can be
effectively export as much as there can be optimum
use of resources.
9) Spread effect:
Because of export industry , other

sectors also expands such as banking, transport,
insurance, consultancies at the same number of
ancillary industry come into existence to support
the export sector
10)Higher Stander of living:

Export trade calls for more production
which in turn increases thus employment
opportunities.
More employment means more power as results of
which people can enjoy better goods, which in turn
improve standard of living of people
A)From view point of business organization
1)Reputation:
A business organization which under
takes export business can bring from to its name
not only in the export market and but also in the
11
home market i.e Sony , Glaxo, Tata etc . enjoy

international reputation .
2)Optimum Production:
It may be possible that the demand for a
company ‘s product falls short of its optimum
production capacity in the home country however
the company can exported its excess production
there by the production can be carried on up to the
optimum production capacity and the company
benefited from the economies of large scale
production .
3)Spreading of risk:
When a business organization face
depression in the domestic market (low demand) it
will be naturally suffer losses .However the
company can spread its risk of losses by selling
products of good price in the export market .
4) Export Obligation:
Certain company need to import
machinery and other requirement to compensate
for imports the government of India, has imposed
compulsory export obligation so as to narrow down
the gap between rising imports and slowing moving
export. Therefore such companies need to export to
honor export obligation imposed on them.
5) Keeping alive old brand:

A product brand may have reached the
stage of declined in the home market but the same
12
product may have good demand in the foreign

market so in that case the exporters would benefits
by exports.
6) Improvement in organization efficiency:

Export marketing requires consent
improvement in skills and technique not only in
marketing
aspects, but also production aspects thus research,
training and experiences in dealing with foreign
market unable the export to improve the overall
organization efficiencies .
7) Improvement in product standards:

An export firm has to maintain and
improve standards in quality unable to international
standards as a result of which consumer in the
home market as well as in the international market
can better quality of goods.
8) Liberal imports:
Export organization can import capital
goods spares components and raw materials
liberally against export obligation .Such import not
only improve the quality of goods produced but also
lower down the cost of production.
9) Higher prices:
Export can fetch higher prices as
compared to domestic markets for instance, prices
of old and petroleum product in the home markets
13
of gulf countries are comparatively less than what

they earn from the foreign markets, and as a result
of this exporters can earn higher profits.
10)Financial and non –financial benefits:

India exporters can avail of a number of
facilities from the government and from banks to
enhance exports.
Functions of export marketing:

The functions of export marketing omsist of those
activities, which are necessary for smooth flow of
goods from the producers or sellers to the
purchasers or consumers.
The following are the functional areas of marketing:

International marketing research:
14
It is one of the important areas of the

marketing, through international research. The
exporter come to know about the likes, dislikes,
tastes, and busing behavior of the foreign
consumers marketing research is must in export
markets due to various factors such as diversities in
social, cultural, economic and political background
of distant markets Thus, marketing research will
help to identify the right export for the company’s
products.
Export production:
The fruits of marketing research and R&D
can be put into use by producing the goods and
services as per the needs and requirements of
foreign markets, strict activity control must be
maintained while producing export goods. Goods
and services should confirm to international
standards, and then only the export firm will survive
and succeed in the overseas market.
Export packaging:
Packagings for exports must be given due
consideration proper and attractive packing not
only protect the products but also sell. The product
in the market , this is because attractive packaging
has advertising valve, if required assistance can be
taken from Indian institute of packaging located at
Marol- Andheri Mumbai.
Export pricing:
It is one of the important aspects of
export management; a proper pricing strategy
15
spells a firm’s survival and success not only in the

home market but also in the export market, while
fixing prices, the exporter cost, demand and
competitive environment prevailing in the export
market.
Advertising:
Now – A day, advertising is considered
to be one of the most effective ways of promoting
goods and services. It makes consumers aware of
the qualities, uses and benefits of the products that
are available in the market. The exporter can make
use of various media of advertising such as news
papers; magazines trade journals, trade directories,
televisions etc. for selling in foreign markets.
Sales promotion:
Apart from advertising, there are
various sales promotion techniques such as sale on
installment basis, free gifts, contests, offering
discounts etc effective selling through sales can
also increases sales in the overseas market.
Export risk management:

Export risk involve risk to the export
cargo in transit, which can be insured with marine
insurers, A more important risk is that credit offered
to overseas buyer , the government of India has set
up export. Credit guarantee corporation (ECGC) to
provide credit insurance to protect exporters from
consequences of payment risks.
16
Financing:
In order to carry out various marketing
activities such as marketing research sales
promotion etc, there is a need for funds, the funds
can be obtained as advances from the customers,
credit from suppliers, loans from institutions etc.
Branding:
Branding is one of the important
marketing function it refers to give name to the
product the purpose of branding is to give a
separate. Identity to the product, which is distinct
from that of t competitor. At times catchy brand
name can sell the product in the market. Care must
be taken to see that the brand name so selected
not have negative meanings in foreign languages.
Transporting-
It refers to moving goods from one
country to another normally the exporter make of
transporting export goods i.e.- sea transport and air
transport .the nature of goods ,cost transport
,buyers requirement and such other factors efficient
export marketing requires the right choice of
transport
Factors affecting export marketing -

The major environment factor effecting
export marketing are as follows
17
Economic factors-
The economic condition prevailing in

the export markets must be considered the general
demands, market recession rate of inflation, the
level of economic development etc. Must be
considered while designing a marketing mix .the
exporter must enter in such export market were the
economic factors are favorable and conductive to
export trade.
Political factors –
The political factors also play on

important role in the export marketing system. The
action policies of the governments of the exporting
country as well as that of the importing countries
affect export trade.
These factors include
• Changes in government policies from time to
time
• Relation of importing countries with India.
• Stability of the government in the importing
countries etc.
Consumer factors-
Its affects export marketing to great

extent . those includes the age group , income range ,
occupation ,buying partners, buying behavior, tastes ,
likes –dislikes and preferences . the exporter should
have good knowledge of this customers characters
18
according the right type of products can be produce to

suit the requirements to the target markets .
Geographic factors –
The exporter must also consider

geographical factor such as area, to geography, climate
and seasons. Again the availability of transport and port
facilities must be studied.
Social factors:-
The social factors are also to be considered.

The attitude of the buyer and the society are to be taken
note of, the exporter has to know about the social values
and life styles of the target consumer’s different life
styles and attitude of the society may require different
marketing mixes and marketing programmers.
Technological factors:-
The level of technology in the export markets also

affects export marketing, for instance technology
advanced; nations enjoy higher standards of living. They
expect high quality goods .the exporter must considered
the degree of technology advancement of the importing
countries and accordingly supply the goods that are in
tune with the requirement of the customers.
Trade factors:-
The trade factors also must be

considered by the exporter .the exporter must under
19
stand that it is trade factors that finally sell the product

in the market .one need to have good distributors to sell
goods in the export market . The trade factors include
• The channel of distribution

• The availability of distributors.
• The services provided by the distributors etc.
Difficulties / problems in export marketing:
Export marketing is restricted to some extent due to

certain difficulties or drawback such as.
1) Difficulties of distance:-
Export markets are spread over long
distances naturally, the exporter will find difficult in
catering to long distance markets. Longer the
distance the more will be the transport cost. There
are also possibilities delays in supply.
2) High risk and uncertainties:

The risk may be both political and
commercial .The political risk involves government
instability, war, civil disturbances etc. The
commercial risk involves insolvency of the buyer
and so on certain political and commercial risk are
insured by export credit guarantee corporation
(ECGC).
3) Diverse languages, customs and traditions:
20
The export markets differ in

languages customs and traditions, these diversities
therefore he has to be selective, and he should
deal in only such markets. Where he can easily
handle or overcome difference or diversities.
4) Different currencies, weights and measures:

Different countries in the world have
there own system of weights and measures. Some
countries may measure in pounds others in
kilograms or in some other measures. Again every,
country has its own currency. Each currency has
heavy fluctuation in exchange note.
5) Customs formalities:
There are number of formalities in
export of goods from one country to another, again
there are customs formalities for the buyers i.e.
customs formalities of the importing country.
6) Trade Barriers:
Export trade is subject to a number of
tariff and non-tariff barriers various importing
countries do impose avariets of taxes and other
formalities. This creates difficulty for the smooth
flow of goods and services among countries
.However efforts are now being a world trade
organization (WTO) to reduce and simplify a number
of trade barriers.
21
7) Foreign exchange regulation-

The exporter has to give a declaration
to the reserve bank of India (RBI) that they will
realize the full value of exports within a period of six
months i.e.180days
8) Documentation formation-
There are a number of documents to be
prepared in export trade.
22
ENETR INTO EXPORT CONTRACT
Export contract is based on terms & conditions

between seller and buyer in order to avoid dispute,
it is necessary to enter in to an export contracts
with the overseas buyer, for this purpose, export
contract should be carefully drafted incorporating
comprehensive but in precise terms, all relevant
and important condition of the trade deal
23
There should be not be any ambiguity regarding the

exact specification of goods and terms of sale
including export price ,mode of payment , storage
and distribution ,methods ,type of packaging part of
shipment ,delivery schedule etc . The different
aspect of an export contract are enumerated as
under
• Quality of product .standards ,specific quality
• Packing ,labeling and marking
• Terms of payment In advance /at sight/L/C
• Terms of delivery /shipment (by seal/AIR)-
FOB /CIF /CNF
• Discount /commission if any
• Statutory requirement of importing
&exporting countries.
 REQUIRE PROCEDUER (REG.) TO

START EXPORT
The exporter should have an organization to look after

the export of his goods /services .the exporter has to
register his organization with a number of authorities,
24
before he proceeds to export. These registrations

include the following:
1) To form a company –
The first and the foremost question you as

a prospective exporter has to decide is about the kind of
business organization needed for the purpose .you have
to take a crucial decision as to whether a business will
be run as a proprietary concern or a partnership firm or
a company. The proper selection of organization will be
depend upon
• Your ability to raise finance

• Your capacity to bear the risk.
• Yo0ur desire to exercise control over the business
• Nature of regulatory frame work applicable to you
1) OPENING BANK ACCOUNT –
The exporter should open a current account

in a schedule commercial bank, which is authorized by
RBI to deal in foreign exchange to open a bank account
for getting registration in port EDI (electronic data inter
changing system).
2) OBTANING INCOME TAX ACCOUNT NUMBER

(PAN)-
The exporter should make an application to

the income tax authorities to allot him a permanent
account number (PAN) .for time being ,for a year or so
25
the income tax authorities allots a temporary number

called “general index registration (GIR) number .the
PAN is subsequently allotted to the firm in due course of
time.
3) TO REGISTER WITH DGPT FOR IEC NUMBER-
REGISTRATION WITH PORT
NO export or import shall be made by the

registered /head office of the complaint to the licensing
authority under whose jurisdiction, the registered
office in case of other falls in the “Aayat Niryaat form”.
Only one IEC would be issued against a single PAN

number .the licensing authority concerned shall be issue
an IEC number. a copy of such IEC number shall be
application form.
A consolidated statement of IEC numbers issued by the

licensing authority shall be sent to the offices of the
exchange control department of the RBI .an IEC number
allotted to an applicant shall be valid for all its
branches /division /units /factories . Where an IEC
number is lost or miss placed, the issuing authority may
consider request for grant of a duplicate copy of IEC
number, if accompanied by an affidavit. If an IEC holder
does not wish to operate the allotted number, he may
surrender the same by informing the issuing authority
shall immediately cancel the same and electronically
transmit is to DGFT for transformation to the customs
and regional licensing authority (RLA).
26
4) To register with EPC for RCMC number –
Registration with port
An exporter may register and become a

member of export promotion council (EPC) on being
admitted to membership. The applicant shall be granted
with registration .cum-membership certificate (RCMC)
Of the EPC concerned, subject to such terms and

conditions as may be specified in this behalf, in case an
exporter desire to get registration as manufacture
exporter, he shall furnish evidence to that effect.
Prospective / potential exporters may also, on

application, register and become an associate member
of an export promotion council. an exporter desiring to
obtain a registration cum-membership certificate (RCMC)
shall declares his main line of business in the
application which shall be made to the export promotion
council (EPC) relating to that line of business . However a
status holder has the option to obtain RCMC from
federation of Indian exporter’s organization (FIEO)
Not with standing anything stated above exporters of

drugs & pharmaceuticals shall obtain RCMC
From pharmexcil only -
In addition ,an exporter has the option to obtain

an RCMC from FIEO or any other EPC .if the products
exported by him related to those EPC’S , if the export
product issue that is not covered by any EPC ,RCMC in
respect thereof may be issued by FIEO .
27
5) REGISTRATION WITH SALES TAX AUTHORITIES

–
Exporters are exempted from payment of

sales tax exemption can be available only when the
exporter has sales tax registration number.
CENTRAL EXCISE REGISTRAION –
For the administration of the central excise act

1944and the central excise rules, 2002(referred to as
the “said rules “) manufacturers of excisable goods with
some exceptions, are required to get the premises
registered with the central excise department before
commencing business.
LEGAL PROVISIONS-
AS PER SECTION 6 of the central excise act

1944, any prescribed person who is engaged in –
A) The production and manufacture or any process of

production or manufacturer of any specified
included in to the central excise tariff act 1989(5 of
1986) or,
B) The whole sale purchases or sale (whether on his
own account or as broker or commission agent) or
the storage of any specified goods. To the central
excise tariff act 1985(5 of 1986) shall get himself
registered with the proper office in such manner as
may be prescribed.
28
For all the practical purposes, the legal provisions

contained in rule 9 of the central excise rules, 2002
govern the scheme of registration .This rules is
reproduced the below.
Registration:
1) Every person, who produces, manufacturers’
carries on trade, holds private store- room or
warehouse or otherwise uses excisable goods,
shall get registered, provided that a registration
obtained under rule 174 of the central excise
rules, 2001 shall be deemed to be as valid as the
registration made under this sub rule for the
purpose of these rules.
2) The board may by notification and subject to such
conditions or limitations as may be specified in
such notification, specify persons who may not
require such registration.
3) Registration under sub rule (1) shall be subject to
such conditions safe guards and procedure as
may be specified by notification by the board.
Conditions, Safeguards and procedures for

registrations.
The central board of excises customs has
specified certain conditions, safeguards and
procedures for registration of a person by
notification under central excise rule 9 in the
specified cases.
1) Application for registration-
Every person specified under sub-
rule (1) of rule 9, unless exempted from doing
29
so by the board under sub rule 9 shall get him

self registered with the (jurisdictional deputy or
assistant commissioner of central excise ) by
applying in the form specified .
2) Registration of different premises of the

same registered person -
If the person has more than one
remises requiring registration, separate
registration certificate shall be obtained for
each of such premises.
3) Registration certificate and number –

It shall be granted within 7 days of the
receipt of duly complete application.
4) Transfer of business –
When a registered person transferred
his business to another person, the transferee
shall get himself registered a fresh.
5) Change in the constitution –

Where a registered person is a
firm or company or association of persons, any
change in the constitution of firm company or
association shall be intimated to the
jurisdictional central excise officer within
30dayes of such change.
6) De- registration –
30
Every registered person who cases to

carry on the operation for which he is
registered ,shall de-registered himself by
making a declaration in the form and depositing
his registration certificate with super indent of
central exercise
7) REVOCATION OR SUSPENTIO OF
REGISTRATION –
A registration certificate granted under
this rule may be revoked or suspends by the
assistant commissioner of central excise or the
deputy commissioner of central excise, if the
holder of such certificate or any person in his
employment is found to have committed
branch of any of the provisions of the act or the
rules made there under or has been convicted
of an offence under section 161, read with
section 109 or with section 116 of the Indian
penal code (45of 1860)
CENTRAL EXCISE CLEARENCE -

Export goods are exampled from
central excise duty. However necessary
clearance has to be obtained either in the two
ways:
a) Removal of goods under bond –

Under this system. The exporter does
not pay excise duty but export the goods
under supported by a bank guarantee for a
31
sum equivalent to the excise duty

chargeable on such goods
b) Export under rebate -

Under this system, the manufacturer
initially pays the duty and the claims the
refund
 Export Pricing and Costing

Export pricing should be difference ate from export
costing price is what we offer to the customer. Cost is
the price that we paslincur for the product. Product
includes our profit margin,’ cost includes only expenses
we have incurred export pricing is the most important
tool for promoting sales and facing international
competition. The price has to be realistically worked out
taking into consideration all export benefits and
expenses. However there is no fixed formula for
successful export pricing. It will differ from exporter to
exporter depending upon whatever the exporter is a
merchant exporter or a manufacturer. Exporter or
32
exporting through a canalizing agency. You can still be

competitive with higher prices but with better delivery
package or other advantages.
Your prices will be determined by the following factors.
• Range of products offered

• Prompt deliveries and continuity in supply.
• After sales services in product like machine tools ,
consumer durables
• Product differentiation and brand image
• Frequency of purchase.
• Presumed relationship between quality and price.
• Specialist value.
• Goods and gift items
• Credit offered.
• Preference or prejudice for products originating
from particular source
• Aggressive marketing and sales promotion
• Prompt acceptance and settlements of claims
• Unique value goods and gift items
Export costing –
Some of the major cost items of cost areas as under
• Material cost
• Labour cost
• Direct expenses
• Factory overheads
• Sales and distribution cost
• Packaging cost
• Cargo handling charges
• Freight charges
33
• Marine insurance
• Commission to agent abroad
Export costing is basically cost accountants job .it

consists of fixed cost and variable cost comprising
various elements. It is advisable to prepare an export
costing sheet for every export product
INCO TERM’S –
The decision for exports depends upon the

terms of delivery. These are severed such trade terms
that are used at international level. Inco terms describe
the most commonly used term of trade in commercial
contracts and are published by international chambers
of commerce (ICC). These terms aim to standardize the
terminology used international trade.
The aim is to eliminate doubts between buyer and seller

by:
• Defining the method of delivery of the goods by the

seller
• Stating exactly what charges are included in the
seller’s price.
• Defining the responsibilities of the parties to the
contract of sale for the arrangement of insurance,
shipping and packing the use of Inco terms are
applied to-
A transaction, it must be incorporatal by specific
references in the contract.
Inco terms (various costs incurred during shipment)
Maritime and inland waterway transport only:
• Free Alongside ship(FAS)
34
• Free on board (FOB)

• Cost & Freight(C&R)
• Cost Insurance and Freight (CIF)
• Delivery Ex-quay(DEQ)
• Delivery Ex-Ship (DES)
Multimodal Mode of Transport
• Free carrier (FC)

• Carriage paid to (CPT)
• Carriage and Insurance paid to (CIP)
• Delivered at frontier (All modes)
• Deliver Duty paid (All modes)
 Export finance
The exporter may require short term, medium term or
long term finance depending upon the types of goods to
be exported and the terms of statement offered to
overseas buyer.
The short-term finance is required to meet “working

capital” needs. The working capital is used to meet
35
regular and recurring needs of a business firm. The

regular and recurring needs of a business firm refer to
purchase of raw material, payment of wages and
salaries, expenses like payment of rent, advertising etc.
The exporter may also require “term finance”. The

term finance or term loans, which is required for medium
and long term financial needs such as purchase of fixed
assets and long term working capital.
Export finance is short-term working capital finance

allowed to an exporter. Finance and credit are available
not only to help export production but also to sell to
overseas customers on credit.
PRE-SHIPMENT FINANCE
MEANING:
Pre-shipment is also referred as “packing credit”. It is

working capital finance provided by commercial banks to
36
the exporter prior to shipment of goods. The finance

required to meet various expenses before shipment of
goods is called pre-shipment finance or packing credit.
DEFINITION:
Financial assistance extended to the exporter from the

date of receipt of the export order till the date of
shipment is known as pre-shipment credit. Such finance
is extended to an exporter for the purpose of procuring
raw materials, processing, packing, transporting,
warehousing of goods meant for exports.
IMPORTANCE OF FINANCE AT PRE-SHIPMENT

STAGE:
♦ To purchase raw material, and other inputs to

manufacture goods.
♦ To assemble the goods in the case of merchant
exporters.
♦ To store the goods in suitable warehouses till the
goods are shipped.
♦ To pay for packing, marking and labeling of goods.
♦ To pay for pre-shipment inspection charges.
♦ To import or purchase from the domestic market
heavy machinery and other capital goods to produce
export goods.
37
♦ To pay for consultancy services.

♦ To pay for export documentation expenses.
TYPES OF PRE-SHIPMENT FINANCE
• Packing credit
• Advance against cheques /draft etc representing
advance payments.
Preshipment finance is expected in the following

forms:
Packing credit in Indian rupees
Packing credit in foreign currency
Requirement for getting packing credit –
This facility is provided to an exporter who satisfies the

following criteria
• A ten digit importer-exporter code number

allotted by DGFT.
• Exporter should not be in the caution list of
RBI.
• If the goods to be exported are not under OGL
(open general license).the exporter should
have the required license permit to export the
goods.
Packing credit facility can be provided to an exporter on
production of the following evidence to the bank.
1. formal application for release the packing credit with

undertaking to the effect that the exporter would be ship
the goods within stipulated due date and submit the
38
relevant shipping documents to the banks within

prescribed time limit .
2. Firm order or irrevocable I/C or against cable /fax

message exchange between the exporter and the buyer.
3. Licensed issued by DGFT if the goods to be exported

fall under the restricted or canalized category. If the
item falls under quota system. Proper quota allotment
proof needs to be submitted.
Eligibility -
Pre shipment credit is only issued to that

exporter who has the export order in his own name
.however ,as an exception ,financial institution can also
grant credit to a third party manufacturer or supplier of
goods who does not have export orders in their own
name .
In this case some of the responsibility of meeting the

export requirements have been out sourced to them by
the main exporter .in other cases where the export order
is divided between two or more than two exporters, pre-
shipment credit can be shared between them.
QUANTUM OF FINANCE -
The quantum of finance is granted to an exporter

against the LC or an expected order. The only guideline
principle is the concept of need based finance. Banks
determine the percentage of margin, depending on
factors such as:
39
• The nature of order.

• The nature of the commodity.
• The capability of exporter to bring in the requisite
contribution.
Different stages of pre shipment finance
Appraisal and sanction of limits-
Before making any an allowance for credit

facilities banks need to check the different aspects like
product profile ,political and economic details about
country .apart from these things , the bank also looks in
to the status report of the prospective buyer , with whom
the exporter proposes to do the business . To check all
these information, banks can seek the help of institution
like ECGC or international consulting agencies like dun
and street etc.
The bank extended the packing credit facilities

after ensuring the following:
a) The exporter is a regular customer, a bona fide

exporter and has a goods standing in the market.
b) Whether the exporter has the necessary licenses
and quota permit (as mentioned earlier) or not.
c) Whether the country with which the exporter wants
to deal is under the list of restricted cover countries
(RCC) or not.
40
DISBURSEMENT OF PACKING CREDIT:
After proper sanctioning of credit limits, the

disbursing branch should ensure:
To inform ECGC the details of limit sanctioned in the

prescribed format within 30 days from the date of
sanction.
a) To complete proper documentation and compliance of

the terms of sanction i.e. creation of mortgage etc.
b) There should be an export order or a letter of credit
produced by the exporter on the basis of which
disbursements are normally allowed.
POST-SHIPMENT FINANCE
MEANING:
Post shipment finance is provided to meet working

capital requirements after the actual shipment of goods.
It bridges the financial gap between the date of
shipment and actual receipt of payment from overseas
41
buyer thereof. Whereas the finance provided after

shipment of goods is called post-shipment finance.
DEFENITION:
Credit facility extended to an exporter from the date of

shipment of goods till the realization of the export
proceeds is called Post-shipment Credit.
IMPORTANCE OF FINANCE AT POST-SHIPMENT

STAGE:
♦ To pay to agents/distributors and others for their

services.
♦ To pay for publicity and advertising in the over seas
markets.
♦ To pay for port authorities, customs and shipping
agents charges.
♦ To pay towards export duty or tax, if any.
♦ To pay towards ECGC premium.
♦ To pay for freight and other shipping expenses.
♦ To pay towards marine insurance premium, under CIF
contracts.
♦ To meet expenses in respect of after sale service.
42
♦ To pay towards such expenses regarding participation

in exhibitions and trade fairs in India and abroad.
♦ To pay for representatives abroad in connection with
their stay board.
Financing for various types of export Buyer’s

credit
Post shipment finance can be provided for three

types of export:
• Physical exports:
Finance is provided to the actual exporter
or to the exporter in whose name the trade
documents are transferred.
• Deemed export :
Finance is provided to the supplier of the
goods which are supplied to the designed
agencies.
• Capital goods and project exports:-
43
Finance is sometimes extended in the

name of overseas buyer. The disbursal of money
is directly made to the domestic exporter.
Types of post shipment finance
The post shipment finance can be classified as:
1) Export bill purchased /discounted.

2) Export bill negotiated
3) Advance against export bills sent on collection
basis.
4) Advance against export on consignment basis
1. Export Bills Purchased /Discounted. ( DP& DA

Bills)
Export bills (Non L/C Bills) is used in terms of sale
contract/ order may be discounted or purchased by
the banks. It is used in indisputable international
trade transactions and the proper limit has to be
sanctioned to the exporter for purchase of export
bill facility.
2. Export Bills Negotiated ( Bill under L/C)
44
The risk of payment is less under the LC, as the

issuing bank makes sure the payment. The risk is
further reduced, if a bank guarantees the payments
by confirming the LC .Because of the inborn security
available in this method, Bank often become ready
to extend the finance against bills under LC.
However, this arises two major risk factors for
the banks:
1. The risk of nonperformance by the exporter,
when he is unable to meet his terms and conditions.
In this case, the issuing banks do not honor the
letter of credit.
2. The bank also faces the documentary risk where
the issuing bank refuses to honour its
commitment .So, it is important for the negotiating
bank and the lending bank to properly check all the
necessary documents before submission.
3. Advance Against Export Bills Sent on collection
Basis
Bills can only be sent on collection basis, if the bills

drawn under LC have some discrepancies.
Sometimes exporter requests the bill to be sent on
the collection basis, anticipating the strengthening
of foreign currency. Banks may allow advance
45
against these collection bills to an exporter with a

concessional rates of interest depending upon the
transit period in case of DP Bills and transit period
plus usance period in case of usance bill .The transit
period is from the date of acceptance of the export
documents at the banks branch for collection and
not from the date of advance.
4 .Advance Against Export on Consignments Basis
Bank may choose to finance when the goods are
exported on consignment basis at the risk of the
export for sale and eventual payment of sale
proceeds to him by the consignee. However, in this
case bank instructs the overseas bank to deliver the
sale proceeds by specified date, which should be
within the prescribed date even if according to the
practice in certain trades a bill for part of the
estimated value is drawn in advance against the
exports.
For any amount: Working Group.
46
• Upto Rs. 50 crores: Scheduled Commercial Banks.

• Upto Rs. 200 crores: Exim Bank.
• Above Rs. 200 crores: Working Group.
SERVICES BIDS / CONTRACTS
On Cash Terms
• Upto Rs. 5 crores: Scheduled Commercial Banks.
• Upto Rs. 10 crores: Exim Bank.
• Above Rs. 10 crores: Working Group.
 BANKING TRANSACTION IN EXPORTS
47
When ever there is international trade and inflow

/outflow of foreign exchange, there must be some
methods of settlements for the transaction. The need for
settlement leads to opening of accounts by banks in
other countries which are called NASTRO and VOSTRO
account as under
NOSTRO-
NOSTRO Account means “Our account with you.

The account that a home bank maintains with a foreign
bank is known as NOSTRO account.
For example, Dhaka Bank’s US Dollar account

maintained with City Bank NA New York, USA is NOSTRO
Account of Dhaka Bank
When a bank in India issues a draft payable abroad in

USA is drawn on bank of new York .the draft when
presented for payment in new York is debited to the
NOSTRO account bank of India and paid to the
beneficiary .similarly all payment proceeds are received
through this account and all payment of import
transaction are paid through this account. Bank in India
are permitted freely to open one or more such account
as per their requirement with their branches or
correspondence banks abroad .opening of such accounts
must be advised to RBI by a separate letter.
VOSTRO ACCOUNT:
VOSTRO Account means “your account with us”. The

account maintained by a foreign bank is known as
VOSTRO account. We can term NOSTRO account when
48
referred to its account holder (foreign bank) by home

bank as VOSTRO account.
For example, State Bank of India’s taka account
maintained with Dhaka Bank is a VOSTRO account of
Dhaka Bank.
Any draft issued by bank of New York and drawn on bank
is paid to beneficiary by bank of India to the debit of this
account.
MIRROR-
The banks in India maintained the replica of
the NOSTRO account they maintain with banks abroad
and the same are called MIRROR account helps in
reconciliation of the account.
Foreign exchange market –

There are three types of markets
1) Merchant markets –
It is the retail market with involves the
transaction of customer with authorized dealers
(AD’S)
2) Inter bank market -
The market where transaction takes place
between authorized dealers (AD’S) within the
country.
3) International market –
The market where transaction takes place
between banks’s in different countries
The base for all these type of markets is need to
square off the position of authorized dealers
(AD’S).authorized dealers are permitted to retain
balances only up to a certain level.
BANK FORMALITISE IN THE RALISATION OF

EXPORT PROCEEDS
49
Payments against export should be realized only

through authorized dealers (commercial
bank allowed to deal in foreign exchange). No
payment can be received even through bank draft
and cheques unless exempted otherwise by RBI
Following are the steps in realizing export proceeds-
1) Approaching bank –
After dispatch of goods either by
sea, or by air, the exporter should approach his
bank (Authorized dealers) with a formal request
to realize proceed from the foreign buyer.
It is obligatory to submit the shipping documents
to an authorized dealer within 21 days of the date
of shipment in India the exporter have to realize
the full value of exports within 180 days from the
date of shipment. Where it is not possible to
realize the sale proceeds within the prescribed
period.
2) Submission of documents to the bank –

The exporter should
submit the following documents
i) Bill of exchange (first and second )

ii) Full set of bill of leading /airways bill in case
of air shipment.
iii) Commercial invoice copies
iv) Packing list
v) Certificate of origin
vi) Insurance policy
vii) Inspection certificate
viii) Shipping bill exchange control copy
ix) Other relevant documents
50
1) Latter of indemnity-
If the exporter wants
immediate payment from his bankers then his
bankers may provide advance payments only
when the exporter signs an indemnity letter. The
implications or indemnity letter is that in the
event of refusal of payment by the issuing bank
in respect of LC. Then the negotiating bank can
ask the exporter to pay back money advanced
along with necessary charges.
DISPATCH OF DOCUMENTS –
Before the transaction of
documents for negotiation /collection the bank
examine them through with reference to the
terms and conditions of the buyer’s order .letter
of credit and the laws relating to foreign
exchange control .if after scrutiny , the
documents are in order the bank dispatches them
to the overseas branch /correspondent branch as
early as possible . The overseas branch of the
bank then submits the documents to the importer
bank and the importers bank hands it over to
importer.
Methods of realization –
For purpose of receiving
payments against export countries have been
divided in to groups.
1) Asian clearing union (ACU) –
Consisting of Bangladesh, Burma, Pakistan,
Iran and Srilanka. The payment is allowed in
rupees from the account of bank situated in
any country of this group
2) All other countries, where the payment is

allowed in any permitted currency.
51
Processing of exchange control-

After realizing the
export proceeds , the exporter ‘s bank makes
necessary entries in the account of the
exporter the amount mentioned in the original
exchange control copy of shipping bill and the
amount realized by the bank must match.
 Promotional Measures
Assistance to States for Infrastructure

Development of Exports (ASIDE)
The State Governments shall be encouraged to
participate in promoting exports from their respective
States. For this purpose, Department of Commerce has
formulated a scheme called ASIDE.
Suitable provision has been made in the Annual
Plan of the Department of Commerce for allocation of
funds to the states on the twin criteria of gross exports
and the rate of growth of exports.
The States shall utilise this amount for developing

infrastructure such as roads connecting production
centers with the ports, setting up of Inland Container
Depots and Container Freight Stations, creation of new
State level export promotion industrial parks/zones,
augmenting common facilities in the existing zones,
equity participation in infrastructure projects,
development of minor ports and jetties, assistance in
setting up of common effluent treatment facilities,
stabilizing power supply and any other activity as may
52
be notified by Department of Commerce from time to

time.
Market Access Initiative (MAI)
The Market Access Initiative (MAI) scheme is intended to

provide financial assistance for medium term export
promotion efforts with a sharp focus on a country and
product.
The financial assistance is available for Export Promotion
Councils, Industry and Trade associations, Agencies of
State Governments, notified from time to time, Indian
Commercial Missions abroad and other eligible entities
as may be
A whole range of activities can be funded under the MAI

scheme. These include market studies, setting up of
showroom/ warehouse, sales promotion campaigns,
international departmental stores, publicity campaigns,
participation in international trade fairs, , brand
promotion, registration charges for pharmaceuticals and
testing charges for engineering products etc. Each of
these export promotion activities can receive financial
assistance from the Government ranging from 25% to
100% of the total cost depending upon the activity and
the implementing agency, as indicated in the detailed
guidelines.
Marketing Development Assistance (MDA)
The Marketing Development Assistance (MDA) Scheme is

intended to provide financial assistance for a range of
export promotion activities implemented by export
53
promotion councils, industry and trade associations on a

regular basis every year.
As per the revised MDA guidelines with effect from 1st

April,2004 assistance under MDA is available for
exporters with annual export turnover upto Rs 5 crores.
These include participation in Trade Fairs and Buyer
Seller meets abroad or in India, export promotion
seminars, etc
Further, assistance for participation in Trade Fairs

abroad and travel grant is available to such exporters if
they travel to countries in one of the four Focus Areas,
such as , Latin America, Africa, CIS Region, ASEAN
countries, Australia and New Zealand.
For participation in trade fairs, etc, in other areas
financial assistance without travel grant is available.
Meeting Legal expenses for Trade related matters
Financial assistance would be provided to deserving

exporters on the recommendation of Export Promotion
Councils for meeting the cost of legal expenses relating
to trade related matters
Towns of Export Excellence
A number of towns in specific geographical locations

have emerged as dynamic industrial clusters
contributing handsomely to India’s exports. It is
necessary to grant recognition to these industrial
clusters with a view to maximizing their potential and
54
enabling them to move higher in the value chain and tap

new markets.
Selected towns producing goods of Rs. 1000 crore or
more will be notified as Towns of Exports Excellence on
the basis of potential for growth in exports. However for
the Towns of Export Excellence in the Handloom,
Handicraft, Agriculture and Fisheries sector, the
threshold limit would be Rs 250 crores.
Common service providers in these areas shall be
entitled for the facility of the EPCG scheme.
The recognized associations of units will be able to

access the funds under the Market Access Initiative
scheme for creating focused technological service.
Further such areas will receive priority for assistance for
rectifying identified critical infrastructure gaps from the
ASIDE scheme.
The notified towns of export excellence are listed in

Appendix 41.
Brand Promotion and Quality
The Central Government aims to encourage

manufacturers and exporters to attain internationally
accepted standards of quality for their products. The
Central Government will extend support and assistance
to Trade and Industry to launch a nationwide
programmed on quality awareness and to promote the
concept of total quality management.
Test Houses
The Central Government will assist in the
modernization and up gradation of test houses and
55
laboratories in order to bring them at par with

international standards.
Quality Complaints/ Disputes

The Regional Sub-Committee on Quality
Complaints (RSCQC) set up at the Regional Offices of the
Directorate General of Foreign Trade shall investigate
quality complaints received from foreign buyers.
Trade disputes affecting trade relations
If it comes to the notice of the Director General of
Foreign Trade or he has reason to believe that an export
or import has been made in a manner that
i) Is gravely prejudicial to the trade relation India
with any foreign country.
ii) Is gravely prejudicial to the interest of other persons
engaged in exports or imports;
iii) Has brought dispute to the country
The director general of foreign trade may take
action against the exporter or importer concerned in
accordance with the provision of the act, the rules and
orders made there under.
➢ VISHESH KRISHI UPAJ YOJANA (SPECIAL

AGRICULTURAL PRODUCE SCHEME)
Objective -
The objective of the scheme is to promote export of
fruits, vegetables, flowers, minor forest produce, and
their value added products, by incentivizing exporters of
such products
56
Entitlement -
Exporters of such products shall be entitled for duty
credit scrip equivalent to 5% of the FOB value of exports
for each licensing year commencing from 1st April,
2004. The scrip and the items imported against it would
be freely transferable
Imports allowed -
The Duty Credit may be used for import of inputs or
goods including capital goods, as may be notified,
provided the same is freely importable under ITC (HS).
Imports from a port other than the port of export shall
be allowed under TRA facility as per the terms and
conditions of the notification issued by Department of
Revenue.
Cenvat/ Drawback-
Additional customs duty/excise duty paid in cash or
through debit under Vishesh Krishi Upaj Yojana shall be
adjusted as CENVAT Credit or Duty Drawback as per
rules framed by the Department of Revenue
.
Special Provision-
Government reserves the right in public interest, to
specify from time to time the export products which shall
not be eligible for calculation of entitlement.
CASE STUDY
TRADE OF INDIA –NEWZELAND (2001-2008)
57
1. Bilateral Trade, Economic and

Cooperation Relations
This chapter looks at the existing India-New Zealand
bilateral trade relationship as well as touching on other
aspects of the bilateral relationship. It considers the
extent or strength of current bilateral trade linkages and
the stability of such linkages.
Bilateral trade statistics reported by any two countries
can at times differ. These differences arise for two
reasons. First, when exports are required to travel
through an intermediary country en route to their final
destination, they may be counted as an export to that
intermediary country instead. Second, the countries’
customs authorities may classify specific products
differently which will create statistical discrepancies. The
solution to this problem used in this study is to use
import statistics from each country, which are generally
agreed to be more accurate. Therefore in this study,
Indian exports are described using New Zealand import
data and vice versa.
1.1. Goods
Historically the bilateral merchandise trading

relationship between India and New Zealand has been
under-developed. The recent trading performance is
beginning to change this position. Since 2002, bilateral
merchandise trade has nearly tripled in size from
US$168.2 million to US$469.9 million, with an average
growth rate of 23.5% per year. With improved market
access, as a result of a CECA/FTA, there is great
potential for the relationship to continue to develop.
The under-developed nature of the merchandise trading

relationship is highlighted by the low relative importance
58
in mutual trade between the two countries. Bilateral

imports from each country account for less than 1 % of
each country’s total imports. In the 2007 calendar year,
India’s exports to New Zealand accounted for 0.64 % of
total goods coming into New Zealand. This had
increased from 0.57 % in 2003. In 2007, New Zealand’s
exports into India accounted for 0.15 % of all goods
entering India. This had grown from 0.11 % in 2003.
These increases show that the importance of trade with
each country is increasing. It also implies that trade
between the two countries is growing at a faster rate
than each country’s total trade.
New Zealand’s sustained economic growth has fuelled
demand for imports from India, which have grown at an
average rate of 17.0 % per year between 2002 and
2007. Growth in India’s exports to New Zealand has
been consistently higher than from New Zealand’s other
sources of imports. This underscores the potential for
this part of the trading relationship to be expanded
further.
1.1.1. India’s Exports to New Zealand
India’s export profile to New Zealand is diverse. The key

products at the HS4 level are diamonds, linen,
medication, jewellery, and monument stone. On
average, each year between June 2004 and July 2007,
these products collectively only accounted for US$34.0
million, out of India’s average exports to New Zealand
during this period of US$162.3 million. These five
products account for less than 20% of India’s exports to
New Zealand. This is a good indicator of the broad profile
of India’s exports.
However levels do not tell the whole story. Between
2002 and 2007, in terms of trade weighted growth, a
59
number of other products also contributed significantly

to the growth in India’s exports to New Zealand. Growth
in diamonds and jewellery contributed 12.7% of India’s
total export growth to New Zealand over that period. The
next 8 most important products contributed an
additional 20.1% towards the total export growth.
In addition, a number of other products have a lower
level of trade, but have shown strong and consistent
growth between 2002 and 2007. These products include
sewing machines, plastic plates, sheets and film, base
metal fittings and mountings, and semiconductors. The
persistent growth of these products demonstrates that
the growth of India’s exports to New Zealand is driven
by a broad range of India’s export interests. This shows
great promise for the bilateral trading relationship as it
continues to develop.
India’s recent spectacular economic performance
has been well documented. This performance has
led to a large increase in India’s demand for
imports. This increased import demand has
generated opportunities for New Zealand
exporters. India’s imports from New Zealand have
grown at an average rate of 31.8% per year
between July 2002 and June 2007. The largest
year on year gain was between 2005 and 2006,
where New Zealand’s exports grew 87.1%. With
India’s economic performance forecast to remain
robust, there are prospects for further growth for
New Zealand’s exports although
access/regulatory/SPS issues will significantly
influence the ability for New Zealand firms to seize
these opportunities.
1.1.2. New Zealand’s Exports to India
Over the last five years massive growth in the export of

coal and wood in the rough has changed New Zealand’s
60
export profile markedly. Since July 2002, exports of coal

and wood in the rough have grown at an average rate of
81.8%, and 39.4% per year respectively. As New
Zealand is naturally abundant in these products, there is
scope for this trend to continue.
Prior to that period of change, New Zealand exported a
reasonably diverse range of products to India. Typically,
the products which New Zealand exports are
unprocessed goods and machinery which contribute to
production processes within India. New Zealand’s key
exports are in coal, wood in the rough, wool, butter, and
scrap aluminium. Exports in these products have
accounted for 73.8% of New Zealand’s total exports to
India on average since 2002. As India continues to grow,
there will be a large degree of mutual benefit, as New
Zealand will continue to be able to supply vital
intermediate and final products to help drive India’s
economy.
In terms of products’ direct share of New Zealand’s
export growth to India, energy related products are the
dominant contributor. The growth in this area has
accounted for nearly half of New Zealand’s total export
growth to India since 2002. Wood in the rough, wool,
scrap zinc and scrap aluminium have also contributed
significantly to the growth in exports.
While the share of growth has been dominated by coal,
wood in the rough and wool, there are a number of other
products which have exhibited very strong growth
between 2002 and 2007. Scrap aluminium, scrap iron,
and paper have on average, doubled each year since
2002, and are now among New Zealand’s ten largest
exports.
There are a number of products which are not yet
dominant in New Zealand’s export profile, but have
grown strongly and consistently since 2002. The exports
61
of these products are now at the level which products

like paper, scrap iron, and scrap aluminium were at in
2002. A number of these are more highly processed,
technical products such as parts for electrical
apparatuses, liquid pumps, medical instruments, and
semi-conductors. This ongoing development highlights
the diversity of products which New Zealand has the
potential to export to India.
These numbers indicate the considerable potential for
New Zealand to contribute to India’s ongoing economic
performance through the export of vital intermediate,
and final consumer products. Continued development of
the merchandise trading relationship could deliver
substantial benefits to both countries.
1.2. Services
Services trade represents an increasingly important

channel of bilateral economic engagement between
India and New Zealand. However, due to the inherent
complexities and confidentiality issues associated with
measuring bilateral services trade, it is difficult to obtain
accurate official statistics to quantify the extent of the
relationship.
Accordingly, we use secondary sources of data and
industry statistics as indicators to describe the changes
in the bilateral relationship, such as the number of
student and visitor arrivals recorded.
As outlined in chapter 2, section 2.3.2.2, New Zealand’s
global services exports are centred on tourism and
education. New Zealand’s services export profile to India
follows this same pattern.
The India-New Zealand education relationship is one that
has been steadily growing. Since 2003 the number of
Indian students studying in New Zealand has increased
from approximately 800 students to over 4,000. The
62
number of Indian students in New Zealand is projected

to surpass 5,000 by 2009.
Tourist numbers have also been growing strongly in both
directions. In the year ended March 2008, the number of
Indian visitors to New Zealand was near 23,000. This
was a 35% increase from five years ago from the year
ended March 2003. New Zealanders visiting India in the
year ended March 2008 numbered 26,500 people. This
has increased nearly 300% since the year ending March
2003.
While the tourism and education sectors are significant
contributors to the bilateral trade in services, and have
exhibited strong growth, trade in other services sectors
is also growing. Areas of interest include, among others,
a wide range of professional and business services,
environmental services and transport services.
1.3. Investment
1.3.1. Indian FDI Inflows
In terms of countries investing in India, New Zealand

ranks 39th and accounts for about 0.13% of FDI into
India. In the same period, actual cumulative FDI inflows
from all countries amounted to US $ 67.33 billion. New
Zealand ranks 55th and cumulative inflows (net of
American Depository Receipts (ADRs) and/or Global
Depository Receipts (GDRs)) from New Zealand were
US$ 8.5 million (0.01%), excluding FDI inflows received
for acquisition of existing shares (up to 1999), stock
swapped, RBI’s-NRI schemes & advance pending for
issue of shares.
The top sectors attracting FDI approvals (from August

1991 to December 2007) from New Zealand were: the
services sector (57.65%), food processing industries
63
(28.37%), telecommunications (12.83%), boilers and

steam generating plants (0.52%), and electrical
equipments (including computer software & electronics)
(0.36%). Top sectors attracting FDI inflows (from January
2000 to December 2007) from New Zealand were: power
(90.79%), computer software & hardware (4.44%), and
trading (2.17%).
1.3.2. New Zealand FDI Inflows

India’s outward investment to New Zealand has
remained meagre. However, in more recent years
New Zealand’s FDI inflows from India in the forms
of Joint Ventures (JVs) and Wholly-owned
Subsidiaries (WOS) have increased from a
miniscule US $ 0.13 million (1996-2002) to US$
2.745 million (2007-2008).
1.3.3. Technical Collaborations
In the last 16 years, India has engaged in nearly 8000

projects involving technical collaborations with other
nations. New Zealand has been granted 20 technical
collaborations since 1991. Top sectors attracting
technology from New Zealand are electrical equipment
(including computer software & electronics) and
metallurgical industries.
Leading information and communications technology
(ICT) solutions company CMC Limited is partnering with a
New Zealand university to take New Zealand’s
innovative ICT technologies and capabilities to the world.
Tata owned CMC ltd has signed a Memorandum of
Understanding (MoU) with Massey University’s e-Centre
in Auckland, New Zealand. The two have jointly
established a technology centre that will give New
Zealand companies a direct pipeline into CMC’s domestic
and international distribution and sales channels. Known
64
as the CMC Technology Export Centre (CMCTEC), the

New Zealand-based venture ensures products are suited
to market needs before they are passed to CMC, with the
first offering – performance-based software developed
by Auckland company QLBS – already sent to CMC. The
current focus is on securing Indian domestic sales for
three NZ companies – the most advanced of these is
Auckland-based email spam prevention specialist, SMX
Ltd.
1.4. Other Areas of Cooperation
Drawing on a shared history, India and New Zealand

have much in common - the English language,
parliamentary democracy, a broadly similar legal system
with an emphasis on the rule of law, Commonwealth
ties, a fondness for cricket and the strong links
developed by Sir Edmund Hillary.
The relationship between India and New Zealand is
growing and expanding. Underpinning the bilateral trade
and economic profiles described above sits a wide range
of bilateral cooperation.
In recent years there has been an increase in high level
visits between the two countries reflecting the greater
importance both sides are now placing on the
relationship.
India’s economic growth has been matched by an
expansion in New Zealand’s trade and economic
relationship with India. There is potential for growth in
tourism, education, business interaction, timber exports,
export of niche products and consultancy services. There
has been solid growth in the number Zealand has also
served to strengthen people to people ties.
India's "Look East" policy and its participation in regional
institutions such as the East Asia Summit (EAS) and
ASEAN Regional Forum mean that India and New
65
Zealand are increasingly interacting in the regional

context. India’s interest extends to the Pacific Island
states and, in 2003, India became a dialogue partner of
the Pacific Forum. Our common membership of the EAS
has also provided a high level platform for bilateral
dialogue, including on climate change. Other areas
where out interests coincide include our interest in
United Nations reform, Commonwealth matters, human
rights, the Alliance of Civilisations process, counter-
terrorism and other transnational issues.
1.4.1. Treaties and Arrangements
There are a number of bilateral treaties in force between

New Zealand and India the earliest of which date from
1963. These cover a range of areas including air
services, double taxation and wool purchasing. In terms
of bilateral arrangements of less-than-treaty status,
there are arrangements on areas including agriculture,
plant quarantine, information technology, education, and
the recent Joint Understanding on Science and
Technology Cooperation signed during the then Minister
Anderton’s visit to India in March 2008.
1.4.2. Business Linkages
The India/New Zealand Joint Business Council (JBC) was

established in 1988. The JBC brings together the
business sectors of both countries for a stock taking and
also looks ahead to future possibilities. In New Zealand,
the India Trade Group is also actively promoting the
bilateral economic relationship.
Officials met in New Delhi in June 1987 for the first
meeting of the New Zealand/India Joint Trade Committee
(JTC), which was established under the New
Zealand/India Trade Agreement signed during the visit of
Prime Minister Rajiv Gandhi to New Zealand in October
66
1986. The purpose of the JTC is to discuss and negotiate

bilateral trade policy and trade access issues.
The JTC and the JBC last met in Wellington in late
October 2007. At that meeting of the JTC, Indian and
New Zealand officials agreed on the Terms of Reference
(TOR) for this Joint Study.
It would be appropriate to review these institutional
arrangements following the conclusion of a CECA/FTA or
even during the course of a negotiation. Suggestions
have been made elsewhere in this study for additional
mechanisms to promote greater understanding,
information exchange, dialogue and cooperation in
particular areas of the trade and economic relationship.
Other proposals may arise during the negotiation in
relation to how aspects of the agreement are to be
implemented. As new mechanisms and processes are
established, either during or following a negotiation, the
JTC could operate as an umbrella institution to monitor,
discuss and coordinate these subsidiary mechanisms
and processes. It might be necessary to alter the
frequency and composition of JTC meetings, to ensure it
can perform these roles adequately. The relationship
between the JBC and these new mechanisms and
processes might also need to be considered. These are
matters that should be discussed further at the next
meeting of the JTC.
1.4.3. Defence
New Zealand has modest but warm defence links with

India. Most bilateral defence interaction occurs between
the two navies. Most recently HMNZS Te Mana visited
Mumbai in August 2008. Earlier, HMNZS Te Mana and
Endeavour visited Port Blair in the Andaman Islands in
May 2007 following exercises with Indian naval ships;
HMNZS Te Mana visited Kochi and Mumbai ports in June
67
2006; and the Indian ship Tabar visited Auckland in

2006.
New Zealand has useful defence interaction with India in
the ASEAN Regional Forum, through the defence
dialogue process and through the Forum’s range of
confidence-building measures.
1.4.4. Diaspora
India has passed legislation that allows dual citizenship

or “overseas citizenship of India” to citizens of a number
of countries including New Zealand. Within New Zealand
there are some 120,000 citizens of Indian descent/origin,
many of whom have achieved considerable prominence
in New Zealand society.
1.4.5. Cultural Linkages
The Asia New Zealand Foundation has organised highly

successful Diwali Festivals to celebrate the Indian
festival of lights, since 2002. The Diwali Festivals are
well-attended and have become one of the largest
annual events in the Auckland and Wellington calendars.
The New Zealand International Festival of the Arts has
also featured Indian artists and in each of the last three
years there have been Indian entries in the World of
Wearable Art show in Wellington. There is also now an
annual World of Wearable Art event taking place at the
New Zealand High Commission in New Delhi in
conjunction with the Fashion Design Council of India.
In May 2003, as part of India’s celebration of the 50th
Anniversary of the ascent of Everest, Sir Edmund Hillary
was honoured by the Indian government. A plaque was
presented to Sir Edmund Hillary by the Indian Prime
Minister, Atal Bihari Vajpayee, and two roads in front of
the New Zealand High Commission in New Delhi were
named after Sir Edmund Hillary and Tenzing Norgay. In
68
January 2008, Sir Edmund Hillary was posthumously

awarded the “Padma Vibhushan”, India’s second highest
civilian honour.
New Zealand and India also have strong cricketing
relations. New Zealand and Indian cricket teams play
each other frequently at various international arenas and
also tour each others’ countries regularly. In 2009, the
Indian cricket team will tour New Zealand. A former New
Zealand opening batsman, John Wright, was the first
international coach of the Indian cricket team. The new
Indian 20/20 League, in which New Zealand players
participate, has attracted wide interest in New Zealand
and worldwide.
In October 2008, the Commonwealth “Youth” Games will
be held in Pune attracting the participation of some 60
young New Zealand competitors. In 2010 India will host
the Commonwealth Games.
1.4.6. High Level Visits
Ministerial visits in both directions are a valuable way of

enhancing political connections and bringing the
relationship to the forefront. On the New Zealand side,
since the former Prime Minister’s visit to India in October
2004, there has been increased Ministerial interaction:
the former Minister of Education, Hon Trevor Mallard
(2005 and 2006), former Minister of Trade and Defence,
Hon Phil Goff (2005 and April 2007), former Deputy
Prime Minister, Dr Cullen (October 2007) and former
Minister of Local Government and Youth Affairs, Hon
Nanaia Mahuta (December 2007). The most recent visit
was by the former Minister of Agriculture and Forestry,
Hon Jim Anderton who led a forestry delegation to India
in March 2008. The New Zealand Governor-General and
Commander-in-Chief His Excellency the Hon Anand
Satyanand visited India from 8-14 September 2008.
69
Visits by Indian ministers have included a 2006 visit by

the Minister of Finance, Chidambaram and two visits in
2007, by the Minister of Textiles and the Minister of
Panchayati Raj (Local Government). The Government of
India was represented at the state funeral for Sir
Edmund Hillary in January 2008 by the Minister of State
for Environment and Forests, Shri Meena. The Minister of
Youth, Sports and Local Government, Mani Shankar
Aiyar, visited New Zealand in April 2008. In May 2008
Commerce and Industry Minister Kamal Nath visited New
Zealand. There is an outstanding invitation for Prime
Minister Manmohan Singh to visit New Zealand.
1.5. Summary
This chapter has shown that the bilateral economic

relationship between India and New Zealand has evolved
considerably in the areas of trade in goods, services,
investment flows and a wide range of cooperation
activities. These linkages provide a sound basis for
further deepening the relationship through a
comprehensive CECA/FTA that addresses these areas.
70
 CONCLUSION
In export marketing Having decide about which country

you are going to export to ,doing the required market
research and finally developing a ’’market entry plan ‘’
for the country .
Market entry strategy involves strategic partnerships

with other companies or individuals with complementary
skills and capabilities. A partner can often provide the
insight, contacts and expertise that fill the gap in your
export readiness. A strategic alliance with a company
selling a complementary product or service can provide
more effective market access, resulting in more foreign
sales in less time. As with indirect exporting
relationships, contractual agreements with partners
must be stated in clear terms and, whenever possible,
refer to Canadian laws for the protection of the Canadian
company.
Strategic marketing action plan is a set of key functional

areas of export marketing which should be performed
well and followed step by step to get succeed in Export
marketing. Performing following key tasks step by step
will give you a rapid success in export marketing with
sustainable and profitable export sales growth.
International bank is the exchange of goods and services

across national boundaries, it is the most traditional
form of international business activity and had played ‘a
major role in shaping world history .it facilities the what
action should take for export of goods and services, it
allows the manufacturer and distribution to seek out
product and component produced in countries
71
.companies acquire them because of cost advantages or

to learn about advanced technical methods used abroad.
Export strategy consider the requirement of the finance

for the producer during the export, it require the bank
formalities to help the exporter for the financial
purposes. During the export some promotional measures
is needed to promote the export market in international
trade.
International trade and strategy will continue to be the

engine that runs most nations .the continued strength of
the world economy has been supported by strong
growth in international trade while the United States and
Europe continued to under in international trade growth
over the past decade the increase the importance of
international marketing in the world economy
It is clear that in export marketing certain export policy

measures are inconsistent with competition and hence
such trade policy intervention can be determinant to
international trade and the fostering of universal
competition polices.
This is the new way to living in the area of the new

economy because of the small exporter can go for the
international trade in India many small manufacturer
going for export in international market .this is helpful
for our economy .
72
BIBILOLIOGRTAPHY /REFERENCE
➢ WWW.INDIANDATA.COM
➢ WWW.COMMERCE.NIC.COM
➢ WWW.GOOGLE.COM
➢ WWW.MSN.COM
• IMPORT-EXPORT BOOK(VIVPUL PRAKASHAN)

• EXPORT MARKETING
73

Export Marketing

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Export Marketing

Uploaded by

Copyright:

Available Formats

EXPORT MARKETING (ENTRY STRETEGY)

various activities such as branding, packaging,

2) Identification and satisfaction of

4) Large scale operations –

Export trade is subject to tariff and

8) International marketing research –

20 steps of export marketing

Those who are interested in export- import

One has to resister with the concerned export

With the completion of these formalities. The

With export order in hand they start

Once manufacturing is over , the exporter

Exportable are then dispatched to parts,

With dispatch of goods, the export firm has to

After completion of these formalities, the

The clearing and forwarding (c and f ) agent

The C and F agent also submits a copy of the

There after for loading exports into ships or

After loading goods in to the ship the captain of

When port payments are made the C and F

After obtaining bill of loading, the C and F

On receipt of the documents, the exporter

Exporters also send shipping documents to

The exporter now presents all important

The exporters’ bank sends all important

After receiving the requisite document , the

As a last step exporters apply for benefit from

Need and Importance of Export-market

The need and importance of export marketing can be

NEED AND IMPORTANCE OF EXPORT

A) From view point of nation –

A country external economic strength

4) Reputation in the world –

6) Financing of development plans:

7) Research and development:

foreign markets. The fruits of Rs D would benefit the

8) Optimum utilization of resources:

Because of export industry , other

10)Higher Stander of living:

A)From view point of business organization

home market i.e Sony , Glaxo, Tata etc . enjoy

5) Keeping alive old brand:

product may have good demand in the foreign

6) Improvement in organization efficiency:

7) Improvement in product standards:

of gulf countries are comparatively less than what

10)Financial and non –financial benefits:

Functions of export marketing:

The following are the functional areas of marketing:

It is one of the important areas of the

spells a firm’s survival and success not only in the

Export risk management:

Factors affecting export marketing -

The economic condition prevailing in

The political factors also play on

Its affects export marketing to great

according the right type of products can be produce to

The exporter must also consider

The social factors are also to be considered.

The level of technology in the export markets also

The trade factors also must be

stand that it is trade factors that finally sell the product

• The channel of distribution