Black Book - Kiran - Roll No.-19

“EXPORT - IMPORT BANK OF INDIA”
(EXIM BANK)
A Project submitted to
University of Mumbai for partial completion of the degree of
Bachelor of Management Studies
Under the faculty of commerce
By
KIRAN YOGESH GOVALKAR
ROLL NO: 19
Under the Guidance of

PROF. SWAPNIL SHENVI
PARLE TILAK VIDYALAYA ASSOCIATION’S

SATHAYE COLLEGE
DIXIT ROAD, VILE PARLE (EAST), MUMBAI-400057
YEAR 2019-2020
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PARLE TILAK VIDYALAYA ASSOCIATIONS’S
SATHAYE COLLEGE DIXIT ROAD, VILE PARLE (EAST)
MUMBAI 400057
CERTIFICATE
This is to certify that Mr. KIRAN YOGESH GOVALKAR has worked

and duly completed his project work for the degree of Bachelor of
Management Studies under the faculty of commerce in the subject of
“FINANCE” and his project is entitled, “EXPORT-IMPORT BANK OF
INDIA (EXIM BANK)” under my supervision.
I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any
Degree or Diploma of any University.
It is his own work and facts reported by his personal findings and
investigations.
Name and signature of

Guiding teacher
(PROF.SWAPNIL SHENVI)
Date of Submission:
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DECLARATION
I the undersigned Mr. KIRAN YOGESH GOVALKAR hereby declare that

the work embodied in this project work titled, “EXPORT-IMPORT BANK
OF INDIA (EXIM BANK), forms my own contribution to the research
work carried out under the guidance of PROF.SWAPNIL SHENVI is a
result of my own research work and has not been previously submitted to any
other Degree or Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.
I, hereby further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.
Name and signature of the learner

KIRAN YOGESH GOVALKAR
Certified by
Name and signature of the Guiding Teacher
PROF.SWAPNIL SHENVI
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ACKNOWLEDGEMENT
To list who all have helped me in difficult because they are numerous and the depth is so
enormous :
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving the chance to do
this project.
I would like to thank my Principal, Dr. M.R RAJWADE for giving the necessary
facilities required for completion of this project.
I take this opportunity to thank our BMS Coordinator PROF. SHASHANK PAI for his
morale support and guidance.
I would also like to express my sincere gratitude towards my project guide PROF.
SWAPNIL SHENVI whose guidance and care made the project successful.
I would like to thank College Library, for having provided various reference books and
magazine related to my project.
Lastly, I would like to thank each and every person who directly helped me in the
completion of the project.
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INDEX
Chapter No. Title of the Chapter Page No.
Executive Summary 7
Chapter 1
Introduction 8
1.1 History 9
1.2 Mission 10
1.3 Functions 10
1.4 Objectives of the EXIM Bank 10
1.5 EXIM Bank’s Need 11
1.6 Role of the Export-Import Bank of India 13
1.7 Import-Export Policies 14
1.8 EXIM Bank’s Important 22
1.9 Export-Import Bank of India-Small & 23

Medium Enterprises
1.10 Important of SMEs Sector 23
1.11 EXIM Bank and SMEs 24
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Chapter 2
Review of Literature 25
Chapter 3
Research Methodology
3.1 Objectives of the Study 43
3.2 Hypothesis of the Study 43
3.3 Sources of Data 44
3.4 Data Analysing 45
Chapter 4
Conclusion & Suggestions
4.1 Conclusion 58
4.2 Suggestions 59
Chapter 5
Bibliography 61
Annexure 62
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EXECUTIVE SUMMARY-
This study on “Export Promotion in India with special reference to the role of Export-
Import Bank of India” has made on attempt to look into the various export promotion
measures and incentives as well as the schemes of financing export by the various
financial institutions and in particular the role played by the EXIM Bank. Further, more
the study seeks to highlight the role played by EXIM Bank in promoting exports by
making available timely finance. Finally, the study highlights the justification of setting
up of EXIM Bank as a separate financial institutions for financing export and import trade
in India. For purpose of in depth analysis the study has been divided into six chapters.
The first chapter look into the various export promotion measures both development of
infrastructure and institutional aids by the government in the last two decades. It also
looks into the institutional arrangements for export finance schemes and working of
EXIM Bank since its inception in 1982. It evaluates the performance of EXIM Bank and
seeks to justify its separate existence as compared to commercial banks who are also
dealing in export finance. It discuss the India’s export performance in the international
scenario and discuss the various potential sectors in which India can compete successfully
in the international market. It also seeks to look at EXIM Bank’s role in the future.
The objectives of the study include changes in India’s exports, their composition and
direction since the inception of the planning era. It seek to highlight the institutional and
infrastructural incentives provide by the Government to promote exports. The study’s
main thrust is on export finance and it emphasises the role played by EXIM Bank in
providing export finance as well as the challenges before EXIM Bank in the future and
after studying all this suggesting a suitable strategy for promotion of exports.
India’s export policy since independence has been discussed in the introduction part. It
highlights the role played by Import-substitution and self-reliance as the cornerstone of
India’s export policy. Furthermore, it discusses India’s export scenario through the
planning period (1951-1990). It is seen that during this era export have only been given
importance after the 1970 Export Policy Resolution. After following the policy of Import-
substitution and self-reliance since independence, India’s economic planners realised in
the decade of the seventies that for India to have a world standing it was important that
the emphasis should be on promotion of exports to help finance the growing debt burden,
and to finance the imports of oil and other commodities. The composition and direction
of India’s export has shifted since independence. From the export of traditional
commodities like jute, spices, tea, cotton India’s commodity composition in the 1980s
comprises of non-traditional manufactured goods like gems and jewellery engineering
goods, chemicals, readymade garments etc.
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EXPORT IMPORT BANK OF INDIA
CHAPTER 1-
INTRODUCTION
As act to establish a corporation to be known as Export-Import Bank of India for providing

financial assistance to exporters and importers, and for functioning as the principal
financial institutions for coordinating the working of institutions engaged in financing
export and imports of goods and services with a view to promoting the countries
international trade and for matters connected there with or incidental there to. The Exim
Bank shall be a body corporate, having perpetual succession and a common seal with
power, subject to provision of this act, to acquire, to hold and dispose of property and to
contract, by the name, sue or to be sued.
The head office of The Exim Bank shall be at Mumbai or at such others place as the
central government may, by notification, specified. The Exim Bank may establish offices,
branches or agencies at such places in or outside of India as it may considered necessary.
The authorized capital of the Exim Bank shall be Ten thousand crores of Rupees. The
central Government can increase the amount of that capital, if necessary by notification.
The issued capital of the Exim bank shall be wholly subscribed by central Government.
To find out the solution for more export problems Indian Government has set up an act of
parliament in September 1981 known as Export-Import Bank of India Act which
commenced in operation in the March 1982. It is the apex financial institution in Foreign
Trade with objectives “For providing financial assistance to exporters and importers, and
for functioning as the principal financial institution for coordinating the working of
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institutions engaged in financing export and import of goods services with a view to
promoting the countries’ International Trade.”
The Exim bank of India consists of 16 Board of Directors out of which 13 are appointed
by the Government of India. This bank has had 10 domestic officers who are at different
places in India and seven overseas officers at the outside of India. This bank provides
value based services to the exporters at all stages of export business cycle such as from
production to post-shipment of the goods. In financing programmes this bank provides
medium and long term credit to buyers and suppliers and short term for pre and post
shipment credit. It also provides credit to imports for capital goods and raw materials.
This bank has institutional linkage such as multilateral agencies-World Bank, Asian
Development Bank (ADB), International Bank for Reconstruction and Development
(IBRD), International Finance Co- operation (IFC) and United Nation Conference on
Trade (UNCTAD). It has also have linkage with trade and investments- promotion
agencies such as Corporation Andina De Fornento, Central American Bank for Economic
Integration Board of Investment, Mauritius, Board of Investments of Sri Lanka and
Netherlands Council for Trade promotion. This bank also have linkage with US- The
Exim bank, The Exim Bank of China, Romania, Brazil, Korea, Africa and Thailand.
The Exim Bank is not profit making bank, it is basically for promoting exports of the
country and curtailment of undesired imports. It aims at maximize social responsibility,
therefore it is necessary to judge the performance of the bank on the basic of contribution
towards additional export, earnings and the diversification of export. Apart from these
verities, the bank set up to give a boost to export promotion effort of the country. The
Exim bank of India helps in promoting India’s integration into global economy.
1.1- History-
This Act extends to the whole of India. With effect from the date i.e. September 1981, as
the Central Government by notification, appointed, a corporation Known as the Export
Import Bank of India was established for the purposes of this Act.
The Export Import Bank of India, commonly known as the EXIM Bank, commenced
operations in March 1982. It was set up so as to take over the operations relating to export
finance which the IDBI (Industrial Development Bank of India) had been handling since
the year 1970. Exim Bank acts as the apex financial institution relating to financing for
foreign trade. It provides financial assistance by way of direct loans and advances for the
purpose of export or import, rediscounting of usance export bills for banks and finance for
international trade activities.
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1.2- Mission-
1- Exim Banks mission is to facilitate globalization of Indian Business.

2- Exim Banks mission statement: “To develop commercially viable relationships
with externally oriented companies by supporting their internationalization
efforts, through a diverse range of products and services.”
1.3- Functions-
1- Financing of exports and imports of goods and services, not only of India but also
of third world countries.
2- Financing of exports and imports of machinery and equipment on lease basis.
3- Financing of joint ventures in foreign countries.
4- Providing loans to Indian parties to enable them to contribute to the share capital
of joint ventures in foreign countries.
5- Undertake limited merchant banking functions such as underwriting of stocks,
shares, bonds or debentures of companies engaged in export or import; and
6- Provide technical administrative and financial assistance to parties in connection
with export and import.
1.4- OBJECTIVES OF THE EXIM BANK-

This bank has been established for the purpose of financing and development of foreign
trade of our country. The responsibility of short term finance for exports is with the
commercial banks while medium and long term finance with the Exim bank of India.
Therefore, Exim bank has to act as a coordinator for workings of various financial
institutions.
The preamble of Exim bank of India states the following two important objectives which
are
Coordination in the workings of institutions in financing export and import trade.
Financing, facilitating and promoting foreign trade of our country.
1- The principal objectives of the bank can be narrated as under

2- To translate national foreign trade policies into concrete action points.
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3- To provide alternate financing solutions to the Indian exporter, aiding him in his affords
to be competitive.
4- To develop mutually beneficial relationships with the international financing

community.
5- To initiate and participate in the debates on issues central to India’s international trade.
6- To forge close working relationships with the other export development and financing
agencies, multilateral funding agencies and national trade and investment promotion
agencies.
7- To anticipate and absorb new developments in banking, export financing and

information technology.
8- To be responsive to exports problems of Indian exporters and pursue policy resolution.
9- To function as the principal financial institutions for coordination the workings of

institutions engaged in providing export finance.
10- To deal with all matters that maybe considered to be incidental or conductive to the
attainment of the above objectives.
11- To provide financial assistance both medium term as well as long term to the exporters
and importers. It refers to the financing of exports and imports, financing joint ventures
abroad, financing of Indian manufactured goods, consultancy and technological services
on deferred payment terms, financing research and development of techno- economic
studies, co-financing global and regional development agencies.
1.5- EXIM BANK’S NEED-
Following are the important causes due to which the Exim bank has came into existence:
The processes of industrial development in our country resulted in diversification and

expansion of the export sector in the 1970s development of the capabilities for exports of
capital goods, engineering goods, manufacturing products, project and services as also
setting up of joint industrial ventures abroad are an important outcome of this process.
Exim bank was set up as a specialised financial institution to finance these expanding
export efforts which could provide comprehensive export credits on international
competitive terms as well as to offered advisory services to exporters for non-traditional
exports.
The Exim bank has been formed as an Apex Institution offering merchant banking
services in foreign trade.
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The chapter of Exim banks states its objectives as financing- (a) Exporters and importers
(b) Export oriented units (EOUs) (c) promotional activities in the foreign trade.
Indian contractors were not able to enter in to jumbo contracts. They were acting as sub-
contractors mainly on account of non-competitive bids. To cater to the needs of new
exporting class, well equipped with non-traditional products, Exim bank has been formed.
The present export was the fastest growing area in the global trade. From the category of
the project exports, construction activity showed boom from 1974. During the early
1980s, it faced the declining trend, therefore the target was project exports as well as
construction, services and supply activities.
One window clearance i.e., all the formalities under one roof is another objectives. The
outcome of this facility is simplification of export procedure and formalities. The working
group mechanism (WGM) functions with this basic aim where Exim bank is the focal
point.
Explanation of world markets i.e. finding out new opportunities and new potentials as the
significant activity covered by the Exim bank. Special affords are necessary to identify
the thrust areas. For the need of marketing the bank has created export marketing fund
(EMF) for effective marketing strategies in international market with new opportunities,
market sustenance and retention strategies are also needed. Market penetration is essential
in the competitive market.
Advisory services information centre for collection and discrimination of information is
also another need of Exim bank of India.
Bank assists in identification of products, opportunities’ funded by multilateral agencies,

as the potential exports. There is urgent need for the data for socio economics and political
conditions, development plans, laws and policies relating to investments’, joint venture
repatriation of profits, taxation policies, competition in international market etc. The Exim
bank aims at building up efficient data Bank.
For business expansions: for efficient service, Exim bank aims at opening of new branches
and offices at present, there are in all 14 branches out of which 5 are overseas and 9 are
domestic branches.
Support to 100 percent export oriented units (EOUs) and units in free trade zones (FTZs)
is one of the objectives so that competitiveness of their products in the overseas market
can be enhanced.
It coordinates the workings of other financial institutions engaged in financing export

import trade.
Diversification and promotion of exports is one of the basic needs of the Exim bank.
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The Exim bank of India also under rights new issue of any company engaged in export or
import to leasing, forming subsidiaries for carrying out the functions of the company.
1.6- ROLE OF THE EXPORT-IMPORT BANK OF INDIA-
The Exim bank plays four important roles with regards to India’s foreign trade. These as
a coordinator, source of finance and consultant promoter. The Exim bank is the
coordinator of the working Group mechanism for clearance of project and services
exports and deferred payment Exports. The working Group comprise The Exim bank,
Government of India representative (Ministry of Finance, Commerce, and External
Affairs), Reserve Bank of India, Export Credit Guaranty Corporation of India ltd and
commercial Banks who are authorized to Foreign exchange dealers. This inter-
institutional working group’s accords clearance to contracts (at the post-award stage)
sponsored by Commercial Banks or The Exim Bank and operates as a one- window
mechanism for clearance of term export proposals. The Exim bank can now accord
clearance to the project export proposals up to US$ 100 million in value.
The Exim Bank provides credit facility to Indian companies, commercial banks and
overseas entities at different levels.
Provides finance for Export Oriented Unites. Working capital to exporting companies as
well as to non-exporting companies.
Overseas investment finance to Indian companies for joint ventures and wholly-owned
subsidiary.
Finance to small and medium enterprises (SME).
Finance to Agricultural-business groups.
Finance to Film industry-for film production, distribution and for export market
development.
The Exim Bank works as rural initiative - with the objectives as reduction in poverty
through export linkage and benefit of Globalisation to grassroots rural enterprise.
Works as Export Marketing Services (EMS).
Tie-ups with international agencies-such as International Trade Centre (Geneva),

Enterprise Management Development Services (EMDS), International Finance
Corporation (World Bank), US based non-profit organisation called Aid-to-Artisans
(ATA), etc.
Formal tie-up with Non-Government Organisation (NGOs)-at field level and has helping
in capacity building, quality improvement, market access, trading, etc.
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1.7- IMPORT-EXPORT POLICIES-
The Import-Export (control) Act 1947 is replaced by the foreign Trade (Development and
Regulation) Act 1992 empowers the central Government to formulate and announce from
time to time the export and import policy and to amend it in like manner.
New Government who took over at the center in June 1991 has realized that India’s
foreign trade policy must respond to the challenges sweeping across the world. In August
13, 1991, the Government made a statement on trade policy in parliament. Instead of
controls and regulations, the focus instead of controls and regulation, the focuses shifted
to promotion and development of foreign trade.
Export-import Policy 1992-1997:
The Government announced the export and Import policy for a period of five years (April
1.1992 to 31st March 1997) on March 31st 1992- coinciding with the period of 8th five-
year plan. The chief controller of imports and exports was re- designated as Director
General of Foreign Trade (DGFT). He is responsible for formulation and execution of
foreign trade policy, including licensing.
This policy made conscious effort to dismantle various protectionist and regulatory
policies and accelerate India’s transition towards a globally oriented economy. This policy
was liberalized by the Government in March 31, 1993. Substantial concessions were
announced to boost agricultural export. The Government has also announced a centrally-
sponsored scheme to set up industrial parks in different states.
This policy is sought to consolidate the gains of the previous policy and future carry
forward the process of liberalisation by deregulating and simplifying procedure and
removing quantitative restriction in a phased manner. It set an ambitious target of attaining
an export level of US$ 90-100 billion by the year 2002 and achieving one percent share
in world trade.
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Objectives of the policy:
1- To accelerate the country’s transition to a Globally-oriented vibrant economy to

driver maximum benefits from expanding global market opportunities.
2- To stimulate sustained economic growth by providing access to essential raw-
material, intermediates, components, consumable and capital goods.
3- To enhance the technological strength and effacing of Indian agricultural industry
and services, thereby improving their competitive strength while generating new
employment opportunities and encourage the attainment of internationally
accepted standards of quality.
4- To provide consumer with good quality products at reasonable price.
Silent Features:
Export and Import shall be free except to the extent they are regulated by the provision of
this policy.
Central Government may prepare Negative list for import and export.
Only in accordance of licence issued export or import should be permitted.
No export or import will take place without an Importer-Exporter Code (ICE) number
Negative list is prohibited, restricted through licensing.
Modified Export-import Policy April 1998:
The new Government at the centre, as the part of the annual export-import policy
modification freed from import restriction a large number of consumer goods and
liberalized all major export promotion schemes. It has been made due to commitments
given to the world trade organization (WTO). There was pressure on India to remove
restrictions on imports. The US had failed a complaint with WTO against India’s import
regime. The commerce ministry has modified and made cleared the Export-Import policy
on 13 April 1998 with the following provision.
340 more it’s were shifted from the restricted list to open General Licence (OGL).
It has set an export growth target 20% for the year 1998 to 1999.
Zero-duty export promotion Capital goods (EPCG) scheme was extended to all software
exporters.
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Government has set up an anti-dumping cell called Directorate General (DG) of anti-
dumping and allied duties. Where the harm is caused to domestic industry by subsiding
exports by the exporting country, then the DG would have the jurisdiction to investigate
all such cases and recommend possible imposition of counter veiling duties.
Other provision-delegation of powers to regional licensing officers. Delegation of power

under advance licensing scheme. Simplified procedure for clubbing of advance licence
scheme. To set up private bonded warehouse to imports, stock and sell even negative list
items.

The Government announced a revised export-import policy on 31st March 1999 which
came into force on 1st April 1999. As per these policy 894 items of consumer goods,
agricultural products and textiles were freed for import subject to only payment of import
duty. However another 414 items were removed from restricted list allowing these to
import against special import license.

On 31st March 2000, the Union commerce and Industry Minister announced new Export-
Import policy of the GOI for the year 2000-01. This policy brought about a major
rationalization in export promotion scheme and launched a series of sector specific
initiatives.
Export Promotion:
The Government announced the following measures for boosting the exports.
Special Economic Zones (SEZ) Government announced for setting up of two SEZs first
at Positra in Gujarat and second is at Nangunery in Tamil Nadu. The industrial units
located in SEZs will be exempted from a plethora of rules and regulation governing export
and import. The entire production will have to be exported from these zones. The units
would be able to import capital goods and raw-materials duty free. The movements of
goods to and from SEZs would be unrestricted.
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Sector-specific Packages: Under this policy it is announced that sector specific-packages
for seven core areas to boost export. Namely germs and jewellery, pharmaceuticals,
agrochemicals, biotechnical, silk, lather and garments.
Involvement of state Government in export promotion: By paying incentives to the state

Government.
Import Liberalization:
This policy has lifted quantities restrictions on 714 commonly used items. This can now
be freely imported. Commodities like meat, milk power, coffee, tea, fish, pickles, cigar,
television, radio, tape recorder, footwear, umbrellas can be imported freely. The
Government promised to the WTO to abolish licensing and quota curbs on the 715 items.
The union commerce and Industry Ministry drafted this policy on 31st March 2001 for the
year 2001 to 2002. As per this policy provisions were-
Removal of quantitative restriction: 342 textiles products, 147 agricultural products and
226 were other manufacture products were removed from the import restrictions.
Agricultural Export Zones: three such zones were proposed to be set up in

Himachal Pradesh, Jammu and Kashmir and Maharashtra. To boost agricultural export
and to provide remunerative returns to the farming community such steps have been taken.
State Government have been asked to identify products specific agricultural export zones
for development of export.
It was unveiled on 31st March 2002. The policy entailed several institutional,
infrastructural and fiscal measure intended to promote exports which are conductive to
economic development of the country. It has generated the farm to port concept for export.
Following were the features of the policy:
Special Economic Zones (SEZs)
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Employment generation: pirating to Agri and Small industry
Technology Up gradation
Growth oriented.
Following are the provision:
A massive trust to export of services by introducing duty free import facility for services
sector unites.
Encouragement of corporate sector with proven credential to sponsor Agricultural Export

Zones for boosting farm export. EPCG scheme made more flexible and attractive so that
even the small scale sector could set up and expand its manufacturing base for export.
Fixing the output norms for status holder on priority basic within a period of 60 days.
Simplification and codification of rules, regulation and procedure applicable to SEZs and
EOUs.
To increase the overall competitiveness of export cluster for up gradation.
Expansion of Duty Free Replacement Certificate (DFRC) scheme.
Mini Export-import Policy, January 2004:
The Government of India has announced this policy on 28th January 2004 with the
following highlights.
Free import of Gold and Silver for export purpose permitted.
Duty free import facility available to star hotels.
Reconstruction on import of electrical energy lifted.
Online licence and electronic fund transfer facility to exporters.
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Foreign Trade Policy (FTP) 2004-2009:
On 31st August 2004, Government of India has announced this policy. A vigorous export
- led growth strategy of doubling India’s share in global merchandise trade in the next
five years, with a focused on the sector having prospects for export expansion and
potential for employment generation.
Objective and Strategy: Overall development of India’s foreign trade and essentially
provides a road map for the development of this sector. Doubling India’s share of global
merchandise trade and using trader policy as an effective instrument of economic growth
with a trust on employment generation. – were the objectives.
The FTP has identified certain trust sector having prospect for export expansion and
potential for employment generation. Such as agricultural, handlooms, handicraft, gems
and jewllery and leather foot ware sectors.
New export promotion scheme launched to increase the exports. Various facilities and
rewards are granted for that. Simplification, Rationalization and modification of ongoing
scheme have been done for export oriented units. Simplification of rules and procedure
was done as well as some instructional measures have been taken for boosting the exports.
Annual Supplement Plan for 2005-2006:
It is the supplement plan to FTP 2004 to 2009 announced on 8th April 2005 with following
high lights.
Push to export of farm, marine, manufacturing and pharmaceutical products.
Export cess on farm commodities abolished.
Infrastructure initiative to reduce port congestion.
Imports by hotels, other services industries made duty-free.
Setting up interstate trade council mooted.
Procedure simplified to cut transaction cost.
Annual Supplement 2006-2007:
On 7th April 2006, the Union Commerce and Industrial Minister announced this
supplement to FTP 2004-2009 policy. With the intension to doubling India’s percentage
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share of global trade within the five years and expanding employment opportunities
especially in semi urban and rural areas.
Trade is a means to economic growth and national development. The purpose of foreign
trade is not the mere earning but the stimulation of greater economic activity. Two
objectives have been set up.
To double our percentage share of global merchandise trade within next five years.
To acts as an effective instrument of economic growth by giving a trust to employment

generation.
These objectives are proposed to be achieved by adopting several strategies. The new
policy envisages merchant exporter and manufacture exporter, business and industry as
partners of Government in the achievement of its goals and objectives.
In this supplement certain innovative steps have been taken for modernisation, refund of
tax, income tax benefits and export of fresh fruits vegetables, sports and toys, interest
relief and about DEPB scheme was to be continued up to May 2009.
Foreign Trade Policy (FTP) 2009-2014:
It is announced on 27th August 2009 in the backdrop of 2008 policy. This policy (2009-
2014) set out a goal of doubling India’s export of goods and services by 2014, with the
long term objective of doubling India’s share in global trade by the end of 2020 through
appropriate policy support.
The short term objectives is to arrest and reverse the trend of decline in exports and
provide additional support to those sectors that have been badly hit by the crises.
This FTP uses a mix of policies instruments including fiscal incentives, institutional
charges, procedural rationalization, obtaining exchanged market access across the world
and diversification of export market. Improvement in infrastructure related to export,
reducing transaction cost, and providing full refund of all indirect taxes and levies are
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three pillars of the policy.United Nation Conference on Trade (UNCTAD) and
development organized an international conference on moving.
Technological Up gradation:
Export promotion capital goods scheme at zero duty has been introduced this FTI to aid
technological up gradation of export sector. In this scheme engineering & electronic
products, chemical & pharmaceutical, apparels & textiles, plastics, handicrafts, and allied
products and leather products.
EPCG scheme relaxations:
Under the EPCG scheme has been reduced to 50% of the normal specific export
obligation. It has been done for increasing the life of existing plant and machinery, export
obligation on imports of spares, modules etc. By considering the decline in exports, the
facility of re fixation of annual average export obligation for a particular financial year in
which there is decline in exports from the country, has been extended in the five years
policy.
Focus product scheme benefits extended for export of green products and for exports of
some products originating from north east.
To accelerate the exports and encourage the technological up gradation, additional duty
credit scripts shall be given to status holders.
Fisheries have been included in marine sector which are exempted for maintenance of
average EO under EPCG scheme.
Gems and Jewellery:
To neutralize duty incidence on gold jewellery export, it has been decided to allow duty
drawbacks on such exports.
To make India a diamond international trading hub, it is planned to establish Diamond

Bourse.
Facility to import cut and polished diamonds on consignments basic for the purpose of
grading certification purpose- has been introduced.
The personal carriage value for export has been increased from US $ 2 million to five US
$ million to participate in overseas exhibitions.
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For Agricultural sector: To reduce transaction and handling cost, single window system
to facilitate export of perishable agricultural produce has been introduced. [9]
Leather sector shall be allowed re-export of unsold imported raw hiders and skins and
semi-finished leather from public bonded houses. Enhancement of FPS rate to 2% would
also a benefit to leather.
Tea: Export of tea has been included in VKGUY scheme benefits. DTA sale limit of
instant tea through EOU units has been increased from 30% to 50%.
Pharmaceutical sector: This sector is included in MLFPS for countries in Africa and Latin
America. Some countries in Oceania, and Far East. Export obligation period for advance
authorization has been increased from 6 to 36 months.
To simplify claims under FPS, recruitment of “Handloom Mark” for availing benefits
under FPS has been removed.
1.8- EXIM BANK’S IMPORTANCE-
India is a developing country, but experiencing adverse imbalance in foreign trade. Being
a country with enormous potential of natural and human resources, India is far behind
many other developed countries, in spite they lack in resources those India has in
abundance. In this age of globalization, every nation is trying to strengthen its economy
by exporting more. India is not behind in the race of export but, it needed to exploit all
natural resources, utilize industrial capacity, increase agricultural production, etc. to
increase export.
EXIM Bank of India is the premier export finance institution in India. Since its inception,
Exim Bank of India has been both a catalyst and a key player in the promotion of cross
border trade and investment. The Exim bank of India is an apex financial institution
selected to study for its role in promoting foreign trade.
As Indian export declined from 2% in 1950 to 0.4% in 1980, therefore EXIM Bank was
introduced to increase exports. However the export is not found satisfactory. Though
EXIM bank plays a vital role in the development of foreign trade, critics are criticizing on
the functioning of the bank. There are so many problems like lending, recovery, etc. The
performance of the bank in increasing foreign trade is not up-to the mark. Hence this topic
is selected for the study. The study is therefore conducted to know how useful the role of
EXIM bank in export-promotion is. For this purpose, it is necessary to know the lending
operations of EXIM bank properly. It is also needed to evaluate the role of EXIM bank
of India in foreign trade. The study is also carried out to know the contribution of EXIM
22
bank in diversification of markets and product in foreign trade. The drawbacks and
difficulties in functioning of EXIM bank are found out. The remedies for effective
functioning of the EXIM bank are suggested. By considering the needs and importance of
study, following objectives are formulated.
1.9- Export Import Bank of India - Small & Medium Enterprises-
Definition of SMEs in India and World-

In India the small and medium enterprises are not well defined. The internal group set up
by the Reserve Bank of India has recently recommended that the units with investment in
plant and machinery in excess of SSI limit and upto Rs. 10 crores may be treated as
medium enterprises. The definitions of ‘small’ and ‘medium’ sized enterprises differ from
one country to another. SMEs have been defined against various criteria such as the
number of workers employed, volume of output or sales, value of assets employed, and
the use of energy. Organization for Economic Cooperation and Development (OECD)
defines establishments with upto 19 employees as ‘very small’, between 20 and 99
employees as ‘small, from 100 to 499 employees as medium and over 500 employees as
large enterprises. However, many establishments in some developing countries with 100
to 499 employees are regarded as relatively ‘large’ firms. Multilateral Investment
Guarantee Agency (MIGA) has recently developed a guarantee programme, called the
Small Investment Programme (SIP) that is specifically designed for SMEs. MIGA defines
SMEs, for coverage under this programme, as firms with not more than 300 employees,
value of assets not exceeding US $ 15 million and annual sales not exceeding US $ 15
million. The European Union defines SMEs that have employees of less than 250, with a
turnover not exceeding Euro 50 million. Thus the definition of SME varies from country
to country and from region to region. The importance of SME sector is well- recognized
world over owing to its significant contribution in achieving various socio-economic
objectives, such as employment generation, contribution to national output and exports,
fostering new entrepreneurship and to provide depth to the industrial base of the economy.
India has a vibrant SME sector that plays an important role in sustaining economic growth,
increasing trade, generating employment and creating new entrepreneurship in India.
1.10- Importance of the SME sector-
26 million people and is involved with the production of over 7500 industrial items. The
SSI sector in India employs around with the product range varying from very simple items
produced with traditional technology to high tech products. At present, the SSI sector
accounts for over 90% of industrial units in the country, 40% of value addition in the
23
manufacturing output and approximately 35% of India’s exports. SSI sector in India has
been exhibiting a striking export performance. Barring few years, exports have grown
double digit in the last 10 years. Major sectors contributing to SSI exports include
readymade garments (27%), engineering goods (14.5%), chemicals & pharmaceuticals,
electronics & computers, and processed foods (11% each).
1.11- Exim Bank and SMEs-
Indian SMEs require business advisory services to enhance their international

competitiveness in a highly competitive globalising world. The SMEs find the services of
reputed national and international consultants as not cost effective and often, not
adequately focused. Recognizing this knowledge gap, Exim Bank of India has been
endeavouring to provide a suite of services to its SME clients. These include providing
business leads, handholding during the process of winning an export contract and thus
assisting the generation of export business on success fee basis, countries/ sector
information dissemination, capacity building in niche areas such as quality, safety, export
marketing, etc. and financial advisory services such as loan syndication, etc.
In the past, Exim Bank has implemented a number of innovative programmes focusing
primarily on SMEs. The Bank, in the past, has operated an Agency Line of Credit for IFC
and an Export Marketing Programme for the World Bank, which are targeted towards
SME sector. The Bank proactively assists SME units in establishing their products in
international markets. Exim Bank’s Lines of Credit help SMEs to offer competitive credit
term to the buyers and to explore newer geographical markets. Recently, the Bank has
signed a Memorandum of Cooperation with the International Trade Centre (ITC), Geneva,
to implement the Enterprise Management Development Services (EMDS) programme,
for supporting SMEs in their globalization efforts. This initiative isbeing launched by ITC
for the first time in any country.
24
Chapter 2-
REVIEW OF LITERATURE-
Abhishek Vijaykumar Vyas, paper titled “An Analytical Study of FDI in India
(2000- 2015)”, published in journal “International Journal of Scientific and
Research Publications”, Volume 5, Issue 10, October 2015 1, ISSN 2250-3153, pp 1-
30
Abhishek describes as urbanisation is creating tremendous pressures on the environment,

the world’s economies, and our social organisations. For the first time in history, more
than half of the world’s population now lives in urban areas, many without adequate clean
water, sanitation, housing, or health facilities. The rapid and continuing urbanisation has
created congestion, pollution, energy consumption, and waste. In short, existing urban
development cannot provide a sustainable quality of life for our communities. New urban
patterns are emerging for the 21st century based on a strategy of sustainable, smart
growth. These new ‘global cities’ are economic regions that are interconnected on a world
scale and follow the principles of sustainable development i.e. 'Smart growth principles’,
‘good growth’, or ‘sustainable development’. DMICMC’s vision is to strengthen the
Indian economy by creating state-of-the-art infrastructure and a globally competitive
environment that activates local commerce, increases foreign investment, and promotes
sustainable development through several large-scale developments.
Government of India, Department of Industrial Policy & Promotion, Ministry of

Commerce & Industry published Annual Report, 2013-14, Chapter 1 Role and
Functions, Pp 1-10
GOI Published Report Investment Promotion and International Cooperation (IP&IC)

for enhancement of external economic engagement is undertaken through bilateral as well
as multilateral arrangements. There are four IP&IC divisions in DIPP to carry out the said
functions, viz. IP&IC-I (Asia–Oceania region), IP&IC-II (Europe), IP&IC-III (North &
South America and CIS Countries) and IP&IC-IV (Africa). IP&IC Divisions are
responsible for dissemination of information about investment climate and opportunities
in India and investment facilitation. IP&IC Divisions endeavour to increase economic
cooperation with developing, as well as developed countries, for mutual benefits through
different for a, such as Joint Commissions / Joint Committees, other bilateral channels
like interaction with the delegations visiting the country, organizing visits abroad for
discussions on issues of mutual interest and business / investment meets between Indian
and foreign entrepreneurs, with the aim of stimulating foreign investment into India. IP
25
& IC Divisions implement the Scheme for Investment Promotion which has the following
components-
1- Organization of Joint Commission Meetings;

2- Organization of business and investment promotion events;
3- Project Management, Capacity Building, Monitoring and Evaluation;
4- Establishment of G2B portal/ e-Biz Pilot Project;
5- Foreign Travel;
6- Setting up of country focus desks for promoting investment;
7- Multimedia audio visual campaign; and
8- Creation of a dedicated investment promotion agency
Mr. David Sinate and Mr. Viswanath Jandhyala, Export-Import Bank of India,
Working Paper No. 17, “Potential for Enhancing India’s Trade with Myanmar: A
Brief Analysis Exim Bank’s”, April 2012
David and Viswanath in their paper observed, India’s trade relations with Myanmar has
witnessed a robust trend in recent years, with India’s total trade with Myanmar having
risen from US$ 408 mn in 2001 to US$ 1.06 billion in 2010, underlined by both rise in
India’s exports to and India’s Imports from Myanmar. India generally maintains a trade
deficit with Myanmar, which has increased from US$ 293 mn in 2001 to US$ 974 mn in
2009, and stood at US$ 520 mn in 2010. In the case of pharmaceuticals, meat and
preparations, sugar and confectionery, articles of base metals, animal fodder, and tools
and implements, India is a major source for Myanmar’s imports, accounting for a
significant share in Myanmar’s global imports. However, in the case of other major
exports to Myanmar, India’s share in Myanmar’s global imports is still marginal, which
would serve to highlight the tremendous scope to enhance such exports from India. To
enhance bilateral trade relations with Myanmar, and at the same time to address the rising
trade deficit with Myanmar, strategy to boost trade relations with Myanmar would entail
identification of potential items of India’s exports (upto 6-digit commodity classification),
which would be in line with Myanmar’s imports demand and India’s export capabilities,
as has been undertaken in this study, as also identification of potential Indian exporters
who could benefit from prevailing and future market opportunities in Myanmar. Other
measures to enhance bilateral trade relations with Myanmar could include:
A national / state level industry association/ trade chamber could be identified which could
undertake various trade promoting activities such as organising Business to Government
(B2G) and Business-to-Business (B2B) delegation visits; organising fairs in Myanmar to
showcase the competencies of Indian MSMEs and to capture market opportunities; and
tie-ups with select industry associations/ chambers in Myanmar so as to understand the
requirements of their members.
26
A bank(s) could be identified to take the lead role in promoting and creating a trade
enabling environment. As major import items of Myanmar and also India’s major
potential export items are manufactured and related products, which would call for
LCs/guarantees and related facilities, such a bank could undertake a detailed study about
the ways and means adopted by other major trading partners of Myanmar, in the light of
the US OFAC sanctions on Myanmar.
Indian banks could consider opening of representative offices (ROs)/JVs/ branches in

Myanmar. Currently, Myanmar allows only ROs to be set up in the country. Towards this
end, United Bank of India (UBI) has received RBI’s permission to open a representative
office in Myanmar. Other Indian banks could also endeavour to follow UBI’s footprints.
Opening of direct road-rail sea routes to Myanmar. As the infrastructure for border trade
is yet to be developed, detailed feasibility studies on potential direct rail-road-sea air
linkages between India and Myanmar could be undertaken by relevant Ministries, while
specific ports/airports could be earmarked to handle and facilitate Indo-Myanmar trade.
Indian companies could also consider establishing JVs/ WOSs in Myanmar.
Government of India is considering a US$ 500 mn LOC to Myanmar, implementation of

which would serve to increase exports from India and enhance economic cooperation
between the two countries.
Bhavya Malhotra, paper title “Foreign Direct Investment: Impact on Indian

Economy”, published in journal “Global Journal of Business Management and
Information Technology”, ISSN 2278-3679 Volume 4, Number 1 (2014), pp. 17-23,
Bhavya India’s Foreign Direct Investment (FDI) policy has been gradually liberalised to
make the market more investor friendly. The results have been encouraging. These days,
the country is consistently ranked among the top three global investment destinations by
all international bodies, including the World Bank, according to a United Nations (UN)
report. For Indian economy which has tremendous potential, FDI has had a positive
impact. FDI inflow supplements domestic capital, as well as technology and skills of
existing companies. It also helps to establish new companies. All of these contribute to
economic growth of the Indian Economy. India is definitely a lucrative place for FDI, but
there are certainly some challenges and areas for improvement still present. Until, these
areas are honed to perfection, India will not become the number one place for FDI. India
is focusing on maximizing political and social stability along with a regulatory
environment. In spite of the obvious advantages of FDIs, there are quite a few challenges
facing larger FDIs in India, such as:
Resource challenge: India is known to have huge amounts of resources. There is

manpower and significant availability of fixed and working capital. At the same time,
there are some underexploited or unexploited resources. The resources are well available
27
in the rural as well as the urban areas. The focus is to increase infrastructure 10 years
down the line, for which the requirement will be an amount of about US$ 150 billion. This
is the first step to overcome challenges facing larger FDI.
Equity challenge: India is definitely developing in a much faster pace now than before
but in spite of that it can be identified that developments have taken place unevenly. This
means that while the more urban areas have been tapped, the poorer sections are
inadequately exploited. To get the complete picture of growth, it is essential to make sure
that the rural section has more or less the same amount of development as the urbanized
ones. Thus, fostering social equality and at the same time, a balanced economic growth.
Political Challenge: The support of the political structure has to be there towards the
investing countries abroad. This can be worked out when foreign investors put forward
their persuasion for increasing FDI capital in various sectors like banking, and insurance.
So, there has to be a common ground between the Parliament and the foreign countries
investing in India. This would increase the reforms in the FDI area of the country.
Federal Challenge: Very important among the major challenges facing larger FDI is the
need to speed up the implementation of policies, rules, and regulations. The vital part is
to keep the implementation of policies in all the states of India at par. Thus, asking for
equal speed in policy implementation among the states in India is important.
India must also focus on areas of poverty reduction, trade liberalization, and banking and
insurance liberalization. Challenges facing larger FDI are not just restricted to the ones
mentioned above, because trade relations with foreign investors will always bring in new
challenges in investments.
Dr. Soheli Ghose and Mr. Sumit Thakur, paper published in International Journal
of Management Studies, entitled “An Analysis of the Growth of Exim Bank as
India’s Premier Export Financing Institution”, ISSN(Print) 2249-0302 ISSN
(Online)2231- 2528, Vol II, Issue-1, June 2015
Soheli and Sumit in their paper have taken into account Export Financing and other
factors contributing to the growth of export. The paper highlighted the establishment, role,
functions and objectives of the EXIM BANK OF INDIA. Developing countries like India
concentrates more on increasing the value and volume of the export turnover to attain
economic developments to provide employment opportunities to utilize all the available
resources and to finance for exports. But the export sector involves high amount of risk.
The Indian exporters have to be protected from several types of risks involved in export
business. Here EXIM BANK plays vital role. By improving the performance of export,
bank is in better position to extend its services to all types of exporters effectively. EXIM
BANK in of course, extends beyond international banking which in its narrow sense
relates to delivery of trade products and services to business and trade Customers. Thus,
28
The EXIM BANK of India is regarded as the drivers behind global trade and corporate
globalization. The paper suggests for increasing the flow of bank credit to export sector,
restructuring the interest rates. It also calls for a change in the attitudes of banks
conservative and risk averse. The need for coordination between banks and financial
institutions, role of EIGC in timely settlement of claims are impetus for a favourable
export business. The stress is on introducing the new innovative services of counter trade,
overseas borrowings, international factoring and banker‟s acceptance for accelerating
promotion of exports. This comparison of the financial data shows the increasing trend of
profits and the balance of profit which is been transferred to the Central Government is
increasing, making EXIM BANK OF INDIA a successful Government institution.
Priyanka Kumari, “Foreign Direct Investment In India: An Inter-State Analysis”,

published in “Global Journal of Multidisciplinary Studies” Available online at
www.gjms.co.in, Volume 3, Issue 4, March 2014, ISSN: - 2348-045 9, pp 43-52
Priyanka in her paper presented case for the study of economy since India's economic
growth over the past two decades has been one of the world's fastest growing countries.
India has managed to reduce poverty, inequality, disparity and sustained the significance
growth of GDP, however, it is largest abode of world's poor and it is far behind its main
competitors in East Asia, particularly China. Moreover, a gulf is growing between India's
richer and poorer states. Acceleration development requires improving the delivering of
public services and concerted efforts to sustain the growth as well as to augment the
productivity, efficiency and effectiveness in production systems and marketing structure.
India has been under foreign rule for the long period, and therefore, its administrators and
political system is based on British model of development and governance, however, it
has made progress in its various sectors of economy over the period. In this Research
paper, a review of historical background of Indian Economy and Indian Economic
development is given to understand the dynamics of Indian Economy.
B Bhattacharya and Satinder Palaha, “Foreign Direct Investment: Facts and

Issues”, Occasional Paper 2, 1996, “Indian Institute of Foreign Trade”, year 1996,
pp 1-27
Bhattacharya and Satinder concluded that foreign direct investment to developing

countries, including India, has grown rapidly in recent years, shifts in its distribution
suggested that significant competition exist among potential host countries. Even
assuming FDI is not an example of a strict zero sum game, aggregate FDI flows are no
infinitely expandable. TNC’s frequently make choices among potential host countries
when deciding where to locate their foreign production facilities.
29
Dr. Jasbir Singh, Ms. Sumita Chadha, Dr. Anupama Sharma, paper title “Role of
Foreign Direct Investment in India: An Analytical Study”, published in
“RESEARCH INVENTY: International Journal of Engineering and Science”,
ISSN: 2278-4721, Vol. 1, Issue 5 (October 2012), PP 34-42,
www.researchinventy.com
Jasbir, Sumita and Anupama in their paper observed on the basis of study and drew
conclusion that maximum global foreign investment’s flows are attracted by the
developed countries rather than developing and under developing countries. Foreign
investment flows are supplementing the scare domestic investments in developing
countries particularly in India. But foreign investor never adopts environment friendly
technique to maximize their profit. These investments met the financial requirement for
building up the basic and essential infrastructure industries of priority sector. But we finds
that the highest amount of FDI gone to financing sector, insurance sector, Real estate and
Business services which is 33.05 percent of total cumulative inflow of FDI in study period
in India. It’s a serious matter in context of foreign direct investment objectives. Main
reason of this sifting is high risk and low profit in concern sectors. Because the FDI are
associated with various types of risks which are expected to provide various linkages in
the development of Indian economy. But there is an upward trend in the flows of foreign
investment particularly in study period. We should provide the better environment for
attracting the foreign investment through direct as well as indirect methods. We should
welcome inflow of foreign investment in such way that it should be convenient and
favourable for Indian economy and enable us to achieve our cherished goal like rapid
economic development, removal of poverty, internal personal disparity in the
development and making our Balance of Payment favourable.
Shalini Aggarwal, Ankush Singla, Ritu Aggarwal, paper title “Foreign Direct
Investment in India” published in journal “IJCEM International Journal of
Computational Engineering & Management”, Vol. 15 Issue 5, September 2012 pp
93-105
Shalini, Ankush and Ritu, in their paper concluded that FDI have helped India to attain
a financial stability and economic growth with the help of investments in different sectors.
FDI has boosted the economic life of India and on the other hand there are critics who
have blamed the government for ousting the domestic inflows. After liberalization of
Trade policies in India, there has been a positive GDP growth rate in Indian economy.
Foreign direct investments helps in developing the economy by generating employment
to the unemployed, Generating revenues in the form of tax and incomes, Financial
stability to the government, development of infrastructure, backward and forward
linkages to the domestic firms for the requirements of raw materials, tools, business
30
infrastructure, and act as support for financial system. Forward and back ward linkages
are developed to support the foreign firm with supply of raw and other requirements. It
helps in generation of employment and also helps poverty eradication. There are many
businesses or individuals who would earn their lively hood through the foreign
investments. There are legal and financial consultants who also guide in the early stage of
establishment of firm. Foreign investments mean both foreign portfolio investments and
foreign direct investments (FDI). FDI brings better technology and management,
marketing networks and offers competition, the latter helping Indian companies improve,
quite apart from being good for consumers. Alongside opening up of the FDI regime,
steps were taken to allow foreign portfolio investments into the Indian stock market
through the mechanism of foreign institutional investors. The objective was not only to
facilitate non‐debt creating foreign capital inflows but also to develop the stock market in
India, lower the cost of capital for Indian enterprises and indirectly improve corporate
governance structures. On their part, large Indian companies have been allowed to raise
capital directly from international capital markets through commercial borrowings and
depository receipts having underlying Indian equity. Thus the country adopted a two‐
pronged strategy: one to attract FDI which is associated with multiple attendant benefits
of technology, access to export markets, skills, management techniques, etc. and two to
encourage portfolio capital flows which ease the financing constraints of Indian
enterprises. Foreign technology induction can be encouraged through FDI and through
foreign technology collaboration agreements. The sectors which have resources but do
not have the required technology acquire foreign technology collaboration through RBI
or Government approvals. The total number of approvals recorded for the period of 2000
to 2010 by the RBI, SIA and FIPB is 8080.
The RBI has approved 4580 proposal whereas SIA and FIPB have approved 3500.
Technical collaborations have put a positive effect on the domestic firms. It helped in
establishing technology transfers. An Indian company may receive Foreign Direct
Investment under the two routes as given under:
Kevin P. Gallagher, Andrés López for Heinrich Böll Foundation North America,
“Foreign Investment and Sustainable Development Lessons from the Americas”,
May 2008, Working Group on Development and the Environment in the Americas
Kevin and Andres reviewed the impacts of foreign investment liberalization and related
economic reforms in Latin America shows that, with some exceptions, foreign investment
has fallen far short of stimulating broad-based economic growth and environmental
protection in the region, according to a report by the Working Group on Development and
Environment in the Americas. The report recommends that national and regional policies
aimed at improving national firms’ capabilities should be implemented and that the
“policy space” for such policies should be accommodated in bi-lateral, regional, and
global trade and investment treaties.
31
The report, “Foreign Investment and Sustainable Development: Lessons from the
Americas,” is the product of a series of studies conducted by development and
environmental economists from the U.S., Mexico, Brazil, Argentina, Chile, and Costa
Rica. Drawing on case studies from across the region—Argentina, Brazil, Bolivia, Chile,
Costa Rica, Ecuador, Mexico, Uruguay, and Venezuela—the Working Group examined
how foreign investment during the reform period has affected economic growth,
environmental policy and performance, and the countries’ political economy. The full
technical studies are available on the working group web page and will be published in a
comprehensive book by Anthem Press in 2009. Beginning in the early 1990s, nations in
the Americas began to liberalize their regimes for foreign investment. Pursued unilaterally
or through regional and bilateral trade and/or investment agreements, a typical set of
reforms included the elimination of performance requirements such as requirements to
source from domestic firms or to export a certain percentage of production, restrictions
on the ability to exclude certain sectors from FDI and to “screen” foreign investment for
development goals, restrictions on the ability to require joint ventures or research and
development facilities, and so forth. Moreover, such reforms alter the nature of settling
disputes over foreign investment. Whereas trade agreements have traditionally relied on
states to settle disputes among themselves in international for a, newer trade and investor
agreements have “investor-state” dispute systems where foreign firms can directly sue a
national or local government without host government oversight. These policies were
advocated by the U.S., the World Bank, and the International Monetary Fund and
endorsed enthusiastically by many governments across the Americas. They have become
enshrined in the 1994 North American Free Trade Agreement (NAFTA) between the U.S.,
Canada, and Mexico became the template for a range of subsequent regional and bilateral
accords, including agreements on the U.S.–Chile Free Trade Agreement, U.S.–The
Dominican Republic-Central America Free Trade Agreement (CAFTA), the U.S.–Peru
Free Trade Agreement, and countless numbers of Bilateral Investment Treaties (BITS).
Investment liberalization of course, has been part of a larger effort broadly referred to as
the Washington Consensus. The broader reforms include a package of economic policies
that promote economic development by opening national economies to global market
forces. Over the last twenty years, governments throughout Latin America have reduced
tariffs and subsidies, eliminated barriers to foreign investment, restored fiscal discipline
by reducing government spending, and have generally reduced the role of the state in all
aspects of the economy.
Export-Import Bank of India Working Paper No. 49 “Act East: Enhancing India’s
Engagements with Cambodia, Lao PDR, Myanmar, Vietnam (CLMV)”, Export-
Import Bank of India January 2016, pp 11
EXIM Bank working paper concluded that South East Asian region has emerged as one
of the fastest growing regions in the world, on the back of its strong manufacturing sector.
32
The existing ecosystem in the region supports sourcing, manufacturing and shipping of
finished goods from these markets. Within this region, Cambodia, Lao People’s
Democratic Republic (Lao PDR), Myanmar and Vietnam, which form the CLMV
countries, are an integral part of the Association of South East Asian Nations (ASEAN)
region, covering 32 per cent of ASEAN‘s geographical area, 26 per cent of ASEAN’s
population, and accounting for 11 per cent of ASEAN’s gross domestic product (GDP) in
2014. Besides the ASEAN market, which is likely to integrate in the form of an ASEAN
Economic Community, business association with the CLMV countries also gains
prominence for India, as the ASEAN has economic partnership agreements with other
Asian giants like China, Japan and Republic of Korea. Further, Vietnam along with the
United States and 10 other countries (Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, and Singapore) are working to craft a Free Trade Agreement
(FTA), called the Trans- Pacific Partnership (TPP) Agreement. CLMV countries have
also been proactively pursuing FTA with the European Union. All these factors make
CLMV countries that of strategic interest to India, as it allows preferential market access
to other countries through investments into CLMV, in addition to reaping the potential of
bilateral economic co-operation with these countries. The CLMV economies are primarily
agrarian; they are endowed with abundant natural resources and low-waged labour force,
in addition to having a young and growing population. However, these countries are
characterised by underdeveloped infrastructure and logistics. Nonetheless, these
economies have enjoyed certain degree of macroeconomic stability in recent years,
highlighting their potential for future development. Opportunities that could be explored,
besides trade include: investments in potential sectors, through joint ventures with local
or foreign partners or wholly owned subsidiaries; infrastructure creation which increases
the connectivity with India that facilitates trade and investment, like ports, maritime
routes, roads, warehouses, exclusive economic zones, industrial clusters/ corridors; and
creation of institutional capability and development facilities in the region.
EXIM Bank of India, Occasional Paper No. 173, “Value Addition Chains and Trade
in Manufactured Commodities in Southeast Asia”, Jul 2015, pp-9-10
EXIM Bank Occasional paper As an economic phenomenon, value chains are identified
as the consequence of rising integration of world markets that “has brought with it a
disintegration of the production process, in which manufacturing or services activities
done abroad are combined with those performed at home”. But beyond the logistics of the
‘value chains’ and the trade and investment flows intrinsic to them, there exist multiple
undercurrents running beneath - historical, geographic, cultural – that influence the
economics of it. How to explore the linkages across them? How to place the international
economics of value chains in a richer context of international political economy that is
shaping what goods get produced where and why? Having identified a certain value chain
and its geographic scattering, how do comparative advantages get split across the different
33
participant nations? How to make trade- indices more responsive/ sensitive to reflecting
specializations across value chains? These are some of the broad questions examined in
this thesis. The thesis comprises of six research papers covering both theoretical and
empirical aspects of value chains.
It is organized under three rubrics-
1-The history and culture of value chains
2-Unfolding the value within the chains and
3-Examining comparative advantages and trade indices in value chains.
While the thesis is geographically rooted in Southeast Asia, given the extensive cross
country trade and investment linkages in the region, the arguments are more broad-based
and would find resonance for India as well. Policy Implications: Contributions of the
Research This research makes the following theoretical and empirical contributions in
deciphering the phenomenon of global value chains:
In a historical-geographic sense, participation in value chains has been one mode of using
trade as an engine of growth. However, it becomes imperative to understand what country
participates at what 10 level of the value chain. As a country seeks to diversify its export
baskets, an important pathway is through moving up the value chain of a product.
However, there could be historical constraints because of pre-established trade patterns
that could hinder this transition.
Not all products may have the same propensity for entering into value chains. The
consumption culture of the product becomes central to determining the type of
international movements it will generate for itself. For trade expansion, it becomes
important to differentiate what products are prone to go international via what economic
channels (trade, FDI, value chains) and how the culture of consumption of a particular
good shapes its participation in value chains.
In a value chain context, there is more to the sources of comparative advantages than
labour and capital. It becomes necessary to understand how combinations of labour and
capital are being employed by multinational firms to produce a range of intermediaries in
the value chain and reorganizing the assembly lines. Comparative advantages have to be
accounted for in terms of whether they are (a) historically induced, (b) indigenously
created through innovation, (c) indigenously acquired through replication or (d) externally
acquired through multinational firms’ investments.
Balassa’s RCA Index is commonly used for measuring comparative advantages of trading
nations. A cascading or nested modification to Balassa’s RCA Index is proposed in the
thesis which provides for a more appropriate representation of a country’s specialization
and positioning in the value chain of a commodity.
34
S. Prahalathan, Ashish Kumar and Rahul Mazumdar EXIM Bank of India
Occasional Paper No. 168, “Research & Development in BRICS: An Insight”
November, 2014
Prahalathan, Ashish Kumar and Rahul concluded under which the BRICS has been
forged as a formal association is to become a more constructive and progressive group in
the developing world. BRICS grouping is important for its members in terms of their
portrayal of creating for themselves an important role on the global stage. This is
underlined by the members sharing a different but common perspective on the global
economic order, and a desire to wield greater influence over the rules governing
international business and trade. The five economies combined currently hold less than
15 percent voting rights in both the World Bank and the International Monetary Fund, yet
their combined strengths are predicted to surpass that of G7 economies in size by 2032.
This perhaps was the fundamental point which also gave shape to the idea of a BRCIS
Development Bank. With various rounds of discussions having already taken place, it is
expected that the member economies would forge important agreements for investments
in multiple areas, such as infrastructure, governance, domestic institutions, social
programs, and production. The BRICS as a whole is well endowed with a portfolio of
wealth – huge agrarian economies, enormous natural resources, a burgeoning services
sector, significant human resources, and an ambitious manufacturing sector which is
poised to become the hub for the entire world. All these factors provide ample incentives
for the BRICS economies to collaborate together and enhance trade among themselves,
and also with the rest of the world. The biggest factor that propels BRICS to become a
force to reckon with is the huge market space that it offers to the entire world – these
countries together account for 43 per cent of the world’s population. Further, BRICS
constitute.
Parvata Raj Prabhu, published paper in Asia Pacific Journal of Research: A peer
Reviewed International Journal, entitled “A Study on Role of Exim Bank in Export
Trade”, ISSN-2320-5504, July 2013, Vol 1 Issue: 7 pp-122-139
Parvata concluded finding out the performance rendered by the EXIM bank of India.
Developing countries like India concentrates more on increasing the value and volume of
the export turnover to attain economic developments to provide employment
opportunities to utilize all the available resources and to finance for exports. But the export
sector involves high amount of risk. The Indian exporters have to be protected from
several types of risks involved in export business. Here EXIM bank plays vital role. By
improving the performance of export, bank is in better position to extend its services to
all types of exporters effectively. EXIM banking of course, extends beyond international
banking which in its narrow sense relates to delivery of trade products and services to
35
business and trade Customers. Thus, The EXIM bank of India is regarded as the drivers
behind global trade and corporate globalization.
Mr. S. Prahalathan, Mr. Ashish Kumar and Ms. Jahanwi, EXIM Bank of India
Occasional Paper No 171, “Indian Electronic Goods Industry: Neutralizing Trade
Deficit with China”, March 2015
Prahalathan, Ashish and Jahanwi concluded that several steps have been taken towards
the improvement of electronics industry in recent times by the Government of India,
including the seminal National Electronics Policy 2012 (NEP), which envisages achieving
a turnover of about US$ 400 billion by 2020. The policies enshrined in the NEP need to
move in tandem with exploring opportunities presented by the electronics market in
China, and attracting Chinese investors. Going forward, rapid urbanization, rising
personal disposable income, adoption of high-end technology devices, high rate of
technology obsole-scence and product innovation, competitive pricing of products, easy
financing schemes, expansion of organized retail and distribution networks, and several
government initiatives are going to be the major drivers for the electronics industry in
India. On the back of these, there exists huge opportunity for the domestic manufacturers.
Select strategies for development of the industry is not enhanced remarkably and to its
full potential. To maintain production at 300 million tonnes plus levels will require
extensive efforts in the areas of mining of iron ore, coal, manganese ores, etc. to boost
their production and ensure that the steel industry finds these raw materials at competitive
prices. It is fairly easily understandable that raw materials remain the basic advantage for
the Indian steel industry and in the absence of their easy and low cost availability; the
steel producers will face high costs of production and remain globally uncompetitive.
With the natural advantages taken away, and given the fact that with increased
globalization and lowered trade barriers, the steel industry faces strong competition from
imports; the domestic market will no longer remain a comfortable place for the domestic
industry. Similarly, there is a need to develop infrastructure to support steel industry’s
growth especially in the areas where steel plants are likely to be located.
Dr. Brijesh Pazhayathodi, Prof. Pushpa Trivedi and Dr. Rajeev Jain, in EXIM Bank
of India Occasional Paper No. 156 “Exports of Services and Offshore Outsourcing:
An Empirical Investigation in the Indian Context” Export-Import Bank of India
July 2012
Brijesh, Pushpa and Rajeev summarised as increase in international outsourcing or

exports of Information Technology Enabled Services/Business Process Outsourcing
(ITES/BPO) from India has stimulated services export from India which is now around
36
2.7 per cent of the global exports. Due to revolution in information technology (IT), it
has become possible to deliver services across borders and at rather low costs as
compared to past. India’s exports of ITES/BPO services have witnessed expansion in
recent years, especially after the Y2K problem (year 2000 software switching over
problem). In fact, the challenge was turned into an opportunity by India. The success in
tackling the Y2K problem by India’s software professionals led to outsourcing the non-
core activities by the developed countries like the US and the EU from India. The
availability of cheap supply of skilled labour has significantly contributed to the
comparative advantage of India’s ITES/BPO exports. Innovations in IT technology,
investment in education by India for sustained period of time such as in Indian Institute
of Technology (IITs)/ Indian Institute of Management (IIMs), engineering colleges),
proficiency in English language, time zone difference, etc. have been the contributory
factors to growth of services from India in general and growth of ITES/BPO services in
particular. Besides contributing to foreign exchange earnings of the country, the
ITES/BPO firms are now becoming an important platform for job opportunities for
Indians, providing both direct and indirect employment. ITES/BPO sector has enhanced
India’s credibility as a business destination. Hence, a study on examining the various
facets of exports of services from India and particularly by the ITES/BPO should not
need any justification.
Mr. S. Prahalathan and Ms. Sumana Sarkar, in EXIM Bank of India Occasional
Paper No. 155 “Technological Interventions in Indian Agriculture for Enhancement
of Crop Productivity” Export-Import Bank of India June 2012
Prahalathan and Sumana in their work proposed that agriculture provides employment
to majority of Indian population and food security to the nation. India has made impressive
strides on the agriculture front in the past three decades. Policy support, production
strategies, public investment in infrastructure, research and development, extension
services, among others, have helped in increasing agricultural production, yield per
hectare, and per capita food availability. Growth in agricultural output over the past three
decades has been strong; more importantly, crop production has been able to broadly keep
pace with the demands from a growing population. Considerable changes have been
experienced by the country in the crop mix, yield and production, since the inception of
the Green Revolution. Despite the growth in production in the Indian agricultural sector
over the recent decades, crop yields remain low as compared to global averages, and
growth in yields has only been marginally higher than the world average. While India
with 158 million hectares of arable land produces only 249 million tonnes of cereals,
China with 110 million hectares and USA with 163 million hectares of arable land
produces 483 million tonnes, and 420 million tonnes of cereals, respectively. Dilemma
also lies in resource instillation in Indian agriculture in relation to crop productivity. While
India has the second largest consumption of fertilizer in the world, just next to China, its
37
productivity in cereal is half of that of China, and USA with much lower fertilizer
consumption than India, has productivity three times higher than India in foodgrains.
Similar situation is also observed in case of agriculture water use. India’s total agricultural
water withdrawal is twice as much as China, and around four times higher than that of
USA. Within India, agriculture development varied in terms of intensity among the states.
With relatively high productivity, the Indo-Gangetic Plain (IGP – mainly comprising of
Punjab, Haryana, Uttar Pradesh, Bihar and West Bengal) has been the mainstay of India’s
agricultural economy, and a strong base for food security of the country, Punjab and
Haryana have been the high productive regions of the country and the heartland of Green
Revolution, much due to the favourable factors. Parts of other states such as Uttar Pradesh,
Andhra Pradesh, Tamil Nadu have also benefitted during the Green Revolution phase.
Following Green Revolution, early 1990s also witnessed equitable growth rate in
agriculture. However, growth rates in agriculture NSDP decelerated in most of the states,
post 2000, with no significant improvement in crop productivities. This may be attributed
to structural weaknesses of the agricultural sector, reflected in the input implants in the
sector, which is analysed in this Study. The objective of the Study is to determine the
factors which might be responsible for such weaknesses and explore possible suggestions
to overcome them. While the Study has reviewed trends in usage of all inputs, specific
focus is attributed to irrigation and water management. Similarly, the Study specifically
focuses on analysis of impact of technological intervention in productivity with respect to
rice cultivation. It is endeavoured to bring out the impact of technological intervention in
select other crops, as a series, subsequently.
Ruddar Datt and K. P. M. Sundaram, “Indian Economy”, 55th Revised publication

S. Chand, New Delhi, year 2007, ISBN: 81-219-0298-3, chapter “Indian Financial
System III: Development Financial Institutions”, Article, Export-Import Bank of
India (EXIM bank), pp no 887-888
Datt and Sundaram in their book explained role of EXIM bank in term finance how it
is provided to Indian exporters of eligible goods and services enable them to offer,
deferred credit to overseas buyers. Technology and other services come under deferred
credits. Commercial banks take an active part directly or as risk arrangements. Overseas
joint ventures of Indian companies are established. Here EXIM bank provides finance
towards their equity contribution in the joint venture. Term loans/deferred payment are
guaranteed to 100% export oriented units in free trade zones and computer software
exporters by EXIM bank. EXIM bank in collaboration with International Finance
Corporation, Washington, and EXIM bank provides loans to enable small and medium
enterprises to upgrade export production capability. For companies with export contracts
having cycle time more than six months EXIM bank provides finance. There is one more
purpose of financing such export contract i.e. for amount mobilisation expanses required
to construction project exporters. Foreign financial institutions and government agencies,
38
besides foreign government finance, is available to lend in their respective country, for
import of goods and services from India. Credit is directly offered to foreign entities for
import of eligible goods and services, on deferred payment. Relending facility is extended
to banks overseas to enable them to provide term finance to their clients worldwide for
imports from India. The authorised commercial banks of India deal in Foreign Exchange
can rediscount their short term export bills with EXIM bank, for an unexpired use period
of not more than 90 days. Authorised dealers in foreign exchange can obtain from EXIM
bank 100% re-finance of deferred payment loans extended for export of eligible Indian
goods. Such credit enables exporters to offer credit terms to foreign Importers. This
programme, which is a component of a World Bank loan, helps exporters, implement their
export market development plans. EXIM bank participates with commercial banks in
India in the issue of guarantees required by Indian Companies for Export contracts and
for execution of overseas construction and turn key projects. Construction contracts
involve erection, civil works, commissioning etc. In setting up a textile mill, supply of
equipment accounts for major value of the contract. In such contracts, an Indian Exporter
usually requires bid bond. Advance payment guarantee, performance guarantee, guarantee
for retention money and guarantee for borrowing abroad.
News Article published in National English Daily Newspaper Times of India entitled
“Exim Bank inaugurates representative office in Abidjan”, source Press Trust of
India (PTI), New Delhi, June 16, 2016
PTI & Times of India from sources said EXIM Bank of India has inaugurated a
representative office at Abidjan that will help pursue interests among various countries in
the African continent. Export-Import Bank of India representative office at Abidjan was
formally inaugurated on June 14, 2016, Exim Bank said in a release. The accord was
signed by Exim Bank Chairman and Managing Director Yaduvendra Mathur and Minister
of Foreign Affairs Abdallah Albert Toikeusse Mabri on behalf of the Government of Cote
d'Ivoire, in the presence of India's President Pranab Mukherjee, who is touring the
country. The representative office in Abidjan is being reopened after it was shifted in 1992
to Sudan because of political turmoil during that time. Exim Bank signed a 'Headquarter
Agreement' which will give it some privileges. "Exim Bank's representative office in
Abidjan shall look after Exim Bank's interest in countries namely Benin, Burkina Faso,
Cameron, Cape Verde, Central African Republic, Chad, Cote d'Ivoire, Equatorial
Guinea, Gabon, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger,
Nigeria, Sao Tome Principe, Senegal, Sierra Leone, Togo," it said. Mathur said Exim
Bank's office in Abidjan is the eighth overseas regional office. He hoped its presence in
Abidjan would serve to further boost and facilitate bilateral trade and investment relations
between India and Cote d'Ivoire, West Africa. Apart from its head office in Mumbai, Exim
Bank has regional offices spread across the major cities of India -- Ahmedabad,
Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, New Delhi
and Pune. The overseas offices of the bank are located in Addis Ababa, Dubai,
Johannesburg, London, Singapore, Washington DC and Yangon.
39
Stephen J. Ezell, Adams Nager, And Robert D. Atkinson, “The Export-Import
bank’s Vital Role In Supporting U.S. Traded Sector Competitiveness”, an article
published in a souvenir by ITIF, July 2014
Stephen, Adams and Robert in an article published in a souvenir by ITIF explains exports
in the field of manufacturing sector, is a vital part of economy and a key component of
countries competitiveness. EXIM bank makes it easy for many exporters to compete in
commercial markets where current and future competitors continue to enjoy aggressive
support from their countries’ export credit agencies. Deferred payment exports arise when
export process are to be received beyond six months, from the date of shipment. Turnkey
projects are those which involve, rendering of service like design, civil construction &
erection and commissioning of plant along with supply of equipment. Typical projects
include supply, erection and commissioning of equipment for generation transmission and
distribution of power and plants for manufacture of cement, sugar, textiles, chemicals etc.
When an Indian Exporter extends deferred credit directly to the overseas buyer the export
contract falls under category of supplier’s credit. On the other hand, if a foreign buyer is
offered, credit by a financial institution in India and the Indian Exporter is paid the
export value by the institution in India, and the relative export contract falls under the
category of buyer’s credit.
“Exim Bank raises USD 1 bn from overseas bonds”, source Press Trust of India (PTI),
New Delhi, Jul 31, 2016
PTI & Times of India Exim Bank announced rising of USD 1 billion about Rs 6,700 crore
by selling bonds to overseas investors. Initially announced for USD 500 million, the issue
was upsized to USD 1 billion based on strong demand from the investors, Exim Bank said
in a statement. The issue attracted a total order book in excess of USD 2.50 billion from
over 157 investors. This was the largest issuance ever for Exim Bank and also the largest
single tranche issuance out of India in 2016, it claimed. "The bank is the closest proxy to
sovereign in the international markets and the 10 year issuance was based on investors'
feedback, so that benchmark 10 year curve out of India could be established," Exim Bank
Chairman and Managing Director Yaduvendra Mathur said. The funds thus raised will be
used by the bank to support Indian project exports, overseas investment by way of long
term credit and its lines of credit portfolio, he said. Having initially marketed the deal at
210 basis points over US Treasuries, the bank was able to achieve a final pricing of 187.5
basis points over US Treasuries, to yield 3.383 per cent on a coupon of 3.375 per cent
resulting in negative new issue premium against a very strong market backdrop, he added.
Yield achieved on the bonds is the lowest on a USD 500 million deal by an Indian entity
since 2000, he claimed. Exim Bank aims to promote India's international trade and
investment. The bank supports Indian exporting companies, especially medium-sized
40
enterprises, in their globalisation efforts through a variety of lending programmes. DP
ABM.
“Fitch affirms 'BBB-' rating to Exim Bank, stable outlook”, source Press Trust of India
(PTI), New Delhi, May 05, 2016
PTI & Times of India Fitch Ratings said it has affirmed the 'BBB-' rating to Exim Bank,
while the outlook on the ratings remains stable. "Fitch Ratings has affirmed the ratings of
Export-Import Bank of India (Exim) at 'BBB-'. The outlook on the ratings
of the policy institution is stable," Fitch Ratings said. BBB means a good credit quality
and indicates lower credit risk. The rating drivers are based on Exim Bank's key policy
role of financing, facilitating and promoting India's foreign trade, and its establishment
by a statute that ensures strong linkages with the government, it said. Exim Bank is a 100
per cent government-owned agency. It can only be liquidated with the approval of the
government and this need not be in line with liquidation laws that apply to other
companies, as per Exim Bank of India Act, 1981. "The stable outlook on the rating mirrors
the stable outlook on the sovereign rating," Fitch Ratings said. Exim's rating is equalised
to that of the sovereign and would move in tandem with the sovereign's rating, it added.
"Any perceived or actual weakening of the linkages between Exim and the sovereign, by
way of sustained deviation of Exim's business model from its policy focus or reduction in
the government's ownership below 100 per cent, could lead Fitch to revise its rating down
from the sovereign rating", it said. Fitch does not expect Exim's linkage with the sovereign
to undergo any change in the near term, it said further.
Mr. Ghule Kshitij Narendra1 and Dr. J.R Bhor, “E-HRM in Indian Sugar Industry:
Differentiating Tool in Competitive Market”, published in IBMRD's Journal of
Management and Research-March.2014.
Ghule et al discussed in his work that there is tremendous scope for EHRM industry in
India. Despite the challenges, it is a worthwhile investment to every stakeholder of the
industry ranging from farmers, promoters, employees, management. Considering the
multifaceted industry, E-HRM and Mobile Application utility for its functions is useful to
improve efficiency and reduce costing. They also suggested to, improve the manpower
management across various departments, analyze and measure the labour efficiency and
performance, and accordingly decide the appraisal, accuracy and reliability of reporting,
scalability through automation of processes, control of timelines, schedules, improve
recovery rate of factories, improve production by farmer, by use of IT applications like
Irrigation tracker, water saving through software controlled pumps and overall industry
gets benefitted by use of cutting edge software technology.
41
A. Vadivelu and B.R. Kiran, “Problems And Prospects Of Agricultural Marketing
In India: An Overview”, published in International Journal of Agricultural and
Food Science-30 August 2013
Vadivelu et al concludes that bringing necessary reforms coupled with proper price
discovery mechanism through regulated market system will help streamline and
strengthen agricultural marketing improving the conditions of poor farmers. In order to
avoid isolation of small-scale farmers from the benefits of agricultural produce they need
to be integrated and informed with the market knowledge like fluctuations, demand and
supply concepts which are the core of economy. Marketing of agriculture can be made
effective if it is looked from the collective and integrative efforts from various quarters by
addressing to farmers, middlemen, researchers and administrators.
42
CHAPTER-3
RESEARCH METHODOLOGY-
This chapter enlightens the methodology used for carrying out the study. Sources of data,
sampling techniques, techniques used for data analysis and explanation of terms used in
the study.
3.1 OBJECTIVES OF THE STUDY-

1- To know the organisational structure of the Exim bank.
2- To assess the Exim policy of India.
3- To understand the lending operations of the bank.
4- To evaluate the role of The Exim bank of India in foreign trade.
5- To find out the contribution of The Exim bank in diversification of markets and product
in foreign trade.
6- To find out the drawbacks and difficulties in functioning of The Exim bank.
To suggest the remedies for effective functioning of the Exim bank.
3.2- HYPOTHESIS OF THE STUDY-

By considering the objectives of the study the following hypotheses are formulated for
the investigation and solution to the hypotheses are discussed below.
The Exim bank of India provides adequate finance to exporters.
The Exim bank of India is contributing in export promotion by providing non- financial
services.
These hypotheses are proved in respective chapters in the theses report.
43
3.3- Sources of Data-
The data collected for research are of two types:
1- Primary Data-
Primary data has been collected through the questionnaire with closed ended questions.
Questionnaire includes 13 questions. Study was conducted with 110 respondents to ensure
the relevance of question used. The questionnaire consists of questions pertaining to the
personal details and opinions.
2- Secondary data-
In order to collect secondary data various sources are used. This data plays major role in
this research study. This data is basically related to the role of EXIM Bank in generating
foreign exchange through export promotion during last ten years. The data relating to
export and import is collected through Annual Reports of EXIM Bank of India (1990-91
to 1999-2000).
Other journals, Magazines, Research Articles, Research Projects and reference books are
also used for collecting information. The major information is collected from annual
report of EXIM Bank of India. It become possible to find out the composition of India’s
foreign trade with the help of collected data. It also helped to study the direction of India’s
foreign trade and cumulative figures of import and export. The growth rate of import and
export is found in percentage every year during last ten years. The rate of combination of
each commodity to annual total export and import is worked out with the help of this data.
The list of major commodities exported and imported by India every year is extracted
from the Annual Reports of Reserve Bank of India. The exchange role of Indian rupee in
term of world major currencies for last ten years is taken from the Report on Currency
and Finance published by RBI, Mumbai for the year 2000-01. India’s share in the world
market in term of export commodity is extracted from International Trade Statistics year
book: United Nation 1999, quoted from Economic Survey of India 1999-2000. The
information about India’s fastest growing commodities related to export and imports is
collected from Economic Survey of India 1999-2000. The trends in export of major
commodities group wise is found from Economic Survey of India 1999-2000.
The information on changes in the exchange rate between rupee and other currencies like
US Dollar, Swiss Franc, Pound Sterling, Deutsch Mark, Japanese Yen and French Franc
during 1997-1999 is collected from Journal of Foreign Exchange and International
Finance.
The export and import of principle commodities with their percentage share and growth
rate during 1987-1999 in four phases.
44
3.4- Data Analysing-
1- Education Qualification-
17.3%
7.5%
10.2%
65%
Graduate Post Graduate Professional Other
Diagram No. 3.1
Education Qualification Percentage

Graduate 65%
Post Graduate 10.2%
Professional 7.5%
Other 17.3%
Interpretation-
Among 110 respondents, 70 respondents are graduate, 12 respondents are post graduate,
8 respondents are professionals and 20 are others like students, under graduate, etc.
45
2- Age Group -
9%
16.8%
17.2%
57%
20-25 25-30 30-35 35-40
Diagram No. 3.2
Age Group Percentage

20-25 16.8%
25-30 57%
30-35 17.2%
35-40 9%
Interpretation-
Among 110 respondents, 18 respondents are 20-25 years old, 60 respondents are 25-30
years old, 22 respondents are 30-35 years old and remaining 10 respondents are 35-40
years old.
46
3- Are you aware about Export and Import Bank of India?
5%
95%
Yes No
Diagram No. 3.3
Aware About EXIM Bank Percentage
Yes 95%
NO 5%
Interpretation-
Among 110 respondents, 100 respondents are aware and 10 respondents are not aware
about the Export and Import Bank of India.
47
4- Where is Exim Bank’s headquarter located?
3.2%
7.90%
8.90%
80%
London Australia Washington Japan
Diagram No. 3.4
Location of Headquarter Percentage
London 7.90%
Australia 3.2%
Washington 80%
Japan 8.90%
Interpretation-
Among the 110 respondents 85 respondent’s answer is Washington, 10 respondents gave
the answer as Japan, 9 respondent’s answer is London and remaining 6 respondents gave
the answer as Australia.
48
5- Does EXIM Bank’s board of directors have quorum to transact
business?
12%
88%
Yes No
Diagram No. 3.5
Quorum to transact the business Percentage
Yes 88%
No 12%
Interpretation-
According to 110 respondents, 90 respondents thinks that EXIM Bank have a quorum to
transact business and remaining 20 respondents thinks that EXIM Bank do not have a
quorum to transact the business.
49
6- Does EXIM bank finance U.S. imports?
25%
75%
No Yes
Diagram No. 3.6
Finance U.S. imports Percentage
Yes 25%
No 75%
Interpretation-
According to 80 respondents out of 110 respondents EXIM Bank does not finance the
U.S. imports and remaining 30 respondents thinks that EXIM Bank finance the U.S.
imports.
50
7- How long are repayments terms for EXIM Bank’s financing?
12%
9%
8%
71%
Short Term Long Term Medium Term All of Them
Diagram No. 3.7
Terms of Repayment Percentage
Short Term 12%
Long Term 9%
Medium Term 8%
All of Them 71%
Interpretation-
According to the 110 respondents, 15 respondents thinks that EXIM Bank financing
repayments for short term. 12 respondents thinks that EXIM bank financing repayments
for long term. 10 respondents thinks that EXIM Bank financing repayments for medium
term and remaining 73 respondents thinks that EXIM Bank financing repayments for all
short term, long term and for medium term also.
51
8- Is EXIM Bank of India provides a support to foreign countries?
10.40%
18%
71.60%
Yes No May Be
Diagram No. 3.8
Provides support to foreign countries Percentage
Yes 71.60%
No 18%
May Be 10.40%
Interpretation-
According to 110 respondents 75 respondents thinks that EXIM Bank provides support to
foreign countries. 22 respondents thinks that EXIM Bank does not support to foreign
countries and remaining 13 respondents not sure about it.
52
9- According to you is EXIM Bank faced any competition during
export financing?
20%
80%
Yes No
Diagram No. 3.9
Facing competition Percentage
Yes 80%
No 20%
Interpretation-
According to 110 respondents, 85 respondents thinks that EXIM Bank is facing a
competition while export financing and 25 respondents thinks that EXIM Bank does not
facing any competition while export financing.
53
10-According to you what are the finance related problems faced by the
EXIM Bank?
20%
35.50%
35.50%
25.50%
High Rate of Interest To Many Formalities

Delay In Export-Import realisation Shortage of Working Capital
Diagram No. 3.10
Finance related problems Percentage
High Rate of Interest 20%
Too Many Formalities 35.50%
Delay In Export-Import Realisation 25.50%
Shortage of Working Capital 35.50%
Interpretation-
According to 110 respondents, 18 respondents thinks that EXIM Bank faced a financial
problems due to high rate of interest. 72 respondents thinks that EXIM Bank faced
financial problems due to too many formalities and shortage of working capital, and
remaining 20 respondents thinks that EXIM Bank faced financial problems due to delay
in Export-Import realisation.
54
11-According to you what are the infrastructure problems faced by the
EXIM Bank?
2.90%
11.40%
8.60%
11.40%
65.70%
Transport Electricity Water Road Changing Policies or Trade War
Diagram No. 3.11
Infrastructure Problems Percentage
Transport 65.70%
Electricity 11.40%
Water 8.60%
Road 11.40%
Changing Policies or Trade War 2.90%
Interpretation-
According to 110 respondents, 68 respondents thinks that EXIM Bank faced infrastructure
problems due to transport, 26 respondents thinks that EXIM Bank faced infrastructure
problems due to electricity and road, 12 respondents thinks that EXIM Bank faced
infrastructure problems due to water, while remaining 4 respondents thinks that changing
policies or trade war may affect the EXIM Bank in case of infrastructure problems.
55
12-Does labour related problems affects the EXIM Bank while export
financing?
20%
80%
Yes NO
Diagram No. 3.12
Labour Related Problems Percentage
Yes 80%
No 20%
Interpretation-
According to 110 respondents, 88 respondents thinks that labour related problems may
affects the EXIM Bank while export financing, while remaining 22 respondents dose not
thinks that EXIM Bank may affects by the labour related problems while export financing.
56
13-Do you feel that EXIM Bank should follow risk management
practices?
14.30%
85.70%
Yes No
Diagram No. 3.13
Risk Management Practices Percentage
Yes 85.70%
No 14.30%
Interpretation-
According to 110 respondents, 94 respondents thinks that EXIM Bank should follow risk
management practices while trade financing and remaining 16 respondents does not
thinks that EXIM Bank should follow risk management practices while trade financing.
57
Chapter 4-
Conclusion and Suggestions-
4.1- Conclusion-
The above analysis reveals that the EXIM Bank has been innovative in offering several
schemes during the study period (1982-1988) both to the commercial banks and exporters
with a view to improve their competitiveness in the global market. The overall coverage
of the fifteen schemes is comprehensive enough covering every stage of export cycle of a
product from procurement of raw material to production, marketing and transportation of
the goods abroad.
An examination of the operations of the EXIM Bank reveals that the major forms of
financial assistance provided by EXIM Bank to the commercial banks was in the form of
refinancing facilities and rediscounting of foreign bills. This accounted for nearly 80
percent of the total funds provided by the EXIM Bank. Inspitte of this, the fluctuating
trend of the refinance ratio during the study period indicated that the EXIM Bank has not
been able to provide a strong and increasing support to export promotion activities. The
decline in this ratio from 10 to 6 percent between 1985 and 1987 is a course of concern.
The reasons for this need to identified by undertaking an in depth investigation of EXIM
Bank operations.
EXIM Bank’s direct credit to exporter has increased phenomenally during the study
period which is a welcome development as it directly accelerate the growth of exports.
This implies that EXIM Bank is taking over more and more the role of export financier
and maintaining a low profile in the field of refinancing.
The programme of the EXIM Bank in terms of non-funded activities during the study
period turned out to be very poor. This indicate that more efforts need to be put in both in
providing better guarantee schemes and their efficient implementation.
58
4.2- Suggestions-
1. Establish your organisation legally-

When you keep your foot forth in the EXIM industry, all that matters the most is having
a legal entity. Your social and legal proof of the brand plays a vital role in starting the
export business. To establish the brand, you have to register your import export company
under the partnership, limited company or proprietorship.
2. Open a current account with a bank-

Without a current account, your import export business will not be valid for any financial
transactions. All the transactions are done through the bank, including the issue of a credit
note, advance payment receipt, etc.
3. Getting the PAN details-

The PAN details are must for helping your business get authorised for trade. Also, your
bank account is linked with the PAN details. Hence, getting the PAN details is a must.
4. Getting the IEC-

The Import Export Code or License is the green ticket your EXIM business. It is issued
by the government after submitting the PAN details. In some cases, your PAN detail is
the IEC license number. You can view our video or read our blog on how to get the IEC
registration in a few easy steps.
5. Getting the RCMC Certificate-

To avail benefit or concession under FTP 2015-2020, it is vital to get registered for the
RCMC Certificate. It is generally granted by the Export Promotional Councils and
Commodity Boards or Authorities of India.
6. Product Selection-
Selecting the product is one of the major decisions because your company’s entire profit
or loss is dependent on the product. You need to study the various market trends for
selecting the right product for exporting. Also, you have to study the International demand
of particular countries.
59
7. Market Analysis-
There should be genuine research on the market including the market size, competition,
quality requirements, product demand, payment terms, insurance coverage terms, customs
rules, etc. to make your import export business more sound and profitable. The role of
market analysis is quite vital in helping you achieve success in the business.
8. Finding Genuine Buyers-

Genuine word is used for buyers because there are two types of buyers in this field, i.e.,
fake buyers and genuine buyers. Being an import export business owner, you must know
how to export your product by scaling your buyer’s genuineness. There are many EPC in
India that will help you to get the entire data of your importer. You can also find your
buyer by visiting his/her website and social media platforms.
9. Sampling process-
Once you find the buyer or you are in touch with the buyer for exporting your product in
any particular country. The next step is about sending the samples or receiving the
samples. In the case of exporting the product, you have to send the samples to the buyer
to help him know about the quality of your product. There are certain laws about the
sampling process, which you must know before sending the sample.
10.Pricing or costing terms-

When you send the samples, the importer replies with an answer about the quality of the
product and whether he wishes to order it or not. If he is interested in ordering the sample,
he/she will discuss the payment terms, the costing terms, etc. It is always a mutual
decision to agree on the costing part.
11.Negotiation with the buyers-

This is one of the most crucial parts of the export or import business. You never know
how to export if you haven’t learnt the art of negotiating. You can consider giving a
discount if you are sure about a long term relationship with the importer for your product.
12.Risk coverage via ECGC-

There are payment risks involved in the import export business as the business is generally
carried out in the International world and mostly online.
60
Chapter 5-
Bibliography
www.onlinebanking.net
www.economictimes.com
www.shodhganga.com
www.eximbank.com
www.investopedia.com
www.livemint.com
www.financialexpress.com
https://affairscloud.com/exim-bank-of-india-an-overview/
https://en.wikipedia.org/wiki/Exim_Bank_(India)
https://www.toppr.com/guides/commercial-knowledge/organizations-facilitating-
business/export-and-import-bank-of-india-exim/
https://accountlearning.com/export-import-bank-exim-bank-significance-
functions/
https://www.eximbankindia.in/about-us
https://financialservices.gov.in/banking-divisions/Financial-Institutions-and-
others/Export-Import-Bank-of-India-(EXIM-Bank)
61
Annexure-
Q.1 Education qualifications?

a) Graduate b) Post Graduate c) Professional 4) other
Q.2- Age group?

a) 20-25 b) 25-30 c) 30-35 d) 35-40
Q.3- Are you aware about EXIM Bank?

A) Yes b) No
Q.4 Where is EXIM Bank’s headquarter is located?

a) London b) Australia c) Washington d) Japan
Q.5 Does EXIM Bank’s Board of Directors have quorum to transact business?
a) Yes b) No
Q.6 Does EXIM Bank finance U.S. imports?

a) Yes b) No
Q.7 How long are repayments terms for EXIM Bank’s financing?
a) Short Term b) Long Term c) Medium Term d) All of the above
Q.8 Is EXIM Bank of India provides support to foreign countries?

a) Yes b) No
Q.9 According to you is EXIM Bank faced any competition during export financing?
a) Yes b) NO
62
Q.10 According to you what are the finance related problems faced by the EXIM Bank?
a) High Rate of Interest b) Too Many Formalities
c) Delay in Export-Import Realisation d) Shortage of Working Capital
Q.11 According to you what are the infrastructure problems faced by the EXIM Bank?
a) Transport b) Electricity c) water d) Road e) Changing Policies or Trade War
Q.12 Does labour related problems affects the EXIM Bank while export financing?
a) Yes b) No
Q.13 Do you feel the EXIM Bank should follow risk management practices?
a) Yes b) No
63
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“EXPORT - IMPORT BANK OF INDIA”

Under the Guidance of

PARLE TILAK VIDYALAYA ASSOCIATION’S

This is to certify that Mr. KIRAN YOGESH GOVALKAR has worked

Name and signature of

I the undersigned Mr. KIRAN YOGESH GOVALKAR hereby declare that

Name and signature of the learner

Chapter No. Title of the Chapter Page No.

1.4 Objectives of the EXIM Bank 10

1.5 EXIM Bank’s Need 11

1.6 Role of the Export-Import Bank of India 13

1.7 Import-Export Policies 14

1.8 EXIM Bank’s Important 22

1.9 Export-Import Bank of India-Small & 23

1.11 EXIM Bank and SMEs 24

3.1 Objectives of the Study 43

3.2 Hypothesis of the Study 43

3.3 Sources of Data 44

3.4 Data Analysing 45

Conclusion & Suggestions

As act to establish a corporation to be known as Export-Import Bank of India for providing

1- Exim Banks mission is to facilitate globalization of Indian Business.

1.4- OBJECTIVES OF THE EXIM BANK-

1- The principal objectives of the bank can be narrated as under

4- To develop mutually beneficial relationships with the international financing

7- To anticipate and absorb new developments in banking, export financing and

9- To function as the principal financial institutions for coordination the workings of

1.5- EXIM BANK’S NEED-

The processes of industrial development in our country resulted in diversification and

Bank assists in identification of products, opportunities’ funded by multi- lateral agencies,

It coordinates the workings of other financial institutions engaged in financing export

1.6- ROLE OF THE EXPORT-IMPORT BANK OF INDIA-

Tie-ups with international agencies-such as International Trade Centre (Geneva),

Export-import Policy 1992-1997:

Export-import Policy 1997-2002:

1- To accelerate the country’s transition to a Globally-oriented vibrant economy to

Modified Export-import Policy April 1998:

Other provision-delegation of powers to regional licensing officers. Delegation of power

Export-import Policy 1999-2000:

Export-import Policy 2000-2001:

Involvement of state Government in export promotion: By paying incentives to the state

Export-import Policy 2001-2002:

Agricultural Export Zones: three such zones were proposed to be set up in

Export-import Policy 2002-2007:

Export-import Policy 2003-2004:

Following are the provision:

Encouragement of corporate sector with proven credential to sponsor Agricultural Export

Mini Export-import Policy, January 2004:

Annual Supplement Plan for 2005-2006:

Annual Supplement 2006-2007:

Annual Supplement 2007-2008:

To acts as an effective instrument of economic growth by giving a trust to employment

Annual Supplement 2008-2009:

Foreign Trade Policy (FTP) 2009-2014:

EPCG scheme relaxations:

Gems and Jewellery:

To make India a diamond international trading hub, it is planned to establish Diamond

1.8- EXIM BANK’S IMPORTANCE-

1.9- Export Import Bank of India - Small & Medium Enterprises-

Definition of SMEs in India and World-

1.10- Importance of the SME sector-

1.11- Exim Bank and SMEs-

Indian SMEs require business advisory services to enhance their international