INTERNATIONAL BUSINESS MANAGEMENT

PROJECT OF E-COMMERCE AND INTERNATIONAL BUSINESS

Submitted To
SIR DR. SOHAIL YOUNUS
Submitted By
Maham Dar (BBA-F19-M47)
Tooba Khan (BBA-F19-M58)
Mahjabeen Ijaz (BBA-F19-M52)
Nimra Fakhar (BBA-F19-M75)
Session
2019-2023
BACHELOR OF BUSINESS ADMINISTRATION (HONS)
DEPRTMENT OF BUSINESS ADMINISTRATION
UNIVERSITY OF THE PUNJAB JHELUM CAMPUS
OCT, 2022
Contents

1. Introduction 1
1.1 Introduction of Import 1
1.2 Introduction of export 1

2. History and importance of

Import and export 1
2.1 History of import and export 1
2.2 Importance of import and export 2

3. Types of import and export 2

3.1 Types of import
3.2 Types of export 3

4. Impact of import and export 5

5. Conclusion 7
 Imports and Exports

1. Introduction:
1.1 Introduction of Import:
The word “Import” derives from the word “port” since goods are often shipped via boar to
foreign countries. An import is a good or service bought in one country that was produced in
another.
Imported goods or services are attractive when domestic industries can’t produce similar
goods and services cheaply or effectively.
For Example:
If a Belgian company produces chocolate and sells it in the United States that would be an
import from an American perspective.
1.2 Introduction of Export:
Exports are goods and services that are produced in one country and sold to buyers in
another. Trade barriers such as taxes on imports, subsides, funding given to domestic
businesses can affect a country flow of exports.
Typically, a country has a competitive advantage on its exports. This means that it has the
natural ability to produce certain goods and service in a high quality and quantity, often based
on its climate and geographic region. For example, because of tropical climate of Brazil, its
largest export is sugar cane.
For example:
• Brazil, Colombia, Indonesia are the exporters of coffee.
• One of Japan’s top exports in cars and automobile parts because consumers trust in
the quality, safety and dependability of Japan made cars.
• The US is one of the top exporters of corn.
• Saudi Arabia, Russia, Iraq are the exporters of oil.

2. History and Importance of import and export:

2.1 History of Import and Export:
The history of importing and exporting dates back to the Roman Empire, when European and
Asian trades imported and exported goods across the vast lands of Eurasia. Trading along the
Silk Road flourished during the thirteenth and fourteenth centuries. Caravans laden with

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imports from China and India came over the desert to Constantinople and Alexander. From
there, Italian ships transported the goods to European ports.
For centuries, importing and exporting has often involved intermediaries, due in part to the
long distances traveled and different native languages spoken. The spice trade of the 1400s
was no exception. Spices were very much in demand because Europeans had no refrigeration,
which meant they had to preserve meat using large amounts of salt or risk eating half rotten
flesh. Spices disguised the otherwise poor flavor of the meat. Europeans also used spices as
medicines. The European demand for spices gave rise to the spice trade. The trouble was that
spices were difficult to obtain because they grew in jungles half a world away from Europe.
The overland journey to the spice-rich lands was arduous and involved many middle-men
along the way. Each middleman charged a fee and thus raised the price of spice at each point.
By the end of the journey, the price of the spice was inflated 1000 percent.

2.2 Importance of Import and Export:

The importance of import and export is as follow;
1) It is one of the simplest routes of entering in a global trade. Import and export
generate employment opportunities.
2) It gives better control over the trade than setting up a market and the risk is considered
low.
3) It is comparatively less risky when compared with different routes of entering in
International business.
4) It can help countries to access the best technologies available and best products and
services in the world.
5) As no nation can be 100% self-sufficient import and export are very crucial for the
functioning and growth of that nation.

3. Types of Import and Export:

3.1 Types of import:
Following are the types of import;
i. One-time import
ii. Recurring import
iii. Full container load
iv. Less container load

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 i. One-time import:
This handles importing most profile information for both people and organizations. You can
import from a CSV file. A list or filter shared by another nation can also be imported using
the one-time import.
ii. Recurring import:
A list or filter shared by another nation can be imported using the recurring import. Public
information connected to a Twitter account can also be imported using recurring import.
Twitter follower’s imports people who follow a particular Twitter account. Twitter
followings imports the profiles followed by a particular Twitter account.
iii. Full Container Load
This type of shipping uses a container transportation service with only one shipper, not
combining goods with other shippers. The cargo contains only the goods of the owner of one
shipper to the destination country with one importer.
iv. Less Container Load
The opposite of the full container load method, this type of shipping uses containers that
contain imported goods from more than one shipper. Less Container Load or LCL is a
method of shipping goods using mixed containers with other shippers and less cargo.
3.2 Types of export:
There are following types of export;
I. Direct export
II. Indirect export
III. Merchant export
IV. Deemed export

I. Direct Export:
Direct exporting is the selling the products in a foreign country directly
through its distribution arrangements or through a host country’s company. Direct
export means direct sales to a customer abroad. In direct export, you send your invoice
directly to the customer. You maintain close contacts with your customers and undertake
your own marketing and sales.
For example:
You product handmade mobile casings, and mail them to your customer in Belgium and
Germany.

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 II. Indirect export:
Indirect export is exporting the products either in their original form or in the modified form
to a foreign country through another domestic company. It means that you appoint third
parties, like agents or distributors, to present your company and your product abroad.
For example:
Various publishers in India including Himalaya Publishing House sell their products, i.e.
books to various exporters in India, which in turn export these books to various foreign
countries.

Advantages Disadvantages

Direct export Direct customer contact Limited market coverage

Higher profit margins Greater financial risk
Independence from foreign
partners

Indirect export Agent knows and has access to No direct customer contact
the market and distribution Dependence on commitment
channels of partner
Smaller financial risks

III. Merchant Export:

A merchant export is primarily concerned with exporting good after purchasing them from
manufacturers. Merchant exporters do not usually own manufacturing facilities but buy goods
from manufacturers and sell them internationally.
For example:

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Merchant exporters receive order from international market and then procure goods from
India manufacturers mostly from labor-intensive sectors such as agriculture, textile and
machinery and sell them abroad in the firm’s name.
IV. Deemed export:
Goods classified as deemed export may not ship out of the country.
For example:
When a Kerala based manufacturer supplies goods to an Export oriented Unit in Maharashtra,
who further ships the product to its customer in the UAE. The first part of the transaction is
classified as deemed export while the second transaction is considered as export.

4. Impact of Import and Export:

A country's importing and exporting activity can influence its GDP, its exchange rate, and its
level of inflation and interest rates.
A rising level of imports and a growing trade deficit can have a negative effect on a country's
exchange rate.
A weaker domestic currency stimulates exports and makes imports more expensive;
conversely, a strong domestic currency hampers exports and makes imports cheaper.
Higher inflation can also impact exports by having a direct impact on input costs such as
materials and labor.
When there are too many imports coming into a country in relation to its exports—which are
products shipped from that country to a foreign destination—it can distort a nation’s balance
of trade and devalue its currency. The devaluation of a country's currency can have a huge
impact on the everyday life of a country's citizens because the value of a currency is one of
the biggest determinants of a nation’s economic performance and its gross domestic product
(GDP). Maintaining the appropriate balance of imports and exports is crucial for a country.

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The importing and exporting activity of a country can influence a country's GDP, its
exchange rate, and its level of inflation and interest rates.
4.1 Effect on Gross Domestic Product
Gross domestic product (GDP) is a broad measurement of a nation's overall economic
activity. Imports and exports are important components of the expenditures method of
calculating GDP. The formula for GDP is as follows:

GDP=C+I+G+ (X−M)
Where:
C=Consumer spending on goods and services
I=Investment spending on business capital goods
G=Government spending on public goods and services
X=Exports
M=Imports
In this equation, exports minus imports (X – M) equal net exports. When exports exceed
imports, the net exports figure is positive. This indicates that a country has a trade surplus.
When exports are less than imports, the net exports figure is negative. This indicates that the
nation has a trade deficit.
A trade surplus contributes to economic growth in a country. When there are more exports, it
means that there is a high level of output from a country's factories and industrial facilities, as
well as a greater number of people that are being employed in order to keep these factories in
operation. When a company is exporting a high level of goods, this also equates to a flow of
funds into the country, which stimulates consumer spending and contributes to economic
growth.

4.2 How Imports and Exports Affect You

When a country is importing goods, this represents an outflow of funds from that country.
Local companies are the importers and they make payments to overseas entities, or the
exporters. A high level of imports indicates robust domestic demand and a growing economy.
If these imports are mainly productive assets, such as machinery and equipment, this is even
more favorable for a country since productive assets will improve the economy's productivity
over the long run.

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A healthy economy is one where both exports and imports are experiencing growth. This
typically indicates economic strength and a sustainable trade surplus or deficit. If exports are
growing, but imports have declined significantly, it may indicate that foreign economies are
in better shape than the domestic economy. Conversely, if exports fall sharply but imports
surge, this may indicate that the domestic economy is faring better than overseas markets.
For example, the U.S. trade deficit tends to worsen when the economy is growing strongly.
This is the level at which U.S. imports exceed U.S. exports. However, the U.S.’s chronic
trade deficit has not impeded it from continuing to have one of the most productive
economies in the world.

However, in general, a rising level of imports and a growing trade deficit can have a negative
effect on one key economic variable, which is a country's exchange rate, the level at which
their domestic currency is valued versus foreign currencies.

4.3 Impact on Exchange Rates

The relationship between a nation’s imports and exports and its exchange rate is complicated
because there is a constant feedback loop between international trade and the way a country's
currency is valued. The exchange rate has an effect on the trade surplus or deficit, which in
turn affects the exchange rate, and so on. In general, however, a weaker domestic currency
stimulates exports and makes imports more expensive. Conversely, a strong domestic
currency hampers exports and makes imports cheaper.
4.4 Impact on Inflation and Interest Rates
Inflation and interest rates affect imports and exports primarily through their influence on the
exchange rate. Higher inflation typically leads to higher interest rates.
5. Conclusion
Pakistan international trade is suffering from huge amount of deficit due to low demand for
its exports. Domestic political instability also accounts for trade deficit. By 2011 exports
forecast the Pakistan oil imports will raise. Pakistan basically is an agrarian society supported
to some extent by the industrial one. Pakistan has a good business deals with its partner, but
unlocking it imports mare than exports. Exports, moreover, are mostly composed of raw
materials instead of manufactured or finished goods.

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